Healthy Money Healthy Planet - library.uniteddiversity.coop

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between local and national bodies.
Kerry Marshall, former President of New Zealand’s Local Government
Association, says of local government that one size doesn’t fit all. 3 He advocates a
great deal of variety in the application of functions, with the type and level of
devolution dependent on the needs of each area. So in one region the fire service
might be devolved, in another the health service, and in a group of regions
housing provision. 4 New Zealand’s Local Government Amendment Act 2001
allows for just such a diversity.
Similarly, currency diversity is also related to the fear governments have of
the informalisation of the economy, because to allow for such diversity is a further
acknowledgement that central control will be reduced. This fear is evident in cases
where governments have quashed successful complementary currency schemes in
the past, as happened with bia Kud Chum in Thailand (see page 000), with the
Wära Barter Company in Germany (see page 000), with Wörgl in Austria (see page
000), and with the Depression­era scrip in the US (see page 000).
There is another more fundamental reason for not allowing the control of the
money supply to remain solely in the hands of private banks: those who issue
money also control the size of the total money supply. When banks effectively
decide how many loans they will give out and how fast lending will increase, they
can use this power for their own purposes. In New Zealand today, where the
private banks create 98 per cent of the money supply and set their own fractional
reserve requirement, they consequently hold most of the central power. The
Reserve Bank of New Zealand does not even know how much money is in
circulation all the time, because the commercial banks keep some information to
themselves. 5 Even if the Reserve Bank decided how much new money was to be
spent into circulation by government, as proposed by the economists Joseph