 So Karl Marx writing in poverty, not far from here in Soho, once remarked that no one had ever written about money so much who had so little. I think it's very appropriate. But he went on to say something else. He said that not even love has made so many fools of men as the pondering over the nature of money. I think this is really the starting point for our talk. To try and understand this thing that seems to kind of rule over us under society as it stands. It's always had a kind of revered place in history. The Bible obviously talks about how money is the root of all evil. It seems to be a kind of mystical force. And in society today all our needs seem to be relegated to the need for money. But there are a lot of revered idols in class society. You have the law, gods, the state, religion. All of these sorts of things are revered under class society. All seem to be quite mystical, like money. But I would say all of these things, including money, if you look with a Marxist analysis of these things, that is to say in a dialectical and a materialist way, you can strip away the mysticism and understand what really lies underneath. If we look at the origins, the evolution and the development of money over history, we can understand also where it might head in the future and most importantly how we get rid of this kind of chain of gold that seems to hold us down under society at the moment. Now Marx actually explained in his writings, in Capital at the end of chapter 2 I believe, he said that really the riddle of the money fetish is the riddle of the commodity fetish. And in other words, capitalism is this system of commodity production exchange, a generalized commodity production exchange. And if you can understand that, if you can understand how the commodity arises and what role commodities play within society, then you can understand why money arises and what role money plays. And Marx said if you understand that, then further analysis is really left just to looking at the different forms of money, whether it's cash or coins or credit or these days crypto currencies. Now with that in mind, if we study history, we see that money has not always existed, but is in fact tied precisely to the arising of commodity production and exchange. In the early days of humanity society wasn't split into classes where you had exploiters and exploited, but it was based more on tribes, where there was communal ownership over the tools and the products within society. Marx and Engels referred to this as primitive communism. Communism in the sense that there was a common ownership over the means of production, as they called it, but primitive in the sense that it was on a much lower level of production. In fact, it was based on scarcity, not like communism in the future, which will be based on super abundance. But within that common ownership, you had no exchange between individuals. Things were just taken from the common pot and contributed to a common pot. And therefore, because there was no exchange, no commodity production, you had no need for money. And this is also true of the earliest forms of civilization. If you look at where civilization began in Mesopotamia, it began with these kind of giant city-states. And within those city-states, there was again, there was no real exchange going on. Instead, produce was deposited at temples and the kind of original banks, really, store houses in the royal temples or palaces. And instead, the economy was kind of bureaucratically planned from the top down with the system of management and accounting. People would store this stuff at these communal stores and that was noted down on tablets, inscribed tablets. That's really where mathematics began as a result. And often, this can be compared, really, to the kind of accounting and management that goes on today within a giant firm, within any big multinational firm. You don't have money changing hands. It's just a question of bookkeeping. And again, this gives us a hint as to the role of money within society and how it might wither away in the future. Money then historically arises with the arising of commodity production and exchange and particularly, obviously, the question of trade. Commodities, as I said, are production not for the individual, not for the your own subsistence. A commodity is something that's produced for exchange, for the market, for trade, exchange with others. And therefore, commodity production and exchange begins at the fringes of society, whereas originally you had, as I say, primitive communism, the beginnings of money are the beginnings of trade between different tribes, where they start to trade the surplus at the fringer society with other tribes. But what Marks and Engels noted was that once this logic had kind of, rather once this process had begun, it kind of took on a logic of its own. And the relationship between different tribes of around commodity production exchange would start to kind of be internalized within the tribe. And this is what Engels writes about in his book on the origins of family private property in the state, where he talks about the early Greek gents, as they were called, the early Greek tribes, where he says as they began to develop commodities and trade, then this would penetrate like a corrosive acid, he said, dissolving all the old communal traditions, laws and bonds. And in other words, as you started trading more externally and thinking of products in terms of commodities, the more that would start to be internalized within the community and you would get the arising of laws that sanctified private property and that kind of set these relationships into stone quite literally often. And as the division of labor within society increased, the amount of commodity production and exchange increases also. And you have, with this process, comes also the