Appetite for Change, Financial market reform with Ann Pettifor

Hi.

Thank you very much. Wow. This is very nice.

Thank you. It's an honor and amazing that people spend their lunch hours doing this.

Yeah.

About the international financial system? Well, you need to know that I regard our monetary system, our developed monetary system in developed economies, as a great civilizational advance. The point about it is that it can enable us to do what we can do. We can't do more than we're capable of. And we can't do more than the ecosystem has the capacity for. But the monetary system, as it's evolved over history, I regard as a wonderful thing. It's enabled us to do what we can do. Unfortunately, it has been captured. And it now is managed and mismanaged in the interests of the 1%. That's my complaint.

Yeah.

Right. Well, first of all, I need you to know that the book is not written for the clever academics in this room who know all about it. The book is written for the woman in the street who thinks it's too complicated for her to understand. So I want to begin with that principle. So who's active in that? The book begins by telling the story of Masamoto Son, who is the chief executive of a company called SoftBank. And Masamoto Son is an extraordinary person. He was Korean that grew up in Japan. But in Japan, Koreans are treated very negatively, very badly. And there's a lot of racism, effectively, towards them. And his father, I think, originally had a pig farm. And he grew up in this place. And then his father opened a pachinko, which is a kind of slot machine place. And I don't know what happened next, but this young man sort of brilliantly decided to take himself to California and discover more about tech and more about the international system, really. And he then began to bet on what was going to work and what wasn't going to work. And he made some fantastic bets. And he's been, at some levels, hugely successful. But he's also had devastating losses. And the thing about him is he's not a tech innovator. He's not like Steve Jobs or the head of Nvidia or anything like that. He's a man who just speculates, but with billions and billions of dollars and loses billions and billions of dollars. And the point is that he moves around the world. And he's the biggest investor in capitalist United States. And the biggest speculator of investments in the capitalist United States, but equally the biggest speculator in communist China. So he's an extraordinary man. And his ability to do that is because of the nature of the international financial system and, in particular, the power of capital mobility.

Right.

Yeah.

Right. Well, there's two things. First of all, you know, central to the book, although it doesn't major on it, is the understanding or the misunderstanding of money. So we have orthodox and what's known as heterodox, but I regard it as not heterodox at all. Understanding of the nature of money and the orthodox understanding is that money is like a commodity. It's what you see crypto is. Crypto is a kind of is based on a Hayekian notion of money as a commodity. And furthermore, as a commodity of the private authority. Whereas for John Maynard Keynes, and I'm a Keynesian, John Maynard Keynes understood money as a social construct, a social arrangement, a promise to pay, which was part of a system which underpinned the promise with the law, essentially, with contracts and with regulation, and was managed by public authority, not private authority. And that's a huge divide in economics. The Keynesian view is disregarded by most orthodox economists and most mainstream economists. I'm sure there's nobody here who is studying Keynes's monetary theories and policies. Am I right about that? How many people have read Keynes's books on money? You see? Oh, we have a couple. Thank you. So this is this big divide. But the point is, if money is under private authority, then that means you can detach it from public institutions like central banks. And you can begin to operate in what is known as the shadow banking system, which is a system of banking, of creating new money, which operates beyond the regulatory authority of the state, of the democratic as well as the undemocratic state. And that space, if you like, has been created by those who want to escape the guardrails of public authority and want to operate simply in markets and create a market in money as if it was a market in platinum or a market in rubber, you know. And that's not possible if your understanding of money is that it's a social construct that must be regulated. And that shadow banking system, that's what I call the casino that operates really. And it's enabled by this great thing called capital mobility, which Mr. Masayoshi Son is so fond of.

Yeah.

Yeah.

