Where Money Comes From and Why They Don’t Teach It in School

Money Puzzles: A Film About Money and Debt, Austerity, Solidarity and Alternative Solutions

Directed by Michael Chanan (2016)

Film Review

This film starts by examining the history of money, which developed in all civilizations except the Incan civilization (the Incas had gold but didn’t use it for money). The first coins seem to have appeared independently in China, India and Ionia* in the 6th century BC.

Our current system of money creation, sometimes referred to as “fractional reserve banking,”** began in the Netherlands and the Italian city states in the 17the century. It came to Britain (and most of the British colonies) with the formation of the Bank of England in 1694.

Contrary to popular belief (and most economic courses), 97-98%*** of the world’s money isn’t created by government (or central banks), but by private banks when they issue loans. The money banks loan out doesn’t originate from reserves or savings accounts. Banks create it out of thin air.

The documentary’s main focus is the debt crisis that collapsed the Greek economy in 2015. Unfortunately the film mentions, but fails to explain clearly, that governments also create money by borrowing from private banks. At times, when banks stop making private loans, governments are forced to increase borrowing to ensure there is sufficient money in circulation to keep the economy going (ie to prevent recession and/or economic depression).

What many people fail to realize, is that most governments have the constitutional authority to create money. Their decision to borrow it from banks (rather than create it themselves) is purely political.

The film explores the collapse of the radical Greek party Syriza when its leadership  ignored a 2015 popular referendum rejecting the EU’s austerity bailout proposal. 61.3% of Greek citizens opposed the bailout, essentially opting for Greece to default on their debt and withdraw from EU.

The filmmakers also explore the Argentinian decision to default on their debt in 2001. Although UN General Assembly passed a resolution in support of the Argentinian default in September 2015, a new Argentinian government took out new IMF loans in 2016 to resume debt repayments.

The documentary concludes with a number of innovative grassroots alternatives Greek citizens have initiated to support each other in meeting post-collapse survival needs (see Debt and the Economic Colonization of Greece), Spain, and Argentina have adopted in the face of extreme economic austerity. These include local currencies, squatting and a variety of community-based mutual aid cooperatives to ensure people don’t go without food, clothing or other basic necessities.

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*Ionia was an ancient civilization in the western part of modern day Turkey. It consisted of the northernmost territories of the Ionian League of Greek settlements.
**Under fractional reserve banking, banks are required to hold in reserve a minimum percentage (10%) of loan’s face value. In reality, most central banks discarded reserve requirements at least a decade ago, essentially allowing private banks to decide how much money to create.
***The other 2-3% of the money supply is issued by central banks as notes and coins.  97-98% is electronic money created via computer entries.

A Tourist’s Guide to Anarchism

Skoros: Anti-Consumption in Crisis

Skoros Collective (2015)

Film Review

This film is about the Skoros collective in Exarcheia,* Athens’ infamous fascist-free zone. Skoros operates a secondhand store in rented space, unlike many Exarcheia businesses, run as squats in abandoned buildings. Skoros formed during the 2008 global economic crisis, which (owing to skullduggery by Goldman Sachs, the IMF and the European Central Bank) hit Greece especially hard. See The Real Cause of Greece’s Economic Crisis. Customers, which include many refugees housed in Exarcheia squats, are allowed to select three items per visit. The store is staffed by collective members as unpaid volunteers. Since the film was released in 2015, the store has become a tourist attraction – listed in A Guide to Shopping in Athens and featured in the Independent travel section.

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*Exarcheia is a self-governing anarchist community spanning four decades. There is a recent effort by Greek authorities to evict squatters from Exarcheia’s abandoned public buildings, but it looks to be an extended process. See

Greece: Exarcheia under police occupation!

and

Ministry Issues Ultimatum

and

Airb Bnb Exarcheia

1177 BC: The Year Civilisation Collapsed*

When Civilisation Collapsed

The Histocrat (2019)

Film Review

I have always been morbidly fascinated by ancient history, largely because most public schools refuse to teach it. I wanted to major in ancient history at university but was scared off by the surplus of PhD cab drivers in the late sixties.

This intriguing documentary concerns a four-century “dark age” in the late Bronze Age between 1200 and 800 BC. It began when four powerful empires collapsed more or less simultaneously. Because literacy also collapsed, there is no written history describing this period. Thus nearly everything we know about it is based on archeological evidence and oral history Homer captured in the Iliad and the Odyssey.

