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  • This lecture is going to actually form part of six lectures

  • focusing on the root causes of our society's problems.

  • [Are you going to do all six now?] - No, no, sadly not, no.

  • There will be 6 one-hour lectures. They'll be available online.

  • They're really to give people a sense of idea

  • of how our movement came about because the fundamental root causes

  • that have informed our world views are not to be summed up

  • in a nice kind of ten-minute elevator speech.

  • This is the first one, and as this is already telling you

  • this one focuses on the monetary system specifically.

  • It should be noted that a complete understanding of the tenets

  • social goals and understandings of the movement I represent

  • can't be achieved through this lecture alone, but I think it will be

  • a very useful starting point and I hope that by the end of today

  • if anything, you will have a look at some of the societal constructs

  • that affect us every day with fresh eyes.

  • Before I begin, a word on the two organizations that I speak on behalf of.

  • I'm primarily a member of The Zeitgeist Movement

  • a global, decentralised grassroots organisation

  • founded at the very end of 2008.

  • The term "zeitgeist" means the dominant intellectual

  • moral and cultural climate of an era.

  • The closest transliteration is the German "spirit of the age".

  • The term "movement" simply denotes motion or change.

  • As such, The Zeitgeist Movement calls for a change

  • in the dominant intellectual, cultural and moral climate of the time.

  • The Zeitgeist Movement is an activist and communications arm

  • of another much older organisation called The Venus Project

  • which under the direction of Jacque Fresco and his associate Roxanne Meadows

  • has focused on the technological redesign of an entirely new social system

  • known as a Resource-Based Economy.

  • At its core, the application of the current state of science

  • and technology for social concern sits

  • using the scientific method and practicality

  • to maximise the quality of life for all people.

  • This is to be achieved through tangible solutions to our problems we face

  • instead of hollow rhetoric and opinion.

  • Our reasoning behind our conclusions are not based on political opinion

  • nor are they idle speculation nor are they stop-gap measures

  • to treat the symptoms of a society as a psychiatrist will treat

  • a psychological aftermath of a patient's experiences.

  • We would rather minimize, and if possible

  • wholly preclude the situations that got the patient

  • in front of the psychiatrist in the first place.

  • Our main focus therefore is to pinpoint the root causes

  • of these ill-effects and to propose straightforward concrete solutions

  • based on the inferential logic and the scientific method

  • and applied for global concern holistically.

  • I wanted to address in the introduction some common barriers we have

  • when it comes to the analysis of economics in our current society.

  • In today's world, many of us question the institutions

  • we're brought up in and by which we're influenced.

  • In fact, it has become a slightly more promoted disposition

  • that questioning authority is healthy than in prior human history.

  • After all, questioning religion no longer is

  • tantamount to being burnt at the stake.

  • And the development and adoption of the scientific method

  • has allowed humanity to update and revise its knowledge

  • of the physical world by systematically adopting

  • a viewpoint of skepticism while hypotheses are tested

  • and until they are proven true or false and adopted or not.

  • Indeed, any and all social protest

  • is essentially a questioning and a conscious rejection

  • of some pre-existing or presented framework.

  • Yet, of all the institutions common across the globe

  • be they political, social, religious or national in origin

  • none has remained so thoroughly unquestioned

  • and even beyond the most basic analysis or understanding

  • by most people than the monetary system itself.

  • Even as the system of monetary finance is displacing

  • more than six million American homeowners

  • and half the world's six billion people are now

  • classed as suffering through poverty, one billion starving

  • a figure is up, by the way, by 80 million since the early 1990s

  • the system remains unscrutinized despite its global presence.

  • Here are some reasons why:

  • Economics is often viewed as a rather dull and abstract subject.

  • In fact, I'm amazed you're even all here today.

  • Financial news tends to be presented

  • and dominated by complex-looking graphs

  • which don't allow for any real understanding of the subject being discussed

  • silently promoting the idea that this is an area best left to the experts

  • to well-paid economists and bankers.

  • Abstract terms like derivatives, mortgage-backed securities and

  • strangely named institutions like Fannie Mae

  • and Freddie Mac are not only hard concepts for me

  • I don't encounter these abstractions in real life.

  • No one has ever sold me a mortgage-backed security.

  • I've never been contacted by Fannie or Freddie

  • and I'm sure it's taken quite a few days for some people other than myself

  • to even catch onto the fact that these aren't even real people.

  • They're institutions. Economics isn't like football.

  • It's not like the physical process of shopping.

  • And even worse, it sounds like it might be about maths.

  • We shy away from this mess of abstract terms

  • and we fear that we might not understand them

  • and suspect that we would dislike them if we did.

  • Others simply don't see a need to question the monetary system.

  • After all, isn't simply the method by which goods are transferred

  • and so, anything that simply represents that method is

  • natural, necessary and will function as dictated by the needs

  • of a populace to earn, buy and survive in a social construct.

  • We do all rely on resources in some form or other

  • and since we don't have absolutely everything

  • a unified, preferably, global exchange mechanism

  • seems the necessary steps in easing

  • any process of acquisition and hence, survival.

  • How can it be questioned any more than we question the need for air?

  • For others still, the monetary system which applies to their community

  • and day to day routine seems to be embedded so heavily in the framework

  • of their lives that it appears not to even be a system at all.

  • It is part of the landscape, invisible to their day-to-day lives

  • exactly because it is a function of their day-to-day lives.

  • Like the ancient music of the spheres which was theorized

  • by ancient philosophers when describing the nature of planets in orbit

  • it is this ever-present thing from birth

  • and therefore invisible and undetectable.

  • It's not so much that it's hard to single out for people.

  • It's the very idea of singling it out [that] seems impossible

  • for it doesn't even occur as a possibility.

  • It doesn't even appear as a separate entity.

