From Speculation to Sustainability:
Reclaiming Finance for People and Planet
According to professor Robert Hockett, our financial system has morphed into a "money-pump that encourages, aids, and abets destructive and wealth-concentrating speculation" [1].
Can we create a sustainable financial system that works for the people and the planet? Hockett, professor at Cornell University, has an optimistic but realistic answer: Yes, we can! And it has never been easier to make the transition than today.
Join us for a thought-provoking webinar Thursday 10 April 19-21 CEST (1-3pm EDT) where prof. Hockett explains his grand plan for how to transform money, banks and financial markets to work for the society, not for the financial elite, and how we can start this journey now. Register to secure your spot:
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A broken financial system
Many have been told that the state ultimately controls money creation. But few know that this power has been delegated to private banks. This means that banks don't need to borrow to give a loan. The banks simply create new money out of thin air, on behalf of the state. Why is this a problem?
To give private banks endless possibilities to expand our public money supply, without any requirements on how to spend it, is madness. As Hockett writes, this means that "there is practically no limit to how much new money can be generated and misallocated to destructive" purposes. [3]
Banks are private profit-seeking companies, investing our public capital blindly in anything profitable such as speculative financial markets and fossil fuel industries.
As Hockett conclude: "The upshot is intolerable injustice and massively scandalous waste" [4]
How did we get here?
Why was money creation delegated to private banks ? As Hockett explains, there were good historical reasons.
Metal coins was a scarce resource. This created a shortage of money and lack of investments.
The most feasible solution was to outsource payments and money creation to local banks. They could keep track of payments through paper and pen and create money flexible for the need of local businesses and citizens.
However, globalization and digitization has enabled huge global banks and "remote participation in production" through trading on financial markets.
This is not necessary a problem, but combined with unrestricted money creation by private banks, the result was disaster.
Today, banks pumps huge amounts of public money into financial markets. This leads to reinforcing spirals of increase asset prices, new loans, and purchase that pushes up the asset prices further. This has created a "financialised" economy where destructive speculation has become more profitable than production itself.
Hockett's solution
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"As Hockett demonstrates, the future now available to us includes transactional privacy and free banking services for all households and businesses, leak-proof monetary policy for all central banks, and a transformed financial system that is once again geared toward production instead of mere speculation"
- Ro Khanna, Professor of Economics and U.S. Congressman.
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Hockett's proposal "would sharply reduce costs, speculative excesses, and opportunities to defraud, while also eliminating the problems of financial exclusion and the unbanked with a single stroke.” It would also: ”reduce the current digital cacophony and excess profit exploitation to a productive minimum.
—Jeff Madrick, New York Times economics columnist and author of several books.
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Fans and foes alike of digital financial technologies will revel in the breadth and sheer exhilaration of Hockett’s ambitious and sweeping proposal to reimagine the US financial system, and to dare policymakers to reply to the question ‘why not?
— Colin W. Brown Distinguished Professor of Law, Duke University; former Deputy Secretary of the Treasury, 2013–2017; former Governor, Federal Reserve Board, 2010–2013
Imagine that there was a simple and straight forward solution, that had the following effects:
Hockett explains that all these effects, and much more, can be achieved almost "with one single stroke". That is "to offer all citizens, along with the U.S.’s state and local governments, small businesses, and other non banking firms too, digital wallet accounts".
How can a public digital wallet be a major step to solve so many problems?
Reclaiming Finance for People and Planet
A public digital wallet for everyone will have revolutionary consequences. We don't need private banks any longer to (i) pay each other or (ii) increase the money supply. This makes it possible to take back the power over the financial system to benefit the people and the planet - not just the financial elite.
With Public Digital Wallets, everyone can now pay each other independently of private banks. Moreover, the public sector can create all new money that the economy needs directly into the digital wallets to fund public infrastructure projects fully independent of private banks.
This means as Hockett notes that "Private sector finance in all subsectors of our financial sectors now will indeed be private" - they finance themselves on the market and can go bankrupt as any other ordinary business in the economy.
Note that this doesn't mean that private banks and financial markets will disappear. They will just shrink into a proper size and start to function as pure intermediaries that borrow and lend already preaccumulated existing money.
The public can still actively choose to lend ear-marked money to private banks with clear requirements on how these money should bes used productively. However, the important difference is that banks are no longer automatically given the right to spend how much public investment capital they want on whatever they want. Instead, we the people, will decide how to spend newly created money through our democratic institutions.
Urgent need for action
Hockett writes that his proposal will lead to "a massive downsizing" of the "too big to fail" financial companies. They will no longer be able to "strong-arm our legislators and other public officials", "for the plan here is precisely to shrink and disarm them, in addition to rendering us no longer dependent upon them."
The banks have realized this, and are scared: "the rent-taking middleman institutions that have benefitted by the old regime see the threats posed to their oligopoly by the emerging regime.”
That is way they are doing everything they can to postpone and stop the development of public digital wallets, also called "Central Bank Digital Currencies" or "Treasury Direct Currencies".
As Hockett conclude, therefore "We must act quickly".
Register for the webinar and Join our movement for moentary reform now!
About prof. Robert C. Hockett
Robert Hockett is a distinguished professor who has been shaping the discourse in financial and monetary law at Cornell Law School since 2004. Professor Hockett focuses his teaching, research, and writing on the interplay between organizational, financial, and monetary systems—examining these in both their national and international contexts. Why you should listen to him:
- His expertise is sought after by prominent institutions such as the Federal Reserve Bank of New York and the International Monetary Fund.
- He has consulted or drafted legislation for prominent figures such as Senators Bernie Sanders, Elizabeth Warren, and Marco Rubio, as well as Representative Alexandria Ocasio-Cortez.
- Professor Hockett serves as a Fellow of the Century Foundation and regularly authors commissioned work for the New America Foundation.
- He also served as a law clerk to the Honorable Deanell Reece Tacha, Chief Judge of the U.S. Court of Appeals for the Tenth Circuit—a role that underscored his dedication to principled legal practice.
Through his balance of rigorous research, practical policy insight, and an unwavering commitment to equitable economic structures, Hockett has become a trusted authority and leading voice in financial regulation, monetary innovation, and forward-looking policy solutions.
Recent work
Historic opportunity
Central bankers, academics, monetary reformers, and policymakers around the world are currently discussing the problems and risks of the current monetary system and exploring new approaches to creating money. Citizens have a historic opportunity to influence and ensure that money creation is organised in a fair and sustainable way. That's why we are organizing courses and seminars on the subject. Sign up and feel free to invite friends and acquaintances.
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Never doubt that a small group of caring, committed citizens can change the world. In fact, it is the only thing that ever has.
Margaret Mead
When? Where? How?
Organizers
International Movement for Monetary Reform (IMMR) consists of non-profit organizations that focus on the critical issue of our time - the creation and disappearance of money and its consequences for the development of society and our lives.
We are non-partisan and act only for this issue. Our vision is that the money system should be fair, sustainable and democratic and used for the benefit of society as a whole.
© International Movement for Monetary Reform