The four Bronze Age Empires that collapsed are Egypt, the Hittite empire (in Asia Minor), the Mycaenean empire (Greece), and the Assyrian empire (in Mesopotamia).

For several centuries prior to their demise, these prehistoric empires battled each other on their borders and traded territory back and forth.

Since the late 19th century, most historians have blamed their collapse on an invasion by mysterious “Sea Peoples.” However as laid out in this documentary, except at Troy (aka Ilium, aka Wilusa), there is no archeological evidence supporting a major military invasion.**

Based on contemporary archeological evidence, the film argues that a combination of natural disasters (earthquakes, droughts and famines) internal revolts, and a surge in sea piracy*** is a more likely explanation.

By the time written language reappeared in the 8th century BC, a number of new tribes and languages had appeared. Athenian and Dorian tribes had migrated into Greece, Phoenicians and Philistines had migrated into the Levant,**** the new kingdom of Lydia had expanded to cover most of Asia Minor. Assyria would ultimately expand to become the largest empire the world had seen.

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*Professor Eric H. Cline’s book 1187 BC: The Year Civilisation Collapsed is credited as a main source for this documentary.

**According to archeological evidence, the Greco-Trojan war most likely occurred between 1300 and 1200 BC.

***All four empires were dependent on Mediterranean trade, especially for copper (from Asia Minor and Cyprus) and tin (from Afghanistan and the Balkans) needed to make bronze.

****Area including modern day Syria, Israel, Jordan, Palestine, and Lebanon.

 

The Celts: Advanced Seafarers or Uncivilized Barbarians?

The Celts: Search for a Civilization

By Alice Roberts

Heron Books (2015)

Book Review

Were the Celts of northern Europe the uncivilized barbarians the Greeks and Romans made them out to be? Alice Roberts thinks not. Her book examines the origin of the Celts, the prehistoric tribe responsible for populating Ireland, Wales, Scotland, Cornwall and early Britain. The conventional view is that the Celts originated in central Europe and gradually migrated west to occupy ancient Gaul (France), Britain, Scotland, Wales an Ireland; south to Egypt and northern Italy; and west as far as Kiev and Turkey. Roberts sides with the more recent view that Celtic civilization developed along the Atlantic coast of Europe – a well-connected group of Bronze Age societies extending from Portugal – and migrated westward to occupy Gaul, parts of Germany, the Balkans, Turkey and northern Italy..

The Celts gives a full inventory of all available archeological, linguistic and genetic evidence, as well as accounts from historical texts and oral myths. The picture Roberts paints is totally at odds with Roman and Greek efforts to portray Celts as uncivilized barbarians. Thanks to their great sophistication in mining, smelting metals into weapons and jewelry, and advanced seafaring, the Celts established major trading centers throughout continental Europe. The Tartessos referred to in the Old Testament at the time of Solomon were early Celts who sailed great ships laden with silver, gold, ivory, apes and peacocks to trade with Mediterranean settlements.

The Phoenicians, the first Eastern Europeans they made contact with, traded wine and manufactured goods for their silver, gold, copper and tin. The earliest written evidence of the Celtic language comes from the beginning of the Iron Age in Southwest Portugal.

In addition to well-developed religious practices, the Celts had a written language and appointed druids to serve as judges, guardians of knowledge, and  priests.

During the Iron Age, they developed a reputation as great warriors and often hired themselves as mercenaries to various kings and emperors. In 387, they sacked Rome for the first time, and in 280 BC they conquered Macedonia and moved south into Greece. Julius Caesar’s primary reason for invading and occupying Gaul was to end the constant Celtic raids on Roman territory.

Hidden History: the Old World Legacy of Syphilis

The Syphilis Enigma

Directed by Amy Bucher and Christopher Salt (2001)

Film Review

This documentary reports on a forensic paleontologist’s investigation into the origins of syphilis. For 500 years, history has blamed Native American women, who allegedly transmitted it to Columbus’s crew members in 1493. Recently a fourteenth century skeleton from Hull (England) called this 500-year-old into question. European paleontologists began a search for pre-Columbian evidence of the disease and also found it human remain from ancient Greece and Pompeii.