formation of debts, of usury, of these sorts of things which have really gone on since the dawn then of civilization. It's not some sort of tumor that arises under capitalism. And with those debts and usury, with the lending, you get obviously accumulation at one pole and enslavement at the other. And this is really, as I say, the beginning of class society. Now, within this process that's going on, of trade, of commodity production exchange, there arises a need, really, a practical need for one commodity that can be seen as some sort of universal equivalent, a commodity against which all others can be compared, something that's basically like a yardstick of value of how different commodities can be compared with one another. And it's this universal equivalent that is the beginnings of money and is the money commodity, Marx calls it. It acts as a means of exchange, of allowing people to obviously trade over much larger distances. Rather than obviously having to meet and barter, you can separate exchange into two acts, a purchase and a sale, or a sale and a purchase, depending on which way you're looking at it. And in this sense, money is a means of exchange, a means of circulation, a means of allowing commodities to circulate around without having to be directly traded. But also, money plays the role of a unit of account, if you like. It's a way, as I say, of comparing things in a bit more of an abstract sense as well. It can act as a store of value, a store of something to put your wealth in and carry it over longer distances, or leave it lying idle. And it can act as a means of payment, as a way of settling debts, of paying taxes. And all of these different functions are different roles, different sides of the same coin, if you like, in terms of how money works. It plays all of these roles simultaneously as its function as the money commodity. Now, money doesn't arise in a kind of conscious or planned way. It arises over a period of time, and the original kind of money commodity can vary actually from place to place, but always rooted in material conditions. In some places, you had kind of herds of cattle would be a money commodity because of the important role of those animals within society. But obviously, that poses certain barriers, if you like, and it's no accident that actually precious metals become the main kind of money commodity that we know of now and that arise historically. In other words, things like gold and silver, obviously, because they have certain material properties that make them very convenient, in the sense that the homogenous generally, if you have one bit of gold, it's much the same as another. They're easily divisible. You can divide them up into lots of smaller fragments to be able to make smaller transactions. The durable, in the sense that obviously gold can survive over long distances, over long periods of time, in that wet sense, it can be that store of value that I just described. And most importantly, they themselves are very valuable. There's a high, if you like, value density within gold. It itself actually contains a lot of value. And therefore, what you see is that things like gold are not revered in society because they sparkle because of their aesthetic qualities, but rather we ascribe certain aesthetic qualities to them, certain mystical properties because they are money. And that's what Marx explained, is that the reason there is a love of gold, if you like, in society, is because of its material properties that allowed it to arise and be the original money commodity. Now, the mystery of money, then, as I said, is related to the question of commodity and what I've just touched upon, this question of value, the mystery of value. So really, we have to ask ourselves, what is value? How is it determined? And to understand this, we have to go back and examine the idea of a commodity. As I said, a commodity is something a good or service produced not for individual use or consumption, but for exchange. And Marx explains that all commodities have a dual nature, two kind of sides, again, of this coin. They have a use value on the one hand, something that makes them useful in society, a kind of utility, without which there would be no demand for them in the first place on the market. But then there's also an exchange value, a kind of quantitative relationship that tells you how much of one commodity you can exchange for another. Marx explained that this exchange value, or just value as he kind of referred to it in general, the value of a commodity is related to the labour time needed to produce it, not just the labour time that goes into that individual commodity, but the socially necessary labour time he called it, the average amount of time that would go into producing a given good or service or so forth on the marketplace. And this contained both the labour of the worker or the living labour that went into the commodity, but also the dead labour, if you like, all the previous labour used to generate the raw materials, the tools and so forth that went into production. Now, prices are just the monetary relationship of the monetary expression, if you like, of value, determined by supply and demand, determined by the invisible hand, if you like, by these market forces. But they always reflect really the relative value of different commodities, the relative socially necessary labour time that has gone into things. The market can obviously play a certain role in deviating prices from the value, but they generally will fluctuate around the actual costs of production, the actual socially necessary labour time. In other words, then, prices, this monetary expression and the value that underlies that relationship, really it's a social relationship, it's a relationship between different individuals and the labour that they've put into the commodities that