I spoke at the Cambridge Union last night at what was described as a “fireside chat”.
Photo: Thomas Murphy
I was amused to learn when signing the guest book that I had followed a former vice-president, Mike Pence of the USA, who had spoken the night before to a larger audience, I think, but we have different appeals.
Isaac James, who interviewed me, had done his homework and guided the questions through subjects ranging from my problems with neoclassical economics to wealth taxation, inflation, capital flight, and the politics of care.
The audience then joined in, with an opportunity to ask questions on any subject they wished, most of which related to clarifying previously stated positions, many of which I could resolve by arguing that we could not solve current problems by perpetuating solutions that had already been shown not to work. The need is for new economic narratives, not for continued, desperate justification of existing formulas that are the reason so many people are alienated from the economy and politics as they are now.
I enjoyed the evening and I was grateful to my hosts. A YouTube video will be available sometime soon.
The evening was also of interest to the team here because we are progressing with our plans to hold our own event. This is now most likely to be on Saturday, February 28, and the venue is also likely to shift from Ely to Cambridge because demand appears to be higher than we initially expected, and we could not find capacity in Ely.
We are also, as a result, now coming in with a price slightly lower than the £50 we previously indicated, but wherever we have looked we have found that the costs mean that the ticket price has to be close to that range simply because of the cost of venues, insurance, ticketing and a host of other incidentals, all of which add up.
If there was one topic that stood out from the questions last night, it was the householder analogy. The mainly student audience was sceptical that any politician could secure office without using it, even if they knew it was wrong. That provides some indication of the scale of the challenge that we face, and the issues I know I will need to address when talking about these things. Creating new narratives will not happen overnight; minds need to be changed.
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Congratulations!
Good news about the first ‘Event’ as well
At the expense of thread drift, if you decide to hold more ‘events’ may I suggest
The Bath Royal Literary and Scientific Institution – BRISLI
Its in the middle of Bath close to the railway and bus stations and its the sort of event they would host
Website at
https://www.brlsi.org/
I could be naughty and suggest the Merlin Theater in Frome coz its over the road from my house as well…………..
Noted 🙂
Frome – excellent idea! One of the few independent councils in the country. My daughter is a town councillor there. Bath might be more practical though – trains etc
I’d come but I don’t want to put people off !! ho ho
Frome is a Green stronghold. At the by-election last year the Green candidate got the highest Green vote in a by-election.
So there is no doubt that the Household analogy is a complete myth, here are some papers:
“The household fallacy“, Roger Farmer and Pawel Zabczyk, Economics Letters, 2018, vol. 169, issue C, 83-86
https://www.sciencedirect.com/science/article/abs/pii/S0165176518301915
Full text: http://wrap.warwick.ac.uk/102451/7/WRAP-household-fallacy-Farmer-2018.pdf
“A government is not a household“, Frank van Lerven, Andrew Jackson, New Economics Foundation, 26 October 2018
https://neweconomics.org/2018/10/a-government-is-not-a-household
“Government-Household analogy” at Wikipedia
https://en.wikipedia.org/wiki/Government-Household_analogy
“Are Policy Analogies Persuasive? The Household Budget Analogy and Public Support for Austerity“, Lucy Barnes and Timothy Hicks, British Journal of Political Science , Volume 52 , Issue 3 , July 2022 , pp. 1296 – 1314 (Full text)
https://doi.org/10.1017/S0007123421000119
Full text: https://discovery.ucl.ac.uk/id/eprint/10129856/1/DebtAnalogy6_20210225.pdf
“Governments Are Nothing Like Households“, Frances Coppola, Forbes, Apr 30, 2018
https://www.forbes.com/sites/francescoppola/2018/04/30/governments-are-nothing-like-households/
Thank you
None of these papers get to the central point that in order for governments to facilitate a stabily functioning economy they must have the ability to use discretionary power to create money without liability, that is without owing anybody else. Once the reasons for this are understood then it becomes obvious the issue of government debt is discretionary!
“ the scale of the challenge that we face”. The myth that banks lend savers deposits is gradually being dispelled so I think, given the combination of time, the collapse of neoliberal economics conflated by austerity, voter despair and their search for a viable alternative might just speed understanding along a bit…..
The myth of the householder analogy is one economic dragon that needs slaying! A couple of behavioural economists beating the same drum on LSE Blog this week. One author is Cahel Moran, the guy behind the Unlearning Economics YouTube channel (long form documentary style, 240k subscribers).
Why we are getting poorer and what the government can do about it | British Politics and Policy at LSE https://share.google/a7Kv3Q8BE3djBbP7t
I like his stuff
Very different in style to me
A few comments.
First, it’s great that you got this chance to speak to this kind of audience – I wonder how many of the students studying Economics will go back to their lectures and tutorials asking some fresh questions? Lots, I hope. I’m looking forward to seeing the video.