Why, then, do ancient New World remains also show evidence of syphilis? The current hypothesis is that Native Americans suffered from a milder variety of the illness with airborne transmission via saliva droplets The European version, in contrast, was only transferred via sexual contact and, in most cases, was fatal (unless sufferers died from plague, smallpox or cholera first).

 

 

Greeks Fight Back Against Austerity and Fascism

Love and Revolution

Directed by Yannis Youlountis (2018)

Film Review

Love and Revolution is about the growing anarchist movement fighting Greece’s deepening austerity cuts (which have cut salaries and pensions in half and ended health care access for a million patients). The film consists mainly of interviews with anarchists over the specific projects they are organizing. The documentary emphatically challenges the recent announcement by the IMF and the European Central Bank that Greek austerity has ended. After years of brutal austerity resulting in thousands of deaths, the Greek government is further than ever from repaying its debt to European bankers.

Among the projects that most impressed me are

• a social kitchen that regular provides free meals on the street.
• an anti-eviction movement that has been by occupying and shutting down eviction hearings at the District Court.
• an ongoing squat that has provided accommodation to more than 6,000 refugees in the last five years.
• an antifascist campaign that has shut down Golden Dawn* offices in Athens and established Exarcheia, a fascist-free zone that also effectively excludes Greek police.
• a campaign to block the construction of a new airport in a pristine rural/agricultural area.
• a YouTube channel dedicated to Greek news from the viewpoint of anti-austerity activists, rather than police and banks.

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*See Greek Austerity and the Rise of Fascism

The Basques: Spain’s Other Separatists

 

The Basque History of the World

by Mark Kurlansky

Penguin (1999)

Book Review

The Basque History of the World is a history of Basqueland, a semi-autonomous region in the Pyrenees straddling the French-Spanish border. Despite the recent declaration of independence by Catalonia, there is surprisingly little attention on historical efforts by Basqueland, to break away from Spanish rule. Like Catalonia Basqueland, which has its own unique language (Eskuera), has been a major industrial and economic powerhouse for the rest of Spain.

Global Mercenaries, Traders, Shipbuilders, Navigators and Bankers

Historically the Basques were traders and mercenary soldiers dating back to the 4th century BC. The Greeks hired them, as did Carthage in their war against Rome. Although Basque was technically “occupied” by the Roman empire for nearly 400 years, the Romans demanded no tribute (taxes) and exerted no military oversight.

In the 7th and 8th century, the Basques became Europe’s leading shipbuilders (which they learned from the Vikings) and iron mongers (which they learned from the Celts). They were the world’s first commercial whalers, establishing whaling stations as far distant as Newfoundland and Labrador. In the 9th century, they also dominated the European trade in salted cod, fishing off Iceland, Norway, Britain, as well as Newfoundland.

Beginning in the 15th century they were sought after by many European explorers (including Columbus and Magellan) as pilots, navigators and seamen.

They were also the first capitalists, financing their shipbuilding via private venture capital. In 1999, when this book was published, they were still global leaders in banking.

Unconquerable

Neither the Moors (in the 8th century) nor King Ferdinand and Queen Isabella (in the 15th century) succeeded in conquering Basqueland. Owing to the immense wealth the Basques generated, they paid no duty on foreign goods imported through their ports. Until 1876, they paid no tax to Madrid and were exempt from serving in the Spanish military. French Basqueland fared far worse after the French revolutionary government eliminated France’s three Basque provinces in their campaign to erase ethnic identities.

Spain was so poor when the second Spanish Republic was declared in 1931, only Basqueland and Catalonia (thanks to their strong industrial base) enjoyed a European standard of living. Both regions demanded full autonomy as a condition of supporting the Republic.

Following the successful coup of Spain’s fascist dictator Francisco Franco in 1939, the Basques provided the only organized resistance against his regime. They also played an extremely important role in the French resistance to Hitler’s occupation of France.

Role in Downfall of Franco Dictatorship

In 1973, ETA, the Basque armed militia assassinated Franco’s second in command, and Basque and Catalan leaders began meeting secretly to plan Spain’s transition to democracy.

Franco’s death and the fall of his government in 1975 would prove disastrous for the Basque economy. The dictator had been heavily subsidizing archaic Basque factories, which were totally unable to compete with modern European industries after Spain joined the EU.

