Peter May has added this video to the Tax Research wiki page on money.
As he says, this is:
Probably the best' half hour video on where money comes from.
It is very good.
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Love this. Thanks for sharing.
Thanks for this. Very clear.
I’m learning and I now feel, largely from reading this site, that I understand and accept the basics. MMT is no longer a theory to me. It is a fact.
Three questions:
Why doesn’t the Labour Party explicitly adopt this approach to tax and spend?
Why doesn’t theTory party adopt it? (I assume the reasons are different)
Following the second, why austerity?
A) I do not know: I am baffled. It’s as if they do not believe in the state
B) I do not know: I am baffled. It’s as if they do not believe in tax cuts.
C) I do know. I am not baffled. They believe in austerity and shrinking the state.
(a) probably because they do not think they would be believed (also no understanding widespread);
(b) policy (shrinking state; neoliberalism; no understanding, etc.)
(c) policy (shrinking state; neoliberalism; no understanding, etc.)
How the hell is it possible to break out of this prison?
Keep talking
One day they will agree
But don’t ask me to say when
Some things I definitely do not know
a) Because Labour need a TINA [There is no alternative] economic reason to tax the rich highly. Telling people we do not need tax money to fund stuff is against this policy.
b) Because Tories need to present a TINA economic reason to cut spending / benefits and shrink the state. Telling people the government has an infinite ability to fund whatever is policy is against this policy.
So both A) and B) are political parties using a fake economic narrative to mislead the public into justifying their reasons for policy. This is wrong, so wrong, when our government / opposition is lying to us.
Labour should simply say we believe that taxing the rich highly reduces inequality and is better for society. Tories should simply say we believe that free market capitalism with a bare minimum government is better than a government who runs everything. However, neither believe the public will buy into it. So both of them lie.
And the Tories are better liars (plus the fact they have the press to lie on their behalf)
You are right: Labour simply needs to say we tax progressively because it is the right thing to do and not becaus it pays for the NHS, or whatever, which is not the case
Nice one Thanks.
I found that video not long after it was made – it’s absolutely brilliant, and benefits greatly from being UK based.
Do you know the speaker Richard?
No – I literally have no clue who he is or what links he has or why he made this
But it’s good
The speaker is Elliot Cowan an actor. The film was made by John Hope who has commented on the blog in the past. I agree about how excellent it was, I understood every word.
have viewed this before but still watched it all again,this should be taught in schools,very good
The only problem I have with it is that he mentioned hyperinflation /twice/ in a context where I think that’s probably more confusing/misleading than helpful – just talking about regular inflation would be more reasonable. Other than that it’s excellent.
Yes, that is the one flaw I spotted as well. “Inflation” would have sufficed; “hyperinflation” is incorrect.
To reach a wider audience would it be possible to link up with a publication such as The Big Issue? Just a thought.
They would be welcome to use material….
Excellent video and very compelling. Really good idea to use an actor. However before sharing it I just did a quick fact check, and could find nothing out about John Hope apart from a couple of links back to your blog. It would be really useful to know some more about him…
Does it matter if he’s right?
It doesn’t matter to you of course, but to those of us with more shaky knowledge, it’s really useful to know who our sources are. But I accept that if you like the video that is good grounds for confidence.
I prefer it too…which is why I spend so much time trying to pout links in
Great video.
Will be sharing with my doubting friends!
I typed ‘what is the purpose of taxation’ into a well known search engine. None of the results mentioned anything about tax taking money out of the economy.
My question is this – are the results being deliberately manipulated so that the truth is being hidden or have all the sites that appear on the first page got it wrong?
Craig
In 2014 the Bank of England said all economic text books described money and banking incorrectly
I venture to suggest the same on tax
That’s frustrating. If the teaching is wrong then it’s another roadblock to getting the truth out there.
I really hope that you can get through/past/around/over all of these barriers and ensure that what actually happens with how money is created is known and accepted by the vast majority and the myths of neoliberalism are consigned to the ‘what can go wrong’ sections of history books.
I think it useful to say that, like science, concepts can be both simple and complicated.
But some useful ideas might revolve around saying what things can be done – that the government does have the power to invest and create lasting benefit.
That it makes no sense to pay 8% (or whatever the figure is) to the Chinese for Hinckley when gov’t can borrow at near zero. That because we are going to have to pay for it one way or another, it makes more sense at 0.20% than 8%. People do get that.
If the case is made that a shed load of ‘money’ saved the banks in the last crisis, that government debt doubled and did the sky fall in? People can get that. If it is said, when has government debt been repaid? and we are still here.
Apologies for my usual brain mess – but my point is that there are enough examples already around to confirm what is possible.
If all else fails, then ‘last time they saved the banks; now can we save the planet?’ might work.
Both work…