Ellen Brown and Earl Staelin: Can Public Banking Solve AI? and End War?

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Attorneys and public banking advocates Ellen Brown and Earl Staelin explain why reforming our system of money creation could help end war and ensure universal prosperity.

Ellen Brown is the founder of the Public Banking Institute and the author of a dozen books and hundreds of articles including a new series on “AI Abundance.”

Earl Staelin is the founder of the Rocky Mountain Public Banking Institute. Note that the Public Banking Institute will be hosting a conference October 21-24 in Philadelphia.

Excerpts:

Ellen Brown: Yeah, yeah, so is mine. It turned out I got a huge amount of pushback. I got hundreds of comments.

Elon Musk said (that AI will bring universal prosperity, necessitating a very high Universal Basic Income.) That is what prompted me to write about it.

I’ve written different times that the Treasury should issue our dollars directly the way Abraham Lincoln did in the Civil War when the British bankers were going to charge around 30 percent interest on loans to finance the war. And one of his advisors said, “you don’t have to borrow. You can just issue the money.” It’s in the Constitution: “Congress shall have the power to coin money and regulate the value thereof.” And it’s what the American colonists did. According to Benjamin Franklin it was the reason for the great prosperity of the American colonists until theKing James required that they—well, the Bank of England leaned on the King to say “you can’t let them do that, issue their own money.” And according to some experts, that was the major trigger for the Revolutionary War was that suddenly we had no money. Before that, our moneywas paper money issued directly by the colonies.

So anyway, we can do that. So Elon Musk predicted that in 10 years, GDP in the US would be 10 times what it is now.

And meanwhile, we have this problem of AI taking over all the jobs. So you have people without jobs, so they don’t have incomes. And then you have a huge amount of supply. So instead of too much money chasing too few goods, which is how we get inflation, price inflation, you’ve gottoo little money chasing too many goods. And so he said we would need to do not just the universal basic income for everyone, but a universal high income just so we’d have enough money out there to buy all the goods that we’d be producing.

So I thought, well, where are they going to get this money? You know, they can’t get it from taxes, obviously. People have been talking about UBI for years, and it’s always, well, where are you going to get the money? You can’t afford it.

But where you could get the money is just have the government issue it directly, and it would not be inflationary, because in this case, you’refighting deflation. You’re trying to bring the money supply up to match this amazing productivity. So that’s what triggered me to write about itin the first place….

And then people said, well, what about this? What about that? So I wound up writing five articles in that series. And the last one was about work. The objection has been that work is where we get meaning. And where would we find meaning in our lives if we didn’t have to go out to work?

Well, of course, sure, work is where we find meaning, but it could be our own work. All us retired people, like me, I’m not sitting around doing nothing. I’m writing. Or maybe you’re not a writer or maybe you’re not an artist, but you’re a grandmother or whatever. You could spend all thistime with your family that you didn’t have before. People do productive things with their spare time. They don’t necessarily just go on Facebook and scroll and scroll. I mean, maybe they do that after their 50-hour-a-week job because they’re so exhausted, they just need some escape.

So they turn on the TV, sure. But if you had total free time, you would do productive things. So I cited a lot of evidence of that. And then therewere other objections. Where are you going to get the power? I went into all that.

But that was the basic thrust. That’s what got me embroiled in all these things about AI. And then, of course, people just don’t like Elon Muskjust because he’s a trillionaire. People don’t like people with a lot of money.

Kevin Barrett: So in a future of unlimited prosperity like that, there’d be seemingly no reason for war, right? Wars are about resources. And even today, we see what this war on Iran is largely about dominating the resources of West Asia and the way they flow through the Strait of Hormuz. So if we could kick back and not worry so much about the resources and wealth, life could get better in a lot of ways, including less war, theoretically. So Earl, let’s talk about that, the relationship between banking, monetary systems, and wars.