Well, because the casino is inclined quite regularly to inflict financial crises on the rest of us. And it's inclined to inflict those crises without itself bearing the cost of that crisis. So we've seen, we saw in the 2007-9 crisis, we saw that Wall Street banks could go bust. But since 2007-9, the situation has changed. And it is now impossible for either a Wall Street bank or a shadow bank to go bust. The central banks of the United States, of Britain, of Europe and of Japan will not permit that to happen. And we know because Jerome Powell said after the latest crisis, which was the collapse of Silicon Valley Bank, he said then that, you know, when he was asked on 60 Minutes, CBS's 60 Minutes show, you know, whether the Federal Reserve had the resources to deal with another crisis, he said, yes, we have plentiful resources. We haven't used up half. I have the direct quote in the book. But it was something to paraphrase, to paraphrase that we have something, half the resources that we've already used. We've got twice as much still available. And the message to Wall Street was, go and play. Nobody's going to bother you. And in the event of a crisis, you're going to go from the private market directly tethered to the public institution, which is the Federal Reserve, backed by American taxpayers, 60 million of them, and they'll bail you out.

Because here we can't afford for another collapse of the financial system because we'll all be damaged by it. So it's a little bit like the fossil fuel crisis. The fossil fuel crisis inflicts damage on others, not just on themselves. But they don't pay the price for that. They are rewarded for it.

Right.

They can see it in the fact they can't get a decent job. And they can see it in the fact that even if they do get a decent job, in real terms, their wages are stagnating. And in real terms, economic activity is repressed. So I can use Britain as an example. Before 2007-9, the trend of economic activity, growth is what the economists call it, was in this direction. And now it's flattened and it's static. And so if we had continued in this direction, average earnings would have been £60,000 a year in Britain. In reality now, average earnings are £30,000, half of what should have been the way. And that's a direct consequence of 2007-9, but also the Covid crisis and also the recent Silicon Valley crisis.

So don't get me started, as they say. The whole question of the independence of central banks is part of, I would call it a conspiracy, to deflect the activities of the Federal Reserve to serve the interests of big global capital markets, as opposed to serving the interests of the domestic economy. And that's by design. That's happened over – that was not the case, for example, in Britain between 1945 and 1971, which is known in all of economics, both on the left and the right, as the golden age of economics. The central bank was not independent. We did not have fiscal rules. And, you know, the Treasury and the central bank worked in tandem to support the economy. So after the war, Britain's public debt was 250% of her income. And the Labour government began to spend crazy money. They spent on building the National Health Service. They built public housing. They built a public education service. They nationalised the coal mines. All of that took government expenditure. And as time went by, the public debt fell from 250% of GDP to 20% of GDP, because, of course, all that spending generated economic activity, which generated income and profits and tax revenues, which came back to pay for the debt, which is why the debt fell in real terms. That was a period in which that's how – that was the Keynesian model. So from 71 onwards, 71, 73 onwards, we've had a different model, and we've had periodic crisis, and we've had high public debt and low private incomes.

So on the note of central banks, however, let's also talk about international mobility. Tell us why that's a solution.

So there's a wonderful book that I would like to recommend you all read. It's by a young woman called Leah Downey, D-O-W-N-E-Y. She's an American, but I think she's working now at university. I think she's in London, University College London. She's written a book, and it's called something like Central Banks as if Democracy Matters. And her book is about how we treat central banks as being an enormous – as invested in, as vested in enormous power, the foundational power of the state, if you like. But that power is not wielded by democratically elected governments, but by independent technocrats. And those technocrats, as I say, work in the interest of the capital markets. Now, I don't want you to think that I'm like Donald Trump, and I want to take control of the Federal Reserve the way he does. But he's got a point, and there is a point about the way in which central banks operate in a detached way from the democratic mandates of governments, right? And they've been – this is a public institution whose power depends on the public in the broadest sense of the word. But the power is deployed instead in the interests of capital markets. And my argument and Keynes's argument was the central bank should be focused on reviving the domestic economy and ensuring that there was prosperity at home, which made the necessity of competition with markets abroad unnecessary. Because he realized from the crises of the 20s and the 30s that there was competition internationally in a world of capital mobility for markets in money and in trade. And that competition created political – well, economic tensions, budgets, deficits, and trade deficits and surpluses, but also with those economic tensions, political tensions, which ended up in a catastrophic war. And he did not want to see that repeated. And for that to happen, the central bank should really be focused on reviving economic activity at home.