  • Maybe it's also because economics relies on a numerical bias

  • on mathematics, equations and graphs.

  • It seems therefore likely to be based on logic, measurability

  • and as true and immutable as those of physics

  • biochemistry or other sciences.

  • And while elements of physics are questioned, revised and updated

  • upon their receipt of proof, physics itself remains entirely intact.

  • In fact, once revisions and corrections are made

  • physics has itself become a more established entity than it was before.

  • Yet, as we'll find later on, not only are the supposed laws of economics

  • not only based on no real-life referents whatsoever

  • when the analysis of the processes of money creation

  • its tangible negative effects upon society and the behaviours

  • it instills upon and encourages in members of society

  • one sees that there is almost nothing in the system

  • of modern economics as it now stands

  • that is of any real value to our process and well-being.

  • And yet the most powerful force that has rendered the system of economics

  • as it stands now beyond analysis, is this closed-door brotherhood

  • of the initiated "Guardians of the Status Quo"

  • who form the population of modern economics

  • authorities, credentialed economists

  • trained by the already established institutional logic

  • CEO's and other lofty and well-paid positions.

  • These are the men and women who should be dealing with economics

  • not average Joes like myself, right?

  • Let me remind you that throughout the glorious period

  • of history known as the Dark Ages precisely this mechanism of initiation

  • and separation was employed by the Church

  • to avoid its institutional power being questioned

  • and to keep education, anything it deemed a threat to its establishment

  • or even reading out of the reach of the remaining inhabitants

  • of that socio-cultural landscape.

  • This sentiment is particularly well-expressed by John McMurtry

  • author of the "Cancer Stage of Capitalism" who writes

  • "We might say that economics is to the corporate market

  • what theology was to the medieval church.

  • Just as ancient Latin operated in the medieval church

  • to reify dogmas into ritualized sequences

  • untouchable by the vulgar passage of time

  • so econometrics functions in today's economics.

  • It conceals the value judgments it assumes

  • in an atemporal algebraic apparatus

  • that is severed from natural language, living referents

  • and the accountability to its effects."

  • It's a remarkable book.

  • This, however, is changing.

  • And it's changing quite rapidly, much quicker than I actually thought it would

  • given all of the above reasons why we don't tend to lock in

  • and engage in questioning of the system.

  • In researching this monetary system I have many a time carried with me

  • large and boring-looking books detailing the history of finance

  • and the way it operates today

  • which does mean wading through thousands of pages of literature.

  • One evening in a bar, no less than 3 unrelated strangers

  • asked me what my book was about.

  • I've been approached on The Underground, that standard haven

  • of uncomfortable silence by strangers asking me

  • not only what is the book about, but even asking me upon hearing

  • my relatively brief 3-minute elevator talk summary of it

  • what the answer might be to our problems raised.

  • And more and more people are beginning to agree

  • not only on the problem that they see

  • when they are presented with the simple facts

  • but also upon the solutions as well. People aren't stupid.

  • They know something's up. And they think it might just be something other

  • than having voted for the wrong politician in the last election.

  • All I wish to do today is to have that

  • same London Underground conversation with you.

  • It's time to question the system that in recent years

  • has become notable by its failure and its damage.

  • First off, the assumption that monetary economics is too complex

  • for normal people like us to understand is completely erroneous

  • nor is it a natural part of society anymore, although

  • as we'll see, it once was, and served fairly interesting functions.

  • And once you understand the methods by which modern finance

  • is operated worldwide, you will understand the dire need

  • to question every aspect of this vast

  • all encompassing system and its validity.

  • So, in order to provide an understanding of economics

  • as it presently affects us, it is necessary

  • to give a brief history of the history of money.

  • Contrary to popular belief, it is very new in the human race's history.

  • Ostensibly, the rationale for money at all

  • existed in ancient times to manage scarcity.

  • In order to ensure that enough labour was contributed to a social system

  • and that it was proportional to the natural resources

  • that people then extracted out of that system that they were in.

  • Coined money appeared around 1500 BC, possibly earlier

  • and many credit the Lydians with introducing gold and silver coined money.

  • This coined money system is termed commodity money

  • being formed or created out of a good or material

  • that is perceived as valuable or has some tangible use.

  • And while there are two materials we would commonly associate

  • with this, being gold and silver, in fact many materials or objects

  • have been used as a base commodity value

  • such as copper, another familiar one, still used today:

  • salt, pepper corns, which pretty much takes care of restaurants, doesn't it?

  • [Others are]: large stones, decorated belts, shells

  • (The Far East used shells quite a lot.)

  • alcohol, cigarettes, which makes me a millionaire

  • chocolate, and candy generally, and barley

  • and my favorite one, weed.

  • This one is particularly interesting. One can only surmise as to

  • how much more peaceful and yet massively unproductive

  • and pizza-consuming the world would be

  • if there were a commodity currency of the globe made weed.

  • Yet one might also suspect that a downside

  • to the cannabis-based monetary system would be hyper-deflation.

  • The next step of monetary evolution was to representative

  • or receipt money, a sort of meta-money if you will.

  • This representative money derived from promissory notes or receipts

  • issued by goldsmiths, individuals who deposited their gold

  • which had become the dominant commodity money

  • for safekeeping in the goldsmith's safe when it became too much to carry

  • or to ensure security of their stash.

  • As trade between the populace picked up or whenever someone came into

  • a lot of wealth, carrying around large sacks of gold

  • or any other precious metal became cumbersome and heavy.

  • Depositing it in the goldsmith's safe is much safer.

  • I wonder which one of those words came first.

  • Not only that, the goldsmith issued promissory notes

  • to enable someone to easily pick up their gold when needed.

  • These promissory notes from the goldsmith's

  • were essentially receipts for the amount that had been deposited