In 1998, after uniting with Catalonia to win constitutional guarantees of legislative autonomy (for both Catalonia and Basqueland), ETA unilaterally renounced violence. This followed a 16-year battle with the GAL, an undercover police/paramilitary operation that engaged in extrajudicial assassinations and torture against Basque nationalists.

 

 

 

The EU and the Colonization of Europe

The Forbidden Colony

Al Jazeera (2017)

Film Review

This Al Jazeera documentary examines the undemocratic nature of the European Union and it’s role in allowing banks and multinational corporations to colonize Europe. It begins by focusing on the EU Parliament, which meets in secret and bans public observation of its proceedings. Elected members of the EU Parliament lack the authority to initiate legislation. They can only rubber stamp laws proposed by the non-elected European Commission.

Croatian philosopher Srecko Horbat examines the right and left wing movements that have arisen in reaction in response to the massive economic dislocation (job loss, low wages, high housing costs) people have experienced following the creation of the EU.

The far right tends to campaign against the massive influx of migrants, which they blame for their declining standard of living. The left, in contrast, is more focused on rebuilding European democracy from the ground up.

For me, the most interesting part of the film was its examination of various European experiments in direct democracy. Examples include

• The grassroots movements in Hamburg and 170 other German cities and towns that have bought back electric power companies from private companies to hasten their transition from fossil fuels to renewable energy.
• Ada Colau, the radical mayor of Barcelona,* who is working to transform squats into cooperatives and forcing banks to make vacant buildings available for social housing.
• Greece’s parallel economy, which operatives massive “no middlemen” food markets in reaction to price gouging by corporate supermarket chains.

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*The capitol of Catalonia, which is organizing a popular referendum to declare independence from Spain – see Showdown in Spain

Greek Austerity and the Rise of Fascism

Golden Dawn

Konstantinos Georgousis (2013)

Review

Golden Dawn is a remarkable documentary tracing the rise of the neo-Nazi Golden Dawn party in Greece. Despite their role in several high profile murders, Golden Dawn has held 18 seats in the Greek parliament since 2012.

Their rapid rise to power relates in large part to dire austerity measures the European Union has imposed on Greece. With 28% unemployment (55% youth unemployment) and drastic pension cuts, many starving Greek citizens join Golden Dawn because of their free food distribution programs.

However as Georgousis makes clear, the strong support Golden Dawn enjoys from police (who openly admit to being members), the media, the Greek Orthodox Church and Greek security services is even more instrumental. In all respects the parallels with Nazi Germany are chilling.

Golden Dawn is notorious for openly beating up and murdering both illegal and legal immigrants – with the police looking on and, in many cases arresting legal immigrants instead of perpetrators.

Only anarchist groups have tried to protect immigrants from these attacks. When they do so, the police step in and arrest, beat and torture them.

In 2012, following the murder of a high profile Greek national, the Greek government finally arrested four Golden Dawn leaders on a charge of criminal gang activity. However instead of stripping them of their parliamentary seats, they then directed Greek jail staff to transport them between jail and Parliament.

What I found most remarkable about the documentary is its excellent footage of actual Golden Dawn meetings and its in-depth interviews with some of its members.

Refugees and Anarchists – Greece’s Burgeoning Popular Resistance

Resistance in Athens

Medialien (2016)

Film Review

Resistance in Athens is a short documentary about the ongoing dismemberment of Greece by the Syriza government to satisfy harsh bailout conditions imposed by the IMF and European banks. As brutal austerity measures continue to shrink the Greek economy, unemployment (now at 25%) and hunger continue to increase and more than 200,000 young people have left Greece for other European countries.

Meanwhile a continuing influx of Syrian, Afghan and African refugees across the Mediterranean continues to fuel the resistance movement. Owing to government budget shortfalls and refusal by other EU countries to accept non-European migrants, Greek anarchists and socialists have played a major role in welcoming refugees and meeting their needs for shelter, food and other survival needs.

The documentary focuses on Exarcheia, a growing self-governing anarchist community spanning four decades.

For me, the highlight of the film was the personal interviews –  with Exarcheia members about their work with traumatized refugee children and with refugees who have turned against capitalism due to their brutal treatment by European authorities.

Click on the cc icon in the lower right hand corner for English subtitles.