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Robert McGarveyIf you dare to ask, young people today will tell you their generation is screwed.


Because they were told, “Be creative, get an education and you can be whatever you want to be.”

Oops, wrong!

Struggle through a creative career and it’s almost impossible to buy a home or escape from student-loan hell. In addition, behind these personal traumas lies an existential fear of climate change – young people today are convinced that civilization as we know it is doomed.

How the world has changed.

As a young baby boomer, the world our generation faced was all positive and accessible. Civilization was served up to us on a platter – and a very good meal it was.

We lived through a period where education was nearly free, jobs were plentiful and homes were affordable. We could get educated, travel the world at our leisure, and then seamlessly start a career and a family without crippling debt.

The irony for millennials is, despite the many challenges they face, they’re the best educated, most creative, tolerant and worldly generation in history.

But they need to reinvent the capitalist system to fully unleash that creativity and establish an economy that’s more just and balanced.

Where to start?

Start at the beginning, reinventing money.

Of all the mysteries in capitalism, by far the most difficult to grasp is money. Money is humanity’s most potent instrument of financial power yet it remains shrouded in mist: capitalism’s deepest and darkest secret.

Why is modern society – with the most technologically-advanced economy in history – drowning in debt?

The answer is money. Or, more specifically, the structure of our monetary system.

A monetary system is simply the way money is defined and produced in the economy as a whole.

We use a privatized debt-money system, which creates all new money as debt. Of course, the system assures us this is perfectly reasonable. Money is valuable; it shouldn’t be created frivolously or that could cause inflation.

But our monetary system not only makes money valuable, it also has some dangerous side-effects that are the cause of many of our problems.

A growing economy needs an expanding money supply, by definition. Otherwise, there would be no currency or credit available to purchase newly-created goods and services.

Unfortunately, in a monetary system where 97 percent of the money supply is created by privately-owned banking institutions, the system creates all new money with an obligation to repay a banker (who did nothing to create it) with a regime of compounding interest.

Why is compounding interest bad?

Because, unlike real economies, compounding interest never sleeps or slows, it grows exponentially, blooming like algae on a lake. Eventually, the debt curve goes vertical and no amount of growth in the real economy can keep pace.

We’re drowning in debt as a civilization because we’ve handed new money creation to private banking institutions without compensation.

If we don’t change that, we really will be doomed.

We’re accumulating unsustainable debts at astronomical rates, both personally and socially.

All this would be academic if we weren’t competing against China.

Have you ever wondered why a developing nation like China can fund 40,000 kilometres of high-speed bullet trains, build vast new cities with full infrastructure or launch massive development projects in the far-flung corners of the world and we can’t?

China and other Asian nations operate a more efficient sovereign monetary system. It means the resources they need to educate their young or build infrastructure are generated debt-free in their governments’ treasury. It allows them to spend at will, a strategic advantage that we should duplicate immediately.

Want to remove the debt albatross from around our collective necks, fund new creative industries, have all education tuition-free or upgrade our collapsing infrastructure?

Reinvent money and create a better, fairer world.

Our antiquated monetary system is centuries old and it has been part of our success story. But today it’s outmoded and – in a competitive global economy – it’s a danger to future generations.

We need to transition to a creative economy and solve the climate change dilemma, but these problems aren’t solvable in the absence of adequate resources.

Money creation needs to be a public good, freed from the iron grip of privately owned banks.

Step up millennials, bring money home and prosper.

Robert McGarvey is chief strategist for Troy Media Digital Solutions Ltd., an economic historian and former managing director of Merlin Consulting, a London, U.K.-based consulting firm. Robert’s most recent book is Futuromics: A Guide to Thriving in Capitalism’s Third Wave

millennials money economy

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