Getting back to Istanbul – and the world of Realpolitik

I’m happy to be back in Istanbul after spending most of the summer at our seaside retreat. We were rocked by a moderately disturbing earthquake in Bodrum – but it seems the big city suffered worse damage from torrential rain and a storm of super-sized hailstones. Gentle reminders from Mother Nature about who’s actually in charge on this planet. Anyway, I have to start work again, a necessary evil in order to sustain a lifestyle above subsistence level.

My good lady is still out of town, so, looking for ways to amuse myself in her absence, I headed over to the European side of the city. I was keen to see Taksim Square, Gezi Park and İstiklal Avenue, having heard so much negative comment about their descent into a black hole of fundamentalist Islamic horror.

democracy park

Not easy to get into. Could that be significant?

My first target was Küçükçiftlik Park, which I had seen advertised as venue of the 4th Istanbul Coffee Festival. I passed through tight security before emerging at a ticket booth totally lacking in any kind of queue. On asking the entry price I understood why . . . 35 Turkish Liras! What? Unable to believe what the young lady had said, I asked, “What’s in there? Is it worth it?” I took her momentary hesitation to mean that she herself had doubts, so I headed for the exit. 35 Liras! Last year it had been held in the grounds of Topkapı Palace, and admission was free. So what had changed over twelve months?

While in the vicinity I decided to check out Maçka Democracy Park, a good-sized island of greenery (yes, another one) in the inner city I hadn’t visited in a dog’s age. It was named in happier times when regular military coups ensured the preservation of democracy and secularism, at least for the nation’s ruling elite. It turned out that visiting the park was easier said than done. Clearly much of the lower end has been leased out to whatever private concern is now scalping citizens for entry to the Coffee Festival, and I had to walk a kilometre or so up the hill to find a gate.

Maçka Park has been in the news recently over an event where a couple of scantily clad young women were harangued by a guy who found their short shorts unseemly – giving rise to a series of protest meetings where sisters gathered (in shorts) to assert their rights to expose however much female flesh they thought necessary or desirable. Me? I keep out of such issues. I just try not to ogle too blatantly when vistas of naked leg and cleavage appear before me 😉

Maçka cable car

Maçka park cable car

I was pleased to find that the cable car I remembered from years gone by still crossed the valley from Şişli to Taksim – and more pleased yet to find that the spectacular view over woodland to the Bosporus was less disfigured these days by youthful inscriptions etched into the perspex windows of the carriage.

A short walk brought me to Taksim Square, still a rather barren space despite council claims that they had planted a large number of trees. Gezi Park, location of much political excitement four years ago, is actually a rather more accessible and pleasant spot than in former times. The whole area has been closed to motor traffic which has been diverted underground. An exhibition area hosts thematic displays of handcrafts and the wares of micro-businesses. On this particular day, dozens of stalls were purveying second-hand books, classic movie posters and prints of old Istanbul, and several outdoor cafes offered Turkish coffee brewed slowly, in the traditional way, on glowing charcoal.

Feeling a little hungry, I headed down a back street and found a tasteful little restaurant calling itself “Gezzy” where I enjoyed a most delicious pide, a kind of Turkish pizza with cheddar cheese, tomatoes and green peppers.

From there, I carried on down the road known as Tarlabaşı Boulevard. On the downhill slopes to my right spread the colourful neighbourhood featured in numerous Turkish films about the underground life of gypsy music, prostitution in all its multitudinous guises, and the world of crime in general. I remember, years ago, on first seeing the narrow lanes of rundown Victorian tenements (or whatever the Ottoman equivalent was), wondering when the mixed blessing of gentrification would arrive in an area so close to the beating heart of the metropolis. Well, arrive it has – amid much fanfare, accompanied by somewhat justified wailing and gnashing of teeth.

pera-house-british-consulate-e1463533606658

A green space in central Istanbul – but just try to get in!

