Blood Roses and Deadly Diamonds

Here’s how we could solve the credit crunch without giving anything to the banks.

By George Monbiot. Published in the Guardian, 20th January 2009

In Russell Hoban’s novel Riddley Walker, the descendents of nuclear holocaust survivors seek amid the rubble the key to recovering their lost civilisation. They end up believing that the answer is to re-invent the atom bomb. I was reminded of this when I read the government’s new plans to save us from the credit crunch. It intends - at gob-smacking public expense - to persuade the banks to start lending again, at levels similar to those of 2007. Isn’t this what caused the problem in the first place? Is insane levels of lending really the solution to a crisis caused by insane levels of lending?

Yes, I know that without money there’s no business, and without business there are no jobs. I also know that most of the money in circulation is issued, through fractional reserve banking, in the form of debt. This means that you can’t solve one problem (a lack of money) without causing another (a mountain of debt). There must be a better way than this.