they're producing. I think this key question of this idea of prices, of value as being a social relationship is really key to understanding what money is in the most general sense and understanding all the different forms that it takes today. The fact is that money then is itself a kind of social relationship between individuals and the rest of society. It's a measure, an expression, a representation of value and the money system that we have, whether it's in terms of coins or credit, numbers on a screen, whatever it may be, is really an expression of the distribution of this value around society. The money that you or I might have, if you like, often it is, as I say, just numbers on a screen, that value, that money, really what it shows is it's an entitlement that we have as individuals to a certain proportion of the wealth within society. That's what money ultimately is. This also explains why things like inflation can affect things like this. It basically is a transfer of wealth from one person to another, a redistribution of the wealth within society. The whole money system that we see around us today is obviously backed up by states. It's backed up by the nation state, guaranteeing a currency, and converting these financial relations that we talked about into legal relations, into property relations. Now, I would say no economist really before Marx really understood this point. Instead of understanding this question of the relationships within society, this interconnectivity, instead they fixated on the different forms that money took and not on the underlying system and the relationships that those forms represented. I would say this really continues today. When you see all these different arguments, either academically or in the press, around money, it always ultimately comes down to this, looking at the form and not at the actual content of what money is. You see often there's a debate around whether money is primarily this means of exchange needed for a universal equivalent, or if it's more a unit of account. There's a kind of debt theory of money, a credit theory of money, which you hear from people like David Grabo in his book Debt of 5,000 Years of Money or something, I think it's called. And then there's that debate that goes on. There's a debate about whether to have a more flexible money system or floating currencies, or whether to go back to the gold standard as some sort of solution. And then there's those who seek to kind of reform or even revolutionize the current money system by taking away the power of money creation from the banks and hence why you've had things like Bitcoin invented and also you see campaigns like Positive Money that talk about kind of democratizing the banking system. And what I want to focus on really the rest of the talk is to look at these kind of questions that have arisen and why it's really all of them come about from a wrong starting point ultimately in terms of understanding what money is. I think it's very understandable that you have people wanting to kind of smash up the banking system, particularly obviously 10 years on from a financial crisis that's left us with a decade of austerity, of crisis, of stagnation and so forth. The effects obviously of the financial crisis in 2008 we still feel today. And with that financial crisis you've seen this emergence of the idea that finance is the kind of nasty side of capitalism if you like, but there's a good capitalism that we could return to. If only we separated out the investment banks, we could reform the banking system, regulate it and focus on real industry, real capitalism which is industry making things and so forth. But what you see is really that finance as I said the idea of debt, of usury, of lending all of these sort of things actually come about since the dawn of civilization. They're not some sort of nasty kind of aberration if you like of capitalism and class society they're inherently tied within it. In fact if you look at revolutionary movements in the very early days of society they always would end up with breaking these tablets upon which the debts were inscribed because that if you like was resetting this relationship of this system of saying who owed what and who owned what and it was abolishing all the old relations and trying to set a new set of social relations. As I said, even in Mesopotamia you had this kind of early system of banking effectively where money was being kept in the temples for safekeeping and people were charged interest as well to be able to lend from these central stores. International banking develops further with the development of trade. You have Ptolemaic Egypt, Hellenic Greece and as these places expand in terms of the trade around the Mediterranean you see the expansion of international banking. The idea of people being able to transfer credit between their accounts as merchants as the ability to swap coins of different origins that were minted in one place be able to exchange them for another. And all of this kind of international system if you like of finance in the early days it really grew and grew with the stability of the empires that underlay it. So particularly under the Roman Empire you see an expansion of this kind of international banking system and as the Roman Empire collapses as that stability that the empire provides politically collapses the banking system collapses also and money begins to regress into just a whole host of different coins based on different fiefdoms, different kingdoms and these coins in turn would be quite frequently debased by the kings and queens. And actually that kind of process of debasement of basically watering down the actual value content within a coin it shows how money increasingly becomes not so much valuable in and of itself but more and more becomes a symbol of value and really is just a