I cut back up the hill towards Beyoğlu, passing by the fortress-like walls of the British Consulate. Built in 1845 as an embassy, in ostentatious imperial neo-classical style, adorned with the requisite inscription in Latin and the date in Roman numerals, the enormous edifice provides little in the way of services, to locals or UK citizens. A bombing fourteen years ago that killed a number of Turkish citizens, and accidentally got the Consul-General, led to the building of a defensive wall. Once an important outpost of empire in the Ottoman capital, Pera House these days looks like little more than an expensive anachronism.

The back streets running more or less parallel to İstiklal Avenue, the commercial thoroughfare leading out of Taksim Square, are lined with imposing buildings of similar vintage in various states of decrepitude and restoration: The Pera Palace Hotel, famed for its role in accommodating wealthy travellers disembarked from the Orient Express; the Grand Hotel de Londres, a reminder that French was a more fashionable language than English in those days; the Italianate façade of the Beyoğlu Council building, erected in 1857. These and more recall that for centuries, in Ottoman times, and before, when the city was capital of the Eastern Roman Empire, citizens lived in the ancient city across the Golden Horn. The district known variously as Pera, Galata or Beyoğlu was a satellite town of foreign traders and diplomats.

Most visitors to modern Istanbul take time to visit Galata Tower, built by the Genoese in 1348, and providing panoramic views of the city from its 63-metre viewing deck. In those days, the Genoese and their Venetian neighbours controlled trade in the Mediterranean, and it was their contact with Eastern civilisations that contributed to the Renaissance in Europe. Subsequently their control was challenged and more or less replaced by Ottoman power – which may have been a major motivation for Western Europe to get its political act together in the interests of defence.

old tower

Lesser known tower of Galata – with the Church of Peter and Paul lurking behind

I had thought Galata Tower was the only remnant of the walls that formerly enclosed the enclave of Galata, but as I walked down the hill towards the Golden Horn I came across another tower and section of ancient fortification in a sorry state of decay. Turkey is often accused of failing to protect its rich architectural heritage, but when you get out and wander around the city, or the country as a whole, you may be overwhelmed by the sheer volume of ancient churches, castles, mosques, temples, bathhouses, theatres, stadiums, city walls . . . Every day, it seems, some farmer ploughing his field turns up the mosaic floor of an opulent Roman villa. This is world heritage – but mostly Turkey is expected to foot the bill for protection and/or restoration. Just as the Middle East refugee tragedy is a global problem – but largely locals are left to house and feed the displaced homeless.

Behind the decrepit tower I caught a glimpse of a bell tower clearly belonging to a Christian church. I wandered round the block trying to get closer, but it was well protected by the walls of a decaying 18th century inn, and a locked gate. Nevertheless, I did identify it as an Italian Catholic church dedicated to the apostles Peter and Paul, erected in 1843 to replace a more ancient edifice that had been converted to a mosque in 1475 after the Ottoman conquest of Constantinople.

In the 19th century, the district of Karaköy, at the foot of the hill below Pera, became a major commercial district where banks and other businesses established their headquarters. I’d heard about Salt, Istanbul, and took a quick look in as I passed by. It’s a kind of research library, museum and exhibition centre housed in what was once the HQ of the Ottoman Bank, established in 1863, according to the BNP Paribas website, “by the Turkish government in partnership with French and British financiers” with the aim of “restoring Turkey’s finances to health and helping to modernise the Ottoman Empire”. Yeah, right! Wonder if the Rothschild family were involved in any way. On the wall inside is another inscription in imperial Latin:Extra fortunam est, quidquid donatur amicis; Quas dederis, selas semper habebis opes.”

Just fishing

Maybe he’s got the best idea. “Leave the wise to wrangle . . .”

My Latin’s a bit rusty these days, but the Internet came up with this translation:

“Who gives to friends so much from Fate secures,
That is the only wealth for ever yours.”

So were those French and British financiers claiming to be friends of the Ottomans? Well, that friendship didn’t turn out so well for the locals in the end, did it! Empires come and go, but leopards don’t change their spots.

Advertisements

End of Labour as a major political force?

The Light Dawns – The Penny Drops!

eureka

It came to me in the bathtub!

It was a favourite saying of my old middle school teacher, Mr Hislop. It was a mildly sarcastic form of congratulations when one, or all of his pupils finally showed signs of understanding something he had been at pains for some time to explain.

