As readers here will be aware, I have been tackling those who are seeking to drive the Greens in what they might describe as a Marxist direction, but which does, in reality, do two things.
The first is that it would place the party's economic thinking within the frameworks used by, for example, John McDonnell when he was Shadow Chancellor of the Exchequer for Labour. That framework was as firmly based on the supposed necessity of fiscal rules to appease markets, and so to cede power to them and to the City of London, as anything the Conservatives ever did.
Second, it denies the power of the state to take control of the economy through its ability to create money, which means that it need never be dependent on market whims. Those dedicated to fiscal rules and to ceding power to markets always deny this to be possible because they refuse to accept the reality, as it is, that modern monetary theory describes.
The refusal by those proposing these ideas to accept that reality means that, in effect, they promote the idea that the state depends on the private sector. This results, first, in their inability to explain the role of money, tax, borrowing, and the whole fiscal management cycle that lies at the core of macroeconomics, and second, in their failure to confront how economic power is exercised in modern economies, which confrontation is inevitably required to deliver the green transition we need. I believe that their views are, as a result, mistaken, and dangerously so, which is why I am taking this issue on.
The green transition, on which I have campaigned for a long time, will not be delivered by good intentions, ethical markets, or better pricing signals alone. It will only be delivered when political movements are willing to challenge the power of finance and markets directly, together with the flawed ideas on which their supposed power is based. And that cannot be done without understanding the role of money creation and the state's capacity to use it for public purposes.
The problem is not that the Greens care too little about economics. It is that too many of them might accept an economic framing that treats markets as the ultimate arbiters of what is possible. Within that potential framing, government is cast as financially constrained, dependent on private capital, and permanently at risk of market punishment. As a result, green ambition could be trimmed to what markets will tolerate, not what climate science demands, and that is how radicalism is quietly neutralised, as I fear might be possible if those whom I am challenging get their way.
If you accept that the state must first persuade or appease financial markets before it can act, then the green transition is already compromised. Large-scale public investment becomes conditional. Industrial strategy becomes hesitant. Public ownership becomes politically “difficult”. And climate action is reduced to nudging private behaviour rather than reshaping the economy. Those promoting these ideas might call themselves Marxist: in action, their policies were very hard to distinguish from those of George Osborne and all who succeeded him.
The result is what we see from government now: plans that look acceptable on paper but collapse under the assumed power of markets.
This is why understanding money creation matters so much. A government that issues its own currency is not financially constrained in the same way as a household, firm, or local authority. It does not need to “find” money from markets before it can spend. It creates money through spending and withdraws it through taxation. The real constraints are inflation, real resources, skills, technology, and ecological limits, not the bond market's mood.
Until that reality is grasped, Green policy will remain trapped inside a narrative of scarcity that markets have every incentive to maintain.
The irony is that the Green Party recognises that climate breakdown is a systemic crisis, but it is at risk of proposing responses that rely on the very systems that caused it if it adopts this thinking. If fiscal rules and other structures are adopted that effectively require markets to deliver transformation, even though they are structurally short-term, profit-driven, and deeply resistant to changes that threaten existing asset values, then any attempt to tackle that systemic climate breakdown will fail.
This is not a technical failure. It is a failure of power analysis.
Markets do not lead transitions that undermine their own profitability. They resist them. That resistance can only be overcome by a state willing to act decisively: investing directly, owning strategically, regulating firmly, and accepting that public purpose must take precedence over private return. But that requires abandoning the idea that the state must ask permission from capital before it acts.
Without that shift, the Green Party risks offering an inspiring diagnosis paired with an inadequate economic toolkit.
This is why debates about fiscal rules, deficits, and “credibility” are not distractions from climate policy. They are central to it. A green transition constrained by arbitrary financial rules designed to reassure markets, or a lack of understanding of money, will always be too slow, too small, and too fragile. Climate breakdown does not wait for bond yields to settle.
Nor is this about being reckless. It is about being realistic. The greatest risk we face is not that the state will spend too much, but that it will do far too little, far too late, because it accepted a story about money that was never true.
If the Green Party wants to deliver a genuine green transition, it must liberate itself from the long-standing myth of market supremacy. That liberation begins with understanding money creation and recognising that democratic governments have far more agency than they have been told. Without that understanding, green policy will remain trapped in a world of constraints defined by others.
The green transition will not be delivered by markets acting kindly. It will be delivered by political movements willing to reclaim economic power and use it in the public interest. Until that happens, climate ambition will continue to be scaled back to fit an economic story written by finance, not by science.
And that is why this debate matters.
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You seem to completely misunderstand Green Party policy. As a member, I have witnessed countless instances of Greens decrying market supremacy and advocating investment in public services. I think you’re confusing the Greens with Labour and the other neoliberal parties.
