Social Credit is not the answer

There are plenty of valid criticisms to be made of developed-economy monetary and banking systems. Finance capital seems to exert too much influence on our economies. Banks seem to make excessive profits. Excessive debt oppresses, and drives individuals, firms, and economies into a frantic search for income growth. The growth obession drives us into dysfunctional actions and outcomes.

Variations of “Social Credit” monetary theory (these days often described simply as ‘critiques of fractional-reserve banking’) often include reference to many of these criticisms, and appear to offer theoretical solutions. I assume that is partly why they are so popular among green movement supporters.

At a practical level, some of the alternative, community-based currencies and related proposals, have real merits and appeal as ways to develop some degree of freedom from the ecologically and socially dysfunctional global money economy.

It doesn’t help, either, that at first sight the fractional reserve banking (how most money in developed economies is created), really does seem like a magic card trick: “I deposit $100, and the bank can lend that out several times over? …so they’re creating money from nothing?”

But Social Credit money theory doesn’t add up, and attachment to it, in my opinion, diminishes the intellectual and economic credibility of the green movement and Green Parties. Dr. Gabriel Martinez, Associate Professor of Economics at Ave Maria University, has written a brief, clear, and simple critique of Social Credit (so short and succinct there’s no point summarising it!) – I recommend it to all who have been taken with ‘Social Credit’ notions.

Advertisements

Leave a comment

Filed under Barry, economic analysis, green politics

Comments are closed.