representation of a kind of abstract value something that is objective but still very abstract and therefore you have coins and then eventually obviously paper money that has no real value in and of itself but represents value and that kind of system of trusting that these things will be accepted is obviously set in stone by the state as I said earlier and the guarantee of the state and if you like this process of debasement of reducing money more and more to a symbol eventually the logical result of it really is the system today where there's very little actual money transferring around in circulation it's mainly just numbers on a screen but nevertheless what we've got to say is that although money is although it starts to have more and more of a symbolic value nevertheless the supply of money in circulation is not arbitrary it has to be tied to something material at the end of the day although money is a representation of this value it's a representation of value it has to be a representation of real value it has to be anchored some way to the real economy and the inability to do that or if you start to rip apart that anchor then actually you pave the way for instability for crises and so forth and you get inflation obviously where the money supply increases but the actual value in circulation in terms of commodities if that's not going up at the same rate then you get inflation and this is why really you can't print your way out of a crisis if you like and you obviously see the effects of that in some way like Venezuela today or Weimar Germany in the past you can't print your way out of a crisis the money supply has to be linked to the real value of commodities that are in circulation that are being produced otherwise you're just debasing your currency no different from the kings and queens of kind of medieval times now we see throughout history there's a bit of a tension around this question of the money supply that comes up repeatedly as you get the re-emergence of a kind of international trade the rise of a merchant class and the beginnings of capitalism that we talked about in one of the last sessions you get again that you know obviously around the Italian city states in particular the re-emergence of this question of international banking and this emergent rising class was the beginning of the bourgeoisie who were often lenders to the old feudal states the kings and queens and they got a little bit pissed off frankly about the fact that they kept on lending their money to these states but then the state would default on its debts it would go to war, borrow money and then build up huge debts but then just default on them and what we saw is as the merchant class becomes more powerful as this rising nascent bourgeoisie becomes more powerful they start to kind of assert that in terms of the financial institutions that you see around and you get the creation of national banks the first national bank was the Bank of England in 1694 it was actually a private bank that was created to basically say to take power in terms of the money supply away from the old ruling class and put it in the hands of this new ruling class the bourgeoisie and basically it cemented the kind of economic power and guaranteed that state debts would be repaid and with the creation of national banks you get national debts as well you get taxation being used to basically pay for those debts and taxation then becomes a way of trying to channel more money from the poorest and the middle layers in society back towards the top and Marx famously said that the only thing that's truly commonly owned under capitalism is in fact the national debt if you want proof of that obviously look at the bailout of the banks and the austerity we see around us today but basically this rising bourgeoisie gave itself the power to create money and it went even further you had the creation of fractional reserve banking which is basically the idea that any private bank can create money effectively as long as it's got some money in its vaults it can lend further money out create new money and lend it out with that kind of guarantee if you like that they can pay back pay the savers back with money that they've got in their vaults and the result of that today is that actually 97% of the money that's in circulation is not cash and coins but is money that's been created by the banks in the form of credit themselves and so you get this emergence of a massive credit system which has an important role under capitalism as I said finance and credit are not some sort of aberration they're not just simply a nasty side of capitalism they're an inherent part of capitalism itself capitalism frankly couldn't have ever come about and couldn't survive without credit Marx makes this point that actually in the previous talk we heard from Josh about obviously the creation of the working class being an essential part of capitalism but the creation of a credit system was equally important why? we're going to look at what is the role of credit what is the role of the banking system and finance and so forth on the one hand very simply it provides a certain fluidity and capitalism, it allows capitalism to continue to circulate in other words you don't have to sell all of your goods when you produce in order to then buy more raw materials and carry on production but rather you can be constantly buying and selling producing and trading all at the same time so there's that very basic role of overcoming bottlenecks if you like but the other thing it also does and Marx again wrote about this is trying to overcome the crisis of overproduction within society now I don't have time to really go into a full explanation of Marx's theory of economic crisis but simply put the fact that the working class is the producer of all wealth in society and the fact that profit is the