There are days when I genuinely wonder what parts of the left think the state is for.
The capacity to create money is the most fundamental power any modern government possesses. It is the basis of its authority. But most importantly, money creation is how the resources to pay for the essential fabric of society, whether they be health, education, care, energy, infrastructure, or more, are mobilised. It is the very foundation of democratic economic choice.
And yet, as is apparent from debate here, swathes of the political left refuse to acknowledge this. They deny the reality that the UK government, like every government with its own central bank and free-floating currency, spends by creating new money, and always has. They cling to the fiction that the state must first tax or borrow before it can act.
Why? Let me suggest the reasons.
First, many on the supposed left have internalised neoliberal ideology. They have swallowed whole the myths crafted to constrain democracy: that governments “must live within their means”, that “the markets” decide what is possible, and that public purpose must bend to private confidence. They confuse households, who really do have financial constraints, with the state, which has the legal authority to create the currency we all rely upon.
Second, some on the left reduce everything to class struggle alone. Power, they say, is all that matters. Understanding the plumbing of money is seen as technocratic, and technocracy is the enemy. The irony, of course, is that they grant the finance sector unchallenged power precisely because they won't understand how the system works.
Third, scarcity suits their politics. When money is claimed to be scarce, the left can pose as noble defenders of whatever is available. Scarcity demands tough decisions; tough decisions demand heroic gatekeepers. Abundance threatens that role. If we admit the state can always afford to employ the willing to meet social need, their drama is over.
Fourth, credibility politics rules. Too many fear appearing unserious to the guardians of economic orthodoxy, whether they be the media, the think tanks, or those within the shadowy world of Treasury orthodoxy. Better, they think, to manage decline respectably than to advocate the truth impolitely.
All these positions share one common thread, which is fear, including the fear of being mocked, the fear of responsibility and the fear that if the government can act, people might start demanding that it must because once it is accepted that governments create money when they spend, then:
- Unemployment is a choice
- Austerity is a choice
- Poverty is a choice
- Failing public services are a choice, and
- Climate breakdown by inaction is a choice
No government can claim “we can't afford it” ever again. The resources to address these failures can always be assembled if the state so chooses. They can only admit “we will not choose it.”
So what do these parts of the left think the state is for if not to deploy its sovereign monetary power for the common good? Their answer implies a bleak vision. It seems that they think the state is, at most, just a household with a flag:
- It must beg from the markets.
- It must prioritise private wealth over public well-being.
- It must deliver balanced budgets even if that means broken lives.
- It must be the administrator of scarcity, not the organiser of possibility.
This is not socialism.
It is not social democracy.
It is capitulation dressed as prudence.
What would change if the left faced monetary reality?
Everything.
We could invest in the energy transition at the scale required.
We could pay carers and nurses decently.
We could have the education that would liberate people to live life to the full.
We could guarantee full employment as a matter of economic design, not wishful thinking.
We could direct the economy to meet needs, and not serve rentiers.
We could build a state that cares.
And all without asking permission from the City.
Money is not the constraint.
Real resources, whether they be people, skills, energy, technology, or materials, are.
Those are the things we must steward wisely, and the power of the money creation in combination with wise taxation lets the state do just that.
The irony is that modern monetary theory does not ask the left to believe in anything new. It simply asks them to recognise the world we actually live in.
And then to take responsibility for what that makes possible.
Politics is the art of deciding what we will do with the power we undeniably possess.
It is time the left stopped denying that power. It is time they used it.
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Maybe the best solution would be for someone who understands MMT to prepare a draft Budget Statement that a Socialist Government could deliver, that would deliver exactly what they want. It’s perfectly possible. I expect you’d be a little bit reluctant to volunteer! There must be someone out there?
I have already done it. It’s called my Alternative Budget.
I think a fully socialist budget would go further on four fronts.
Ownership: It would move beyond directing private capital and instead take all key utilities, energy, transport and major banks into public ownership, not just regulate them.