Second, on Radio 4 this am (about 7:50) I heard Andy Burnham promoting the message of public spending being a good thing, boosting growth and development as it can do. Another step in the ‘one step at a time’ approach. I like his delivery – clear and straightforward. He comes across as a practical politician who knows what he wants to do, and how to get that done. A rare bird! Have you ever met him?
Third, I’m planning to come along to the event – there will be some interesting presentations and, at least as important, Q&A sessions. A stimulating day! Worth making a few days of it as well, given what a great place Cambridge is to visit.
Thanks Nigel
The essential response is how can an economy work in a well-balanced way based on the household analogy which demands that all money must be created with a liability, that is owing somebody else. See my post on the Stephanie Kelton topic.
Re: the householder analogy…
Politicians will only stop using it when, everytime they DO use it, their audience/postbag/interviewer laughs at them and says, “surely you don’t STILL believe in that outdated PPE rubbish?!”
And as you say, that reveals the scale of the challenge. But Polanski is doing it fairly effectively, which is a start (while YourParty are still engaged in old fashioned Labour Party factionalism and power squabbles back in the green room, about who will get the microphone).
We need a similar challenge on immigration, when omnibus passengers tell MPs, “!+^%£*# immigration, what I want to know, is why my mum can’t get to see her GP!”
Or maybe have a BBCQT in Tewkesbury, so the politicians can apply their minds to why the townspeople are more worried about needing their OWN small boats rather than stopping other people crossing the channel in them.
What is encouraging as we slide down the spiral of economic, social and political chaos, is that gradually, the unfocussed and dangerous contempt for established politicians, is, very gradually morphing into INFORMED contempt, along with a realisation that the fraud Fa***e is the most established, long-serving (Conservative 1978, Anti Federalist League 1992, UKIP 1993, Independent 2018, Brexit Party 2019, renamed Reform UK Ltd 2021) cynical, dishonest and incompetent politician of them all.
We have a long way to go, but we are beginning to move.
I think we are….
Oh Noooo! I would have come, so 28th is in my 2026 diary.
Prof: Fan girl here happy to link you to Cambridge knowledge/ locals who arrange such events in CB1.
Thanks
I may get back to you.
This article, which was posted by one of your commenters some time ago, might be pertinent here.
“The power of folk ideas in economic policy and the central bank–commercial bank analogy”
https://www.tandfonline.com/doi/full/10.1080/13563467.2022.2109610#abstract
Thanks
Interesting.
Was the household analogy seen as just a means to get power do you think and just accepted – is that what they seemed to be saying – justifying it, or did they share your concern that it was just plain wrong?
I’ve got to say that with both Oxford and Cambridge – I just don’t trust them at all. As Hobbes pointed out, universities can be like Trojan horses…………..
Was Chang around at all?
The students said what the current political strategists won’t say. Household analogy is to gain power and sound relatable to the public. It is a lack of confidence in the public and a belief that the public wants to be deceived.
this begs the question, will any politician be bold enough to stand up and state the truth… (crossing everything that Zack Polanski builds on his BOLD Politics podcast and gets the message across.)
Have you thought about the Esmee Fairbairn Foundation? I believe it’s possible they might offer financial support without cramping your style.
I am not interested in apllying for grants any more. I have lived for a long time with the restrictions they supply, and don’t want to do so again.
OK. Got the message. And I can see your point. Just as long as your message gets to the people who matter – the people you want to help. They’re the ones who need to understand that there’s another way, not just a bunch of reasonably well-heeled, though well-meaning, people like me. They’re the ones who need to demand the right kind of change.
“The mainly student audience was sceptical that any politician could secure office without using it”
Very interesting.
How to destroy the myth? everybody in the audience carried with them a note (literally a “note”) with writing on it that destroys that myth.
Does this open narratives/routes to destroy the myth?
There is a video coming
I carry around the odd banknote just in case, although I can’t remember the last time I used one. I’m a bit old fashioned by still using a physical debit or credit card. But I wonder how many of the students bother carrying either, rather than just waving their phone.
Richard, you have much in common with VP Mike Pence – apart apparently some Irish ancestry. He apparently behaved quite well during the Jan 6th Capitol attack.
To realise how embedded , ideas can become, this morning’s Melvyn Bragg repeat discussion with three astronomical scientists . One said that the moon is drifting away from the earth at the same speed as fingernails grow , so that in a million years time there will be no more total solar eclipses viewable from the surface of the earth.
One said ‘whether the national debt will be solved before than I don’t know’
🙂
I feel the same about the household analogy: most people do not have the time or education to understand why it is erroneous and I think it is the reason why Gary Stevenson uses it: it is a short cut to getting people’s attention on another key issue that matters to them: inequality.
