The presentation that I made to the House of the People citizens' assembly on Monday gave me a great deal to think about. It might even have a lasting impression on my work.
When Steve Keen and I discussed the morning's events after they had taken place, we both appreciated just how hard it was for many people to understand what we both now think is glaringly apparent, but which requires extraordinary effort to comprehend when first explained.
Several of these issues arose during my own presentations and discussions. Examples included:
- Money is created out of thin air.
- There is no physical asset backing for money.
- All money is debt.
- When the debt that creates money is repaid, the money disappears.
- When a debt, including that to pay tax, is settled, then money is destroyed.
- Tax does not fund government spending, central banks do.
- The government does not need to borrow. It takes deposits as a favour to the City of London.
- We don't need to tax the wealthy to fund government expenditure. We need to tax the rich to reduce inequality.
- The government does not need to borrow from the City. It can borrow from its own central bank.
- There is no such thing as taxpayer money
- Savings are dead money.
- Savings are not the same as investment.
- Tax reliefs are a real cost of the government, just as direct payments are.
I offer these as examples. I am not suggesting that they are complete. I am quite sure that there are many more, and that precisely because I am so familiar with these issues, I probably am not the person to work out what they are. In that case, suggestions are welcome.
What is the relevance of this? It has become increasingly clear to me that without a basic economic primer that addresses these issues, my idea of writing a book about the politics of care might be an ineffective exercise. Explaining the policy implications that understanding these issues permits makes no sense if the economic ideas underpinning the solutions I propose are not understood themselves. As a result, I think I now understand my own reticence about writing that book. I had felt that something was missing that was preventing me from doing it, and now I realise what it is.
The question is, how should I proceed now? That is, obviously, something that I will need to think about with care.
The current video series on wealth that we are producing seems to be going quite well, and Thomas and I are pleased that people are referring back to earlier videos when they find a later one. The concept of a series as an educational tool appears to be working. However, whilst that topic is, in some ways, more advanced than those I note above, I also appreciate that it might be easier to comprehend in other ways.
So, in that case, do we need to produce some series on the basics of what might be called new economic thinking? These series might cover:
- Money
- Taxation
- Bonds
- The government money cycle
- The fundamentals of economics, concentrating on the difference between micro and macroeconomics and the problems created by the household analogy.
- Difficult economic concepts including government debt, deficits and GDP.
- Neoliberal myths, and what replaces them.
The obvious advantage is that these provide us with a significant number of topics that will keep us in video topics for ages, as well as providing blog content. What they might also do is create new glossary material or even publications that can be used to explain core economic concepts over time. Put together, they might even become a book.
Does anyone have thoughts on this?
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An excellent idea. As I said previously I’m a simple man with no knowledge of economics.
Seconded
Thirded.
Fourthed
We have failed completely to ‘market’ effectively the truth about public money creation. Associated with this is a relative absence of detailed accounts of what might happen (scenarios) if government chose to develop and undertake public policies in a fashion informed by MMT truths.
In addition to producing blogs and videos that preach chiefly to the converted, it would be great if you would apply the above thinking to the government’s recent NHS 10 Year Plan. Would you be willing to undertake a scenario project that would demonstrate what could be achieved in the NHS if the government took money creation seriously?
I am confident that collaborators and funding can be provided as necessary
Collaborators – I agree.
Funding? Probably not…
Fifthed – suggestions below for optimising impact
Hey Richard.
Would you be willing to promote this event, in Sheffield, run by Steven Hail’s Moden Money Lab?
It would be wonderful to grow a ‘North’ MMT community to drive knowledge and change in the region.
https://events.humanitix.com/public-money-mmt-sheffield
Thanks.
On the blog tomorrow
Debunking the government money as household money myth is really imperative. The public, journalists and MPs use it daily on the radio, in the media, and are then tin eared to any suggestion that we can create the money to invest into the productive economy.
Fantastic idea, perhaps also debunk the “Liz Truss myth” of government spending freaking out the bond markets. That seems to be mentioned whenever an increase in government spending is discussed in the mainstream media.
Perhaps we need not only a coalition of the willing, but a coalition of the able- let me explain! I struggle or perhaps it’s more accurate to say that those I talk to struggle to ‘get their heads around’ the insight I am attempting to share with them- how does a fiat currency system work and what then are the implications for government policy! It would appear that the myth of the ‘household budget’ analogy is so secure in the heads of so many that it is has for them acquired the status of an immutably law of nature. I remember some time ago that you highlighted that Jonathan Pie had in one of his monologues disparaging our government betrayed that he didn’t understand that sterling was a fiat currency and consequently was confirming the the false assumption that government pays its bill with tax payers money. Is it now the time- four years out from a general elections- to secure the support of Tom Walker, Steve Coogan, Led by Donkeys and others who have a similar ability to reach a wider audience and use their skills and methods to augment the attempts of people like Gary Stevenson and yourself to educate the voting public- we need to find a way to break through this ‘common sense’ understanding, as I believe Mark Twain once said it is easier to fool somebody than it is to convince somebody that they have been fooled!
Thanks
And how do we do that?
