There's a good article under the above title by Prof Mary Mellor on The Conversation blog this morning. I could reproduce it here - but I recommend going there instead.
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Yes a good read, although most of the ideas will be familiar to readers of TRUK.
The conclusion that
“The answer must be to subject both forms of money creation — bank and state — to democratic accountability.”
Does not really work for me because they are democratically accountable. Money is not the problem. The problem is how wealth subverts democratic power via the control of politicians and the media.
I agree – but think in the light of Facebook’s new currency they have relevance
I am getting to Facebook…….
Excellent article – concise, easy to read and understand. It’s perhaps a pity Prof Mellor didn’t clarify how a central bank’s creation of money at a keystroke needn’t result in runaway inflation, as this is the normal reflex reaction of neoliberalists against MMT. If that had been covered with the same clarity and concision as her description of the Monetary Cycle it would have been an ideal paper to share with interested/ sceptical people.
@ Ken Mathieson
I too found the article really interesting and very easy to follow without it being patronising. That last point sounds petty but it’s what I usually get accused of being when trying to explain MMS (I prefer the word ‘system’ to ‘theory’ as it gets a better response to begin with) to others. That could be because I’m rubbish at explaining MMS as, to be honest, I only just about grasp it myself, and then somewhat hazily… not it’s best proponent, but I do my best!
I think your point about inflation is very good. I ALWAYS get asked the ‘V, W, Z’ question with barely contained triumphant glee in the questioner’s eye; along the lines of, “A, HA… but what about Venezuela, Wiemar and Zimbabwe? Printing money didn’t do them much good did it!”
Try as I might, my explanations are so convulated that they make the Gordian Knot look like a doddle to unravel by comparison. I need the verbal equivalent of Alexander the Great’s solution to said knot.
I was hoping Prof Mellor would have one in the article as it is definitely my biggest sticking point when it comes to attempting, and usually failing, to discuss MMS.
Maybe I should leave such things to the experts and stick to restoring skip rescued park benches and converting compost bins into daleks. I know what I’m doing with the latter two.
I think the Gower Initiative have done this…..
My view is that this is a really good article.
However, I think that it underplays the significance of money as a unit of exchange – it’s utility – and also its links to who originally produced it and why – the temple or palaces of those who ruled society at the time it was created.
I think that the author could do with reading Michael Hudson’s book ‘ ….and Forgive Them their Debts’ (2018).
On page 21, the creation of money by temples and palaces is explored. The printing of money also had an aim and objective to bring a sense of order and even a form of standardisation and regulation by which are certain number of standards could be brought to bear on the markets.
Money was not just a market driven phenomenon; it was one based on practical ideas of reigning in certain behaviours around money (particularly around debt) leading to the issuers also having a policy of periodic debt jubilees.
This reigning in it turns out was for very self interested but generally useful reasons to ancient society at the time – keeping a supply of corvee labour for big projects, manpower for armies for example, as well as curtailing the ability of other less accountable groups in society to challenge the powers that be by becoming too powerful due to the issuance of debt.
I think that a hard line anti-market sentiment dominates the writing too much early on but it does not detract from the other really interesting points of view it brings in later which are quite refreshing.
Thanks.
BTW Charles’ point is spot on.
And I hope that Mr Zuckerberg’s new currency is brought to heal. Currencies are a public matter – not a private one. We should tell him to get lost – period.
I have half a blog on Zuckerburg
I just wish I did not have a day job….
You don’t have a day job
Tell my university that
Great link Richard!
This clear analysis works well with Mariana Mazzucato’s work.
She has done a great job of reminding us of the ‘thinking traps’ that prevent us from understanding money: https://www.tvo.org/video/mariana-mazzucato-elections-and-economics
and how the economy really works: https://www.tvo.org/video/makers-and-takers-in-the-global-economy
She also supports MMT type thinking – https://www.youtube.com/watch?reload=9&v=6IBEoWSiTHc
Thanks Joe