Yeah.

To be honest, I don't – you see, the very fact you pose the question in that way suggests that political pressure is a bad thing. You know, when President Trump goes to Davos, I need you to know – I hope I don't have to explain that I think he's a fascist and he's a very unpleasant character. But when he goes to Davos and says that the banks should cut credit card interest rates, he's reflecting a political position that's coming from below, if you like. It's a democratic demand. People are finding that the banks are making usurious rates of interest on something that we're dependent on, a credit card. And it takes a fascist to argue that we should be doing something about it. In my view, democratic politicians should be saying the public is being ripped off and the public knows they're being ripped off and they're mad as hell and they're behaving badly as a result. Do you see what I'm saying? So now you need to know that most of my work has been in the field of sovereign debt and I've worked in Africa an awful lot of the time. And I helped Nigeria clear about – what was it? It was about $30 billion of debt that she owed at the Paris Club in 2005. And I know about the corruption of central banks because I've worked in Nigeria. So I'm clear that there has to be a distinction between the political class and the technocratic class managing the central bank. But on the other hand, the technocratic class – and clearly you do need the central bank to have expertise and so on – has to be responsive to democratic demands from below. And if it isn't, then we get what we have now, which is the public are stupid. They may not have done macroeconomics. They may not have read Keynes' treatise on money. But they can see that there's a grave injustice happening. It's both inequality but also bailouts for the rich and burdens for the poor. And that is creating the kind of tensions that's making the far right so successful across the whole of the world, not just in Europe, not just in the United States, in India and so on. So anyway, I'm ranting now. But the point is, therefore, it seems to me we've got to get this balance right without doing a Donald Trump and trying to manipulate and sack Jerome Powell for reasons that have no rational basis.

And then that's a real problem. I mean, that's why you need regulation. I can be corrupt very easily. I mean, I can get on my bicycle and ride through a red light. And I do it regularly. My instinct is to behave badly. And I need regulation to curtail what I do. In exactly the same way, we need regulation because we are prone to cheating. Let's face it. It's kind of human nature. So we need to be managed. I regard regulation as one of democracy's great. I'm a Karl Polanyi adherent. I don't know how many people have read The Great Transformation. But Karl Polanyi was very clear that markets do not grow up without regulation. It's never throughout history. We've had markets, as David Graeber explained to us, for 5,000 years at least, probably for longer than that. But always the village chief or the city authorities always managed whether a pint of beer was a pint of beer, whether a yard of cloth was a yard of cloth. Because it was very easy for the cloth seller to sell you less than a yard when you'd ordered a yard or to sell you less than a pint of beer. Because that's his instinct. He's trying to make a profit on every sale. So throughout history, we've linked markets to regulation. And I see this as democracy working. I see this as part of society saying we want to regulate something. And I always give the example of the London Underground. This might sound simplistic. But when I moved to London, which was a long time ago, 50 years ago, when you got into the London Underground, the coaches were full of smoke. People smoked, right? You'd get on and choke. And you would think this is natural. And everybody said it is natural. There's nothing wrong with it. And the tobacco companies made sure that we did not understand the links between tobacco and cancer. And so we carried on smoking and we carried on getting cancer. And then gradually, the knowledge developed, the understanding developed. And when we understood there was a link between smoking and cancer, we began to say, hey, government, you have to manage this. You have to regulate it. And then we regulated. And today, when you go on the London Underground, there is no smoke. That's a good thing. So it's kind of regulation is that process whereby society says, hang on. This market in cigarettes or this market in cars is killing me. And society wants, demands that government should do something about regulating those markets. And it's been doing that throughout history.

Yeah, yeah.