The household analogy works on an individual and microeconomics level so can build on that a ‘yes and’ or ‘yes but’ that will only get you so far without the bigger picture, an understanding of macroeconomics which has different rules, can’t see the wood for the trees etc
Noted
We need a book for the man/woman in the pub.
The Guinness Book of ‘How to Pay for It’
For the price of it today we also need a book on:
Guinness; how to afford to pay for it.
And this suggestion comes from an observant Best Bitter drinker!
It is an enduring problem, even when I speak to intelligent friends / relatives who dismiss these concepts with “I prefer the household analogy because it’s simple” that’s even when they have agreed that it may be wrong. I think starting on the basics of money may be a good place to start.
Thanks
I know you are a professor, but can I suggest including some pedagogical techniques to help convey your message:
1. A learning objective: What will the viewer have learnt by the end of the video. e.g. Why taxes do not pay for government spending.
2. What the viewer will gain: How to spot government bullshit. How the spending really works.
3. Context. Why do people think that taxes pay for government spending (what was their motive).
Usually summaries at the end.
Noted
And worthwhile
I woul love to see clear examples of the multiplier effect.
And, as a subset, how it may make zero economic sense to dismiss public employees – save 30,000 salary and lose income tax, NI, benefit payments and the effect of the individual losing their spending power.
Noted
It’s always useful to try to work out why a message isn’t working with the audience. I commend your perseverance.
Don’t re-invent the wheel, give it shiny spokes and rubber tyres so as not to frighten the horses, but don’t re-invent it.
If you haven’t seen his work, look up Alan Hutchison on the GIMMS Associates listing
https://gimms.org.uk/about/gimms-associates/
and look at his articles (mostly condensed from talks he gives) at his own website. They are *all* worth reading.
https://www.matchesinthedark.uk/
Hutchison “baselines” his audience. He begins, unusually, with how we perceive money before climbing to the origins at the Bank of England. I think it’s a fruitful approach for a complete beginner, although i can’t be certain, having myself been brought up from the 1950s with spend-and-tax.
It’s easy to see that Modern Money isn’t igniting the internet, but that means that another tack might be worth considering instead of sailing the same course in different words.
https://www.matchesinthedark.uk/we-pay-for-it-by-spending-the-money/
(Apologies for the drift from wheels to yachts )
He appeared to last post in 2018…..
GIMMS added his contributions in 2022.
Still not “today”, but I was recommending his approach more than his full content. He’s built his talks on what worked with an audience “last time out”, most (not present company) bloggers and Substack writers tend to launch words into the ether and move on.
My tuppence-worth, that’s all.
Thanks
Thank you Anne. Sankey diagram helpful, and good explanation of fiscal multiplier (and its reverse gear) in Matches in the Dark
Is there a way we can require all present and prospective MPs to take a course on this?
We can wish…
To get as many MPs (and influencers) to take the course, I would:
1. Publish a book “Economics 101 for influencers: Funding the Future”
2. Very short chapters, Title, learning objective, context, history, summary, sources. Pretty pictures (layout is very important).
3. Send a copy to every MP (and influencer). Could be crowd-sourced.
Even if 10% read it, that’s over 50 MPs
Much to agree with
The household analogy is deeply entrenched on the omnibus. It is key.
I wouldnt contemplate starting a discussion on the omnibus, about bonds, I still don’t understand them. Likewise foreign exchange.
In a middle class community it might be different priorities.
We really need a progressive MMT version of Fa***e, on BBCQT every week.
So what would you start with?
My 2 omnibus priorities are:
Trashing the household analogy (and I mean trashing, ridicule it, scorn it, make it sound really stupid and point out the link with failed austerity, everyone hates austerity but it is chained to the household analogy.
Taxation of the wealthy. Really really simplified.
We tax the poor too much.
What are taxes FOR?
How to tax the rich.
With rhetoric!
The initials MMT stand for Modern Monetary Theory AND Magic Money Tree.
That is an opportunity rather than a problem, given how often the money tree gets mentioned, and how it does seem to yield cash for defence or nuclear power.
I haven’t forgotten about an omnibus version of TWR2024 but it wont happen soon – life is a bit full on at present.
Noted
Thanks
As someone once said “culture is upstream of politics”. That may be so, but in my experience it (culture) is itself downstream from economics.
IMHO, you need a more overtly cultural vehicle to convey the essence of your economic worldview to a mass audience.
Is the play the thing? Look at the impact of “Mr Bates and the Post Office” and how it crystallized the widespread feeling that Britain was “broken”. A play might not be the right vehicle but there are a lot of very creative people – bloggers, storytellers, playwrights, and poets – who might be willing to help.
Your own blog and videos are, of course, significant cultural vehicles in their own right, and would be invaluable for any creatives willing to take up the challenge.
Just a thought.
But I think I need to lay the foundations first
And then the back up material for those asking for more.
I add my voice of support to this excellent idea, Richard. The assault on the intelligence by our political class and the MSM commentators needs addressing.