The words came to my own lips as I read an opinion piece in New Zealand’s own Herald newspaper/website. The writer was commenting on the woes of the NZ Labour Party in the lead-up to this year’s General Election. The conservative National Party has been in power since 2008. The Prime Minister for most of those years was an unabashedly rich finance mogul whose standard response to news media questions about the numerous scandals that broke during his term of office was, “Oh, nobody cares about that!” New Zealand has a ludicrously inflated housing market, a playground for wealthy local and foreign “investors”. The country has received dishonourable mention in global reports on child poverty and international money laundering.

In spite of that, and more, the main opposition Labour Party is plunging rather than rising in public opinion polls, and the party’s panicked response has been to choose a new leader, four months out from Election Day. It’s the beginning of the end of Labour as an automatic major political force,” says this political commentator.

Interesting choice of words, don’t you think? automatic major political force”? Unfortunately, that’s what it is, and has been for the last 40 years – and not just in New Zealand A brain-dead response by people unhappy with the social injustice created by traditional conservative economics. Political pundits in the UK are desperately trying to convince voters that the local Labour Party has found, in Jeremy Corbyn, a leader to take them back to their roots. The US Democrats managed to sell Barack Obama to their well-heeled, trendy-lefty supporters, and nearly did it again with Bernie Sanders. The sad fact is that Labour Parties (and their alter egos) in these countries and Australia, and others for all I know, are just a construct of the established financial elite who wield the real power while conning a pathetically gullible electorate into thinking they have a choice at the ballot box.

walking dead

Labour back from the dead – again?

Let me quote you some facts and figures. New Zealand voters elected their first Labour Government in 1935, in the depths of the Great Global Economic Depression. That government did actually manage to implement some genuine socialist reforms, on which their successors have been dining out ever since. By 1949, however, they had turned their back on most of their founding principles, got rid of any dissenting voices in their own ranks, and were deservedly thrown out in that year’s general Election.

68 years have passed since then. Conservative National governments have held the reins of power for 47 of those, and pale pinkish-blue pseudo-Labour governments, the remaining 21. The last possibly true old-style Labour Prime Minister, Norman Kirk, was elected in 1972 on the slogan, “It’s time for a change” – which voters were ready to accept after twelve years of National rule. Unfortunately, Big Norm died two years later, and Labour were thrown out in 1975, having failed to achieve much at all.

puppet

Work it our for yourself.

National returned to office and proceeded to make themselves pretty unpopular, nevertheless winning again in ‘78 owing to their own electoral gerrymandering and Labour’s predictable incompetence. Despite NZ’s manifestly unfair first-past-the-post electoral system, a rejuvenated force had appeared on the NZ political scene. The Social Credit Political League began picking up support from voters fed up with the lies and deceit of the two main parties. After giving the National Party two shock defeats in by-elections, Social Credit actually replaced Labour as the country’s preferred opposition party in public opinion polls in 1980.

That was when the business/financial elite showed their true colours. Going against almost total international opinion, the National Prime Minister arranged for the NZ Rugby Union to host a tour of the country by a team from apartheid South Africa. Whatever naïve political writers tell you, it was a deliberately cynical ploy to divide the country along conventional lines, with the rugby-mad and the libertarians supporting the tour, and left-leaning union-leaders, armchair liberals and “intellectuals” coming out strongly against it. The 1981 General Election returned to the same-old-same-old, manipulators-extraordinaire National and a temporarily ideologically renewed Labour.

The victory went again to National, but by 1984 NZ voters had definitely had enough of them. Seeing the writing on the wall, the same business/financial elite set up a well-financed straw party to siphon off the protest vote and ensure that Labour would finally return to office. But what a Labour Government!! Their public relations creation windbag Prime Minister led a government that implemented libertarian reforms drawing inspiration from the UK’s Iron Witch Margaret Thatcher and US Wild West hero Ronald Reagan.

yellowbrickroad

Sorry, folks – Labour won’t take you to the Emerald City.

