Review Of Between Debt And The Devil By Adair Turner

Dec. 19, 2015 11:49 AM ET
Hazel Henderson profile picture
Hazel Henderson


  • A review of Between Debt and the Devil, by Adair Turner.
  • The book looks beyond superficial issues concerning global debt to deeper causes.
  • It points to the many researchers and organizations offering viable solutions.

Between Debt and the Devil, by Adair Turner, Princeton University Press, 2015

Author Adair Turner, former Chair of the Financial Services Authority, the top UK financial overseer, clearly lays out the deeper reform of global finance so far avoided since the crises of 2008 and the still painful aftermath. The title sums up the book's theme: between the hazards of global debt overhang and the tempting alternative - creating fiat money. Turner correctly reviews in early chapters the nature of the 2008 debacle and its roots in excessive private credit creation, inadequate policy responses, obsolete economic models, limited theoretical diagnoses, inefficient financial markets, perverse incentives and efforts of central bankers to substitute monetary policy for deficient fiscal tools and political will.

Most of Turner's analysis covers familiar ground, but his deeper dive into territory fiercely contested by incumbent players in our global casino makes this book a breath of fresh air. Turner fearlessly wades into taboo subjects orthodox bankers and economists obfuscate:

  • Swollen finance and the "utopia" of the Arrow-Debreu fantasy of "market completion"
  • Dangerous debt and how private banks create it too often for secondary assets and real estate
  • Driving up asset prices and how banks create money through fractional reserve banking rules
  • Speculation, inequality, unnecessary credit and excessive trading
  • Irrelevant bankers in an unstable system
  • Abolishing banks, taxing debt pollution and encouraging equity

These latter topics are discussed in the last two sections of the book: Fixing the System and Escaping the Debt Overhang.

Here's where things get really interesting. Turner's credentials are so deep and his experience so compelling that he touches the deepest taboos: how money creation occurs as a result of private bank lending and the whole subject of fiat currencies, the politics of central banks' quantitative easing and credit allocation across national economies. Ethical Markets Media and TV special "The Money Fix" have been covering these issues for a decade, including my own critiques in my syndicated columns for Inter Press Service and 3BL. I am now in cash except for my positions in Envision Solar (OTCQB:EVSI), Natcore (OTCQB:NTCXF) and a group of private companies and equity partnerships.

All these taboo topics have reemerged from the debates after the Great Depression in the 1930s in the reforms that followed. Turner points to the Chicago Plan for ending fractional reserve banking and replacing it with 100% reserves so that banks would be restricted to collecting deposits, managing payments and making loans, essentially as public utilities. Devised by Chicago School economists of the time, this plan has been revived by many reformers including the American Monetary Institute, headed by Steven Zarlenga, a former mutual fund manager and author of the magisterial The Lost Science of Money (2002) and lawyer Ellen Brown's The Web of Debt (2007) and The Public Banking Solution (2013), which founded the Public Banking Institute (on whose Advisory Board I serve) and Mary Mellor's Debt or Democracy (2015). These sources are not cited by Turner. He cites only Ben Dyson, leader of Positive Money, co-author with Andrew Jackson of Modernizing Money (2013) and David Graeber's Debt: the first 5,000 Years (2012). There exists a vast array of new research on these issues by Bernard Lietaer, Shann Turnbull, Michael Linton, Thomas Greco, Lynn Twist, Elisabet Sahtouris, Riane Eisler and William Greider, to name a few.

This politics of money creation and credit allocation now form the main agenda of many grassroots groups and activist reformers spurned to action since the post-2008 debacles: from Occupy Wall Street and its European parent groups, the rise in the US of libertarianism and the Tea Party to a wide spectrum of reformers in education, healthcare, environment, social justice and poverty alleviation. All have delved into the politics of money creation and credit allocation as issues of fairness, inequality and justice - countering the elite's all-purpose defense when challenged by new agendas and priorities for finance and economic policy: "Where's the money coming from?" This won't wash anymore since we all see money printing and bailouts of bankers and financiers in movies and on TV shows daily.

Now that this money-creation cat is out of the bag, these social reformers and angry citizens know that money isn't scarce but that private banks and central bankers create it and often give it to their friends. New proposals for 100% reserve banking, public banks and sovereign money are now being debated by Iceland's parliament, in Britain's House of Commons, Australia and other countries.