Well, let me give you the example of something called Ryanair. Everybody knows Ryanair?

Does everybody know Mr. O'Leary? Does everybody know Mr. Elon Musk? Right. Mr. Elon Musk wants to buy Ryanair. And Mrs. Von der Leyen puts her hand up and says, no, sorry. There's a regulation in Europe. You can't buy our airlines. It's not allowed. Thank God. You know, we don't want Elon Musk owning our airlines. That's a capital control. We're controlling capital coming into this country, into Europe. And it's a jolly good thing, really. So capital controls are not just vicious, horrible exchange controls that stop you going on holiday, which is how they're depicted. It's the management of cross-border capital mobility. So, for example, in Britain, we are the most liberal, the most orthodox, the most neoliberal nation in the world. But when London house prices went through the roof, our central bank governor, one Mr. Mark Carney, introduced a new regulation, which was that foreigners buying property in London had to put down a bigger deposit than local people did. That's a capital control. It's called a macro-prudential tool by the central bank authorities. And what happened then, as a result, prices started to cool. They didn't stop capital mobility entirely, but they cooled it down. Property prices, not sufficiently. We still have a housing crisis. So, you know, capital controls have been demonized by the orthodox because it's in the interest of Mr. Masayoshi Son to have capital mobility, right? And we like it too because it means we can shop at Amazon. It means I can come here. It takes me a hell of a long time to get through passport control in London. I have to go through three passport controls. This time I've had to do a biometric test and have my photograph taken. And I've watched little babies being held up and being biometrically tested before they can go through one. And then they have to go through a second one. But if Mr. Masayoshi Son wants to buy up one of our great technical outfits called Arm in Cambridge, there is just no friction for him to do that, really. So we find that there is friction. There's barriers for labor and there's barriers for trade. But there are barriers for capital. And so, you know, and the point is between 45 and 71, we knew how to do it and we couldn't do it again. Now, the problem with doing it is that it requires an international effort. It has to be coordinated. And in a world dominated by Mr. Trump, there is no international coordination. There is only hostility. And the way it gets changed, we will change the law. We'll change the system again, but only in my view. And I'm being really hopeful and cheerful here. After a catastrophic world war, we'll wake up again and say we can't have these imbalances anymore. And that'll be it'll be too. So there's one way we could be reasonable and rational and deal with this reasonably and rationally. Or we can allow the system to continue as it is at the moment, creating crises, accelerating inequality, and above all, creating imbalances, both financial and trade imbalances, which are causing global geopolitical tensions, which is leading to the rise of fascism. And, you know, therefore, ultimately, you know, war between China and the United States, perhaps if God knows what else. But the point is, we could go that way or we could be rational and we could abandon the orthodox economic theory. And that's going to be hard and that's going to be difficult.

Right. Two things. First of all, I mean, all our money is digital anyway at the moment. You know, we don't. It's not tangible. Most of it. Most of it is done on the Internet, you know, with the most tangible bit is our card, our debit card or our credit card or our bank statement. If we get a paper bank statement, we don't even get that anymore. So we've got digital money. I don't understand. I'm listening carefully. I've got great respect for the economists at the Bank for International Settlements who are discussing this, but I really don't see the point of it because for this reason, it's as if we want to turn the work that commercial banks should do, which is to be intermediaries between the central bank and the population requiring credit, as if we want to move all of that work into the public institution. That is the central bank. And we want the civil servants to do that work. I don't understand that. And I was reading a BIS paper. And it's clear that if you are going to get the central bank to hold all of our money, if you like, and dispense all of our money, then you have to massively expand the infrastructure of the central bank. And you have to have hundreds, perhaps thousands of civil servants negotiating a loan for Mrs Jones's car or a mortgage for Mrs Smith's house. Who's going to be doing that kind of work? Which is why they've begun by saying you can only have a limited amount in there. For me, the real issue is this. It isn't that the money should be in the public institution. I don't see what's wrong with having commercial banks. What I think is wrong about commercial banks is that they're not doing the dreary work of arranging Mr Jones's loan and Mrs Smith's mortgage. They want to use the deposits in the bank and the money they make from it to gamble in the shadow banking sector. Well, they should be stopped from doing that. And they should be turned into boring, dreary bankers once again. Doing that work. And maybe they should be rewarded with a little something or other tax breaks for doing that dreary work. But why we should then move that work into the central bank seems to me bizarre, really. The role of the central bank is to be, if you like, strategic and to be macroeconomic and to decide how much credit should be available to the commercial banks for dispersal to the population and how much credit should be available to the state. That's the real power of the central bank. And why are we going to turn it into this body which is going to make loans? So that's my question about it. Now I might be wrong. I'm trying very hard to be unbiased about this debate, but I don't really see the need for it.