I am discssing a particular issue around ecobnomic policy and the risk that Green policy may not be delivered.
I think you have seriosuly misunderstood my point, which is that carpet baggers are trying to take the Greens in a direction Greens do not want.
I think I really do understand the Greens.
So, if I understand your reply correctly, you aren’t objecting to Green Party economic policy but rather you’re suggesting there exists a faction within the Greens who resist them in favour of a neoliberal framework.
If I’m wrong and you do object to a specific policy, I would welcome knowing what that it is (because I respect your opinion and knowledge).
If I’m right and you believe there exists this resistive faction, can you please let me know how you formed such an opinion and, if possible, provide sources. I ask because I’m unaware of it.
My concern with Green Party economic policy has been consistent, even though the labels have changed. Whether through its earlier embrace of Positive Money or its more recent possible flirtation with fiscal rules, the party has repeatedly misunderstood the nature of money, the role of the state, and the source of political power in the economy.
The Positive Money phase was problematic because it treated money creation as a technocratic flaw to be corrected, rather than a core function of the modern state. By seeking to separate money creation from government and vest it in an “independent” authority, it echoed the same depoliticisation that underpins central bank independence. This approach denied democratic accountability over one of the most powerful tools available to society. Worse, it accepted the false premise that the state must constrain itself to prevent irresponsibility, rather than recognising that responsibility lies in managing real resources, inflation, and distribution. In doing so, it reinforced the idea that government is financially limited in the same way as a household — an idea that is simply wrong.
The current apparent shift towards fiscal rules does not represent progress. It repeats the same error in a different form. Fiscal rules assume that markets must be reassured before policy can be enacted, and that public spending is only legitimate if it fits within externally imposed financial constraints. This cedes power to financial markets and embeds austerity by design. It also makes a meaningful green transition impossible, because climate action requires long-term, mission-driven public investment unconstrained by arbitrary deficit or debt targets.
Both approaches share a deeper flaw: they deny the monetary sovereignty of the state. A government that issues its own currency is never financially constrained in that currency. The real constraints are ecological limits, productive capacity, skills, and inflation — none of which are addressed by either Positive Money or fiscal rules. Unless they embrace this reality, the Greens risk designing policies that are internally incoherent and politically disempowering.
Most seriously, these frameworks encourage the party to argue only about redistribution within imposed limits, rather than challenging the limits themselves. That is how progressive politics ends up managing decline. If the Greens are serious about delivering a just green transition, they must abandon market appeasement and reclaim democratic control over money and macroeconomic policy.
These are my well-founded concerns.
Use Google or AI to find material by me on these issues.
Correct Richard.
The Greens do not need the likes of Grace Blakeley or James Mediocre-way to mislead them into a economic dead ends.
These two would even call gravity ‘technocratic’ if they believed they could fly and that believing that you could fly was more important than reality and only that mattered.
Very few (Keen, Mitchell, Kelton, Mosler and why not mention Bagehot) other than yourself have really delved into the real ways and means of how money is created and where the power really lies. The Greens need to acknowledge this and embrace this real power, otherwise they will simply not deliver and end up not unlike Starmer.
And for me they had better embrace it or ain’t voting. Simple.
The green party were heavily influenced by Positive Money (bad) a while back and at the election presented their economic policy entirely within a neoliberal frame claiming a “fully costed manifesto” etc.
Many individual members may have alternative views to both those but prior to the change of leadership the official economic line was not much different to Labour
Agreed
The Greens have always promoted a far more ambitious manifesto regarding public ownership than ‘New’ Labour. The details of the underlying economic principles underpinning Green policy weren’t shared, and you may be right in assuming they were similar to Labour’s, I don’t know.
What I do know is that since Zack became leader and the underlying principles have been exposed to public debate and scrutiny, it’s very clear to me that the party is following MMT in its rationale for economic transformation. I’m quite sure that Richard, along with the likes of Gary Stevenson, Grace Blakeley, James Meadway, and probably Stephanie Kelton too. Whilst I’ve seen Positive Money talking about Green policies, I haven’t seen the Party referring to to Positive Money, maybe I missed that, maybe it’s in the past, maybe it hasn’t happened. I don’t know but it’s helpful for any such concerns to be raised now, a a few years before an election!
I do not think Gary Stevenson, Grace Blakely and James Meadway are in the same space as Stephanie Kelton and me.
See this re Positive Money. https://www.taxresearch.org.uk/Blog/2023/07/07/the-green-partys-policy-on-money-and-so-on-the-economy-is-a-work-of-econimic-fantasy/
As a member and activist within the Green Party’s Economy Policy Working Group for the past 14 months, it is my belief that there was a failure of nerve in omitting any reference to MMT or its principles in the GP Manifesto 2024.