The simple fact of the matter is those who hold the real power in New Zealand (and other Western pseudo-democracies) want to retain the Labour Party as the main political “opposition” to maintain the illusion that voters have a choice. “The end of Labour as a political force?” Sorry, mate, that happened decades ago. They’ve been dead for years – they just won’t lie down.

I’d like to believe that the light is finally dawning in New Zealand, and the penny will drop to activate the machinery of a new political age – but I don’t hold out much hope. Too many people want to believe in the yellow brick road.

Who is that economist working for?

41wtMZTrtVL._SX327_BO1,204,203,200_

If you believe that . . .

Economics has been called the dismal science. Well, “dismal” it may be, certainly in the way it is used to justify the gross inequalities in the distribution of our planet’s wealth – but “science”? Possibly a “human” science, ranking with other notoriously imprecise fields of human knowledge such as psychology and sociology.

I have noted previously that Alfred Nobel did not include economics in his list of prizes. Not only did he think it unfit to sit alongside the true sciences (physics, chemistry, physiology, medicine), he didn’t even consider it as objectively assessable as Literature and Peace!

Bearing that in mind, then, it seems to me that I have as much right as anyone to have my ideas on the subject taken seriously. It could even be argued that the views of a high profile rugby player in New Zealand have greater validity than those of a former Governor of my country’s Reserve Bank.

We are all aware that high-level sport these days is mostly about money, and economics has inserted its dismal finger so that honesty, fair play, clean living and sportsmanship now rank well down the list of priorities. The home ground of Istanbul’s Beşiktaş football club, formerly commemorating the republic’s second president and close friend of Mustafa Kemal Atatürk, has recently been rebuilt and reopened as the Vodafone Arena, commemorating . . . the power of money.

banksters-300x199It’s a brave sportsman or woman these days who can cite moral principles to his or her paymasters as Sonny Bill Williams has done in New Zealand. Williams has the advantage of being an extremely valuable property, moving seamlessly between two rugby “codes” (league and union) in a way that would once have been frowned upon. So, when he announced that he would not wear a team strip emblazoned with the logo of the Bank of NZ, he opened a can of worms. Williams is, apparently, a Muslim, and follows that religion’s injunction against usury – the lending of money at interest.

A columnist for the NZ Herald, Brian Gould, picked up on Williams’s moral stand, writing an opinion piece entitled “Banking should be under closer Government control”. Supporting the Muslim rugby player’s position, Gould said, Most people believe, and it is a belief assiduously promoted by the banks themselves, that the banks act as intermediaries between those wishing to save and those wishing to borrow, usually on mortgage. . . But this benign view of their operations is inaccurate and misleading. The banks do not lend you on mortgage money deposited with them by someone else. They lend you money that they themselves create out of nothing, through the stroke of a pen or, today, a computer entry.”

The next day, the Herald published a reply from a gentleman by the name of Don Brash insisting that both Williams and Gould were wrong.

“Mr Gould is not alone in peddling this nonsense, but that certainly doesn’t make it correct.

How the Fed works

How the banking system creates MONEY. Money is not wealth, especially if you have to borrow it at commercial interest rates. (Source: Time Magazine)

“The banking system does create money. When Bank A lends money to one of its customers, the customer may use those funds to buy something from somebody who banks with Bank B. Bank B then finds itself with an additional deposit, a part of which it can lend out to its customers (keeping some of the additional deposit as a liquidity reserve). So an initial loan may end up considerably increasing the total lending by the banking system.

“If individual banks really could create money by “the stroke of a pen or a computer entry”, as Mr Gould contends, why do they bother paying interest on deposits, why do they borrow funds from parent banks overseas, why do they borrow funds in the international market, why do they need to hold some funds in government securities as a liquidity reserve, why do some banks occasionally run out of money when customers lose confidence in them?

As well as being a former Governor of the Reserve Bank, I now chair the small New Zealand subsidiary of the Industrial and Commercial Bank of China, the largest bank in the world. It would certainly make life very much easier if we could, “by the stroke of a pen or a computer entry”, simply create the money which we lend out to New Zealand borrowers. Unfortunately, we can’t.” (My highlighting)

Pinocchio

Would I lie to you?