The way Government manages its finances, I feel, desperately needs to be opened up to democratic scrutiny. Currently, it’s a closed book because successive Governments and their officials don’t trust the electorate and want to keep things as they are. This must change, and change quickly. Just to take one example among so very many, the electorate should have the right to demand an explanation as to why the overseas aid budget will reduce from about £15 Bn a few years ago to about £9 Bn by 27/28, while debt interest payments to overseas holders of UK Bonds have soared from around £13 Bn to more than £30 Bn over the last 5 years or so, free of UK tax. The first step on this journey has to be education. So please, please, please proceed.
With the WGAs not audited for a 2nd yr running, the press should be tearing into the government, but it scarcely made a ripple.
This no way to run a “household” let alone nation!
Agreed
I was trying to write units for the Open Tech many years ago; specifically on control of industrial boilers. I felt that understanding the system and problems was the route to effective teaching; those commissioning wanted just training material for a specific setup. My units weren’t bought. The relevance here is that you could go for understanding, which I think would be your natural bent, or go for some form of training so that people react with visceral disgust to household analogy, etc. Second may be easier to get across with celebrities and advertising-style videos, even slogans.
To muse upon, and thanks
I think that promoting the truth about money is one of the most important things to do at present, because the widely-held belief that restrictions in the money supply control our behaviour as a society can be made to justify and eventually normalise almost any brutal and destructive act. Sadly, we see it doing so all the time.
I knew nothing of MMT or of the details of how our monetary system works – how inflation is managed, for example – until I started reading this blog, but I had worked out for myself that we had a fiat currency and that money other than cash was just an entry on a computerised accounts system. If I had a fiver for every time I’ve said “We’re not on the gold standard, you know,” I might not be so consistently in the bottom percentile of all the wealth graphs that appear on this blog!
My very strong impression from this experience is that the appeal of the household analogy and of ‘balancing the books’ is very deep-seated psychologically in many people, with a link to morality and self-esteem. They project this onto a national scale, so that ‘balancing the books’ of the country becomes an issue of national pride and a measure of our greatness as a country. I’m sure that Margaret Thatcher and her team (who very smart about that kind of thing) understood this and exploited it.
I think that these feelings may have deep roots, at least back to the 19th century, and probably to religion, perhaps Methodism, although I haven’t studied the issue enough to present any evidence. But I’m sure that it is linked to people’s sense of identity and self-esteem, which is why it is so difficult to shift.
I don’t have a solution to suggest, but I wanted to make this comment because I’m sure that to be successful in getting the message across you need to take this into account. Those promoting the false analogies certainly have. We know it’s not impossible to change such entrenched ideas and create new norms across society from a wide variety of social changes that have taken place in recent decades, but it’s been a hearts as well as minds exercise, and I believe this is too.
Thank you
Read, appreciated and noted.
You are absolutely right Emily. I view our current understanding of macroeconomics as primarily being a result conditioning. What someone else I have enormous respect for would, I suspect, call ‘involuntary learning’. Learning that we didn’t choose or sign up for.
I think this is an excellent idea, Richard, and I would also agree with Dan Macaulay.
The challenge here is how to engage with your target audience, bearing in mind that your audience should also include the potential young 16-17-year-old voters (assuming the government goes ahead with its proposals) – perhaps a partnership or discussion with the likes of Tatton Spiller at Simple Politics (and now Simple Money) would be in order.
Good luck (and prepare for the long haul)
Thanks
” that those I talk to struggle to ‘get their heads around’ the insight I am attempting to share with them- how does a fiat currency system work and what then are the implications for government policy! ”
This to me is THE big problem in getting the message across to non-believers (including orthodox economists – such as in the email I sent you earlier today), who can & do just say that’s your opinion and we disagree – ‘the bank of England is independent and nothing to do the with government’. The only way I can see with a hope of convincing them otherwise would be to include a reference (with link) to what the BoE actually said on this not long ago (which I tried to find but so far without success).
The family member I am arguing about on this also referred to the Maastrict agreement which apparently obliged all signatories to ensure this Independence. Clearly since Brexit the UK is no longer subject to Maastrict, but he says it would have been enacted into UK law , so the UK would have had to change the law since Brexit. Is this correct – and if so did the UK govt make the law change?
Maastricht is noted by non-compliance.
We got the notionally independent BoE in 1998 but everyone everywhere knows all of this is a sham
Those who pretended otherwise ignore law can be changed – and we can do that now at will
Agreed, you only have to think of who technically owns the bank of England – chief secretary to the treasury, who also agrees the annual budget of the bank
Very good idea, Richard, and I think much needed.
I like Ian Tresman’s hint of using that kind of modern pedagogical structue.
You can’t require MPs to watch such a series, but you could offer it to those who would like to be against austerity if they could feel that was a responsible option and had the arguments to support their choice. That could be quite a large contingent.
Thanks
“The truth is that this is a subject on which there can never be any efficient or immediate appeal to the public at large. It is a subject on which the progress of opinion has been and always must be exceedingly slow” – J. Fullerton, On the Regulation of Currencies (1845)
Over the years, many people have pointed out how difficult it is to explain monetary matters to the general public. That doesn’t mean it isn’t worth trying and your efforts are both praiseworthy and extremely important.
