Grace Blakeley has responded to my suggestion that she is wrong about modern monetary theory (MMT), saying:
Thanks Richard – this confirms my assumption that the argument for MMT is essentially a technocratic one – ie how do we make the existing capitalist system work more effectively, rather than how do we effect a systematic redistribution of wealth and power in favour of working people.
It's not surprising that we don't agree on this issue, because as you've clearly laid out here, you are not a socialist. There's nothing wrong with that, but you also shouldn't expect those who hold a fundamentally different view about the operation of capitalism to agree with every policy proposal you suggest.
My response, expressed in a spirit of curiosity (including about my own well-being if she succeeds in winning her 'class struggle') was as follows:
Hi Grace,
Thank you for replying again. I appreciate you doing so.
I find your reply confusing because you do not address the issues I raised. So, may I ask some direct questions to clarify your position for the readers of this blog?
1. If you reject modern monetary theory, how do you think money works and where does money come from? Please set out the mechanism.
2. Do you think tax funds public spending? If so, can you explain precisely how?
3. Why do you think I am a capitalist simply because I do not agree with you? Is everyone who disagrees with you a capitalist? How is the world that binary?
4. If I am a capitalist, as you suggest, and you are promoting class struggle, which seems inherently non-democratic given your language, what will happen to me if you succeed in the struggle you want? I am not a member of the elites you oppose. I simply believe in democratic processes to pursue many of the goals you espouse. Is that a crime in your form of socialism? What happens to those deemed to be dissenters?
5. What is your definition of socialism? Your writings suggest (I think) that you believe that smaller private businesses should continue. But if workers remain employed by private owners of capital, how is that consistent with your socialist claims? Where is the line between capitalism and socialism in your view?
6. How will you justify to the owners of most capital in the UK — ordinary workers with pension funds, life assurance, ISAs and bank savings — why they should lose their lifetime savings as part of the class struggle you promote? Around 80% of capital is owned in this way. You appear to be advocating its sequestration. How is that democratic? How does that serve working people? How can a movement be for workers while simultaneously taking away the wealth that workers have saved?
7. More broadly, what is your vision of democracy? Who participates? Who decides? Who protects dissent?
8. What would the state you want to create look like when “the workers are in charge”? I have set out what I want. What is your desire?
If you would prefer to write a fuller piece rather than respond in comments, I will happily publish it unedited (legal caveats excepted). Use as many words as you wish.
Best,
Richard
I think that's pretty generous, but also essential.
I should add, response or not, I will continue to explore issues arising from this exchange because I think they are really important for a number of reasons, including:
- Understanding what Marxist opponents of MMT think.
- What Marxist members of the Greens want.
- What the consequences of Marxist-proposed class struggle are.
- What freedom of speech means when class struggle is threatened, and some are deemed to be opponents of it, whether that is true or not.
There will be more posts in the morning.
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Well Richard, I espouse all the things that you do, and call myself a Socialist – the gentler democratic Socialism of the English variety. From my reading of your views, I am sure that you want all the good things for people that Grace Blakeley also wants. I cannot understand her objections to your views, or to MMT specifically – I wish it was call Modern Monetary Practice and dropped the misleading ‘Theory’ bit.
Thanks
I am utterly bemused as to why I am a pro-capitalist enemy in her view.
Hi, Richard,
I think a key obstacle to the understanding of class by the Grace Blakeley school of thought is their commission of a classic category error.
In a word, they confuse class in a sociological sense with class in an economic sense.
No one would say that my being roughly middle class – even upper middle class, if such refinements are permitted – means that I’m on a par, sociologically, with the Duke of Westminster.
However, whatever your sociological class, if you have to sell your labour to make a living, then you are working class.
Of course, the higher up the sociological class ladder you ascend, the more you accumulate mechanisms and sources of funding that insulate you from the need to sell your labour. But if that’s what you have to do, then you’re working class.
Queen Elizabeth l is famously reported as saying that if they turned her out in her night shift, she would make her way. Had that happened, that monarch and Royal Tudor would have become working class!!
MMT (I wish it were Modern Monetary Model, giving us a meaningful 3M to set against a less meaningful M3 monetary measure) offers a means of analysing what needs to be done to ensure anyone who DOES have to sell their labour to make a living gets a fair crack of the whip, and a fair return on their efforts.
Truth to tell, that is actually a very Socialist idea (and I am a Socialist), just as an effective market is also a very Socialist idea, because a market is only truly effective if it is fair, ensuring equality of bargaining power to both sides of a negotiation.
The Left has really dropped the ball on this point, as I suggest Grace Blakeley has over MMT.
