Money creation and inequality – an underexposed topic for monetary reformers
by Lino Zeddies
Posted March 4, 2018
It is beyond doubt that the current money system has a huge impact on the distribution of power and wealth and heavily contributing to systemically worsening inequality. Even though there is growing public awareness and debate about the problem of inequality, so far the focus has been on the distribution of existing money and wealth, while the distributive effect of how and for what purpose money is created in the first place, seems to be a complete blind spot.
To raise awareness for these neglected dynamics, this article provides in the following an overview of the several direct and indirect channels through which the current money system worsens inequality and how a sovereign money reform could improve matters. Some of the mechanisms might seem at first glance not to be connected with bank money creation but it can be argued that they are part of the current money systems logical unfolding and would probably not, or to a much lesser extent, exist in a sovereign money system. More…