Your approach is extremely convincing and efficient for the educated middle class but may well be passing by the majority of the working class. And that’s a worry I believe.
Both you and Gary should prrhaps find a way to harmonize your message so as to encompass a bigger audience under the same ideas and goals.
I feel the same about the household analogy: most people do not have the time or education to understand why it is erroneous and I think it is the reason why Gary Stevenson dedided to
use it: it allows him to get people’s attention on the issue that matters the most to them: inequality.
Your approach is extremely convincing and efficient for the educated middle class but may risk to pass by the majority of the working class. And that’s a worry imo.
Both you and Gary should prrhaps find a way to harmonize your message so as to encompass a bigger audience under the same ideas and goals.
How do I harmonise with someone who is singing a different tune in a different key, and time signature?
I can handle dissonance: Bach does it brilliantly. But there has to be an intention to resolve it.
Put simply: ‘where there’s a will, there’s a way’ .
To succeed requires that you focus on the end goal at first. Here, the end goal is, first of all and above all, challenging inequality because it is on this basis alone that you and Gary can deliver to the public a message that creates a real change in the public perception. And that’s where the challenge around success in delivering results on the ground starts. That’s where the common good fuses with the common goal.
The common good always require that people compromise a little bit.
It is the key to achieving success in creating a stable society.
Don’t be too wedded to academic purity: the public is a slow learner and can only progress if those who promote change sing from the same sheet. At least to start with.
I don’t do academic purity.
I am wholly solution focussed and have always been so, and few people hace deliveered more tax reform in the world than I have: wealth taxes are not deliverable. Aditya Chakrabortty has sussed that in the Guardian today.
Hmm. Well “The Clash” seemed to find an audience:)
Modern dissonance is difficult because it’s aim is never to resolve; always sounds like sthg you have trodden in.
Did you manage, Richard, to use the ‘knighthood’ analogy? If so, reaction?
I found an earlier sentence of yours resonating: “The need is for new economic narratives, not for continued, desperate justification of existing formulas” (that have failed the people).
Now the challenge is to put that in language understood by the Sun readers.
I amde a video on it…
It did not excite people
Well Catherine a lot of people “have the time” to belly ache about the long waiting times for NHS treatment and most are not that stupid to realise that extra government spending on resources would alleviate this problem. The immoral right-wing media owned primarily by the rich, however, bang the drum that the nation can’t afford it. Most people don’t want to trouble themselves to ask the question why, to leave no stone unturned to discover if this is true. They prefer to regurgitate the right-wing media lie! Until the consequences of this laziness become dire nothing will change!
“Challenging inequality” as an “end goal”
https://www.taxresearch.org.uk/Blog/2025/11/20/building-economic-narratives-one-step-at-a-time/comment-page-1/#comment-1054186
– is surely to set the bar very low indeed?
“I CHALLENGE INEQUALITY!!”
There we are – job done? Of course not.
Perhaps a better challenge might be variations around “REDUCE Gross Inequality, and introduce specific measures ( a b c d etc ) to counter the forces that have allowed inequaliy to increase to such socially, economically and morally destructive levels in the last 4 decades” – several of which are tackled in this “alternative budget”.
Regarding the difficulty in dispelling the household analogy myth, Kelton’s book on MMT really resonated with me when she referenced the moon landings. There was political will behind vast government spending, with Kennedy stating that it would be expensive but necessary. It’s arguable whether the moon landings were actually necessary; listen to Gil Scott-Heron’s “Whitey on the Moon” to highlight the hypocrisy of the endeavor, but transforming our country certainly is. We have the money and the resources, and changing our country so it is fit for the future will be costly but necessary. We can’t shy away from the cost narrative, but need to emphasise the results we will achieve. It’s not a cost, it’s an investment.
The Guardian has an article on a wealth Tax
https://www.theguardian.com/commentisfree/2025/nov/20/wealth-tax-left-super-rich-britain-budget-2025
So I posted using your taxing wealth report
It only so far as 6 upticks but one response from “Educated coin” said
“I learned a lot from Richard Murphy. He’s an excellent and profoundly serious leftwing voice on this stuff and deserves to be more broadly heard.
some people are listening.
The Independent today had an article by John Rentoul “Why a wealth tax won’t fix the black hole” quoting Dan Needle. IMHO a lot of ill-informed nonsense. I posted your report there too but so far few comments.
But it may be the message is spreading.
It’s a shame Aditya did not quote me. We do know each other.
The students were pragmatic for observing the difficulties in overcoming the ‘government is like a household’ narrative.
I hope that you left them with the conviction that they need to be part of the vanguard responsible for dispelling this damaging myth.
I tried
Well done, Richard. As others have indicated I do hope the students (especially those studying economics) go back and really challenge their lecturers and tutors by asking the powerful questions you raised.