Yeah.

Yeah.

Yeah, that is a sort of profound question, actually. I mean, so I've worked in Malawi and I've worked across Africa where, you know, Malawi, for example, it doesn't have a trustworthy central bank. And it doesn't have the public institutions that uphold their monetary system. And as a result, Malawi has no money. She relies on other countries' monetary systems, the dollar, Japanese yen and so on. And the question is, how if there's corruption on both sides, how you deal with that? Now, in the case of Malawi, the World Bank says to her, don't you worry about building your police force, your criminal justice system, you know, your tax collection system, your accountancy systems, your standards. Don't develop those. Instead, privatise everything and borrow dollars. Because actually, you know, there's lots of dollars going and it's much easier for you. And that way you can avoid corruption. And so what happens is the IMF dumps, you know, 300 million dollars in the Bank of Malawi and it all gets stolen overnight sort of thing. So you need those public institutions. But what gets you that integrity, that decency, that honesty of those public institutions? And I think we come back to ethics and morality. One of my grievances with economics is that economics will exclude in your education power, history, morality. Right. We don't teach those things. No wonder these guys go off and behave badly. But fundamentally, so, you know, in my view, we have institutions, including religious institutions, who teach us ethics, who teach us, you know, that it's against the commandments of the Bible to steal. But if you don't even have those ethics, if you don't have those underpinnings in your society of ethics and morality, if your economics has no morality, then don't complain to me when you have no when you have corruption. And there wasn't always corruption in Malawi. It was not the case after the Second World War. And, you know, the level of corruption in my life, and I'm an old lady, I have seen us move from an era of relative stability and non-corruption in money matters to a scale of corruption and theft and fraud that is unbelievable to me, really. Governments are run by, you know, President Roosevelt railed against government by organized crime and government by organized money, you know, but we have now governed by organized money. And I think that comes out of it. So the question you're asking is a deep question. And it's about how we restore ethics in our daily lives, you know, how we persuade people like me to honor a red light when I'm on my bicycle. Make me feel bad if I go through it.

I'll try not to say anything as well as I could.

Yeah, sorry.

Yeah.

Yes. So there's two ways in which it happens. If you think about it in the broader sense, finance provides the rocket fuel that the oil and gas industry needs in order to expand, right? If you look at the fracking sector in the United States, they went through a period of, you know, real difficulties when it wasn't profitable to frack. But it's become profitable and, you know, Wall Street has gone in there and bailed and bullied. So if you look at the way in which oil and gas is financed as compared to the way in which clean energy is financed, the reason why the finance sector won't invest in clean energy is because it's just not profitable. You can't make enough money from it. You can make an awful lot of money from oil and gas. So that's the big reason why that's happening. But there's another reason, which is the capitalist system. And I just want to remind you that Keynes's great work was called The General Theory of Employment, Interest and Money. And he was absolutely obsessed by the power of the rate of interest in extraction and in intensifying imbalances. And that's because if you have a credit system with high real rates of interest, then you have high real rates of extraction to compensate. If you think about it, if a farmer takes out a loan at a very high real rate of interest, for him to be able or her to be able to repay that loan requires that he must, and Holland is a profound example of this, must intensely, intensely exploit the land and increase its productivity in order to match the growth in the debt that comes as a result of the sometimes compounding of interest rates. And so for me, the rates of interest is one of the drivers of extraction and exploitation. But it's not regarded as that. You know, very interesting, orthodox economics has no theory of interest. It doesn't work on the question of it. They think of money as simply being a veil over real economic activity. And B, they don't regard interest as being terribly problematic. Keynes was very clear that interest lies behind the increased. And if you think of a country like Brazil that is constantly getting into debt with foreign creditors, and foreign creditors demand repayment in dollars, which requires Brazil to strip her forests, to fish her seas and to degrade her land by planting excess amounts of soil. And so the direct link between exploitation of the ecosystem and the monetary system, for me, lies in that. So we have to manage that first and make it sustainable for Brazil to develop without having to do that.

