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The lobby for the status quo

Paul Krugman is a Nobel prize-winning economist, right?

He went to Stockholm and rubbed shoulders with the world’s leading scientists, novelists and peacemakers — fellow members of this elite community. Right?

Wrong, kind of. Alfred Nobel was a Swede who, as everyone knows, made his fortune in the explosives business. On his death, he bequeathed that fortune to the endowment of five awards in the fields of physics, chemistry, medicine, literature and peace. Not economics.

The prize that Krugman won is officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, and has been sponsored by the Swedish central bank since it created the award in 1968.

It is the only other prize awarded by the Nobel Foundation, and some of Nobel’s descendants actively protest the association of the economic prize with their name.

Discussions about nominations cannot be disclosed for 50 years, so we have a few years to wait to find out how the selection process works, but one thing is clear, according to Bernard Lietaer, an economist who once worked at the Belgian central bank: there must be no discussion of the monetary system.

“Didn’t they tell you? Never touch the money system,” Krugman once told him, apparently. “You’re killing yourself academically if you touch the money system.”

Mainstream economists disagree over many things, but they rarely differ much over the money system. Whether in the Soviet Union or the USA, bank-debt money was the only game in town for both communists and capitalists.

“We have been blind ideologically to what is common between them,” says Lietaer in an interesting presentation on “monetary blind spots and structural solutions”:

This video is the first of five parts, in which Lietaer challenges assumptions about how our money system works the way it does. And why.

“At Belgian central bank, they told me: ‘We exist, the central banks exist, the IMF, the World Bank exist for one purpose: to keep the system going as it is, not to improve it.’ It is the lobby for status quo. At the time, in the 1920s, the banks got the best deal they could ever get, so they created a reality that froze it forever. There’s an active lobby that nobody sees as a lobby, because central banks are different from the banks, right? But there’s one thing they agree on, the money system.”

They also agree that anyone who challenges the status quo doesn’t get a “Nobel Prize”.

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