One approach might be to use a dialogue format in which someone asks basic questions and you provide answers, each video gradually increasing in sophistication. The topics would have to be carefully sketched out in advance but the actual exchanges should be as natural as possible, including follow-up questions (“I don’t quite understand”). Just a thought…
Thanks
As you are circling back to reflect on the content you are producing I’d like to take a step back and suggest several interlinked considerations.
Content: Production is not a problem. Endless ideas, the skill sets of a multi media journalist and restless energy.
Product: There is alot! Too much? This blog, video series, newspaper column, in-person presentations, radio appearances, books etc. Alignment required to maximise engagement and grow reach – can see this is receiving attention. Trial, review analytics and repeat what works.
‘Distribution’: Getting people to engage with your content/products. It tends to be ‘super-engagers’ who champion, validate and amplify and in doing so help build more general awareness. Distribution is a dark art of publishers. They are very good at leveraging both third parties organisations and individuals reaching similar target audiences to mutual advantage at no or low cost. This is currently driving podcasts.
‘Packaging’: This signals who your content is aimed at and the reaction you seek to inspire. Two key components. First the core message- the what and why. The discussion ahead of changing the name of this blog from Tax Research UK to Funding the Future was around this. That felt a necessary at the time. The second element is the communicator, your goodself. You have been on a journey from the expert ‘public Professor’ to towards being an independent authority. More a voice on behalf of regular people than the academic critic of the status quo.
Finally, Finance: With success more resources are required to support. The most successfully ‘solutions’ seem to be as unique as the content producers themselves.
I discovered you through ‘The Joy of Tax’. it’s your understanding of tax (money and Government) that’s kept me coming back and helped reshape my economic thinking. But why keep coming back? Chunking this up, you bring a message of hope: tax can (help) get us out of the mess we are in. Hope also comes from the comments and community of positive engagement.
Relentlessly growing inequality is the underlying issue. The energy for change is rising. People crave hope. Hope requires understanding. On the side of social justice that understanding coming from you, Gary Stevenson, David McWilliams and Martin Lewis.
You’ve said again how motivating you find other people’s economic curiosity. It might be interesting to consider how that dynamic might be captured to bring life to new economic learning.
That was really useful. Thank you.
I’ve encouraged you before to write that book, but now I’m not so sure. I think you were right to shelve the project because there are, in fact, lots of books about right now, not least of which are still L Randall Wray’s “Modern Money Theory” (2012) and Stephanie Kelton’s “The Deficit Myth” (2020), plus plenty since by the likes of Dirk Ehnts et al.
But the one thing that swung the MMT argument for me as a retired accountant and business owner, was when I realised that money isn’t a thing at all – it’s a record of a debt. It was a lightbulb moment when I was out walking. It all fell into place in my accountancy concept of the monetary world as just a matter of debits and credits, assets and liabilities. Numbers in ledgers.
I wrote a paper based on that principal called “The Root of All Money”, the first chaper of which explains, for novices, how accountancy works. But when you condense it like that it doesn’t make up enough words (666) for a book because it’s all pretty simple really. And it has never been published because I don’t have any status in the world and nobody would actually buy it. Who the F is Nigel Hargreaves, after all?
My good friend, campaigner and pupil of Steve Keen has written a book along those lines, proof read by me, but he can’t find a publisher. You, of course, Richard, do have that status, and you are an accountant. So maybe…
Maybe, yes..
And I stress, this book is not just MMT by a very long way
YES please! Lots of good ideas on here folks.
I was vexed to realise that my ‘household economy’ model came from the woman I didn’t vote for in 1979, but relieved to understand that the jargon-filled economics books I tried from time to time were teaching a weird and unhelpful mathematical model.
Your articles and videos have enlightened me, but it’s been slow! The threads are now forming a fabric. I think separate ‘stories’ will interest many, and that they will weave the threads together – better than trying an overview approach. But we all learn differently! I like graphics and story-like threads.
History of Bank of England (explains national debt, move from gold to fiat currency) MMT as a description of what occurs (most of us get basic bookkeeping) government spending (budget triggers money creation) tax (civil society, inflation and inequality) inequality (trickle-down debunked, tornado suction upwards destroying all revealed), the multiplier effect…
I agree that giving prominent campaigners for a more caring society, the economics grounding to support their case would be a plus. We need as many voices as possible talking about how it really is, to raise curiosity, rather than telling people they are ‘wrong’ I feel.
Thanks
Good ideas, Richard.
What really helped me understand money, was thinking about what money was, from a kind of “first principles” barter system. Admittedly, my background is physics and engineering, so I tend to think that way anyway, but I think it’s possibly the easiest analogy to put forward against the household analogy.
Something like:
– if you do a bit of work for a friend (or someone you know well enough to trust), and they give you an IOU, then you can redeem that IOU at a later date
– Expanding the concept: if you trust persons A and B… A could do work for B and have an IOU from B. Now if you trust B is good for their IOU, you could do a similar piece of work for A, and A could ‘pay’ you with the IOU from B, which really was a previous piece of work from A (starting to get a bit messy, but the point is that we have people we trust, and if we all exchange our efforts in a trustworthy fashion, we have a small working economy). Perhaps importantly, the backing commodity of this economy is trust (sound familiar?)
