While all the TV news cameras point at politicians in Westminster, the power to create money gives the banking sector more power than government.
1. We’ve given the power to create money to the banks, with no accountability
Banks create money when they make loans, which means that they effectively control where newly created money goes to in the economy. That means banks have the power to shape the economy.
They’ve used this power to push up house prices, inflate speculative financial bubbles, and starve small businesses of investment. They have no legal obligation to use this massive power in the interests of society as a whole, and we have no way of holding them accountable when they use it badly.
2. There was never any democratic decision to give banks the power to create money
When the government talks about privatising parts of the health service, there is a huge public debate and arguments on all sides. But there has never been a debate or vote in parliament to give the banks the power to create money. In fact, the opposite has happened. Most MPs are unaware that the power to create money has shifted to the banks.
The power to create money affects almost every aspect of our society, so it’s worrying that we’ve allowed it to fall into the hands of banks with no debate in parliament or the press.