unpaid labour of the working class means you have this inherent contradiction within capitalism where it's always tending to produce more than the market can reabsorb and the role of credit is to artificially expand the market in the short term to be able to overcome this contradiction temporarily because obviously credit is always lent out with interest it has to be paid back and all it does is delay obviously the crisis until a moment like in 2008 when the whole thing comes crashing down but Marx and later Lenin also emphasised another role within credit which is really fundamental to capitalism which is that it converts all of the kind of small savings that you've got within the economy there's lots of small amounts of money all around society people have individual savings pensions and so forth but not all money is capital not all money can produce profit there's a qualitative difference between money and capital which is money that can create more money if you like money that can be put to use to make a profit and this is what capitalism is about it's not just simply the existence of money which as I say has existed throughout class society it's the existence of money concentrated in such sums that it can be put to use to make more money to be able to make profit it's got to be not just money but capital and really the role of the credit system is to accumulate all of these bits of small savings banks obviously take our individual savings and we think oh how wonderful and nice the bank is it looks after our money until you find when there's a run on the bank that it doesn't actually sit in the money with a nice little box with your name on it waiting for you to come along and take it out no obviously what it's actually being used for is not for our benefit but to accumulate all our savings that are far too small by themselves to be capital to make a profit and put them together put them in the hands of the capitalists who can then actually use that money to invest and invest in real production although obviously at the current time when you've got over production, a crisis a saturation of the markets then obviously this isn't put to real use but is instead speculatively used and we'll come on to that a bit more in other words what the credit system really does far from democratising capitalism you hear this sometimes today all shares and all of these sorts of things allows everyone to be a capitalist if you've got a pension you are a capitalist because you've got your pension in shares so you're a capitalist it's absolute nonsense and the point is actually it's the opposite it doesn't democratise capitalism it centralises power more and more in the hands of the banks of the financiers and as Lenin said as imperialism these become closer and closer and meshed with the big monopolies and you get the epoch of kind of finance capital so really you see then the role of credit it's an essential part of capitalism but it obviously this ability to create money out of nothing seemingly you obviously break that link between the money supply and the real economy and it sows the seeds therefore for potential crises in the future where the money supply that's out there the prices of things ceases to play any real representation of the actual value in society you have a stock market now that's booming meanwhile real wages are completely stagnant and this all is really paving the way for bigger crises and it all comes down to that essential turning point when money can kind of be created out of nothing and that's why you see at certain points in history a desire for something much more tangible in terms of money something solid that people can hold on to you know when there's a crisis people want an actual commodity particularly something like gold obviously that they can pour their money into because it feels real and that's why over history you do get these kind of alternating periods between where money expands on the back of a stable political situation a stable economic situation the money supply expands everyone trusts everyone and there's an expansion of credit and so forth but then when suddenly things start turning into the opposite the whole thing contracts very rapidly and you get the credit crunch and that's a very important point not the lack of credit that causes the crisis but rather the crisis of capitalism that causes people to suddenly withdraw the credit which obviously then fuels and exacerbates the crisis further now you see this kind of craving for gold something tangible you see it eventually turned into the gold standard in the 19th century in Britain you have money starting to be the money supply being tied to gold and the reason it was brought in was because on the back of the Napoleonic wars you had this huge inflation of government debts and as I said people didn't want these debts to get higher they didn't want these debts to be defaulted on and there was rampant inflation and so the gold standard was brought in to try and restrict the money supply and on the back of the British Empire again providing that kind of international stability it started to export the gold standard across the world until you had an international gold standard allowing currencies of different origins to be obviously tied all to to the gold and this became an enormous boost actually to world trade allowed a much more simple facilitation of trade but ultimately it was on the back of the British Empire the real benefit of it was British capitalism itself the gold standard ended up being unstuck in the first world war again because of the crisis that was taking place you had suddenly a situation where previously had all the economies in the world kind of moving in the same direction 30 years of boom of capitalism where everyone was getting better suddenly the whole thing went into reverse