Workplace power: It would go past taxing excess profits and introduce worker control in firms, mandatory worker boards and stronger rights to co-determination.
Property and housing: It would go beyond better taxation of property and implement land reform, large-scale public housing construction, and a decisive shift away from private landlordism, involving compulsory redistribution of land, wholesale expropriation of private landlords, and a fundamental restructuring of the housing market
Corporate power: It would supplement stronger taxation with breaking up dominant corporations and replacing rentier markets with democratically planned investment.
In short I think a truly socialist budget would want to go further with who owns, who decides, and who benefits. Up for it?
1) I talked at length about nationalisation
2) This is stuff I have talked about, but no one ever gets very excited about it or notcies it
3) I addressed this at length. Do you read what I write?
4) Hallo! Did you read what I wrote?
Why not read what I have written Cliff? I really don’t like being criticised for not doing something when I have done it by someone who is a regular commentator. I suggest you read more and use ChatGPT less Cliff.
Cliff – is this challenge directed at Richard (who HAS produced HIS Alternative Budget based on his arguments) or is it directed at, say, Grace Blakeley or another Novara-based Socialist economist?
I continue to struggle on how we deal with the Bond market in the context of MMT. Can you point me in the right direction on articles that show how we can ensure that by issuing “unfunded” money the markets will info respond in a negative manner. Keep up the good work.
I wrote several pieces on bonds recently that should answer this. They are in the glossary.
But, but, but, it is not just the ‘left’ that espouses these things, it is every government in power that I have ever known, that keeps telling us constantly that the government must,
” – beg from the markets.
– prioritise private wealth over public well-being.
– deliver balanced budgets even if that means broken lives.
– be the administrator of scarcity, not the organiser of possibility.”
Reading your articles on MMT in recent days, a few things are beginning to fall into place:
1. how quickly our Australian government could find money – without borrowing – to support businesses, of course not individuals, during the Covid pandemic. Billions were found over night without a moment’s hesitation and no mention of borrowing it.
It is clearly a lie that we have been fed by every government regardless of its leanings. The annual hype about the nations AAA standing with Standards & Poor credit rating agency.
But how does printing money not lead to inflation? And why does the government still talk about needing to borrow money?
I have written time and again why more money does not lead to inflation. The most recent was this weekend.
I think it is as I alluded elsewhere – modern politics is too much about faith and beliefs and ‘convictions’. Perhaps there needs to be a law that limits human conviction to facts? Not beliefs? Or partialities?
We need a higher level of proof.
This is what charismatic and conviction politics style leadership like Thatcher has bequeathed us.
Belief in dreams. Other peoples’ dreams – such as the rich, sold to us wholesale.
Many on the Left have failed to understand the lesson from the Chinese Tiananmen Square massacre that it was caused by the state’s undemocratic and irresponsible way of using money:-
https://en.wikipedia.org/wiki/1989_Tiananmen_Square_protests_and_massacre
The importance of MMT is that it provides voters the “technical tools” to decide a better balance between market and state for the purposes of general well-being.
Interesting when handed the possibility of power on a plate the Left seem to have failed to grasp it……………..
Could it be that Marxists such as the Novara crew & Grace B. don’t actually want anything to get better right now? The current crises may suit them, hoping that things to get sufficiently bad that capitalism will collapse due to its internal contradictions. Pulling back from the brink with MMT and a restoration of democracy might interfere with or postpone that process? Could they actually be secretly pleased at the prospect of a Reform government speeding up the terminal crisis of capitalism in the UK? At which point Novara Media’s preferred ‘Fully Automated Luxury Communism’ utopia would presumably be magicked up out of the ashes.
Much to agree with
What do they think government is for? I’d say, To protect us from enemies, which I guess would mean military defence and (for some people) defence from immigration. But (1) they rarely accept that we need immigration as well as having a moral and legal duty to welcome asylum seekers; (2) we don’t seem at all good at defending ourselves against Trump, Putin, Zionism, financial power or foreign companies!
