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| Positive Money | |
|---|---|
| Name | Positive Money |
| Type | Nonprofit think tank |
| Founded | 2010 |
| Founder | Joseph Huber; Gideon Rachman |
| Headquarters | London |
| Region | United Kingdom |
| Focus | Monetary reform, banking reform, public policy |
Positive Money Positive Money is a UK-based advocacy group and research organisation that campaigns for fundamental reform of money creation and banking. It promotes proposals to change who creates money, how credit is allocated, and the role of central banks and commercial banks. Its work interacts with debates involving central banking, financial regulation, fiscal policy, and democratic accountability.
Founded in 2010 amid debates following the 2008 financial crisis, Positive Money emerged alongside NGOs and think tanks calling for reform of financial regulation such as The Robin Hood Tax movement, Center for Popular Democracy, and Occupy Wall Street. Early influences included academic critiques from Hyman Minsky, C. A. Phillips, and Richard Werner, and political allies such as members of Labour Party (UK), Green Party (UK), and campaigners associated with Movement for Change (UK). The organisation developed links with international networks including Bank of England observers, researchers around European Central Bank, and activists engaged with International Monetary Fund critiques. It published reports drawing on work by scholars from University of Cambridge, University of Oxford, London School of Economics, and policy discussions in forums such as House of Commons Select Committee on Treasury hearings.
Positive Money advocates a set of principles rooted in monetary sovereignty, democratic control, and financial stability. Drawing on historical episodes like the Great Depression and the 1997 Asian financial crisis, it argues that money creation concentrated in commercial banks contributed to asset bubbles seen in episodes such as the Dot-com bubble and the United States housing bubble. It cites models used by economists affiliated with Deutsche Bundesbank, Bank for International Settlements, and heterodox scholars such as Joseph Stiglitz, Janet Yellen, and Paul Krugman to support proposals for central-bank-led sovereign money systems. Principles emphasize transparency advocated by institutions like Transparency International and governance reforms inspired by mechanisms found in constitutions such as the Weimar Constitution and fiscal rules like the Maastricht Treaty.
Key proposals include replacing or complementing deposit-based money creation with mechanisms where a central bank directly issues money, drawing comparisons with historical reforms such as Alexander Hamilton's finance measures and twentieth-century central banking changes like those implemented after the Bank Charter Act 1844. Positive Money proposes reforms to reserve regimes, capital requirements influenced by the Basel Accords, and tools akin to quantitative easing but under direct democratic oversight reminiscent of debates in European Parliament committees. Specific mechanisms involve public money issuance for infrastructure investment similar to projects under New Deal, coordination with fiscal authorities as in Keynesian stimulus frameworks, and tighter separation of retail and investment banking inspired by the Glass–Steagall Act and Vickers Report.
The organisation has campaigned through research reports, public petitions, parliamentary briefings, and media engagement across outlets such as BBC, The Guardian, Financial Times, The Economist, and Channel 4. It has organised workshops with academics from King's College London, Imperial College London, and policy briefings for members of House of Lords, House of Commons, and municipal officials in Greater Manchester Combined Authority. Collaborative campaigns have linked it with groups such as War on Want, Friends of the Earth, and consumer advocates like Which?. It has contributed evidence to inquiries by bodies like the Public Accounts Committee and engaged in public events at venues including Royal Society panels and City Hall, London forums.
Critics from mainstream institutions such as Bank of England, International Monetary Fund, and commentators in The Times have challenged technical feasibility and potential side effects. Economists associated with Chicago School approaches, figures like Kenneth Rogoff, and regulatory bodies citing the Financial Stability Board warn about unintended consequences for credit supply, interest-rate transmission, and bank profitability. Debates have invoked historical critiques from Milton Friedman and practical concerns raised during reforms like those following the 2007–2008 financial crisis. Controversies include disputes over modelling assumptions cited by academics at University of Warwick and University of Edinburgh, and disagreements with trade groups such as the British Bankers' Association.
Positive Money has influenced public discourse on monetary reform, prompting parliamentary questions from MPs in parties including Labour Party (UK), Scottish National Party, and Liberal Democrats (UK), and inspiring similar initiatives in countries linked to institutions like the European Central Bank and national legislatures in Iceland and Switzerland where monetary reform debates have surfaced. Its proposals have been discussed by advisors in administrations in UK governments and cited in academic journals such as those published by Cambridge University Press and by research centres including Centre for Economic Policy Research. Reactions range from endorsement by some progressive policymakers and civil-society organisations to scepticism from central bankers and financial-market practitioners represented at firms like Barclays, HSBC, and Goldman Sachs.
Category:Monetary reform think tanks