Now if we tried to expand such a system to anything bigger than, say, a small village, we’d lose trust that these IOUs were worth anything. We don’t know the people, or their capabilities. But what if there was a bigger authority that we did trust? Now we would have a standardised IOU, lets call it the pound for short…
Suddenly, money’s not a magic thing. It’s just a big pool of IOUs. You do your work; you get paid in IOUs; you can go and use those IOUs to pay other people for their goods or work.
I know it leaves a lot out (like tax, etc) but you need bite-sized concepts as building blocks (I’m sure I’m telling you all how to suck eggs at this point)
Anyway. I hope this helps 🙂
Thanks
How about something like this to start an explanation of money? Its ” a story about money” I wrote back in 2020 based on a real event.
One day I took a bike ride to a place I visit regularly to sit out at a table overlooking a beach on the Isle of Bute. As usual I ordered a cafetiere of coffee and a toastie…total price £5.75.
When I placed my order at the coffee shop I told S who runs the shop that I had accidentally left my wallet at home. His response was – no problem Jim, you can pay next time you are in.
He was happy to do that because he knows me; I have been a regular customer for several years and we have got to know each other during that time.
I said I would write out an IOU for him, so I did that on an empty sugar sachet. This was a form of money but only money in a one-to-one transaction between me and him.
I wrote out another IOU but this time I wrote on it “I promise to pay the bearer on demand the sum of £5.75”, and signed it. I said to S that he could use that as currency as he could pass it on to someone else and as long as that person knew me and trusted me that it would serve as money in the one-to-one transaction between him and this other person.
I then wrote a text message saying “I owe xxxx coffee shop £5.75” and texted it to S. This is an example of digital money.
Anyway, S said I didn’t need to do any of those things as he trusted me to pay him the next time I was in. It was left at that. The “money” that was created between us was based on trust and it has no physical manifestation whatsoever. It came from thin air.
In fact all the different forms that the money took in this one-to-one transaction came from nothing…the writing on the paper and the text on our mobile phones was just a record of something that came from thin air….the promise I made to S to settle the debt I owed him.
The money you have in your bank account is a record and your monthly bank statement is a record of what has been owed to you and paid (money in) , and what you owed to others and paid (money out). This information is also recorded on a computer and so is virtually all money except money which is recorded on banknotes (just read what it says on a banknote….it contains a “promise to pay the bearer on demand the sum of…..”) or as tokens (coins).
This is what “money” is …. its a promise to pay. It comes from nothing other than trust. In the bigger economy we trust the government to pay. The government’s “money” too comes from nothing. So when you hear politicians say “there is no money” to do this, that, whatever, that is just one big lie. There is always the money to pay for what we need.
Thanks Jim
I like it…
I think that somewhere along the line a professional communicator needs to be involved to build a cohesive campaign. Dominic Cummins (bless his cotton socks) was extraordinarily effective. I think that someone that ‘gets’ what triggers people then understands how to steer them.
Personally I think that ‘debt’ is such a loaded term in the minds of most (for obvious reasons) that we almost need to eschew (or reconfigure) the term completely, particularly when it comes to government ‘investment’ and bonds being a medium for savings rather than a form of borrowing.
It’s a long road but the more that we normalise different language amongst ourselves I think the easier it will become to disseminate.
A much needed book.To increase the size of the readership perhaps ,as this blog does,also focus on the last 12 months of Labour in power.Give examples of what they have been doing and what they should be doing,so there is a past/ present theme and an outlook on the future.Trump and Farage can also be included.
It would give the book a more powerful and political impulse.
Thanks
Thanks Richard.
My query re Maastrict was an afterthought – just wondering whether was still, in principle, concerned (whether it was generally repsected or not) or whether they had removed any undesirable elements from UK law).
But my main point was that I fear that neither you nor Steve Keen, Stephanie Kelton etc will never convince enough people (including politicians) of the ilpotant & real difference between the economics of households and the government without the declared support of a critical mass of economists. So, IMHO, providing sufficient & convincing evidence with direct links to original sources (eg the BoE) to convince mainstream economists is essential.
Maybe this was discussed above, but – with family currently visiting – I admit I have not yet had time to read it fully
We will never get that critical mass. 92% promote neoliberal abuse. What we have to show is that they are promoting abuse of us all.
Richard: Fair enough, though depressing, that you see no hope of at convincing at least some the 92% neoliberal economists (as has been said by another commentator, it wasn’t always lile this).
“What we have to show is that they are promoting abuse of us all. ”
Agreed. But, in view the fact that a huge majority of economists disagree with you, I still maintain that, to convince as many people as possible, you need to include some links to solid external sources (like the BoE) to show that it is truly the 92% and not you who are promoting ‘fakeconomics’. Otherwise, why would they choose to believe you and not them?
Because what they’re promoting does not work?
No one believed Galileo, remember.