So, according to Brash, Gould and Williams are wrong – but the banking system does create money. Huh? Look at the weasel words in the last sentence. OK, that’s not how they do it exactly, Don. And Bill Clinton did NOT have sex with that woman.

As I hinted above, Don Brash was Governor of New Zealand’s Reserve Bank from 1988 to 2002. He has held academic positions at several universities at home and abroad, sat in big chairs in large offices in several well-known banks, and even been involved in politics at the highest level. Clearly he, and the editor of the NZ Herald, and other naïve souls too for all I know, believe his words carry the power of gospel truth in matters of economics.

Look closer, though, and ask yourself if a guy who works at the upper levels of banking administration can possibly express publicly an unbiased view of the workings of the banking system.

Check the guy’s record, and you’ll see that he is a loser from way back. His first foray into politics was in 1980 as National Party candidate for the “safe” National seat of East Coast Bays. He lost, not to the main opposition Labour Party, but to an opponent representing Social Credit, a party whose main platform was exactly the view of banks expressed by Messrs Williams and Gould. That was a by-election. He failed to win the seat back in the General Election of 1981 and was dumped.

es514f00bfSomehow he managed to get himself elected as leader of the parliamentary National Party, despite his inability to actually win an electoral seat – holding the position from 2003 to 2006, then resigning from Parliament in 2007 to take up another academic post as economics guru.

He returned to politics in 2011 as leader of the right wing ACT Party, holding the post for seven months before resigning again after failing to make any impact in that year’s General Election. Clearly the average New Zealand voter is more perceptive than those who appoint general managers in banks or professors of economics at universities.

Brash is a hired lackey of the capitalist establishment, and a loser whenever he has offered his services to the New Zealand public. I’m not going to stoop to discussing his private life. If you’re interested you can get an overview on his Wikipedia page.

How the US Uses War to Protect the Dollar

I’m reblogging this because it’s crucial that we all know how US Money Power is manipulating the entire world:

The Gods of Money William Engdahl (2015) The first video is a 2015 presentation by William Engdahl about his 2010 book The Gods of Money. It focuses on the use of US economic and military warfare to maintain the supremacy of the US dollar as the global reserve currency. As his point of departure, he […]

512-I1WyqFL._SX331_BO1,204,203,200_In 1971 when Nixon was forced to end the gold standard,* the gold-backed US dollar was replaced by the “petrodollar.” According to Engdahl, it was so named because of a secret agreement the US made with Saudi Arabia – in return for a guarantee that OPEC would only trade oil in US dollars, the US guaranteed the Saudis unlimited military hardware.

In this way, oil importing nations (most of the world) were forced to retain substantial US dollar reserves. This was the only way they could provide their economies with a continuous supply of oil.

In 1997 the US Treasury and Soros made a a similar attack on economies of Southeast Asia (Thailand, South Korea, Indonesia, Hong Kong, Laos, Malaysia, Philippines) that attempted to use currencies other than the dollar as their reserve currencies.

The second clip is a Guns and Butter radio interview with Engdahl. It focuses on a second area the Gods of Money covers, namely the long US battle to abolish their private central bank (aka the Federal Reserve) and end the ability of private banks to create money out of thin air (see How Banks Create Money Out of Thin Air).

via How the US Uses War to Protect the Dollar — The Most Revolutionary Act

Human Development in Turkey

More sad news for Turkey. The United Nations Development Programme released its latest global report last week, placing Turkey 71st out of 188 countries on its Human Development Index. “71st! How bad is that!” I thought.

But then I looked a little closer. The first thing I noticed was that Turkey had actually moved up one place from the previous year. In fact, from 1990 to 2015, the country’s HDI value had increased by more than 33%.