Thanks, Andrew
Sound and fair questions, as I see it
Richard, I gave up all of this class struggle in my teens, although all of my friends and family will tell you my view are certainly left of the middle.
I’m not sure if people who can’t get to see their doctor think of the proletarian struggle, or the young woman I spoke with in Harrogate sitting on a cold pavement outside Tesco’s last year, who became homeless through no fault of her own.
This is the reason why ordinary people get turned off by left wing politics and listen to the charlatan who is my local MP, who I call the Invisible Man.
To say you support the capitalist system is errant nonsense. MMT, like any system, is not perfect but to me it goes some why to my definition of a civilised society which is:
Access to free medical care
Access to free education for everyone
Access to social housing (I grew up in social housing in London & the Home Counties)
Access to employment
Investment in our communities and our futures
Let’s hope people like Grace do not infiltrate the Green Party like they did Labour and get it tied up in political/ideological rhetoric instead of looking after the people they claim to represent.
Keep up the good work.
Thanks
This is an urgent task for Zack Polanski to expose the danger and irrelevance of these Marxists!
I cannot comprehend the response at all.
MMT has the capacity to reconnect democracy with the money supply and affect redistribution. It would be bottom up potentially, real democracy. Blakeley seems to be very top down with no doubt the workers in charge, but all you have in effect is a change in ownership of a bad structure. I can’t see the use in that.
Fascinating.
The cardinal sin of the Marxists Grace Blakely (economist), James Meadway (economist) and Paul Mason (not an economist) is that they appear to never have properly understood the work of John Maynard Keynes as the following symposium paper by James K. Galbraith strongly suggests. In the paper Galbraith says two things. In Keynes’s 800 page two volume “A Treatise on Money” he subtitles the first volume “the pure theory of money,” and the second “the applied theory of money.” Galbraith says the following about the first volume:-
“In the opening pages of Volume 1, Keynes does state that all money, ‘beyond the possibility of dispute,’ is Chartalist, meaning that the State exercises the power to declare and define what is money, and to change, from time to time, that definition.”
Galbraith goes on to argue that in his later book “The General Theory of Employment, Interest and Money” Keynes made clear that this was a “monetary production” book where he was linking his knowledge of money to production:-
“The General Theory is by Keynes’s own description a “monetary-production” theory of output-as-a-whole, from which employment and unemployment are derived. The departure from the Treatise consists in the fact that the General Theory takes the theory of money and builds on that foundation a theory of fluctuations in output and employment, which had been missing from the Treatise.”
In other words The General Theory of Employment, Interest and Money” is a follow-on or linked to his two volume “A Treatise on Money”!
https://justmoney.org/j-k-galbraith-marglin-on-keynes-on-money/
Eighty four years later in their book “Trade Wars are Class Wars” Matthew C. Klein and Michael Pettis make clear that Chinese Marxists suppress the need for adequate government spending on public services such as healthcare and social care, to keep consumption down and thereby engender high levels of private sector savings to cover them. This reduces market demand which in turn has an effect in reducing wage pressure to keep export costs down and limit imports. It also means that government creation of money can be spent on transportation infrastructure to help production and for state owned banks to write-off bank loans to businesses. What is missing of course is Chinese citizens having a democratic say in these Marxist state decisions.
I have to say that it made me smile to read something from someone who apparently still harbours the belief that there’ll be an overthrow of capitalism. I once believed that. But there won’t be. And no amount of wishing, or sticking to the principles of Marxism will make it so. But that doesn’t mean we can’t end neoliberalsim and move back to – and perhaps well beyond – the social democracy/democratic socialism that marked out the period after the WW 2.
Agreed.
I think someone posted something about the how the battle over the money supply being between the real investment class and the rentier class – government investment with base money versus interest rate bearing rent of the private sector and I think that that is the real class war right there.
But to class MMT as mere ‘technocracy’ is akin to saying that instead of having your operation done by a highly trained surgeon you’d prefer – what? – a faith healer instead, or a witch doctor?
It is also a very rigid approach to take – structurally – when really MMT implies a dynamic, operational approach and in that way Blakeley’s view is every bit as bad as static Neo-liberalism.
Both these approaches are ideological twins – ossifying society in a never ending slanging match that seems to go nowhere, locked into inevitably and eternity.
Also, is this Marxism? Marx always said that capitalism would bring itself down. And when it does so as it is doing so now, how do you actually bring about change?
Why can the modern Left not accommodate a society learning about MMT (technocracy) in the writings of Gramsci and Freire, who from my readings urged the people to gain a critical consciousness over a naive one?
Or is that this critical consciousness has to be through some form of left-wing priesthood peopled by the likes of people like Blakeley? How convenient?! Such an arrangement is not politics: it is asking for religion, and as such is no better than the religion of Neo-liberalism.
