| Popis: |
The essence of the capitalist engine, as Geoffrey Ingham tells us in ‘Capitalism’ is the ability by banks to be able to create credit money on nothing but a promise to repay. This thesis investigates whether the two major financial crises of the last 100 years are symptomatic of the fact that money is just too important to be left to banks to create simply through the issuance of debt. The Great Depression, beginning after the stock market crash of 1929, and then the Great Financial Crisis of 2007/09, were the stimulants for two major debates on monetary reform. This study addresses these debates firstly through the lens of three great economic thinkers of the 1930s, Henry Simons, Frank Knight and Irving Fisher, and their assertions on the newly elected Roosevelt Government to mandate a 100% Full Reserve Banking system. Then it will pursue the arguments mounted post GFC for a Sovereign Money System (SMS) by various nations. Under the SMS, government as the sovereign entity is to reclaim the responsibility for the issuance of the media of exchange. This thesis seeks common threads between these two inquiries into monetary reform. What do they say about Minsky’s assertion that economic volatility leading to economic crisis arises as a result of the endogenous contradiction of the capitalist system? That is, the creation of money through debt issuance. |
