I found time this morning to watch the film Four Horsemen. It’s about what’s fundamentally wrong with the world and it features some major thinkers from Britain and the world.

I feel fairly sure many of them did not know that the central point of the film is to explain why money should be separated from the state. As I set out in my maiden speech,

Today, money is a product of the state. The Bank of England controls the price, quantity and quality of money. Perhaps if we were talking about any other commodity, there would be far less confusion over and questioning of the cause of the crisis. If money is a product of the state, we should ask ourselves, “Is this a good idea?”

In the coalition, we have a Government ideally suited to be conservative to preserve what is good, but radical to change all that is bad. If we are to have a once-in-a-generation, fundamental review of the role of government, let us also examine government’s role in the system of money and bank credit.

The financial system is not free market. It is riven with privileges granted by government and the entire system of money and bank credit is centrally planned. Money is the lifeblood of an advanced economy founded on the division of labour and exchange, but it is broken. As a consequence, the financial system is manufacturing injustice on a vast scale with unprecedented subtlety.

So it is no wonder Russell Brand wants a revolution but can’t say what system he really wants. In so far as he articulates it, Brand’s vision sounds like revolutionary Communism. That’s been tried: it produced impoverishment, misery, injustice and murder.

The only social system capable of producing justice and prosperity is a free one, ie capitalism. However, as I said in the Commons, if this is capitalism, I am not a capitalist. What’s wrong with it? Active management of money by the state and the capture of political power by rent-seeking special interests. The film explains. I’ve found myself opposing both with only a few allies: in the Finance Bill committee 2013 for example (end of here and starting again here).

Meanwhile, the top story at the Bucks Free Press is Residents frustrated at delayed bin collections, which is fair enough: it’s caused real, concrete inconvenience in people’s lives. These big issues of the institutional framework of our society are complex and abstract, even if contributors to the film say that they are simply questions of power and democracy. Most of the time, most of us have lives which are just fine, or perhaps which are easier to bear than to change.

Therein lies the biggest problem with our democracy: people scarcely take part. Political parties’ membership has collapsed. Journalists like Hugo Rifkind and Jeremy Paxman (my constituent) can’t be “arsed” to vote or otherwise step up to the challenge of practical politics.

Four Horsemen finishes with these words,

To really understand something is to be liberated from it. Dedicating oneself to a great cause, taking responsibility and gaining self-knowledge is the essence of being human. A predatory capitalist’s truest enemy and humanity’s greatest ally is the self-educated individual who has read, understood, delays their gratification and walks around with their eyes wide open.

The film is available on YouTube here or via their site here. A paper I published explaining what is wrong with the financial system is available in NEF’s Banking 2020, extracted under its Creative Commons licence here: Bank reform demands monetary reform. It was reviewed by two great monetary economists.

We live in a democracy. Change is possible but it requires knowing what you want and taking part. You can do so here.


  1. So Paxman cant be “arsed” to vote……welcome to the public perception of politics Steve !!

    Politics is just not seen as dynamic anymore, and in fact the general perception is that nowadays all parties are now singing from the same manifesto hymn sheet. Add in the fact that politicians attract an awful lot of bad press ( re expenses scandals etc ) and you can see why the general public just doesnt turn up at the ballot box anymore. Which , in a way , justfies your idea of reducing the role the state plays in everyones lives .

    • good article……..though the days of me actually reading a newspaper are long gone since the advent of the internet !!

    • Yep, Moonbat has got it half right/half wrong as usual. What he is railing against is crony corporatism. That can only happen where there is a nexus of power between crony politicians their bureaucrats satraps and large corporations. The EU is the World Champion at this.

  2. 5566hh’s link is interesting, but misses the point. Government should not stop listening to business, it should start listening to everyone else too. Just as in the argument over subsidies that Mr Baker linked to in his Finance Bill committee discussion, Government is too keen to listen to the loudest lobbyist and forgets about the harm done to those who are not lobbying, those who are just getting on with their life and their work, those whose taxes must fund the subsidy.

    The true cause of the lack of engagement with politics lies elsewhere, though. What, really, is the point in taking an interest in Westminster politics when the decisions of import are made in Brussels?

  3. Steve, I believe you are expressing the same contradictory ideas regarding money as laid out by Adam Smith in The Wealth of Nations.
    That a “commodity money” is a “veil over barter”.
    It is not.
    David Graeber explains this brilliantly in his book, Debt: The First 5000 Years.
    If everyone is a market participant, promises to pay i.e. credit can be used to exchange any good for any other. Here credit is money.
    If money is a commodity however this adds another market participant.
    Now all other market participants have to recieve credit from the money seller in order to exchange their goods.
    Credit is the “veil over barter” and “commodity money” the distortion of the market.

    • Adam Smith was wrong about several things, not least the objective theory of value and I do not think I have ever suggested that credit cannot be used as money without a commodity base: plainly it can.

      As you indicate, all these matters are contested. Economists agree on little: the ideal system of money is one of those areas of profound disagreement. My intention is to stimulate debate by raising some of the dreadful consequences of the present system, which Mervyn King described as the worst possible.

      • “The Bank of England controls the price, quantity and quality of money.”
        This quote of yours is why I commented originally.
        The Bank of England does control the interbank rate (price) but not the quantity of money (I don’t exactly know what you mean by quality here).
        The base money at a central bank has virtually no influence on banks ability to extend credit during a boom.
        The system is a closed loop.
        When a bank extends credit this becomes deposits somewhere else in the system.
        Banks then seek to balance reserves between themselves via the central bank i.e. find the newly created money.
        The quantity of money is not controlled by the central bank unless a system has gone rogue e.g. Weimar Germany.
        There are however extenuating curmcomstances where the central bank will provide additional reserves for stability and when there is a credit contraction like presently.
        Anyway my point is that capitalism *is* a system where banks decide the quantity of money and a central bank a mechanism for stabilising things when it goes wrong.