The October 14, 2015 hearing at the finance
commission of the Dutch parliament regarding monetary reform was a
milestone for the Dutch and international movement. The 140 minute
long hearing can be watched on-line and will soon be provided with
English subtitles [1]. This momentous event was triggered by a
citizens' initiative by the Dutch monetary reform organization
Ons Geld (Our Money) and the satirical theater group De Verleiders
(The Seducers), which gathered more than 100,000 signatures,
comfortably over the 40,000 needed. The first panel at the hearing,
comprised of members of the citizens' initiative, gave a very clear
exposition of its proposals and during the second panel, comprised of
financial authorities, bankers and academics, an outstanding debate
developed between Dr. Bezemer and Dr. van Egmond about the necessity
of reform.
Van Egmond made some very clear and passionate points
in favor of reform. He seems to be totally on board with the monetary
reform agenda, which is a great boon as he is not only a respected sustainability
scholar, but also a founding member of the Sustainable Finance Lab at
the University
of Utrecht and,
most importantly, a member of the very influential
Dutch advisory council De Sociaal-Economische Raad (The
Social-Economic Council).
Actually van Egmond co-wrote a working paper with Dr.
de Vries titled "Dynamics of a sustainable financial-economic
system"[7], which presents a "dynamic simulation
model" in which the recent research into the nature of bank
credit money by Dr. Werner [9,10] is incorporated.
"The model provides the ‘laboratory’
setting in which the discontinuities and associated socio-economic
un-sustainability of the current financial-economic system can be
studied and the feasibility of more sustainable alternatives can be
explored"[7].
As far as I know the paper by van Egmond and de Vries
is the third one to model the sovereign money proposal after the
papers by Drs. Benes and Kumhof at the IMF [6] and Dr. Yamaguchi from
Japan
[11]. They all come to very positive conclusions regarding the
proposal.
To be complete, there does exist a very recent
fourth paper by Drs. Van Suntum and Neugebauer of the Center for
Applied Economics Muenster, Germany. They
investigated and modeled the Swiss sovereign money proposal and
concluded that it was promising way more than could be realistically
expected, even stating that “[m]ost of its desired effects are
either negative or wishful thinking”[8].
In a response Dr. Huber, a long-time advocate of
sovereign money [2] and critic of its alternatives [3,4], challenges
the assumptions on which the authors had based their model,
especially their idea that sovereign money would just be added to the already existing pool
of money, instead of realizing that “Sovereign money - in its
original and proper meaning – is a replacement for bankmoney,
not an addition to the existing quantities of bankmoney”[5].
Govert Schuller
Naperville,
October 20, 2015
Sources
[1]. "Round table conversation on the money
system". 2015. Hearing at the Permanent Commission on Finance of
the Second Chamber of the States General of the Netherlands.
Troelstra Hall. 14 Oct 2015. https://www.youtube.com/watch?v=3TSb9gBdyVE
[2]. Huber, Joseph & Robertson, James. 2000. Creating New Money.
London:
New Economics Foundation.
[3]. Huber, Joseph. 2014a. “Modern Money Theory
and New Currency Theory”. Real-world economics review
66, (13 January 2014): 38-57. http://www.paecon.net/PAEReview/issue66/Huber66.pdf
[4]. Huber, Joseph. 2014b. "Sovereign Money in
Critical Context: Responding to criticism of monetary reform from a
variety of economic viewpoints". Source:
sovereignmoney.eu/papers-and-manuscripts, Oct 2014. http://www.sovereignmoney.eu/sovereign-money-in-critical-context
[5]. Huber, Joseph. 2015. “Side notes to”
van Suntum, Ulrich & Neugebauer, Tom. 2015. Link to note at http://www.sovereignmoney.eu/confronting-criticism/.
[6]. Kumhof, Michael & Benes, Jaromir. 2012.
"The Chicago
Plan Revisited". IMF Working Papers 12/202, International
Monetary Fund. http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf
[7]. Van
Egmond, N.D.
, and B.J.M de Vries. 2015. "Dynamics of a sustainable
financial-economic system". Sustainable Finance Lab Working
Paper. http://sustainablefinancelab.nl/files/2015/04/SFM-working-paper.pdf
[8]. van Suntum, Ulrich & Neugebauer, Tom. 2015.
“Vollgeld, Public Debt, and the Natural Rate of
Interest”. Working Paper, Centrum für Angewandte
Wirtschaftsforschung Münster (CAWM), June 2015. Link to paper at http://www.sovereignmoney.eu/confronting-criticism/.
[9]. Werner, Richard A. 2014a. “Can banks
individually create money out of nothing? The theories and the
empirical evidence”. International Review of Financial
Analysis, 36 (2014): 1–19. http://www.sciencedirect.com/science/article/pii/S1057521914001070
[10]. Werner, Richard A. 2014b. “How do banks
create money, and why can other firms not do the same? An explanation
for the coexistence of lending and deposit-taking”. International
Review of Financial Analysis, 36 (2014):
71–77. http://www.sciencedirect.com/science/article/pii/S1057521914001434
[11]. Yamaguchi, Kaoru. 2011. “Workings of a
Public Money System of Open Macroeconomies: Modeling the American
Monetary Act Completed”. In Proceedings of the 29th
International Conference of the System Dynamics Society, Washington D.C.,
USA,
2011. The System Dynamics Society. http://monetary.org/wp-content/uploads/2011/11/DesignOpenMacro.pdf