Reading Blakeley’s Substack “On MMT,” I find it striking how she dismisses the very aspect of MMT that is most politically transformative: its power to educate the public about what is actually possible within a modern currency system. Understanding MMT exposes the lies and myths that underpin neoliberal austerity—showing that governments are not inherently revenue-constrained and that the allocation of spending is a choice, not a necessity. This knowledge itself is mobilising.
The mass cohesion and popular pressure that Blakeley hopes for—the strikes, the grassroots organising, the challenge to elite power—would be catalysed almost immediately if the electorate grasped these fundamentals. Yet she treats technical understanding as irrelevant to class struggle, as if ordinary people cannot comprehend or act on it. That is both a misjudgement of public capacity and a limitation of imagination.
Her position also reads as a form of gatekeeping: by maintaining a narrative in which markets are untouchable, she preserves her own authority as commentator and advisor, importing wisdom and selling books in a system that continuously portrays finance as inevitable and unchallengeable. The practical consequence is to leave the public trapped in the fear-based austerity narrative while real levers of power lie exposed.
MMT is not a technocratic distraction—it is a tool that can accelerate the very social mobilisation Blakeley advocates, by illuminating the systemic levers that elites rely upon to maintain control. Ignoring it risks delaying meaningful change and underestimates the capacity and passion of ordinary people to act once they understand the mechanics of their collective servitude.
In short: Blakeley’s reluctance does not reflect public incapacity, it reflects the limits of her own imagination and, arguably, a comfort in maintaining her role within the very narratives that sustain elite power.
Much to agree with.
The left is, and in my opinion always has been hamstrung by ideological in fighting at the expense of practical and real world solutions.
I realised at a very young age that there was actually no such thing as class in an economic sense, most people had to work, therefore the vast majority of us are working ‘class’.
I only had to look around me at the time (late 70’s/early 80’s) to see what the real issue was… wealth and power was the divider not this notion of class.
The idea of class is therefore a social construct of which both the right and left are happy to perpetuate… the left use it to further their suffrage and toil narrative giving them the motivation to ‘fight the enemy!’ The right use it as a tool to keep us in check and to ‘know our place!’
The left are so busy being focused on the ‘class struggle’ at the detriment of monetary understanding that it is no surprise there is a reluctance to fully understand MMT… the question is can’t or won’t.
Put it this way, you wouldn’t attempt to fix a car if you didn’t first of all understand how the engine works!
Let’s be honest, MMT is a challenge to understand especially when you’ve had a lifetime of being fed conflicting narratives… I like many discovered the reality through yourself Richard (for which I’ll be eternally grateful) and reading Stephanie Kelton’s, The Deficit Myth. However it has taken me sometime, over four years, to get my head fully around the nuances of MMT and what it actually all means in practice and even now I’m still learning how to communicate this to others in an easy to understand way.
The word theory is always problematic as is the old ‘Magic Money Tree’ put down, so might I propose…
EAR (Economic Accounting Reality)…
or if you want to add the word ‘Traditional’ to make TEAR… many I’ve felt like shedding over the last couple of weeks listening to the amount monetary illiteracy being spouted over the airwaves!
Thanks and much to agree with
I don’t recognise this characterisation of the left, at least the left I’ve associated with for many years. We’ve consistently argued for state control and funding of resources and services we want prioritised at local and national level – housing, education, health, transport… We opposed privatisation and the selling off of council homes.
I don’t recall conversations along the lines of, but where’s the money going to come from. Part of the point obviously is to stop/reverse our resources falling into the hands of the wealth extractors and it’s been all too apparent that a lot of state funds and resources – and people – end up in their hands.
You may not, but I do.
And I do so most especially in those with vested interests in maintaining the status quo from Marxist entryists, to many in tax justice NGOs to a lot in policy in aid agencies, for all of whom the idea of real change is anathema because if it happened where would their funding come from?
