Mr Benn and the Red Knight

A story and some thoughts on money, banking and democracy, by Alex Dower 

My favourite TV program when I was a kid was ‘Mr Benn’. Mr Benn was a simple, humble guy who lived in a house on his own and one day, on a walk to find a costume for a fancy dress party, discovers a little costume shop. In each episode the shop owner invites Mr Benn to try on a costume and from the changing room Mr Benn steps into another world - the world of the costume.

The first episode is Red Knight. Dressed in a suit of red armour, Mr Benn walks out into an old kingdom. He soon meets a dragon, who is alone and crying. The dragon explains that he has been banished. He was the fire-lighter for the people who lived in and around the king’s castle. However, a man who produced matches came along and wanted to replace the dragon as the fire-lighter. He couldn’t convince people to use his matches as they had a dragon for the job, so he caused a destructive fire and had it blamed it on the dragon, who was sent away by the king.

Mr Benn offers to speak with the king on the dragon’s behalf. To cut a long story short, he successfully does so (Mr Benn is always the humble, peace-making hero of these stories) and the dragon is reinstated. Everyone is pleased as the matchmaker had been charging more and more for the matches. The deceptive, greedy matchmaker is thrown in a dungeon BUT has to keep making matches, for free, so that everyone has fire.

You can watch this amazing video here: https://youtu.be/KJuj_ZT8pjU. It is beautifully written and illustrated by David McKee and narrated by Ray Brooks. Incidentally, the only autograph I ever wanted or got was McKee’s, at a book signing when I was about 5. I queued up and he drew me a quick picture of a dragon.

When my sons were one and three, in 2010, I bought a DVD collection of old TV shows from my time. This episode of Mr Benn was included and watching it, in the shadow of the financial crash of 2008, it immediately stuck me as a perfect allegory & solution for the banking system. Like the matchmaker, bankers have convinced us that we need their services and they exploit the situation to their advantage: once they are allowed to control the money supply, they simply make more and more money, gaining the power and influence to deepen and extend their position.

And my conclusion was that as in the story, these deceivers & exploiters should simply be thrown in prison from where they can continue to provide simple money management services, but with no exploitation of their ‘control’ of money. Okay, only those who committed connectable crimes need to be thrown in prison, but the rest of the bankers should simply be paid a wage to run banking, with no exploitation, interest, fishy financial instruments etc allowed. 

I’ll explain: from the introduction of fractional reserve banking in the 1600s, a bank can lend more money than people have deposited with it for safe keeping. If you owned a bank, you could create money. You do this by creating a loan (or mortgage etc) - the borrowers promise to pay is what creates the money. A simple trick.

As the bankers get richer, the rest get more in debt. Within this system, it is not true to say ‘there is enough for everyone’. The amount of money grows, but it is concentrated into the hands of people who know how to play the game. Others are forced to play, but as pawns in the game, not playing the game.

For more on this I recommend the YouTube video ‘Money as Debt’: https://youtu.be/4AC6RSau7r8

During the current lockdown, I have been co-facilitating an online 6 session workshop on money & the future of money (https://www.daoleadership.com/futurecourse/) and giving this whole issue a lot of reading & thought.

I was very happy to discover that my simple analysis was agreed on by an ex-Governor of the Bank of England:

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand ever invented. Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money and control credit.” Josiah Stamp, Director of Bank of England 1928-41

Leo Tolstoy described it like this: “Money is a new form of slavery and distinguishable from the old simply by the fact that it is impersonal, there is no human relation between master and slave” 

We do not need interest. We do not need this financial system. We do not need this form of indebtedness, whether as individuals or as countries. A huge proportion of tax money goes to pay interest on loans. Governments could simply control the money supply themselves and create money by investing in infrastructure that benefits all. Money would be created out of value, not indebtedness. No tax money would be wasted on interest payments. 

With the current bio-diversity loss and climate change crises, the infrastructure should probably be in regional green projects, including training. This would also address the issue of loss of employment post-covid. *

As Abraham Lincoln put it, “the privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power.” 

Unfortunately monetary reform is difficult: 

We are brainwashed into believing several things: that the system works, is fair and gives the best means of improving living standards and opportunity; that the only alternative to this form of capitalism is socialism or communism aka soviet style dictatorship; and many other ‘truths’.  

Secondly, the people making money from the current system have great power & control (e.g. ownership of mass media; control of politicians and political parties etc) and self-perpetuate as rulers very effectively (Eton, Oxbridge, Ivy league, nepotism, corruption, old-boys networks etc).

“The government, which was designed for the people, has got into the hands of the bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy.” 

― Woodrow Wilson, US President 1913-21

I don’t know whether David McKee had any of this in mind when he wrote Red Knight, but it works for me. Let’s create new monetary systems and throw out the matchmaker.

* For more on this, watch this video from a couple of weeks ago: https://youtu.be/tNOqnaeF378 - (Adair Turner, Chairman of the Energy Transitions Commission, explores the policy choices facing governments as we move from crisis response measures to longer-term economic recovery planning. 'What steps can we take now to build a better economy – one that enhances the health of people and ecosystems?')