Michael Rowbotham
Michael Rowbotham is a political and economic writer, commentator and thinker based in the UK. He has no formal training in either field.
Economic views
He is best known for his two books, The Grip of Death and Goodbye America, which both focus on what he believes to be inequities in the practice of fractional reserve banking (which he equates with counterfeiting) and the economic distortions he believes to be inherent in the so-called debt-based monetary system which almost all nations utilise in the modern age.
His argument essentially is that fractional reserve banking amounts to monetary fraud, in that it creates money "out of nothing" but requires the payment of this money back to private banks at some point in the future. He argues that, with modern electronic finance and fractional reserve banking techniques, new money is created every time a new loan is approved, which circulates through the economy via bank accounts and acts as money after its creation. He refers to money created in parallel with debt "debt money" because it only comes into existence with the inducement of the borrower to get into debt through the creation of a new loan.
This money is then destroyed when the loan is paid off. "Debt money" is therefore, in his eyes, inherently unstable and illusory as it only comes into existence through borrowing and can be extinguished through repayment. This form of "debt money" existing in the bank accounts of the banking system benefits the banking system through the payment of interest, but causes every other productive member of society to slowly sink into debt slavery, due to the inherent impossibility of paying all of these debts. He argues if there were no debt, there would be no money.
Through the periodic expansion and contraction of the credit cycle, he alleges that the populace is systematically dispossessed of its real wealth, as banks increase and decrease the rate of supply of money in the economy, by first lowering and then raising interest rates, causing widespread insolvencies which then allows the acquisition of valuable secured assets by the banking system.
Solutions
Rowbotham believes that governments should "ease" the burdens on citizens that this causes by issuing their own "debt-free money" to smooth these cycles and alleviate the poverty and concentrations of wealth that he believes will inevitably arise through fractional reserve banking.
Many mainstream professional economists dismiss monetary reformers such as Rowbotham as amateur economists (or "monetary cranks") who lack formal training.[citation needed] However Rowbotham has supporters in the trained academic community who have pointed out that the recent financial crisis has been caused by exactly what he was talking about.[citation needed]
See also
References
- George Monbiot (2000). "They don't owe us, we owe them". Guardian Unlimited. Retrieved 2008-01-02.
- Ed Metcalfe. "Goodbye America! Globalisation, Debt and the Dollar Empire. (Review)". The Ecologist. AccessMyLibrary. Retrieved 2008-01-02. (Subscription required)
- Wendy Olsen (2001). "The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics. (Book Review)". Capital & Class; Autumn2001 Supplement, Issue 75, p31-33. EBSCOhost. Retrieved 2008-01-02.(Subscription required)
- Kirsten Garrett (2001). "Drop the Debt". Background Briefing (program transcript). ABC Radio National. Retrieved 2008-01-02.