with the first world war and the crisis that ensued afterwards you had instead a beg of thy neighbour policies being brought in the contradictions of the nation state emerging and different economies moving in different directions trying to pull against each other and obviously then the gold standard was becoming unstuck you had basically different countries were trying to export the crisis and wanted to come off the gold standard so that they could competitively devalue their currencies in particular Britain was very guilty of this the pound was far overvalued and the result of this because they were tied to the gold standard was that they had to do what was called internal devaluation and so you saw enormous attacks on the working class in Britain as British capitalism in terms of its competitiveness relative to America and Germany and Japan and these emerging capitalist powers Britain could only maintain its position on the world stage tied within the system of the gold standard if it attacked the working class and that obviously created enormous social instability it's really the basis behind some of the massive strikes including the 1926 general strike that you see in Britain in that period and eventually once you get the great depression in 1829 the whole system really falls apart and one country after another comes off the gold standard in order to be able to fuel its money supply, fuel the banks increase liquidity and so forth and eventually the whole thing collapses as I said after the Second World War when you start to have stability kind of restored if you like you get the establishment of what's called the Britain Woods system effectively was like the gold standard because now you had all the currencies pegged to something but it wasn't gold it was the dollar and that was because obviously by that point America had become the dominant world superpower playing the role that Britain had done in the 19th century and it's the American empire if you like that guaranteed the kind of stability of the system and what you had was currencies all pegged to the dollar but the dollar effectively was as good as gold two thirds of the world's gold lay in Fort Knox and if you did international trade it was just moved from one bit of the Fort Knox to another basically and that represented the international trade if you like now as I say that could really only be implemented because of the hegemonic kind of imperialist position that the US occupied after the Second World War provided a certain stability to world trade and you see a massive expansion of world trade but ultimately what underlaid that was the post-war boom and the massive economic stability that that provide and as the economic boom slowed down as the kind of Keynesian measures that were used to try and manage capitalism as the contradictions of those started to develop what you saw was the money system also again once again coming under strain and so in particular what you had was inflation in the US because of the war in Vietnam because of Keynesian policies massive public spending that eventually fed through into inflation as I said because the money supply was accelerating faster than the actual strength of the economy and that inflation was then exported across the world because of the Bretton Woods system and then it's finally in the 1970s with the world crisis that comes into play in 1973 you have the oil crisis it tips the whole system over the edge and Bretton Woods completely collapses and there's a move instead at that point to floating currencies where basically exchange rates are now automatic based on the different supply and demand for different currencies which in turn reflects the different strength of those different economies so the different competitiveness of different economies is reflected in the strength of their currencies if the currency is strong it reflects the strength of that economy and the demand to be able to have that currency so you can buy the exports from that particular country and vice versa but the whole idea was that through this you would get some sort of automatic regulation of the financial system of the currency system where as countries became less competitive they would obviously their currencies would devalue their exports would increase and they would rebalance obviously when that process happened the working class in that country would pay through obviously higher prices of imports and so forth so whichever way you look at it under capitalism is always the working class that was going to be paying for and ultimately it's an unstable system again it can last for a certain period when the economy is booming but in a period of crisis suddenly again the nation state reemerges as this contradiction and all the different economies are pulling in different directions you get this idea now that in Greece for example where they're still kind of in a gold standard only it's called the euro zone they've got to somehow export their way out the crisis by this internal devaluation but the problem with this whole idea of you know being more competitive is that competitiveness is ultimately a relative quantity we can't all be the most competitive someone's got to be first someone's got to be last if it's America first it's the rest of us last in kind of Trumpian speak and that's why we see how the limits of the gold standard have reemerged as I say with the euro crisis but what I've really outlined here in this kind of development of the money system the international money system is that every over the last 100 years in particular every money system has at certain point reached a crisis point where the whole system has kind of broken apart and a new system has to be brought into place and it's always coming on the back of the money crisis first but rather it's the crisis of capitalism first