“No one believed Galileo, remember. ”
OK. But I sincererly hope you won’t end up like Galileo, who was found guilty by the Inquisition on ‘strong suspcion of heresy’ and spent the last 10 years of his life under house arrest!
That said, his main opposition came of course from the Roman Catholic Church (who only lifted the ban on publication of his theory in 1822 and finally accepted he had been right as recently as 1992, over 300 years after he first proposed it as a possible alternative to the geocentric one !).
Elsewhere however others could speak & publish more freely – around the same time, Kepler was also promoting a heliocentric theory with, like Galilieo, some evidence from observing the motion of the planets, later supported by Isaac Newton’s wider theory of gravity, with more general acceptance coming slowly.
Apologies for the diversion, but this is something I used to teach my Applied Maths students.
I’ll say no more, other than repeat my firm opinion as a scientist that presenting any available evidence (with sources other than just your word) can only help in the struggle to convince as many as possible. You may disagree, but in case of doubt it surely can’t do any harm to try and I think is something you could easily include?
I’ll think about it
I promise that
Could it be helpful to start by asking what has changed?
After all the NHS was created when the country was supposedly bust. Yet now the government cannot afford it…
We used to have university student grants not loans. Now the government cannot afford them.
We used to have libraries. Now the government cannot afford them.
We used to have youth clubs. Now the government cannot afford them.
We never used to have potholes. Now the government cannot afford to fill them in….
Money is power and money creation is the way government gets stuff done.
Artificially limiting money creation is a dishonest but desperately easy way to shape the art of the possible that is politics.
Although neither the Conservative nor Labour manifestos mentioned the economy at all until 1950, the sainted Margaret used economics as a weapon and stated in the Sunday Times on 3 May 1981:
[…] And therefore, it isn’t that I set out on economic policies; it’s that I set out really to change the approach, and changing the economics is the means of changing that approach. If you change the approach you really are after the heart and soul of the nation. Economics are the method; the object is to change the heart and soul.
She has changed the approach and the heart and soul of most – including the Labour Party.
She changed politics.. And the money men have easily grabbed the power.
Margaret’s purse and handbag still shape economic thinking.
We have to ask Why, and to what end exactly, do we want to do this to ourselves?
Who is going to send in the bailiffs when we cannot pay?
No one of course, but meanwhile we are manufacturing crises and , in effect, regularly sending in the bailiffs – to ourselves.
When we realise that, we can, just as easily, stand them down.
I’m convinced that Pablo Freire is right when he talks about naïve consciousness in consumerist societies and that a ‘critical consciousness’ is where people need to be to be authentically involved in democracy.
BTW – ‘critical consciousness’ does not belong to the Alt-Right who depend on such naivety – and just tell lies to obfuscate issues – this is not critical thinking at all by any measure.
The economics primer you have just put up would certainly help address the naivety.
However, the main item that seems to get overlooked is the sovereignty of the legal tender and its relationship with your government.
At a time when states are rolling back their operations, the key question is who is that sovereignty actually for then? Who benefits? Why are you supposed to vote? Why is there any sovereignty at all? What use is it?
Money is a sovereignty issue. Someone has to be in charge. That is a historical fact and Neo-liberalism is anti-historical. The link between democracy and sovereignty is being broken down all the time and the main theatre of war is over sovereign currencies (versus ‘private’ money issuance) and how that money is allocated. This battle negates sovereign currency production for the many, and favouring to allocate to the few.
The objective of sovereign currency issuance is for economic hygiene – moving money around continuously to supply activities to generate and allocate resources widely, destroying it and re-making it. Currently, the economy is being used to generate benefits that are too narrow in definition and effects and not democratic at all. Money for money’s sake is the new rule – the social benefits of being able to afford things are being ignored.
This to me is why the household analogy (HHA) needs to be destroyed for good. And on top of that, the HHA is also a very individualistic way of look at the issue – bounding the real rationality of money by one’s own situation. People should – must – be able to see how money circulation helps everyone – the social cohesion it offers for a start.
Just a few thoughts………………
“Fakenomics” – or “Myths about Money”
Eg:
Taxes fund spending
Black holes
Balancing the budget
The Household Analogy
The maxed out credit card
The country is bankrupt
The wealthy create wealth
The unsustainable welfare burden
Money spent on welfare is wasted
There is no Magic Money Tree
TrickleDown benefits the poor
How will you pay for it?
Austerity allows growth
Taxation stifles growth
Fiscal rules
Budget deficits are bad
Surpluses are good
These myths need to be ridiculed, laughed at, made to look unbearably, undeniably stupid, until the day comes (dream on folks) when Daniel Hannon is booed and laughed at hysterically by the entire BBCQT audience should he ever dare to mention them.
I think we need to rubbish the myths in as populist a way as possible, but using populism to spread truth, not Reform UK Ltd corporate metal trading lies.
That’s a name for a video series….
I once saw a very graphic pictorial description of MMT using that rapid drawing technique. It used a picture of a bath, with taps representing money being spent into the economy and the water coming out the plug hole representing taxation. This made the whole dynamic of how money circulates in the economy so beautifully simple. Can you look into this rapid drawing technique which you can aquire an online program to get started producing your own sketches. People get pictures; they are more likely to understand and remember the pictures.
