Positive money: progressive solution or Trojan Horse?

This article critically examines the 2012 banking sector reform proposal by Andrew Jackson and Ben Dyson, which aims to eliminate commercial banks' ability to create money and return this power to an independent public body called the Money Creation Committee (MCC). The proposal intends to reduce societal debt, end taxpayer-funded bail-outs, and increase financial stability by replacing private banks’ current accounts with risk-free Transaction Accounts and shifting money creation to the state. However, the analysis reveals that the reform would not significantly reduce household or business debt, would increase costs and risks for bank customers by replacing bail-outs with bail-ins, and could actually enhance private banks’ profits and moral hazard. Additionally, concerns are raised about the undemocratic nature of granting unelected bodies control over money creation, the potential growth of unregulated shadow banking, and the reform’s limited impact on environmental and democratic outcomes. Overall, the proposal is characterized as a “Trojan Horse” that preserves private banks’ advantages while shifting risks onto customers and taxpayers, thus failing to deliver the progressive change it claims to offer.