Author Adair Turner has picked up this groundswell of deeper knowledge in most advanced societies and in his book lays out all the issues surrounding his proposal for withdrawing from private banks the inordinate privilege of creating a nation's money supply as loans - and the inevitable overhang of dangerous levels of unrepayable debt. Turner harkens back to the Chicago School's plan and to Milton Friedman, later winner of the Bank of Sweden Prize (sometimes confused with the Nobel). Friedman's early clarity on money and macroeconomic stimulus tools is newly debated today. His Negative Income Tax was to stimulate aggregate demand, a forerunner of guaranteeing basic income to all so as to bolster their purchasing power and eliminate the need for poverty alleviation and social service bureaucracies. Friedman also proposed his now-famous alternative stimulus from the bottom-up (rather than trickling down funds through the banking system): simply load bags of cash into helicopters and throw them out the windows for citizens to pick up and spend, as "Helicopter Ben" Bernanke once reminded us!

So I and all those whose works and activism we cover in or latest headlines will buy this book and promote Lord Turner's clarity and honesty in exposing the grandees of now-obsolete economics and its financial models still mispricing energy and risk with their fossilized asset allocation buckets. Turner, whose recent lecture is at, serves as chair of the George Soros-funded Institute for New Economic Thinking (INET) which still is cautious and timid in funding disruptive research. We do not need any kind of new economics which is too narrow as a framework for Mapping the Global Transition to the Solar Age. This is a multi-disciplinary systems view, beyond "economism" toward full spectrum accounting as IIRC and SASB do for all six forms of capital: finance, built, intellectual, social, human and natural assets.

This article was written by

Hazel Henderson profile picture
Hazel Henderson D.Sc.Hon., FRSA, is the founder of Ethical Markets Media, Certified B Corporation and producer of its TV series. She is a world-renowned futurist, evolutionary economist, a worldwide syndicated columnist, consultant on sustainable development, and author of The Axiom and Nautilus award-winning book Ethical Markets: Growing the Green Economy (2006) and eight other books. Her editorials appear in Wall Street International Magazine and many other media partners, including Other News, and her book reviews appear on Her articles have appeared in over 250 journals, including (in the USA) Harvard Business Review, New York Times, Christian Science Monitor; and Challenge, Mainichi (Japan), El Diario (Venezuela), World Economic Herald (China), LeMonde Diplomatique (France) and Australian Financial Review. Since becoming a full-time media executive in 2004, Hazel has stepped down from many of her board memberships, including Calvert Social Investment Fund (1982-2005), the Social Investment Forum and the Social Venture Network. She has been Regent's Lecturer at the University of California-Santa Barbara, Horace Albright Chair in Conservation at the University of California-Berkeley, and advised the U.S. Office of Technology Assessment, the National Academy of Engineering, and the National Science Foundation from 1974 to 1980. She remains on the International Council of the Instituto Ethos de Empresas e Responsabilidade Social, Sao Paulo, Brasil; serves on the Program Council of FORUM 2000, Prague, Czechoslovakia, founded by the late President Vaclav Havel; is a World Business Academy Fellow; an active member of the National Press Club (Washington DC), and a member of the Association for Evolutionary Economics. She is an Honorary Member of the Club of Rome. She shared the 1996 Global Citizen Award with Nobelist A. Perez Esquivel of Argentina. In 2007, she was elected a Fellow to Britain’s Royal Society of Arts, founded in 1754. She leads the Transforming Finance initiative, created the Green Transition Scoreboard®, co-developed with Calvert the GDP alternative renamed the Ethical Markets Quality of Life Indicators, co-organized the Beyond GDP conference for the European Commission, and funded three Beyond GDP surveys, finding strong support worldwide for ESG metrics in national accounting. In 2010, 2012, 2013, and 2014, she was honored as a "Top 100 Thought Leader in Trustworthy Business Behavior" by Trust Across America. In 2012, she was honored with the Reuters Award for Outstanding Contribution to Development of ESG & Investing at TBLI Europe. In 2013, she was inducted into the International Society of Sustainability Professionals Hall of Fame.  Her 2014 monograph, Mapping the Global Transition to the Solar Age, published by ICAEW and Tomorrow’s Company, UK, is available for free download from

Disclosure: I am/we are long EVSI, NTCXF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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