Well, it would require, first of all, we have to deal with the oil and gas sector. We just have to close them down. Now, the thing is, I'm not in favour of just destroying them and destroying shareholder value and so on and so forth. They will probably have to be compensated, you know, and I'm not against compensating some people. And we're going to have to transform the economy to be more sustainable and to depend more on clean energy. China is moving in that direction. But in order to do that, we need a lot of money, right? We need our monetary system to enable us to finance the transition. Now, I'm a member of the Scottish government's Just Transition Commission, and it's been a very illuminating experience. Scotland has Aberdeen, which is a very intensive oil and gas extraction centre. That's where most of Britain's oil comes from, from the North Sea. And Aberdeen, if you go to Aberdeen, it's like London. It's kind of super, super wealthy, right? Because it's all oil and gas. How do we work with that community? And on our commission, we have trade union leaders who represent oil rig workers who are very highly paid, right? And they're asking us, in the transition, what are you going to do with us? Are you going to treat us the way you treated the coal miners when you closed down the coal mines? And we're arguing, actually, no, we have to move from that. And you're going to have to move into a different kind of economy. We have, for example, we pay much more emphasis on social infrastructure rather than physical infrastructure. And social infrastructure involves all those sectors which are not, on the whole, carbon emitting. And that includes education from youth to old age. It includes the arts, includes sports. It includes health. It includes science. It includes research. All of those things which are terribly important to society's resilience, economic resilience, but which do not, in the same way, emit the same amounts of carbon as oil and gas. So then these trade unionists say to us, well, are you telling me I've got to go and work in an old age home and look after old ladies with Alzheimer's where I'd be paid nothing? And I said, no, what we have to do is to increase the incomes of people in those sectors and recognise those sectors as working as valuable as the work that is done in the oil sector. And then it'd be meaningful. So, you know, this transition, my Scottish experience has given me a lot of understanding of how hard this is, really. But in order to be able to do it, we need the monetary system to work for society and not against society, really. But can I just say on the Green New Deal, I'm very amused. First of all, the EU, I mean, we wrote the original Green New Deal back in 2000, in the middle of the financial crisis in 2008. It was a very modest report and it was picked up by people. And then one day the American democratic socialists turned up on our doorstep and they said, we have this candidate called AOC who's standing in a primary in New York and we would like a policy programme for her. And we said, oh, we've got something here called the Green New Deal. And they went off and then she, of course, made it very famous. And the Europeans then eventually they come up with something called the Green Deal. But the one that amuses me most is Donald Trump, who calls it the Green New Scam. And what I like is that he keeps the Green New bit into it, you know. So the echo of the Green New Deal is still there, even while he's calling it a scam. It's fun.

Yeah.

Yeah.

Yeah.

