HSCB – A Rebel Bank with a Cause

Let’s start with where the idea comes from, because not every day people get up and think, ‘you know what? I’m going to open a bank.’

Mr Edelstyn tells Renegade Inc. that the actual idea for turning people into bank notes came before the idea of setting up a bank.

“It was more of a mint in the garden shed wasn’t it?,” he said. “At first.”

Ms Powell told Renegade Inc. that they first made a prototype bank note with ‘Gary from the food bank’, to test out the idea.

“I don’t know it came from,” she said, “the idea, when we started looking into debt, we realised debt was so tied up with the very act of money creation, that money creation became something that particularly Dan was researching, along with banking reform. And then we thought, ‘why not?’. Then and there we got this bank. It’s the old Co-Op Bank and everything just fell into place. This could be a place where we could have our kind of bank, churning out our own money for the common good, or for the purchase of debt.”

Bankers with the courage to relearn how money is created

When Edelstyn and Powell started going down the rabbit hole that is monetary policy, they began to understand how the banking system actually works, instead of how they had been told it worked.

“A lot of the understanding of economics came out of the act of Strike Debt, which was buying up and destroying millions of dollars worth of medical and student debt in America.”

(Strike Debt is an international movement comprised of debt resisters fighting for economic justice and democratic freedom).

“That was intriguing,” he says. “I read about that in The Guardian and I wondered if that could be done in Britain. I didn’t even really ask myself why it should be done in Britain, I just flew over to America. I got a little bit of money from The Guardian newspaper who were interested in making documentaries at that time. I flew over, met some of them. They introduced me to the people who bought up their debt.

“At that point I was thinking: I have a credit card. If I could just buy up £1 million of  British UK debt, on my credit card, would that make for an interesting movie?”

The idea very nearly happened, but the debt purchasers that were going to help Edelstyn through Strike Debt disappeared,  so he was unable to finish the project. But that was the moment Powell was beginning to read the movement’s literature, including the book, Creditocracy by Andrew Ross, which asked the fundamental question as to whether or not our western democracies were effectively being hijacked by a creditor class who are wrapping debt around access to social goods.

“For instance: education, health care and housing,” says Edelstyn, “if you look at the costs of buying a house in Britain and the spiralling costs of that since the 1970’s, you can’t help but begin to agree with that idea.That was how the project began, but it was still about how to frame it as a film. That was the challenge, because tone is everything really, and we were very keen to try and bring this story to a big audience.”

Change we can believe in

The duo thought producing a documentary while setting up a people’s bank that can buy up and forgive mounting debt was a more oblique way round, instead of going the traditional route of lobbying politicians, for instance.

“I think it can be more powerful in a way,” Powell says. “I don’t like to ‘big it up’.

“You can have the policy papers, but unless public imagination and the conversation around things change, then politicians won’t change.

“I think it starts from this kind of grassroots surge of action and through cultural action and creativity, particularly through inclusiveness in this bank, people are literally coming in and seeing money being printed. It’s not an explanation of how money is created, but it starts to kind of ask questions and make things accessible, not in a dumbing down way, but lots of these economic ideas are a bit like ‘woohoo God!’, and even after kind of absorbing from Dan and beginning to read myself there’s still like, you’re still like, this is really hard to imagine.”

Powell says the idea can seem so abstract, that seemingly such a ‘little’ change in the way we think about money can have such a big impact.

“All these assumptions that we make about how things work, and particularly I like to think of it as these structures of enchantment that we’re bewitched by,” Powell says. “We all live under the artists, particularly cultural activists, they can kind of pierce those dominant narratives through creating enchanting acts that get behind the scenes of these dominant discourses. So doing that seems quite small scale, while we’re in a High Street in Walthamstow, but the queues through the door, through cultural action and films,  we have been able to change those perceptions and kind of start the conversation.”