The UN uses three factors to determine its HDI value: Life expectancy at birth; expected years of schooling and mean (average) years of schooling; and per capita Gross National Product. Over that period since 1990, life expectancy had increased by 11.2 years. Average years of schooling had increased by 3.7 years. Per capita GNP increased by 78.2%.

slaves_of_dubia_coverIt is also important to recognise that, as a country moves higher up the rankings, it becomes increasingly difficult to overtake those ahead on the list. The top five countries are Norway, Australia, Switzerland, Germany and Denmark. The USA ranks 11th, and the United Kingdom, 16th; Japan is in 17th place, and Finland, 23rd. Even if Turkey’s standards improve markedly, how is it possible to overtake countries that have such a head start? Turkey is, however, well placed in the second category of countries, labelled as having “High Human Development”, its HDI index placing it in the upper half of this group.

Then there are other countries ahead of Turkey on the list whose high rankings are open to question. How does Greece, for example, with its economy in tatters, manage to slot in at number 29? Saudi Arabia and the United Arab Emirates have healthy rankings of 39 and 42 respectively, yet many of their residents are poorly-paid migrant workers, without the benefits of citizenship and, one assumes, not counted for statistical purposes.

Kazakhstan (57), Cuba (68) and Iran (69) all have higher rankings than Turkey – which makes me wonder how much credence I can give to the UN report.

I suspect that few people will actually read the report’s 288 pages. Most likely, those in countries at the higher end of the list will wallow in unjustified complacency. One point the report writers make is that average figures can hide wide discrepancies in internal standards. This is a concern in developed countries,” they say, “where poverty and exclusion are also a challenge, with over 300 million people – including more than one-third of all children – living in relative poverty.” This is undoubtedly true in New Zealand, despite its HDI ranking of 13.

one+percent_vectorized“Legal and political institutions can be used and abused to perpetuate group divisions,” the report says. It cites the LGBTI demographic as an example – but what about the broader situation in the United States, where Wall Street financiers buy political influence with professional lobbyists, and 45% of eligible voters do not even bother to participate in presidential elections?

“The top 1 percent of the global wealth distribution holds 46 percent of the world’s wealth.” Well, we knew that. So what does that mean in reality? Those Western First World countries may have high per capita GNPs, but clearly the average figure is distorted by a small number of multi-billionaires. Far more than half of their population exists well below that per capita average GNP.

The report goes on to make a number of recommendations which, sad to say, are unlikely to receive much serious consideration in the corridors of global power:

“Measures are needed to strengthen strategies that protect the rights of and promote the opportunities for migrants, to establish a global mechanism to coordinate economic (voluntary) migration and to facilitate guaranteed asylum for forcibly displaced people.” Can you see the Saudi royals or those United Arab emirs taking much interest in rights and opportunities for those indentured labourers from Asia and Africa who do most of the unskilled work? As for rich countries in Europe “facilitating guaranteed asylum for forcibly displaced people” from Syria, for example – Dream on!

“Accountability is central to ensuring that human development reaches everyone, especially in protecting the rights of those excluded. One major instrument for ensuring accountability of social institutions is the right to information.” The people at Wikileaks are doing their best here – but it’s also clear that Western governments have little interest in transparency, and deal harshly with whistleblowers who challenge their right to withhold information.

whos-the-one-percent-look-in-the-mirror__1500x670_q85_crop_subsampling-2

Work harder, and you too can have one of these 😉

Sustainable development activities at the national level must be complemented with global actions. Curbing global warming is possible. Continuing advocacy and communication on the need to address climate change and protect the environment are essential.” It may be possible – but to me it seems that the forces of conservative capitalism are working to undo most of the progress that had been made in protecting the fragile ecosystem of Planet Earth.

“Reforms should focus on regulating currency transactions and capital flows and coordinating macroeconomic policies and regulations. One option is a multilateral tax on cross-border transactions; another is the use of capital controls by individual countries. To move towards a fairer global system, the agenda for global institutional reforms should focus on global markets and their regulation, on the governance of multilateral institutions and on the strengthening of global civil society.” Don’t hold your breath waiting for Wall Street and the puppeteers of global finance to “regulate currency transactions and capital flows” and “move towards a fairer global system”.

Once again we see the need to view all published statistics with a healthy measure of scepticism.

How banks create money out of thin air

8e74d904f189e407614b2a0cd6393339

AND loaned out at interest! AND the depositor can still ask for his/her money back!