Yeah, I think the real big task is that those of us who care about the climate must get out of our silos and care about the finance sector. And those of us who care about the finance sector must get out of our silos and care about the climate. And it's our problem is and the problem for me, the reason I'm writing this stuff is because I want us to have much wider understanding of the way the system works so that we can transform it. Just like we had to learn about tobacco and cancer. We've got to learn about the cancer of the international financial system. How do we do that? Education. So that's what Rosa Luxemburg argued. She said, first of all, mass education and then mass action. And that leads to transformation, not necessarily revolution to transformation. Right. Now, that's kind of utopian, perhaps in this climate. But for me, that's the only way I don't want to create. I don't want to go out and shoot people and assassinate politicians because I don't think that's going to help. I think public understanding and public action and public anger. I mean, it's there already. People understand there's something very, very wrong, but there's no progressive answer to that question. There is a very right wing answer to that question, which is vote for me and I will ban Mexicans and Canadians and Chinese and black people and whoever and Muslims and protect your job. Right. And people say, oh, someone is going to protect my job. But, you know, why isn't there a progressive answer, which is, you know, we're going to look after we're going to protect your interests in a democratic. Anyway, I'm getting carried away here. But I think that's the challenge that we face. And I'm afraid, well, I should be looking after my grandchildren. I'm determined that we should do something to spread understanding.

Yeah.

Yes.

Yes.

I don't you know, the point is, first of all, I mean. Perhaps it's very unfair to say pretending to be powerless, because in my view and I've my experience as British is our politicians were made powerless. When I was very young, the politicians sitting on the green benches in the House of Commons were responsible for the health sector. But they were also responsible for broadcasting. They were responsible for water. They maintained the water industry. It was public institution was privatized. These are very these are powerful resources of the state, which we privatized and gave away. And when you do that, you find you're sitting on the green benches and you're not making political decisions about any part of your economy. And when you've privatized your bank, your central bank, again, you're not making any. And then you invent something called fiscal rules. And in Europe, we're as dedicated to fiscal rules as the Brits are. And where did they come from and who are they? Oh, there's some technocrat sitting in the office for budget responsibility who is saying to a politician, sorry, there is no money. We can find 70 billion pounds the day after we hear about covid for the finance sector. But actually, for welfare, there is no money. Right. And why is that happening? Why are politicians accepting that? Partly because so much has been privatized and marketized. The politicians are genuinely powerless, but partly because they they have made themselves powerless, really. But what do you do about it is to say, no, you it's about time you exercise power on behalf of your constituency, which is your democratic constituency.

So mainly we have we have the reason, you know, it's so hard to do. There are several things we can do straight away. And I was explaining this last night at our meeting, which is, you know, the the financial system operates independently. It appears to be of the authority of the state. But in a crisis, it appeals to the state for bailout. But also it is tethered to the state in many, many ways. And one of the most important ways is for the enforcement of financial contracts. So, you know, if you make a deal with a Russian oligarch to purchase something, you go to your London court to get the contract signed. You go to your London court to sue him or her when he fails to uphold the contract. Or if you get married in Moscow and then you want to get divorced, the best place to go is to London where you're going to get the best deal out of the most efficient courts. So so what so what the public institutions do in the public institutions are paid for by taxpayers is to uphold contracts. And that's incredibly important to the private sector. On the one hand, we could say to them, you're very happy to make a contract out there in the shadow banking system. But sorry, we are not going to uphold your contract overnight. You would see people be far more careful in doing deals. Number one. The other thing is our debt, public debt, sovereign debt, which takes the form of bonds or guilts or treasury bills, is an asset, is a fantastically productive, but also safe asset for the financial system without bonds or treasury bills or debt, public debt. They would lack the assets that they need to invest in to protect their surpluses. Right. So they use our publicly created debt as the fundamental plumbing of the financial system. In 2000, President Clinton decided that he was going to have austerity. He was going to balance the books. He was going to cut spending. And so the US Treasury stopped producing treasury bills. And that really broke Wall Street. Because for Wall Street, this is the most essential collateral for A, investing your surplus into and B, for use as against leveraging for additional capital. Right. So when BlackRock wants to obtain cash from Blackstone, perhaps, they present the fact that they are holding US treasury bills. And they ask if they can exchange that for cash from Blackstone. Right. Because this asset keeps its value. It's trustworthy. It's safe. It's safer than London property or Amsterdam property. Right. Because the London property can get flooded and can break down. But this can't break down. And these governments don't default on their debts. We could say to them, this is public money. This is public debt. If you want to use it for collateral, that's fine by us. But these are our terms and these are our conditions. You shall invest in our economy. You will spend your and you'll pay your taxes. And if you do that, you can make use of these public assets. Why don't we say that? These are powers that we have and our politicians have and we are reluctant to use, which is why they pretend to be powerless.

