Posts Tagged ‘Paul Mason’

In his 2013 budget speech, Chancellor George Osbourne repeatedly used the phrase aspiration nation. This idea comes from the conviction politics, economics and social policy of Thatcherism and is a pivotal ideology of Conservative politics.

This aspiration nation is a society that values and fetishizes commodities above all else, as predicted by Karl Marx (b. German, 1818 – 1883, Das Kapital Vol.1, 1867).

I believe this “aspiration nation” is in fact a neo-feudal culture. It has become a Corpocracy, a society usurped by corporate global banks. And these international banks are tightening their grip by increasingly pushing us toward a cashless society.

Governments would love to see the end of banknotes. But what would a cashless society mean for freedom? The Guardian’s   has written about this today…

Crime, terrorism and tax evasion: why banks are waging war on cash

I can remember the moment I realised the era of cash could soon be over.

It was Australia Day on Bondi Beach in 2014. In a busy liquor store, a man wearing only swimming shorts, carrying only a mobile phone and a plastic card, was delaying other people’s transactions while he moved 50 Australian dollars into his current account on his phone so that he could buy beer. The 30-odd youngsters in the queue behind him barely murmured; they’d all been in the same predicament. I doubt there was a banknote or coin between them.

The possibility of a cashless society has come at us with a rush: contactless payment is so new that the little ping the machine makes can still feel magical. But in some shops, especially those that cater for the young, a customer reaching for a banknote already produces an automatic frown.

Among central bankers, that frown has become a scowl. There is a “war on cash” in the offing – but it has nothing to do with boosting our ease of payment or saving trees.

Consider the central banks’ anti-crisis measures so far. The first was to slash interest rates close to zero. Then, since you can’t slash them below zero, the banks turned to printing money to stimulate demand. But with global growth depressed, and a massive overhanging debt, quantitative easing (QE) is running out of steam.

Enter the era of negative interest rates: thanks to the effect of QE, tens of billions held in government bonds already yield interest rates that are effectively below zero. Now, central banks such as Japan and Sweden have begun to impose negative official interest rates.

The effect, for banks or long-term savers, is that by putting your money in a safe place – such as the central bank or a government bond – you automatically lose some of it.

Not surprisingly, these measures have led to the growing popularity of cash for people with any substantial savings. Bank of England research shows demand for cash has grown faster than GDP in many countries. So the central banks face a further challenge: how to impose negative interest rates on cash itself.

Technologically, you can’t. If people hold their savings as physical currency, it keeps its value – and in a period of deflation the spending power of hoarded cash increases, even as share prices and the value of bank deposits fall. Cash, in a situation like this, is king.

But the banks are ahead of us. Last September, the Bank of England’s chief economist, Andy Haldane, openly pondered ways of imposing negative interest rates on cash – ie shrinking its value automatically. You could invalidate random banknotes, using their serial numbers. There are £63bn worth of notes in circulation in the UK: if you wanted to lop 1% off that, you could simply cancel half of all fivers without warning. A second solution would be to establish an exchange rate between paper money and the digital money in our bank accounts. A fiver deposited at the bank might buy you a £4.95 credit in your account.

More radical still would be to outlaw cash. In Norway, two major banks no longer issue cash from branch offices. Last month, the biggest bank, DNB, publicly called for the government to outlaw cash.

Why would a central bank want to eliminate cash? For the same reason as you want to flatten interest rates to zero: to force people to spend or invest their money in the risky activities that revive growth, rather than hoarding it in the safest place.

Calls for the eradication of cash have been bolstered by evidence that high-value notes play a major role in crime, terrorism and tax evasion.

In a study for the Harvard Business School last week, former bank boss Peter Sands called for global elimination of the high-value note. Britain’s “monkey” – the £50 – is low-value compared with its foreign-currency equivalents, and constitutes a small proportion of the cash in circulation. By contrast, Japan’s 10,000-yen note (worth roughly £60) makes up a startling 92% of all cash in circulation; the Swiss 1,000-franc note (worth around £700) likewise. Sands wants an end to these notes plus the $100 bill, and the €500 note – known in underworld circles as the “Bin Laden”.

 

The advantages of a digital-only payment system to the user are clear: you can emerge from the surf in only your bathing shorts and proceed to buy beer, food, or even a small car, providing your balance is positive. The advantages to banks are also clear. Not only can all transactions be charged a fee, but bank runs are eliminated. There can be no repeat of the queues outside Northern Rock, nor of the Greek fiasco last summer, because there will be no ATMs, only a computer spreadsheet moving digital money around. The advantages to governments are also clear: all transactions can be taxed. Capital controls are implicit within the system.

But there are drawbacks, even for governments that would like to take absolute control of money transactions. First, resilience. If a cyber-attack or computer malfunction took down a digital-only payment system, there would be no cash reserves in households and businesses to fall back on. The second is more fundamental and concerns freedom. In most countries, the ability to take your cash out of the bank and to spend it anonymously is associated with many pleasurable activities – not all of which are illegal but which exist on the margins of society. How tens of thousands of club-goers would pay for their drugs each Saturday night is a non-trivial issue.

Nevertheless, the arrival of negative interest rates for banks, together with new rules allowing governments to bail-in – i.e. confiscate – deposits above a protected minimum, are certain to increase savers’ awareness of the value of cash, and will prompt calls in earnest for its abolition.

If it happens, it would be the ultimate demonstration of the power of FINANCE over people. As for resistance? Go ahead and try.

It may be the Queen’s head on a £50 note but the “promise to pay” is made above the signature of a Bank of England bureaucrat.

_______________________________________________________________

Neo-Feudalism and the invisible fist, a form of structural violence, a return to the caste system. It is privatised governance and the ordinary person doesn’t stand a chance.

 

Advertisements

Given the vile attack by the Conservatives on the Union movement I am posting this article written by Paul Mason about how the first world war ended.

http://blogs.channel4.com/paul-mason-blog/world-war/1240

Not many people will know that it was in fact the German workers who brought an end to the war and that Hitler subsequently fearing their power banned them.

This is surely why the Conservatives are intent upon destroying the labour movement. It should be a rallying call for people to get behind the union movement which is the only mechanism for protecting the rights of workers.

“For Hitler, the German workers’ role in ending the war became the “stab in the back”: it was his ultimate justification for eradicating the German labour movement after 1933.

In the British imperialist version of events the Kiel sailors become useful ancillaries: Yanks and tanks turn the western front and, naturally, the Germans throw the towel in once their front starts to crumble.

But to social historians the German workers’ role in ending the war is no surprise. Because exactly 100 years ago this week, they had also turned out in their hundreds of thousands to try and prevent it starting.

The German socialist party was a massive social institution – with libraries, schools, choirs, nurseries – and during the fatal slide to war they called their members onto the streets in every major city. Then, under the pressure of war fever and fearing their institutions would be outlawed, the socialist leaders swung behind the war effort.

We know now, thanks to the publication of records and memoirs, that it was entirely possible to have stopped the first world war. Key members of the British cabinet were against it; large parts of the social elite in most countries, including Germany, were stunned and appalled by the unstoppable process of mobilisation.”

Chicken Chow Mein and a million quid Christmas bonus… The latest banking scam explained by Channel 4 Economics Editor, Paul Mason.

http://www.channel4.com/news/banking-explained-graphic-video-bankers-paul-mason