Let’s not get sidetracked. There’s actually more to the world’s problems than just Donald Trump and Turkey’s RT Erdoğan.

This is clip is from a NZ source – but the same situation exists the world over:

http://tvnz.co.nz/seven-sharp/paying-interest-loan-never-existed-video-5336329

The ending is a bit weak – so you only need to watch the first few minutes.

“NZ at the Crossroads” – A somewhat overdue book review

Well first up, I want to apologise for the lateness of this review. In mitigation, I will offer the excuse that my birth was still some years in the future when the book itself was published in 1936. I managed to get hold of a copy recently after a search on the Internet turned up a signed first edition at a bookshop in Symonds Street, Auckland.

nz-xroadsWhy was I searching? I’m a long-standing proponent of monetary reform – a firm believer that most of the world’s ills stem from the fact that ninety per cent of the money governing every aspect of human life on planet Earth is created as interest-bearing debt by private bankers. And not until the power to create money is removed from private interests and vested in the state, the government and the people who elect them, will true social justice ever become an achievable goal.

Back in the late 70s and early 80s in New Zealand I was actively involved with a political party/pressure group arguing for monetary reform. I stood twice (unsuccessfully) as a candidate for parliament in 1981 and 1984. I saw close up the dirty tricks the forces of reaction would stoop to ensure the Social Credit Political League was wiped out as a voice of reason in a system designed to maintain a corrupt and unjust financial structure.

Recently I have been heartened to see a re-emergence online of individuals and organisations arguing for Positive Money. It’s long overdue. The case is irrefutable. The main stumbling block is public ignorance about how money actually works. The Money Power Elite use this ignorance to maintain a grotesque system that keeps most of the world’s population in poverty and slavery.

The author of “New Zealand at the Crossroads” was Henry J Kelliher, knighted by Queen Elizabeth II in 1963 for his “services to Philanthropy”. It may have helped that he was one of the country’s richest men as a result of being owner/founder of Dominion Breweries, one of the two companies that produced most of NZ’s beer. Nevertheless, the case for Sir Henry’s philanthropy may have a better foundation than other mega-rich claimants to the title in our days.

In 1956 he set up a trust to administer an annual award for promising painters, and some of the NZ art world’s biggest names were early recipients. The award was discontinued in 1977, but a second foundation continues to present annual prizes for essays written by young students of economics.

I’ve searched online and I’ve been unable to turn up any of the subjects these young economists have written about. It also possibly detracts a little from Sir Henry’s reputation for philanthropy that his knighthood was put forward by a National (conservative) government at the time. “New Zealand at the Crossroads”, however, provides firm evidence that its author had a strong social conscience, and was at the forefront of the contemporary movement for monetary reform.

In fifteen chapters and 184 pages, Kelliher covered such topics as:

  • The nature and function of money
  • The social and economic disaster of unemployment
  • The importance for all of economic security
  • The urgent need for monetary reform
  • The influence of the press in resisting reform
  • The hypocrisy of the church in failing to fight for social justice

His first sentence announced that his book was “intended for those men and women who prefer to do their own thinking,” and he made a clear statement of intent in his introduction:

arresting-commies

Arresting “Communists” in Auckland, 1932

“It must be evident that a government which does not recognise as a fundamental duty the function of issuing all new money, and of controlling and regulating all money in circulation does not control the affairs of the country, nor is it safeguarding the welfare of the people. Such a government may govern but does not rule, because the real control of the country is in the hands of the ‘Invisible Government’ – the Money Power.”