that then expresses itself in a crisis of the money system you initially have a source of economic stability of political stability that facilitates the growth of trade of the market and so forth but eventually all of that will turn into its opposite the money system then instead of becoming a facilitator of world trade actually ends up being a facilitator of contradictions of antagonisms between different countries and it then actually fuels instability rather than stability and that's what you really see with the eurozone now that for a certain period when everyone was moving in the same direction it was great, it was great particularly for the German banks but you know no one was complaining when the Greeks borrowed more either because it meant then borrowing to buy German cars now eventually that turns into its opposite and now you see how the euro has become this great albatross around the next particularly of the least competitive countries the Spain's, the Italy's the Portugal's and the Greece's and so forth who can't find a way out within this straight jacket but the real point to emphasise here is it's not the euro that is the problem it's the crisis of capitalism that expresses itself through a crisis of the eurozone whether you're inside the euro or outside the euro the problems are ultimately that Greek capitalism cannot compete on a world scale and the only way that these countries can really compete what's really the aim of all the policies of the IMF and the eurozone and so forth is really to try and bring the competitive conditions of places like China over to Europe that's what it really means when you talk about competitiveness it's to erase to the bottom in the favour of the capitalists themselves but as I say at a certain point every money system really hits a wall and then you get this kind of paradigm shift if you like where they move from one monetary system to another and all of these the gold standard, Bretton Woods floating currencies, all of these really are only a reflection the crisis of them, only a reflection of the general crisis of capitalism which suddenly exposes all the flaws and the weakness but the underlying crisis is the root of the problem and that's really why the ruling class doesn't have any solutions to today because obviously they fundamentally defend the capitalist system and they have no way out on a kind of monetary basis, you've seen actually now the limits of monetary solutions to the crisis in the past you would lower interest rates but now they're at rock bottom they're at zero, there's no way of really encouraging more lending along those lines and hence why you have desperate measures like quantitative easing which even then is not some sort of magic wand that they thought it might be originally for a while they thought quantitative easing in Europe and America and elsewhere had stabilised the economies what no one was really seeing was that whilst it was giving a certain stability for a certain period of time in certain places it was meanwhile leaking out into the emerging economies, fuelling credit bubbles there and now obviously with the crisis in Turkey and Argentina and elsewhere you see the chickens coming home to roost, there's no free lunch under capitalism if you like it will always at some point come back to bite you and this is why just the final part I just want to really emphasise this question of how all of these things that are now proposed by different people who want to try and overcome these limits they're always ultimately attacking symptoms but never this root problem you've heard talk about returning to the gold standard as I said you've heard campaigns like positive money talking about democratising the banks but what they forget really is that bank lending isn't just out of control because of greedy bankers but is in response to the demands of capitalism the insatiable demands of capitalism to find bigger and bigger markets and the fact that there's a lack of investment in real production because of the crisis of overproduction because of the crisis of capitalism and you can't bring that under control by some sort of abstract idea of democratising the banks and taking money creation out of their power and on the other side we get to the question of these crypto currencies you know people like bitcoin for example which are a kind of anarcho-libertarian response to the fact that at the moment the state and the central banks that are part of the state ultimately have all the power in terms of money creation and it's no surprise that when you've had things like quantum easing that have massively increased the money supply there is a certain fear about the fact that the government can just print money as it likes and hence the creation of things like bitcoin they're an attempt to basically distribute the money supply and so what you have really in summary bitcoin and other crypto currencies instead of having one kind of centralized system of money creation and one copy of all the transactions that are going on in the central bank instead that's distributed it's a distributed ledger it's called an electronically distributed, digitally distributed something called the blockchain and a new money new crypto currencies created by people called miners who perform calculations and update the blockchain and bitcoin is actually risen and bitcoin and other crypto currencies have led to multiple problems first off that question of mining is actually a huge problem mining real resources damages the environment well mining crypto currency does too because it actually creates an enormous amount of energy and electricity goes into creating new bitcoin and it's mainly focused now in places like China where electricity is very cheap and you've got huge amounts of terawats being produced being used just to kind of mine this