I don’t doubt there is a section of the ‘non-profit’ sector that tends to perpetuate rather than solve inequalities and may be an “understudied form of money in politics” as this video discusses from a US perspective.
I suggest it’s worth gathering research on this. But most on the left I know are concerned unconditionally with fighting for a fairer society.
https://www.youtube.com/watch?v=mOd-V56mIzQ
I have never thought that true.
Many on the far left are only fighting for power for themselves, as do those on the far-right.
There are those on the left who do fight for justice. But I have never yet found any of them on the far left.
I was encouraged to see the MMT UK stand at the Your Party founding conference. Even more so by the fringe session on alternative economics with Steve Keen, Stephanie Kelton and at least one other MMT espousing economist. I only caught her first name, Patricia.
The fringe session was well attended.
The message is getting through.
My main thought is your fourth point on credibility.
After 4 lost elections they were told by ‘professional’ analysts’ they must attract the centre vote. Even divert some of the Daily Mail readers ( a paper losing circulation ). They must appear ‘reasonable’, not extreme, and ‘balanced enough’ for some to say ‘they are safe to elect’ i.e. not change too much.
Then there is the argument for having the City on side, support from Murdoch -as in 1997, and to attract donations.
It looks plausible but the Telegraph and Mail people are not going to vote Labour and in the meanwhile its own supporters despair of real change and stay at home or vote for another party.
Much of politics is about creating an image . It is less tribal than the 1950s and 60s. The Labour image has failed. Partly due to media but mainly due to themselves.
They half apologise for ‘welfare’ spending but don’t come back with ‘wages have stagnated for two decades and dividends have more than doubled. We need to talk about that.’
Individuals sometimes create false self -an outer mask-and it fails as its not authentic. It is a lack of courage.
You are so right about fear. It underlay the problems of many people I saw in therapy sessions.
Bringing about change needs a number of things and a willingness to be criticised and stand up for one’s beliefs is pretty important. Courage in a word.
Here endeth the rant.
It’s depressing that allies are treated as enemies by some. I still would like an in-depth blog about capital controls because I do believe globalised vested interests will try everything possible to sabotage a sovereign government trying to address social inequality and ecological vandalism
I think your point about scarcity nails it Richard. I’m sure that many (most?) politicians are well aware that the State can create money, however they are probably terrified of the potential chaos if this became widely known. There would be immediate demands for better State pensions, more money for the NHS, disability payments, sickness and unemployed benefits; the list is endless. There is also the question of motivation. Many people are currently employed in mind numbingly boring jobs (call centres, production lines etc.) which suits large employers as they are relatively cheap. Unlimited money might well cause many of the people employed in such work to question whether it’s worth being employed if enhanced unemployment or sickness benefits are available. This is where AI will make an impact as many of these jobs will cease to exist, at least for humans. Then what? Then we have the real prospect of the creation of Universal Basic Income (UBI) where everyone gets a wage irrespective of their circumstances. It’s cost wouldn’t be a big issue since we know that the State can create the cash needed. In time I believe this will create a whole new way of living in which, rather than accepting the drudgery of a boring job and eating comfort food as compensation, quality of life is the prize, a life in which, I would hope, creativity and innovation will flourish. However this will take time and courage for any Government embarking on this route. Zak Polanski looks like the only politician currently who might embrace such a notion.
Thanks and uch to agree with
@ Dave
https://www.taxresearch.org.uk/Blog/2025/12/01/why-wont-so-much-of-the-left-believe-in-the-sovereign-power-to-make-money/comment-page-1/#comment-1056313
Two areas of the “non-profit” sector (where I worked for 27yrs) which merit more attention,
1 – Housing Associations
2 – Multi-Academy-Trusts
particularly with respect to executive pay, asset-stripping and quality of service for the public they serve.
NB:- this is not a blanket condemnation of the NPS, far from it, I know plenty of the good guys, even in MATs and HAs but there are bad ones too.
something not working
No post has an uptick.
It doesn’t bother me but in case no one has mentioned, thought you’d like to know.
We are working on it.