Credit creation as an interest bearing debt creates an imbalance between available goods and services and purchasing power, especially when it is combined with a lack of credit and the doubling time effect on debt, caused by the practice of usury (interest charges). The inability, under this system, to maintain a proper balance between production and consumption fuels an almost desperate drive to achieve that balance by exporting. Rowbotham exposes the inequity in this assumed solution. Nations successful at exporting must do so at the expense of other nations who become net importers. Their debt problem worsens and their economy suffers. The successful nations direct their export dollars into their own economies. The need to boost domestic purchasing power demands it. Economists who claim creditor nations will balance trade by pushing their surplus currencies back into the world economy are proved wrong.
The environment also suffers. Rather than a system of world trade, based on the supply of surplus necessities, an export led economic system sends a nation’s real wealth off shore. They lose the best of their goods to other nations and over-exploit their natural resources in exchange for money. In doing so they often produce goods which other nations are quite capable of making themselves. Importing these goods depresses or eliminates local production. In all of this raw commodities and finished goods are needlessly shipped all over the globe with all the attendant wastage and depletion of the world’s finite resources.
To ameliorate the worst effects of this export led system many nations floated their exchange rates. Neo-liberal orthodoxy claimed doing so would cause the value of a net exporting nation’s currency to rise, making its products less attractive. Its exports would fall off, helping other nations struggling to generate sufficient export revenue, until a balance in trade was achieved. Experience has shown that this system does not work efficiently. Many countries persist in being net importers or exporters.
Neo-liberal economics has extended its reach into the world’s money and stock markets thanks to the deregulation required as a condition of World Bank and IMF loans. Individuals and corporations are able to amass huge financial assets by simply playing the stock and money markets. There have been instances where individuals leverage off hedge funds to borrow huge sums to influence whole markets. Speculating on currencies, stocks and commodities has become a trillion dollar industry that makes money for nothing; no real value in the form of products or other national assets is created.
The business of financial market speculation has also involved asset stripping both companies and nations. One of the most blatant examples occurred in Malaysia where virtually overnight financial institutions sold up their stocks and moved money out of the country, almost bringing the nation to its knees. Similar exercises have been conducted in South Africa, South Korea and Taiwan. These same financial institutions can then move back into a depressed stock market and scoop up otherwise good companies at rock bottom share prices. All of this happens completely outside of the real world where people lose their jobs and taxation increases to fund the inevitable requirement to cover losses with more loans. Industries have also been lost to foreign ownership and the whim of international speculation. Playing this sort of game with people’s lives and local economies for quick bucks is reprehensible.
The end result of so much written here comes down to the accumulation of wealth and land far in excess of any conceivable need. In 2012 James Henry, former McKinsey and Company chief economist, released a report for the Tax Justice Network. It disclosed that upwards of 21 trillion U.S. dollars has been salted away in tax havens, excluding land holdings, estimated to be valued at five trillion. One hundred thousand people hold just under ten trillion in these havens, which are managed by some of the most ‘respected’ companies in international banking. If the richest 10% gave just 10% of their wealth to charity the four trillion dollars it would provide could solve the worlds poverty and disease problems. Imagine what might have been if polices limiting the accumulation of this sort of wealth had been in place. Again, with the right will, so much could have been done economically to enable economies to provide employment and make big government welfare unnecessary.
The super-rich and their corporations are also behind massive land grabs going on across the world. Indigenous people are being forced off their land so large areas can be sold to foreign investors. Corporations have also been complicit in buying logs and diamonds from Africa knowing their money was being used to fund civil wars. According to the sources cited here, 139 ‘developing’ countries are subject to an outflow of capital into tax dodging havens and 220 million hectares around the world were sold to foreign interests in one five year period alone (in the 2000s). Exploitation, death and injustice, alongside lost opportunities to invest in poverty reduction and self-sustaining economic development, are the result. Individuals and corporations amass huge and unjustified wealth at the expense of others and then compound their greed by avoiding tax, or piously lauding their philanthropy. In the UK the alcohol industry maximises its profits by preying on those with an alcohol problem. Several studies reveal £23.7b, or 60% of its profits, is made by selling to problem drinkers, while claiming it promotes responsible drinking.
When the government in my country (New Zealand) neo-liberalised the economy the privatised power and telecommunications industries set out to price gouge the population while degrading the infrastructure provided originally by the tax-paying people. At one point power went out to NZ’s largest city. An investigation revealed the company concerned had put profit before maintenance. In addition, investigators found various power companies, owned in the main by off-shore corporations, had overcharged the public to the tune of ten-plus billion. The telecommunications network was privatised to a monopoly corporation which then price-gouged for decades, making phone charges some of the highest in the world. Very reluctantly and slowly did government introduce competition. Our liberal-corporate politicians are very reluctant to remedy obvious social and market failures because they are fixated on neo-liberalism and swayed by the corporatist lobby. The litany of corporate excess and greed goes on and on, while tax-payers are forced to put billions into failed corporations, because it is claimed we cannot afford to let them fail. This corporate tyranny, backed up by sycophantic governments, has to end.
 See Fred Pearce’s 2012 book, The Landgrabbers: The New Fight Over Who Owns the Earth.
 Guardian and Observer, Jan 23rd, 2016, Kindle edition.