Thanks
“left-wing priesthood peopled by the likes of people like Blakeley”
ah-ha – hitting the nail on the head. You can be critically conscious – provided it is approved by Grace Blakley – standing @ the altar of left-whinge beliefs.
I think it may simply be the case that these “Marxists” have fossilised the prescriptive part of Marx’s theory (actions for the transition from a Capitalist to a Communist society) . Marx’s analysis of Capital indeed addresses its inbuild demise, how it would / will bring itself down… there is (and has been) a big ‘historical space’ and contributions made since, that we can inform the viability of the first (prescriptive) and how this transformation and transition to a ‘society of the future’ which support the “Common Weal” or the “Common Good” should come about. Time to get up to speed with the 21st Century, no offence to ANY part of Marx’s work whatsoever.
This article by John Harris in the Guardian about the “Squeezed Middle” explains well why fantasy Marxists need to make a better effort to understand money creation. It’s the fantasy of needing a “Fully Funded Rule” that’s helping create that “Squeezed Middle”!
https://www.theguardian.com/commentisfree/2025/nov/30/labour-squeezed-middle-class-budget-families-voters
As I see it, mmt is a technocratic argument about technocrats running our technocratic government. I saw clips of Zak Polanski talking with Rory Stewart about the government debt. None of our politicians have a clear idea about how any of current system works. They look for old metaphors because that is were they are comfortable and that is what they know. And Marxists have a very similar deposition.
Just why won’t Marxist properly engage with this blog? I only once saw an associate of mine respond and rather than work through the reasoning he never reaturned, just became abusive. Why is this?
Is it that left academics like to engage in launching a monologe just get very angry and are verbally agressive. They are in a familiar loop of their like minded comrades phrases. Not a lot is achieved.
For near on ten years i was a member of a socialist choir ‘singing songs of struggle’. I had very few differences with the material but most members really could’nt collectively engage in any other paradime. Perhaps it’s group – think?
You have nothing to loose but your chains!
I’ve just listened on You Tube a debate by Alistaire Cambell on Rorry Stewart interviewing Zack Polanski. All very reasonable until they came to macro economic. Shocking ignorance on behalf of Stewart and Cambell about how MMT works.
As you say they grasp aspects of it but compleately fail to grasp the how money is spent into the economy and the role played by tax.
Need a concerted public education campaigm. Its urgent.
Agreed
It might be interesting to ask Campbell and Stewart to describe how they think government finances itself.
“Finding the Money” – film, 2023, available on YouTube – had some really disturbing interviews with previous US presidential and Congressional advisors doing 30 seconds of stunned silence before stumbling through a piece that ended with, “Well, I think that’s how it works,” when of course nothing could be further from reality.
In which vein, I will be interested to read Ms Blakey’s responses to your questions that drill straight into the heart of Modern Money.
She has pointedly said she will not be answering what she called the homework I set.
I wanted to share my negative experience with Marxists back when I was a community organizer in the USA midwest in the 1980s. I was a member of an organization that would bring people to Washington DC the days the World Bank and IMF had their annual meetings. One of the reasons we protested the World Bank and IMF was that our researchers had shown World Bank and IMF austerity policies forced countries to become dependent on flows of illegal money from drugs, guns, and other types of organized crime.
Back in the midwest organizing, I would occasionally encounter Marxist and other leftists on various campaigns. When I tried to engage them on the issue of international banking and finance, 1) a surprising number did not know what the World Bank and IMF were, and 2) they were entirely uninterested in the issue of organized crime and dirty money corrupting “capitalist institutions.” They already had an ideology that explained how terrible “capitalist institutions” were, and they were unwilling or unable to consider any other factors than capitalist exploitation. “Blind ideologues” would be a fair description.
Years later, when I visited the Occupy encampment in New York City, bringing army surplus woolen socks as a donation, I also brought some books to give to the encampment library. I engaged in conversation with the librarian on duty, and the result was the same as in the 1980s. The librarian was a Trotskyite, and after 10 or so minutes, our argument was joined by someone who was an anarchist. Or perhaps the librarian was an anarchist and the new interlocutor was a Trotskyite. I don’t remember; it doesn’t matter. They quickly got into a shouting match over bizarre points of ideological philosophy. I was glad to be free to walk away from the librarian, but sad that the intellectual state of the left had not advanced an iota in a quarter century.
We saw that in Occupy here.
For months they sat outside St Pauls n ot kn woing what to do.
Then they adopted the tax justice agenda, almost entirely written by me (as the technocratic research and policy creation task was my primary role in that movemen tback then) and at long last they had something to talk about, but the energy had been dissipated by then.