This artist follows the money
By Rob Wipond, October 2011
Paul Grignon has struck a popular nerve with his cartoon exposé of a financial system that’s exacerbating our public debt spiral and hastening descent into environmental destruction.
By now most of us have heard about at least a few of the local people who’ve “made it big” in the world of online viral videos. Victoria writer Andrew Struthers’ two-minute spoof based on the Canadian Wildlife Service’s “Hinterland Who’s Who” commercials, “Spiders on Drugs,” is the undisputed champion, currently nearing 30 million views on YouTube. More typically, other area folk have garnered tens or hundreds of thousands of hits for a beautiful folk song, a recording of a police assault downtown, and one of the biggest lip-sync gatherings in the world (I don’t know of any popular videos of local babies or pets doing especially adorable things, but there are likely a few of those, too).
Certainly the most surprising of them all to go viral, though, would have to be 63-year-old Gabriola Island visual artist and animator Paul Grignon’s Money as Debt.
It’s an independently-made 47-minute video lecture on our current system for creating money.
Yet Grignon has now sold over 12,000 copies of it on DVD, while it’s been (mostly illegally) copied and resold, uploaded, and translated so widely that by Grignon’s last estimation it was in 24 languages, appearing or being discussed on thousands of websites, and surpassing two million viewers. It’s been endorsed by the Canadian Action Party and the American Monetary Institute, ex-managers of Wall Street investment firms, and prominent economists like David Korten and Hazel Henderson. It’s also been heavily promoted by Elizabeth Kucinich, along with her more famous husband, congressman and former US Democratic presidential candidate Dennis Kucinich, and used at rallies for current Republican presidential candidate Ron Paul.
What accounts for its surprising popularity?
“I like to think it’s because it’s good,” suggests Grignon, chuckling. “It’s simple, and even though it’s about serious stuff, it’s still kind of fun to watch...I wanted to keep it simple enough so that children would understand it. Or at least keep them interested. But deep enough that it was true.”
It’s not really the kind of fare you can pop into the TV to keep rowdy kids distracted for an hour, yet Grignon’s hand-drawn and computer-animated cartoon and effective use of a variety of storytelling techniques do make this esoteric topic at once more understandable and politically compelling.
The film’s opening image is of a figure cloaked like an apparition of Death, hammering away ineffectively at a giant Debt to which his ankle is chained. The straightforward narrative is then brought to life with moving flowcharts and diagrams, visual analogies, theatrical anecdotes with recognizable characters in familiar financial situations, and provocative quotations that take on ever more disturbing significance as the film progresses, like that of 18th century German banker Mayer Anselm Rothschild: “Permit me to issue and control the money of a nation, and I care not who makes its laws.”
The most effective interplay of all these elements occurs in an eight-minute sequence called “The Goldsmith’s Tale,” the original seed for the film.
Grignon was commissioned in 2002 by a now-defunct activist group to create a video from a five-hour seminar about fraudulent lending practices, and prefaced it with this animated short. Soon, monetary reform activists from across the political spectrum were asking for more. Inspired, he began consulting with experts and by 2006 he was putting in 12 to 20-hour days for six straight months to complete the full-length version of Money as Debt.
The Goldsmith’s Tale begins with early trading between indigenous peoples and telescopes hundreds of years of economic and cultural development into the story of a single village of alternately curious, grateful and suspicious townspeople and one highly crafty money-lender. Along the way, various key aspects of modern banking become much more understandable.
We learn how banks manage to loan out much more money than they technically have.
And we learn how those same loans turn around to become leverageable bank assets and deposits; that is, how my written promise to a bank to repay a loan—my debt—“creates” new money.
And finally the film explores how having turned this power of money creation over to the private sector is now generating seemingly insurmountable problems for our governments. What happens when we’ve built a financial system that’s dependent on taking out loans and generating debt to private banks in order to keep money flowing? What happens when we have an economy that’s dependent on ever-accelerating growth to pay off those ever-growing debts with their ever-compounding interest?
This is where the cleverness of Grignon’s approach becomes evident. Even though the film has gained some blogger critics for its confusing moments, brow-furrowing shortcuts, and ultimately anti-establishment message, overall, much of its content parallels what can be readily found (if not as easily comprehended) in educational publications like the US Federal Reserve’s Modern Money Mechanics. However, consistently describing our society and entire banking system as if in a children’s story about “one small community” with one or two banks, much of the mysticism in complex exchanges can be bypassed or more simply explained, and we see the precarious situation we’re actually in.
By the time the credits roll, it’s difficult not to feel as if all other progressive social and environmental activism should play second fiddle to reforming our monetary system. After viewing it myself, I promptly began researching more, helped found Transition Victoria’s Economy Working Group, deluged the City of Victoria’s economic strategy with input, and started wondering how we could pull ourselves out of the global financial system and survive.
According to Grignon, that was the very reason he made the video. “I used to be more oriented towards environmental concerns,” he says. Still today, his visual art is dominated with affectionate portrayals of trees, whales, birds, beaches, shorelines and other natural West Coast imagery. “We live in a beautiful place. My art just celebrates it.”