The magic money tree

Before they embarked on this project, Powell said they, like most people, leaned on the narrative that the country’s economy, and by extension the banks, were like a household economy, where Mr Smith comes in and gives the bank £20,000, which is then used to lend to other customers.

“Where actually, there is a ‘magic money tree‘, but it is not used for the common good,” says Powell.

The magic money tree refers to the unlimited ability of governments that issue their own currency to run out of money. (We have written about this in detail and you can read more about this here, here, here, here and here).

“It is hard to get your head around all of the moralising,” Powell says. “Particularly around debt and the moral myths of austerity, the judgement placed on people in debt, and the kind of narratives that need breaking, because it all takes away from the fact that systemic change is needed.

“The creditor class, or the creditocracies are where the ones the fingers should be pointed at, not the people who are suffering as a consequence of that system.”

Edelstyn says particularly in Britain, debt is still weighed down by the vestiges of Victorian morality.

“We still remember that we should neither a lender or a borrower be, and that we should cut our cloth according to our kind, and all these types of adages which I grew up with. My mum taught me, because she’d been taught about how to manage her money, she unfortunately died before we finished making this film, but every fibre of her philosophical being was against what we were doing.

“She believed that if someone went into debt, it was effectively a character flaw which had led to that debt in the first place, whereas she was she was unwilling to look behind the curtain. She didn’t want to understand the structures of enchantment. She felt this was just a ruse of radical left-wing thinkers whingeing about how difficult it was. She didn’t really want to look at how money was actually created as interest-bearing debt, or what the consequences of that was for people. She didn’t want to understand, I suppose, how much new money had been created.”

Faith-based allies

Money has increased by around 25,000% since the 1970s in Britain, resulting in a debt crisis where those at the bottom of the economic food chain are anchored with all the debt, while those at the top have all the money.

“The people at the top are saying to the people at the bottom, ‘you owe us and you’re morally wrong and if you don’t pay your debts you should be ashamed’,” says Edelstyn. “All of that type of stuff, my mum was also unwilling, I suppose, to look into the history of or challenge the history of religious thought.

“My mum was like Christ the Redeemer, someone who was coming to pay our debts for the sins that we had accrued during our lives. These are very, very deep moral beliefs.”

Powell, like our Prime Minister, is the daughter of a vicar, but she has a slightly different view of the monetary system than Theresa May.

“My dad recently has engaged a bit more with this project, because they’ve been avoiding it too,” she says.

“Like normally with projects that we do, all the family and friends come on board and they buy up whatever – art work you might have created, for example – but this one people stayed away. They’re like ‘is it legal? You’re printing your own money. What are you doing buying up debt?’ There’s that. But now my dad said there is a good biblical basis for this project.

“So it’s grounded in the Bible, so it’s all right,” she says. “But yeah, the idea of a jubilee – that isn’t in the Bible – this idea of a cyclical debt write-off that obviously the jubilee campaigns have taken on board.”

Powell might be surprised to discover that the Bible has much more to do with debt than the church would have us believe.

Economist, Professor Michael Hudson recently revealed that actually, cyclical debt jubilees were the basis of ancient and modern-day economies.

He says that the death of Jesus Christ can be read in a very different way, because when he started talking about a jubilee, he upset the powers that be at the time and that was curtains for him. So rather than having died for our sins, Hudson posits that Christ actually died for our debts).

“Well I didn’t know so much about the jubilee,” says Powell. “But the turning over of the moneylenders’ table, because I was trying to win my arguments to win over my dad, is that Jesus was on the side of the oppressed and was fighting for a fair society, so we’re carrying on that tradition.

“I’m not really a practising Christian, but I’m saying whatever my father grounded and instilled in me from the Bible I am now fighting for, so it’s a good thing.”

Edelstyn says that the themes of moral faith is what interested and motivated him to make the film

“Making a film, or making art work is an act of faith, actually, in many ways,” he says.