Well, those big questions. I mean, you know, I think they have to educate themselves. They have to understand what's going on. And then they have to appoint leaders. And we see this happening in the United States. Really, we're beginning to see the United States saying we know there are politicians who are not going to do anything. We know they've been bought by Wall Street. They're owned by Wall Street or Israel, one of the two. And we're not voting for them. You know, there's been a recent election in New Jersey for the governorship of New Jersey. And a Latino woman who's lived in New Jersey for a long time, who used to work for Bernie Sanders, has won the election against AIPAC, which is the Israeli lobbying fund, which was funding the centrist politician. Right. So what we see emerging in the United States are political leaders who are beginning to understand what's going on and beginning to represent the real population. Now, it's Mamdani in New York and it's this woman in New Jersey and a few others. It's tiny, but it shows you that in the democratic process, that can happen. It can't happen in Russia and it can't happen in China, but it can happen in a democratic society. We can choose that. We can. And it's very fascinating what's happening in Britain at the moment. Our politicians, our Labour Party politicians, take a lot of money from AIPAC, from the Israeli funding system. And, you know, they are bought by the City of London. And Labour is deeply, deeply unpopular. And then we have this green politician emerging and we have a young woman who's a plumber in a by-election in a few weeks' time. And, you know, I'm not saying these are perfect or that these are correct, but it's an indication of, you know, society getting itself together for a more progressive answer to the problem of the system. Now, I'm feeling exhausted because I feel these questions are very demanding.

Have a sip of water. And I think the audience has had enough.

Yeah. So I was involved in the leadership of a movement for the cancellation of the deaths of the poorest countries at the turn of the century, before many of you were born 25 years ago. And it was a movement based on the biblical principle of Jubilee. And the Jubilee principle is fascinating, actually. It's based on the notion of the Sabbath. And the Sabbath is based on the notion of periodic correction to imbalances. So the Sabbath is a day of rest when you're not allowed to exploit the land or labor. And then you can go back to work the following day. Right. And that's a law. That's a regulation. That's the first regulation that we made 2000 years ago. And then there's the seven year Sabbath sabbatical, which academics still enjoy, actually, when you have a whole year off for a sabbatical because you're an academic. No other profession has that privilege, really. And then there's the concept of Jubilee, which is seven times seven, 49th. In the 49th year, you cancel debts, you restore slaves to freedom and you restore the land. And then you sound the trumpet of Jubilee. And that principle led the anti-slavery movement in the United States. If you go to Philadelphia, there's the Liberty Bell, which emerges from this concept of the trumpet of Jubilee. You ring the bell when it's the Jubilee year, which is the liberation from slavery. So these are profound principles, ethical principles, if you like, based on Christian and Judaic beliefs and Muslim as well. All the old Abrahamic faiths adhere to these principles. And so what happened was we ran a campaign, which to my astonishment, and it shouldn't have been because, you know, the religious organisations globalised long before McDonald's did. And, you know, there was an upsurge of support for these principles across the world. And, you know, we resulted in about 100 billion dollars of debt being cancelled for poor countries.

Yeah, I think it can be. And, you know, we back in 2000, the Internet hadn't even got going really well in the 90s. We only started to be able to communicate with African colleagues, for example, in the 1990s on the Internet. And, you know, now we have far more resources for communicating and mobilising across the international system. So, yes, I think it can happen.

Yeah.