However, Grignon’s research into “peak oil” kept leading him ever deeper into the ways our modern financial system and economy ultimately put increasing pressure on our planet’s inherent limits.
“You find out that the money system is based on perpetual growth. So how are you going to win any of the other battles related to growth?” he asks. “It’s like having water running downhill at you. You can’t possibly get uphill without stopping the water. And the money system is like this constant need for growth. Exponential growth at all costs.”
Nevertheless, says Grignon, he wasn’t interested in making another gloomy movie about impending doom to help foment panic. “I didn’t want to induce more fear. I don’t see how that’s useful. Just understand it. Understand how it works now. Understand how we could make it work differently.”
The recent international financial collapses, he says—which Grignon explores in a sequel but were presciently predicted in his first film—are a piercing siren call for the danger we’re in.
“Banks just created money and debt that was irresponsible debt that couldn’t be repaid,” he says. When homeowners began defaulting, the banks didn’t have anywhere near enough money to cover those loans they’d made and we were all threatened with financial chaos. “Taxpayers are now on the hook for the loss of money that banks never had in the first place.”
That private debt hasn’t gone away, of course; it’s simply become public debt. “It can’t go on,” says Grignon. “The system is broken.”
It certainly stretches the imagination to grapple with the question of how much longer we can go with the average Canadian now supposedly carrying over $41,000 in debt, doubling since 1989. Our collective government debt then piles on another $37,000 per person. Then add in business debts. And we all have to work harder, produce more, sell more, and use more resources to pay off those debts. And lately, of course, whenever waves of debtors crack, we’re also being called on to bail out the very banks that hold these debts, because the banks never truly had that money to lend in the first place. (It’s not often widely discussed that, in fact, our federal government did bail out Canadian banks in 2008 to the tune of—depending on whose analysis you can get your head around—somewhere between $25 and $265 billion in risky mortgages. Even at the lower end, this is an amount not terribly dissimilar to the US bailout, considering the relative sizes of our respective federal budgets and banking sectors.)
So our governments are now borrowing more and becoming even more indebted to private banks, and constantly selling new government bonds to help pay the interest on the old bonds and keep themselves afloat for a little longer. “If anybody else would do it, it would be called a Ponzi Scheme and they’d go to jail,” points out Grignon.
It’s the same accusation The Economist made last year, when they calculated most wealthy countries were now carrying debts two to three times their GDPs.
And as more governments frantically turn to cutting back services and selling off public assets as another way of paying down debts, Grignon notes, “We’re heading back to the feudal system where the lords own everything, people own nothing...That [debt] cannot just keep getting bigger and bigger and bigger without breaking the back of the debtor. It’s a path to ecological and social suicide.”
But haven’t we managed to bumble through successive major bank collapses and debt crises in Europe and North America, and we’re still standing?
“It’s gone a lot further than I thought it would,” concedes Grignon. “It’s not changing my mind; it’s just more resilient than you think.”
And besides, he points out, we only have to look outside a handful of buttressed financial forts to know that everything is not peachy. “A lot of the world collapsed a long time ago.”
He adds, “If you’re using a money system that is a path to suicide, one would think the smart idea would be to change the money system. But that isn’t even on most people’s radar.”
Grignon believes we need to start moving towards an alternative exchange system “beyond money” that supports direct trade between people, with less need for mediation from banks, loans, credit cards or cash—something he explores in his completion of the trilogy, Money as Debt III. It doesn’t have the same richness of storytelling as the first film, but it’s certainly impressive for its ambitious detailing of exactly how one particular form of alternative monetary system might practically function and help bring us closer to a true melding of economic and environmental sustainability.
“Virtually all the alternative currencies in existence are some form of self-issued credit: You promise your own good or service into a system,” summarizes Grignon. “We already have business-to-business barter networks in which businesses issue credits for their goods and services and trade with each other, using credits as money. All you’d have to do is extend that... to people in general, and you would have money backed by goods and services in demand.”
But even with the help of computer-based networking, wouldn’t it become complicated trying to negotiate trades between people and businesses variously offering credits for massages, bunches of carrots, new vehicles, plumbing repairs, sheet metal, ads in Focus, and apartment rent?
“If you want the most clean-cut, easy system, stick with a monopoly money system,” comments Grignon. “If you want liberty and freedom...It’s a bit messy!”
In terms of that money we’re still using, Grignon reports that despite all the fame and accolades, “the minimum wage is a distant dream” for all the work he’s put into the films. So go to http://moneyasdebt.net to view samples and purchase DVDs directly from him.
Money as Debt 1 will be shown at St John the Divine Lounge, 1611 Quadra Street (rear entry from parking lot on Balmoral), Monday, Oct. 17 at 7 pm, followed by a Q & A with Paul Grignon. Admission is by donation. For more info see “Events” at www.transitionvictoria.ning.com.
Rob Wipond invites economic researchers to add to this discussion at www.focusonline.ca. He can be reached at rob (at) robwipond (dot) com.