“I’m not religious in any way. Well, maybe I am, but certainly not in any traditional way. You leap into a void, you know? You have no idea what’s going to happen, and you do it because you feel compelled and we seem to share now a platform with, it seems to be quite a lot of faith groups that seem to be circulating around us, although we’ve in no way encouraged that. In some ways it is a little bit embarrassing but I don’t really want to be attracting a load of Christian groups connected to this…”

“It’s not just Christian groups,” Powell interjects, “”it’s across religions.”

So actually Edelstyn and Powell have managed to identify a unifying aspect of money creation which a lot of people can get behind. There is hope for humanity after all.

“We would certainly see ourselves as being trans-political and ideally trans-faith in terms of the characters that we have chosen to work with in this project,” he says.

“We’re trying to represent a diversity of different backgrounds in religion or politics within this project.”

Asking the fundamental question

So Powell and Edelstyn have identified a social issue and started asking fundamental questions about it. The social issue is money and credit creation, asking whether it is a good or bad thing. They have identified a fundamental economic question which we have made an assumption about as a society. They are challenging that assumption, but what they are also saying is: ‘we need to answer this question’.

“To do this together, so there’s no room for kind of factional infighting around it,” says Edelstyn. “And how it’s particularly here, with a High Street location in the last two weeks and seen the range of people that have come in and bought into this project, an idea that is taking from Strike Debt, that it’s a bailout of the people, by the people.

“This is a bailout of the people, by the people.”

“That you can see that working together, empowering people, that everyone can make a change, it starts from people on the ground working together to make that happen.”

Their idea is to create a bank where it produces money with local people on the front.

“Instead of Adam Smith or the Queen, we’ve got Gary, Syrah, Tracy and Steve on the bank notes, and all the community leaders who are fighting the fallout of the current economic system in one way or another.”

Gary started the local food bank, Syrah runs Plates for You, a homeless kitchen. Steve runs a youth project which takes kids off estates and gives them role models, and Tracy is the head teacher of their children’s school which was subject to huge cuts.

“So all of those four characters are fighting the fallout of the current economic system so we decided that we wanted to celebrate them because they’re all exemplars of one kind or another,” says Edelstyn.

“Basically how it works, is if someone buys one of those banknotes, half of the money from the banknote goes into helping these local causes, and the other half is going to be used for buying up and destroying a million pounds of local debt on the secondary market.”

“We’ve called it toxic debt because it’s payday loans, but it’s payday loans which are very distressed, and what that means is that these are loans that haven’t been paid for certainly over a year, maybe two years, which makes it toxic in the sense that it’s highly unlikely it would be paid, which makes it very cheap on the secondary market, so that we could buy it for 2p in the pound perhaps or five per pound. The debtor wouldn’t know that, of course. If we were to chase them, we’d chase them for the full amount, but it’s toxic in the sense that not only is it a predatory form of debt, it’s also not been paid for so long, it’s highly delinquent.”

What Edelstyn and Powell are doing is actually enacting a community jubilee. They haven’t asked for permission of anyone, or gone to the government or the Bank of England. This is community driven debt relief, in its purest form.

“I suppose initially we thought it might be hard for people to get their head around that, which is another reason why we gave half to the local causes and half to debt abolition, because people understand charity better than they do money creation,” says Powell.

“But actually all the characters on the notes say they’re doing this job because if there was a fair economic system there wouldn’t need to be a food bank and a homeless kitchen in what’s meant to be one of the richest countries in the world.

“So the debt abolition shines a spotlight more on the kind of systemic causes of debt. We don’t expect that we’re blowing up a million pounds worth of local payday debt. That might not have a massive impact, even on the people whose debts are exploded, but it raises awareness of the fact that you buy £1 million of debt for so little and why are these people even in debt?

“I mean there’s a recent call for £42 billion household debt to be written off in Britain, so the kind of public conversation is moving towards the fact that we have to get out of this debt crisis and this is one way of doing that.”

Tune into the rest of the episode above to find out more about how money and credit are really created and what an equitable economic system might actually look like.