My problem is I simply don’t think that way.
I would need help.
Nor do I Richard. I’ve seen that too, and it doesn’t work because the water still has to come from somewhere. And go somewhere for that matter. It might work if you thought about oil being pumped from a well, being refined, stored, transported and then burned up in an engine. Money is simply a measure of the extraction of the oil, the labour to refine it and the use of tanks and tankers. And then it has to go somewhere – into the air where it also uses up health care resources.
None of these metaphors really work because money is not water or electricity as they both require physical presence from earth resources..
Money does not.
That is probably why its concept is so difficult to grasp.
It is abstract.
Why not think of the Egyptians building the pyramids who were by all accounts not paid – because their Pharoahs were gods and while the constructors were doubtless fed and watered there was no money involved..
Or even those Europeans in the Middle Ages who built cathedrals – all without architectural drawings – who seemed to do much of it voluntarily as a religious obligation – and as most cathedrals took at least a century to build, many with only an abstract idea of the eventual outcome.
So I reluctantly conclude that both money and democracy is now the new religion – and issuing money is simply how democratic government operates.
If we don’t believe in that religion – fine – but how else does – or can – our rickety democracy work?
The existential bit……
In lieu of a book from Richard I can thoroughly recommend ‘Act Now’ from the Common Sense Policy Group ( Richard Wilkinson, Danny Dorling and Kate Pickett) as a possible manifesto for progress.
It’s good
But bitty.
The household analogy needs to be broadened to include the country it actually sits in! At present it is highly myopic and an incomplete model/picture.
The issues arising from the citizens assembly and lack of reference points re money creation/macroeconomics are hardly surprising given the general lack of depth in financial and economics education.
On the matter in the UK, many have come before, James Robertson whose newsletter mentioned Ben Dyson who later formed Positive Money after reading Michael Rowbotham’s ‘The Grip of Death’ (1998) (whose acknowledgements mention many others.)
Ben Dyson did us all a great disservice by totally failing to understand money
Positive Money has been massively harmful in this regard – taking gibberish to the poisoning if effectively promoting the gold standard.
I followed Positive Money from the beginning, they did well with getting the money creation side to a wider audience but yes, a massive piece of the puzzle missing, I was totally blindsided by not knowing the MMT side of things when trying to explain to others, many thanks for your help in those matters!
‘Shock them out of their complacency’.
I think I would begin with ‘Anything we can actually do, we can afford’.
Incredulous – they would have to start thinking about money in a different way.
Indeed…
Do what YOU do best and do it as well as you can. You are good at what you are gifted for and passionate about.
Encourage others to do what THEY do best and ally with them if you can make it work.
Listen to everyone, especially those outside your own context and experience.
(Eg: if Fa***e shoots one of your MMT/TWR foxes (like money creation or differential interest rates in BoE), watch to see how he does it, and if people listen to him, then nick his support!)
Thanks
Sorry to keep banging on, but I find this to be most useful thread for some time.
I’m currently researching the history of Neoliberalism – just waiting for Amazon to deliver “The Invisible Doctrine” as recommended a few days ago.
I’m also a member of the 99% Organisation, which is doing great work getting their message out to MPs with the help of my own MP, Neil Duncan-Jordan.
The big problem to me is that neoliberalism and the idea that government finance is like a household budget has been about (since the Mont Pelerin Society) by the capital owning classes for their benefit. They’ve got almost limitless resources and complete control of the media. So we ordinary people don’t stand a chance.
As someone above said, “Mr Bates” was one of the most succesful campaigns in a long time. But would we get the BBC to air anything like that if it was on how the gigawealthy end up with half of the national income?
I’m also unhappy about the fragmentation of the various and numerous groups of campaigners who all seem to have formed factions fighting one another. Can’t we all come to a proper concensus like good friends? After all, Richard, you claim to be a Quaker. Aren’t Friends Meeting House meant to be for everyone to come to a concensus?
But that is incredibly hard
It does not always happen
And the left has people like Positive Money who claim to be in it
Perhaps it’s worth starting with a good example, that everyone knows, of when the government did create money out of thin air, for instance COVID furlough or the bank bailout to show what nonsense the whole household analogy is. Not all supposed government debt is owed to organisations, some of it is owed to the bank of England which is owned by the treasury. You could then move on to where would large organisations such as pension funds and banks put there money safely if they weren’t allowed to buy government bonds. The fact that when someone buys premium bonds they increase government debt, when they save with ns&I they increase national debt contrast that with them saving in a bank.
I agree with your sentiments.
Some details are sketchy though.
So take COVID furlough, very few people were working so very little tax take yet the government had money to pay furlough, build extra hospital capacity etc where did that money come from? Truth is it didn’t exist before, how could someone who believes that tax fund spending explain that?
They can’t
Yesterday evening, being the beginning of the parliamentary recess, I emailed my MP Libdem Caroline Voaden. I know her personally a little.
When she ceased to be an MEP in December 2019… amongst other things…she got in touch with me as the Make Votes Matter local organiser to find out about MVM and how it operated. We met just before lockdown for a coffee and chat.