Earl Staelin: Yeah, there’s a very interesting book about World War I by McGregor and Dougherty. It cameout about 10, 11 years ago, 2015, Ibelieve. And they showed how Britain had planned to provoke Germany to start a war for about 15 years or so before World War I started.

And the reason for that was that Germany was growing faster and was going to surpass them and overtake them in industry, commerce, even inshipping. And arguably, the reason for that is that Germany had a system of public banks, city-owned public banks in 1,500 cities, as well as anational bank that was publicly owned, and their lending was for local, small, medium-sized businesses. The national one included largebusinesses, but they were productive. They created many jobs. And that, of course, grew their economy and was why they were growing muchfaster than England, which had been concentrating its banks into a smaller number of very large banks. And, of course, the U.S. has moved in the same direction since then, even more.

The goal was to provoke Germany to start World War I. And that was so that they could get Germany in a war with Russia and in a war on itseastern front against France and eventually England, and, they hoped, the United States, which they of course eventually brought in. But itstemmed from this banking situation and the discrepancy between an economy run by a few large banks versus one with many small banks thatare locally creating businesses that are more creative, that create more jobs and more prosperity.

And we have that situation today, by the way.

Now, what is the incentive for large banks for war? Well, first of all, they prefer to lend to large corporations. They’re large themselves. It’s easierfor them. Economies of scale. They make more money, more profit. Wars have some guaranteed profitability that is very appealing to largebanks.

One is that the spending is very high for weapons of all kinds. The spending is unlimited. The government guarantees repayment that may bebacked by bonds and taxes and other things. The banks may even lend to both sides. The loser guarantees payment of both sides’ debt.

And of course, weapons are a form of planned obsolescence. They’re destroyed and they have to be replaced. And then after the war, it createsbusiness for contractors to rebuild. So it’s an endless source of income for banks that fund the many corporations. And gas and oil use isincreased during a war, chemical bombs of various types, chemical warfare. All of the weapons, planes, ships, submarines, tanks and missiles,drones, radar, satellite imagery, all kinds of electronic weapons, bioweapons, it even gets into big pharma. It’s just unlimited. It’s a bonanza. And what happens when war is over or if there isn’t war or fear of war is that defense contractors are afraid their money is going to dry out. And the same thing happens to the banks.

So that’s a summary of the incentives. I began my legal career working for a large corporation where we did antitrust law, and I became very familiar with how the incentive and duty of the corporation is, as they see it, to maximize profit.

We could by statute say, well, you also have a duty not to damage the public interest, and things like that. But that’s basically the background.We have an excellent quote from Carol Quigley. He was aprofessor at Georgetown University for many years in international affairs, and hewrote about this power of the big banks and elite powers over government. Here’s a quote from his book, Tragedy and Hope: “The powers offinancial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able todominate the political system of each country and the economy of the world as a whole.” And war, of course, plays into that as being their mostprofitable way to make a really big profit.

Another excellent source, of course, is Smedley Butler, who was our most decorated Marine general ever, who wrote the book War Is a Racketafter many years of defending the United States in foreign countries—or actually aggressively pursuing wars in foreign countries. He wrote thatthese wars were not about national security, they were about protecting and fighting for corporate interests of the United States, very often against international law, and provoking fights and effectively stealing resources of other countries.

So that’s kind of the overall picture. And now we’ve got the United States, England and most countries in Western Europe dominated by largebanks. The ECB, the European Central Bank, is like that. They profit from loans to large corporations. They profit from war. They are notsupporting the real prosperous economy, the domestic economy that serves the needs of the people. And as a result, the countries that are doingthat, and countries with publicly owned banks like Russia, Iran is another, China is another big one, that are devoting their lending toproductive purposes and not to inflate real estate or stocks that is nonproductive, but for productive purposes, are growing their economiesmuch faster. And countries that are dominated by these big banks that are seeking profit from asset inflation and not production, or fromweapons and war, cannot compete with these countries that have a lot of public banks.

And so the role of public banks in helping prevent wars can be very, very significant.