Money Puzzles is a documentary film about money and debt and the widespread misunderstanding about what they are and how they function to be found in the media, everyday life and even university economics departments.
Following on from the same filmmakers’ 2012 documentary, Secret City, it looks at the illusory qualities of the myriad forms of money in the twenty-first century, questions the role of debt in creating invisible and shadowy economies, probes the nature of debt at both national and household level, and asks what happens when debts, in either case, become unpayable.
Money Puzzles is being made at a moment when a new anti-austerity politics is becoming a reality in Greece, Spain and elsewhere, including the UK, where the Tories’ election victory makes it ever more urgent to challenge the big lie that the 2008 crisis was caused by excessive public debt, rather than by bailing out banks “too big to fail” when the financial bubble burst. Undermining the falsehoods and distortions on which austerity politics is based, the film points to an alternative conception of economics emerging across Europe and beyond, which proposes citizens’ debt audits, challenges hegemonic ideas about economic growth, and argues for different ‘structural reforms’ than are meant by the plutocrats of the EU and the IMF.
A revolt has broken out among economics students. Six years after the Queen asked a bunch of academics at the London School of Economics why no-one saw the crash coming, they are questioning the way their subject is still taught and practiced. Some 65 associations of economics students from 30 countries have launched ISIPE, an international student initiative for reform. The students’ discontent prompts a variety of questions, beginning with the most basic: what is money?
To pose the problem in the simplest possible terms: There is something strange about money. As a measure of value, it doesn’t have a price of its own. If I give you a five-pound note for five one-pound coins, we both still have the same amount. To put it another way: it doesn’t seem like the commodity that you pay for with it, like a bar of chocolate, and isn’t, like a bar of chocolate, physically consumed, but continues to circulate. On the other hand, it doesn’t grow on trees. I have to work for it, or if I want to borrow some money, for example from a bank, I have to pay for it, whereupon it does behave like a commodity. What do such contradictory characteristics indicate about the fundamental nature of money?
The film proceeds by unfolding two parallel strands, one about money, and one about debt. The money strand begins in the Numismatic Museum in Athens, where you can see the earliest known coins—found in Ionia (western Turkey) and dating from around 650 BCE—where a conference is being held by local community groups to discuss proposals for household debt restructuring (7 May 2015). The plight of Greece, unfolding as we make the film, dramatises the contradictions of the debt crisis which produced the crash of 2008, in which the international institutions (the troika) demand compliance with the banks in the matter of the country’s sovereign debt while downloading the cost onto families and households, with scant regard for long term economic and social consequences. We filmed in Greece in May 2015, and will film there again in the middle of July, when an international conference of academics and activists takes place on the theme of democracy.
We learn the functions of money through contributions from academic numismatists, museum curators, amateurs, collectors and dealers. A picture emerges of a strange type of object, which first appeared in Asia Minor in the late seventh century BCE, with a bewildering mixture of properties: medium of exchange, unit of account, store of value, etc. But we also learn from archaeologists that methods of accounting, and thus of recording debt, existed well before the appearance of coinage.
Bankers and economists join in the discussion. We learn about different forms of money –commodity money, or precious metals; fiat money, decreed by the state but worthless in itself, like cheap metal coinage or bank notes; and credit money, like the original letters of credit granted by merchant bankers to facilitate trade – privately issued and accepted as a form of money because the issuer is deemed creditworthy. We learn that coinage represents only a tiny percentage of the money in circulation, and that a history of money is necessarily also a history of debt, because that’s how banks work, creating debt by borrowing and lending.
We learn how as capitalism develops, credit money takes on new forms – like the introduction of credit cards in the 1960s which have hugely expanded consumer credit – and how the regulation of the credit system falls to the state. When the state deregulated financial controls in the 1980s, the stage was set for the rampant financialisation of the global economy which by creating and trading in unsustainable debt, sowed the seeds of the 2008 financial crash and ensuing economic crisis. Contributors speak of the need for reforms of the banking system at both national and global level.
The debt strand looks at what happens when a debtor—an individual or a country—can’t pay. An advisor at a debt counselling charity explains what happens when you become bankrupt. We hear the stories of some of the charity’s clients. Homeless people speak about what it’s like to live without money. Examples are drawn from Greece and Spain.
To guide us through the maze we follow the work of a team of researchers at Goldsmiths, University of London, led by Johnna Montgomerie, investigating indebtedness in the UK. We observe the work of groups and organisations offering debt advice, like the charities StepChange and Citizens Advice, and community groups advocating reform or resistance, such as reform of payday lending or collective debt management. Contributors raise questions about the efficacy of austerity as a solution to the current crisis.
What we discover at the community level are radical alternatives to austerity and economic disfunction, including the creation of local currencies. Molly Scott Cato, Professor of Green Economics and MEP, tells us about an initiative she was involved in known as the Stroud Pound. In Brighton, a Bitcoin trader tells us about alternative digital currencies.
At the international level, to see what happens when a country defaults, we go to Argentina, where the Finance Minister Axel Kicillof and others recall the ‘Argentinazo’ at the end of 2001 when the economy collapsed, and Kicillof explains Argentina’s legal battle in a New York courtroom during 2014.
The dilemma facing Greece is analysed by Costas Lapavitsas, and Molly Scott Cato discusses the concept of odious or illegitimate debt. We hear arguments for Citizens’ Audits, and calls for a debt jubilee in the interests of global justice and sustainable economics.
The film concludes by reporting on the developing situation in Greece and Spain.