She is a very nice and sincere person and has been out with our MVM group on a number of actions.
However I know from some brief exchanges with her that her economics’ understanding is decidedly mainstream orthodox.
I have asked her if we might be able to get together, before she gets back to the scrum of Westminster, to discuss our broken economics’ paradigm. Enabled by your teaching Richard, I was able to feel confident about what I was conveying to her. I also feel confident about being able to engage with her in a sensible discussion around this.
A couple of weeks ago I met up with Martin Whitlock author of ‘Human Values, Human Politics’ and quite a heterodox economist…to discover that I can engage on level of understanding that, actually, quite surprised me!
I’ll let you know if I get the requested meet-up with my MP.
Good luck
My personal view is that your list is pretty spot on but have been thinking for a while now that what is needed is a series similar to Dummies books but in the form of pamphlet pdfs on each of them (not chapters in a book) that can be downloaded and read offline or even printed. Need to come up with something catchy though.
Deficit Guide for Dimwits
Neoliberalism for Numskulls?
National Debt for Dunces?
Agreed
This stuff will need careful curating. I am not sure how as yet. But I am aware of the need.
You worry about knowing too much to explain basic economics to the uneducated echoes my long held belief that mathematicians should not teach basic arithmetic and simple maths in schools
I agree, and disagree
They can teach maths if they can be bothered to work out why others find hard what they see as obvious
But most importantly, if they can explain why it is useful to know and so worth the effort to learn
The Divine Light dwells within each of us, guiding us to live lives of boundless love. This Inward Teacher calls us to embrace radical compassion, extending forgiveness to all, and seeking peace in every interaction. It inspires us to dismantle barriers, recognizing the sacred worth in every person, and to live with humility, integrity, and a joyful commitment to justice.
My experience teaching in inner city schools that most teachers are hard put to fine tune their teaching and their pupils are part of the cohort you need to convince.
Agreed
Sorry I have not unlike you Richard read all the comments. Just a couple of ideas.
Why not produce something like Ivan Roger’s 9 lessons in Brexit covering those fundamental points you make which as you say without an understanding of make subsequent arguments more difficult to land.
Then a more out the box idea….is to join forces with a group with more resources and take the government to court for Libel on the lies they talk about on the household budget etc….doesn’t need to go the full distance but might raise awareness…coupled with the book
The economic primer should meet the first need
The second is not my style
Thanks for the response Richard.
Fully understand the libel route might not be your style but might be worth planting the seed somewhere and see if it takes off.
Keep up the good work and cause.
Here’s your big chance Richard. Why is the site not accepting my comment?
https://www.theguardian.com/politics/2025/jul/23/rachel-reeves-seeks-economic-heavyweights-advisers-reduce-roles?CMP=Share_AndroidApp_Other
John McDonnell would not listen to me, although I think he now realises I had a point. Why would Rachel Reeves?
I think it is very important to emphasise that the people who have been left behind will have their lives much improved by governments adopting your economic policies.
We live in a world with a short attention span. People need buzzwords and simple analogies or they lose interest. Thatcher got incredible traction talking about a housewife managing her money even though it was economic nonsense. Your challenge is presenting heterodox economics in a simple way that resonates with people. No one I’ve read has managed this so far.
Agreed
And I know the scale of the challenge
The idea that money is debt is a myth. If you go into a bank and ask for your pound note to be repaid, the bank will give you another, newer, pound. Money is a means of exchange; it allows you to purchase something, say a car, and preserves the value of the car in the hands of the car dealer until he or she can use that facility to buy more cars. Think of money as a tradable receipt, it is a receipt but one that you can use to buy something else. If we were ever to repay the national debt, none of us would have any money and we would be back into a barter society. We’ve all been conned.
I regret to say that you appear to be deeply confused, Patrick.
Let me start by saying that you are not describing money. You might, at best, be describing cash, and cash is part of base money, which is distinct from all other forms in that it’s a bearer bond, which does mean it has some of the characteristics that you describe.
But, cash represents less than 3% of the money supply, and the 97% is made up of the bank balances, and these only exist because they are recorded as debt in the ledgers of banks. It is literally technically impossible for any other description to be given to these entries other than debt.
They have no physical existence.
They have no asset backing.
Their movement cannot be observed except by changing ledger balances.
They exist only as debits and credits, meaning they are sums owing to and from people.
That is it.
Those entries are not a means of exchange. They have worth solely because the government will accept that debt in settlement of the tax liabilities that they create and we we owe. I stress, that is it.
But because we almost all have such liabilities we trust that the debts have value, so we swap them for goods and services. But the value is not, per se in the exchange, it comes from the ability to extinguish tax liabilities, which is backed up by law.
As a consequence, this money must be debt, because it can extinguish liabilities.
This is not mythology, but fact, because if you want to pretend that money as debt does not exist, try paying your taxes in another way and you’ll find that you will have a considerable problem. 
And even cash is debt. It actually declares the fact. It is written upon it.
I regret to say it, but you are quite simply either confused or wrong, and it amounts to much the same thing.