These are as follows:
· Wealth-creating capacity should be re-orientated towards good (humanitarian and sustainable) wealth creation.
· Bad (unsustainable, destructive and indulgent) wealth creation should be cut back dramatically.
· Economic growth is good only if it is sustainable.
· There should be full employment[92] so as to achieve the above re-orientation.
· The money supply and spending should be sufficient for full employment but no more.
· Reductions in money supply and spending below the full employment level are extremely harmful and should be avoided.
· The health of the economy depends on the things it produces being bought - spending and consumption are essential.
· Society should be generous to those who spend their income on new wealth, and ungenerous to those who save their income or invest more than is needed for pension purposes - see chapter 96 - in existing assets.
· Inflation and deflation can be controlled if the supply of money is controlled.
· The money supply and spending should grow in line with economic growth.
The above analysis shows that those who control the supply of money control the economy, and therefore have immense power. Those people are not, as is commonly thought, the central bank and the government, but the banks.
Banks create 97% of all UK money (Jackson and Dyson 2012 p48). Like all other commercial businesses banks aim to make as much profit as possible by any and all legal (and sometimes illegal) means, and have little or no allegiance to anyone other than their directors, senior managers and shareholders. Banking is examined in Part 2.
There is nothing to stop the government and central bank from taking control of the money supply, and therefore also having complete control over inflation.
This option is examined in chapter 55.
In the light of the above information the uncontrollable nature of the money supply is hopefully becoming somewhat less of a mystery, and will be explored further in the banking section in Part 2. In particular the way that banks can cause deflation is explained in chapter 52.