Richard,
You got a name check in the New World by Paul Mason but noting good way. Perhaps you could demand a right of reply.
Quote,
“Worse, Polanski turns out to be “Modern Money Theory curious”. In recent conversations with heterodox economist Richard Murphy,……The problem with this idea is that it is “bollocks.”.
Very rude and hardly an argument but shows what you are up against.
I think the same of Mason: a supposed Marxist what has turned out to be a profound defender of the status quo whilst not having a clue about money or the economy, who spends all his time brown nosing Keir Starmer because he is desperate to be a Labour MP, which reveals how poor his judgement is.
Good work! Keep going with the changing minds, it is so necessary. Thank you
It really is very difficult to get people to understand that the gov is not the same as a household with a credit card and substantial indebtedness. Once you try to explain it to a person or friend over a coffee, you have to take things a few steps back to build your foundation. They may indulge you if they are genuinely interested. More likely, they would switch off however compelling your conversation.
The only place to do this is a classroom, preferably as part of a course in economics, business studies, or better still, citizenship. Make no assumptions, start from the beginning and tell the story, which also happens to be the truth. Start now, and in 5 years it might be accepted on to the syllabuses of examining bodies. In 10years, the household/ National Debt fallacies will be a minority view.In 20 years, the gov as a household will be like saying: the sun goes round the earth. It’s really going to be a long job and I won’t be around to see it. Please write and tell me how it all worked out, if you can find the address.
There is a video coming on this….
As a member of the Oxford Union, I have been thinking it might be an idea to see if the current leadership team at the union would be interested in holding a debate to explode a few of the current economic myths. “This house believes…” What would be the best assertion to support or to tear down? Often the most provocative debates make a really radical claim, as that draws the greatest crowd at debates.
Since Oxford is perhaps the most prolific breeding ground for warped Neoliberal teaching, the Oxford Union would be an excellent place to challenge those failed, outdated views. I think Rachel Reeves would leap at the chance to pretend she is a responsible economist by showing-off at the union. Ego would draw Zia Yusuf, who also fancies himself as an economist, promoting the wacky ideas of Reform that I doubt will wash at the union. George Osborn was ‘spawned’ at Oxford and is familiar with the union, I don’t doubt he could be persuaded to defend his failed austerity agenda.
Who should join your team to uphold the legitimate economic thinking to replace neoliberalism in modern politics? On several occasions, the leader of the Green Party, Zack Polanski, has publicly rejected the Household Analogy. Although he is never given the chance to elaborate on this, I believe he understands MMT well enough to debate. Who else? A carefully phrased question is key, but would you be up for ‘entering the belly of the beast’ in an attempt to re-educate the next generation of Oxford PPE graduates? I do not have any particular sway at the Oxford Union, but I could put the idea to them if you would be interested.
I would be interested.
Well Richard, in a few weeks time you will have an audience of 300+ of the educated middle-class at Keele. I encouraged Bill to get you back, this time in person.
I am particularly eager to hear the 45mins of Q n A; that will be spicy!
Last time, during Covid, I think you opened with, ‘Where did Rishi find his magic money forest?’ Then you lifted your PC keyboard up to the camera, and my thinking has never been the same since.
Bring it on!!!
I must bring a keyboard with me…
Thanks
Hi Richard,
Like you I use Ai to help clarify my thinking. I asked DeepSeek to suggest an alternative to the household analogy and it suggested this:
The Gardener of the National Garden
This is perhaps the most comprehensive and intuitive alternative.
· The Metaphor: The state is the gardener, and the society/economy is the garden.
· How it Works: A gardener cannot force a plant to grow. But they can create the conditions for thriving: they till the soil (invest in infrastructure), ensure a steady water supply (provide public services), pull weeds (regulate abuses), and plant seeds for the future (fund research and education).
· The “Household” Contrast: A household spends money it has. A gardener invests energy and resources to create a system that generates abundance for all its inhabitants.
· Why it Fits a “Politics of Care”: It’s inherently about nurturing, long-term health, and creating a sustainable ecosystem where all elements can flourish. It frames spending as investment and regulation as stewardship.
Perhaps you might be able to use that.
Sorry, but most definitely no.
Not sure if my previous comment got through as it might have been over 400words, but maybe you can read it.
The essence was that I asked DeepSeek for a counter metaphor to the household analogy. It suggested the Gardener of the National Garden. Maybe you could use that.
I don’t think so
Not an image that works for me at all. Far too many images and thoughts come crashing into my mind, none of them useful.
Another alternative was the Responsible Parent of the Nation
Sorry, but another “no” from me.
So disappointing we’ve not been able to chip away at the error filled metaphor.
“ The mainly student audience was sceptical that any politician could secure office without using it, even if they knew it was wrong. That provides some indication of the scale of the challenge that we face, and the issues I know I will need to address when talking about these things.