In November 1935, in the depths of a global economic depression, and suffering more than most its socially destructive effects, New Zealand voters overwhelmingly elected the country’s first Labour Government. The main reason for Labour’s broad appeal, to farmers and owners of small businesses as well as wage-earners and the unemployed, was its “pledge to the people of New Zealand to take control of its own money and credit.” And they were not alone. According to Kelliher, “In Italy, Germany, Russia and Japan money [had] recently been put completely, or almost completely, under control of the governments of those countries.” Such a claim might cause one to wonder whether there was a more sinister agenda behind the demonisation of those countries in years to come. Whatever the case, Sir Henry argued that “There [was] ample evidence of a deliberate and well-planned conspiracy to keep this truth and knowledge from the people by those who hold this all-powerful monopoly to manufacture money and to conceal or disguise the unsoundness and iniquity of the existing system.”

michael_joseph_savage_portrait

Mickey Sav – The portrait that hung on many a domestic wall in NZ for years afterwards

That New Zealand Government after 1935 did indeed attempt to implement its pledge first and foremost by converting the NZ Reserve Bank into an entirely State institution, then using credit provided thereby to carry out a programme of house building that provided a stimulus to industry, jobs for citizens, and low-cost, high quality housing for the needy. The results of the programme saw that Labour Government beloved by the people, and its Prime Minister, Michael Joseph Savage, elevated to a status bordering on, or possibly exceeding, sainthood.

Sad to say, that programme was a one-off. Kelliher wrote prophetically in his conclusion, “The great privilege, and the still greater responsibility to carry out the wishes of the people, and to bring to full fruition the possibilities and potential effects of this momentous piece of financial legislation [the Reserve Bank Act] rests entirely with the Government. The machinery has been provided, and the future will depend on the full and effective use and wise direction of this machinery in the service of the people.”

The Government reneged on its pledge. Some argue, and it is indeed highly probable, that the supra-national “Money Power” cajoled and threatened Labour’s leading politicians into dropping their programme. Those in the government who argued for its retention were sidelined or driven out. Within a couple of years, the British Empire had launched itself into a horrendous global war, financed by traditional private sector-created debt. New Zealand took the wrong turning at those crossroads, an epochal chance was lost – and the world settled comfortably (for some) back into hands of the blood-sucking money monopolists.

to-scrim

The dedication in my copy of the book

As a footnote, my copy of this little book, signed by HJ Kelliher himself, 27 years before his knighthood, is dedicated to CG Scrimgeour Esq. Colin Graham Scrimgeour, popularly known as “Uncle Scrim”, was a hugely influential personality in New Zealand in the Golden Age of radio broadcasting. Under the guise of religion, “Scrim” broadcast regular weekly programmes during the Depression years giving voice to the concerns of the common people and “pushed the rigorous censorship of broadcasting to the limit”. He was a strong supporter of the Labour Party in the lead up to the 1935 election, and some say, an important contributor to its electoral success.

In spite of that, however, he was not given the commercial licence he was expecting to operate his own radio station. Savage’s Government in fact nationalised broadcasting – before later re-privatising the creation of money. As the Labour Government moved away from its financial reform pledge, Scrim became an increasingly outspoken voice of conscience. After Savage died, he was succeeded by the newly conservativised Peter Fraser, who led New Zealand enthusiastically into the Second World War, and reintroduced military conscription, against all his one-time principles. Fraser did not conceal his hatred for Scrim, had him called up for military service at the age of 40, and dismissed from his position as Controller of the National Commercial [sic] Broadcasting service.

I’m sorry to say, you are unlikely to find a copy of Kelliher’s book. I consider myself inordinately fortunate to have found this one. Call it fate or coincidence. HJK was once upon a time my grandfather-in-law – though I only met him once when he had long-since given up his reforming zeal. I do encourage you, though, to click on this link to Positive Money, and do your best to draw aside the veil of ignorance covering this all-important of subjects. Eighty years on, it’s more important than ever!

_______________________________________

Postscript: You may wonder why I’m posting this seemingly irrelevant book review on my blog site about Turkey. It occurred to me that these ideas on financial reform were very prevalent in the 1920s and 30s, around the time Mustafa Kemal Atatürk was trying to build a modern viable republic from the economic and social ruins of the Ottoman Empire. I can’t help wondering if he managed to finance some of his rebuilding projects by intelligent use of the new nation’s credit.

I haven’t yet turned up any corroboratory evidence – but neither have I found any serious discussion of where the money actually did come from. It’s equally true that you will search hard through any histories of New Zealand in those days before you find even the most oblique reference to how Labour financed its state housing project. So I’m not ruling it out.