digital currency that isn't really then used for anything other than buying off the silk road and things like that you know all these kind of illegal produce and the fact that that's what bitcoins really limited to is these kind of fringe economic activities means it can never really play the role of a genuine currency it doesn't have any real economic anchor and instead bitcoin and other crypto currencies have just become a vehicle for speculation in other words people buy them just in the hope that their price is going to go up and they can sell them later it's no fundamentally different from things like the tulip bulb craze where I can't remember which century it was in Holland people bought tulip bulbs just because they would hope that they would get more and more expensive and that's really the definition of speculation but the fact that you've got all this speculation the prices go up and down daily so volatile makes it very difficult to use as money you know the fact that if you were in a shop and you had your things priced in bitcoin you'd be having to go around constantly changing your prices every day because and every hour even because of the volatility of the currency so it doesn't really play a viable role because you do kind of need under capitalism particularly you kind of need that trust if you like that the state creates in the money system and really the problem isn't the meddling of the central banks but it's the anarchy of the capitalist system and things like bitcoin under capitalism will always be a kind of utopian experiment so really the question has to be how like if you want to get rid of the kind of evils of money you know if money is the root of all evil and how do you get rid of it well it's to get rid of obviously the disease itself that underlines all these panacea symptoms but money can't be just abolished you know it can't just be waved away as I said it historically rises because of certain material conditions because of commodity production and exchange and that in turn is tied to the question of private ownership money represents value and value arises out of private property and production for exchange to get rid of money then really as I said need to go back to what Mark said you need to solve that if you want to get rid of the money fetish you need to get rid of the commodity fetish you need to get rid of the system of commodity production and exchange and that means going back to a kind of communist society but on a much higher level where we've got the tools and the technology and the wealth for super abundance but money even then will not just be abolished but it will wither away was what Marks and Engels and Lenin analysed like the state like class society these things will wither away over time there will be a certain transitional period from socialism the lower form of communism to the higher stage of communism which begin with the working class seizing power with the working class taking the key levers of the economy into common ownership under a democratic socialist plan of production and as more and more of the economy is integrated into a socialist plan less and less will be commodity production exchange and less and less will there be need for money all the products of labour will be socially owned and there will cease to be commodities and in fact you can already see how this might play out under capitalism you know we have a system like the NHS for example where you don't walk in and have to pay any money apart from for certain things but the point is that why not if you had that same principle expanded to food to housing to transport why could you not take one sector after another out of this system of commodity production exchange out of the market and with it reduce the need for any monetary interactions and in fact Trotsky analysed this by talking about how at the end of the day we all receive kind of two wages we receive an actual income for our work a wage but you also have a social wage the kind of the wage that you never see because of the social services the public services that are provided within the state and so forth and the whole point of the transition from socialism to communism would be to decrease the actual money wage and increase the social wage over time until eventually there was no actual physical wage that you saw at all and money itself would just become kind of mere tokens entitling us to a share of the common pot basically and it would be kind of like rationing in the second world war only on a much higher level rationing was because of scarcity and people were given tokens entitling them to a certain amount and bread and so forth but now imagine that on a much higher level where there's super abundance where it's not rationing but rather it's just saying if you work if you're a member of society and then you can then you can take from the common pot and eventually we'll have a system where all scarcity is eliminated the need for tokens themselves will be eliminated we can just walk into the shops that are around take what we need full in the knowledge that tomorrow that will be replaced and will have effectively Marx's maxim that said from each according to their ability to each according to their needs now I just want to leave this discussion leave the final word to Leon Trotsky the Russian Revolution who said iPeds forget our miserly attitude towards every excess minute of labour our humiliating fear about the size of our ration having lost its ability to bring happiness or trample men in the dust money will turn into mere bookkeeping receipts for the convenience of statisticians and for planning purposes in the still more distant future probably these receipts will not be needed either but we can leave this question entirely to posterity who will be more intelligent than we are what we are fighting for