I am in direct contact with only 7 of the members of the PWG, including at least one other apart from me who strongly advocates MMT, and the active membership may number perhaps 30. (I cannot be precise because internal communication within the group is far from perfect.) But it is possible that MMT is the majority view in the PWG.
IMO, the PWG did not commit strongly enough to MMT in its Voting Paper presented to conference this year and it was “referred back” and is currently being revised. A commitment to MMT is only one of several other more progressive and practical omissions that must be urgently rectified. But I am hopeful that they will be.
Such rectification is necessary so that there is clear practical policy supporting the progressive alternative narrative to failed neoliberalism that Zack Polanski has begun to articulate.
But the main current failing is that the Green Party is currently basically a passive canvassing party in its engagement door-to-door with the electorate.
That at least is my experience in Manchester Green Party, and it may be typical of other local Green Parties, insofar as they base their approach on Targeting to Win, which is a manual on how to win council elections and probably devoid of the progressive narrative alternative to neoliberalism.
The most urgent requirement then is for the Green party to switch from its passive canvassing approach and adopt instead a positive campaigning approach, with the explicit purpose of persuading electors to vote Green, by articulating the progressive narrative alternative to neoliberalism in authentic engagement with the electorate.
That requires a New Model Army of committed and trained activists – a far cry from the effete dilettantism that characterises Manchester Green Party at present in its engagement with Mancunian electors.
Thanks
Peter Lihou
” I’m quite sure that Richard, along with the likes of Gary Stevenson, Grace Blakeley, James Meadway, and probably Stephanie Kelton too.” Perhaps you could finish t6hat sentence, please?
@ Pete Lilhou
Pete you are missing the point our societies use of money can be distorted and it is being in the UK by all the political parties (with the possible exception of the Green Party) who prioritise the needs of a rich elite. Essentially these parties apply a form of “closet Monetarism” a good example being the current Labour Party’s Fiscal Credibility Rule. You clearly have Monetarists in the Green Party namely James Meadway, Grace Blakely, Harriet Lamb and Caroline Lucas. The latter two have agreed to sit on the board of James Meadway’s proposed Verdant think tank which on past evidence of James Meadway’s thinking will be promoting “closet Monetarism”.
@ Ian Lovegrove.
I’ve only recently begun helping in Newcastle, supporting the local Green candidate for the council elections in May, and my early experience has raised similar questions.
Most activity seems to involve litter picking and door knocking with a leaflet and short questionnaire asking about local issues. While listening clearly matters, I find myself wondering whether this kind of canvassing is enough. Are we mainly gathering information and being seen or are we actually persuading people?
Shouldn’t canvassing also be a space for positive political engagement, where we articulate a clear progressive alternative to neoliberalism rather than simply recording what’s broken? If we don’t offer an alternative and coherent political narrative on the doorstep, what really distinguishes us?
I hear this from elsewhere too.
I find it rather surprising.
Well said!
“If there’s anything the establishment fears more than the working classes seizing the means of production, it’s the working classes seizing the means of production of money (or more precisely, of currency).”
https://tribunemag.co.uk/2019/06/for-mmt
Before the advent of money human beings, whether living in a tribe or a state, had an obligation to commit resources whether goods or labour to help mutual thriving. As time went on it made sense for a variety of reasons to monetise that obligation. Money therefore is communitarian and we need to return to recognising this and that successful mutual thriving (for all) won’t happen by leaving it under the control of an elite and their political stooges who distort how it can be used.
Thanks
Might it be that a state with grounded self-confidence could bring to a mixed market-government national economy the essential democratic facet of reasonably stable equitable society?
Can/would a market dominant socio-economy do such?
Might a well grounded self-confident government bring competition to the market?
Might the neolberal aim of stunting the state be a covert avoidance of competition for the market?
Might the avoidance of competition be a profound flaw in the theory/premises of Neoliberalism which seems to/does laud competition above practical consequences for the majority of citizens and their children?
Why haven’t the Green Party given you a formal role in building their economic policy given your very close ties with Zach Polanski?
I haven’t asked for it.
I won’t be.
They have not offered it.
It is not in his gift. Green leaders have very little power, including over policy.
Oddly, it seems like Harriet Lamb has….
Of course you wouldn’t ask but they have to offer roles to someone so why not you. It must be terribly frustrating to be frozen out like this. You are already standing up to what you see on Green economic policy and calling out its shortcomings. The problem though this will drive a bigger wedge between you and the Party with you becoming even more isolated.
I am not frustrated.
I am not seeking roles.
I am noit a Green, and in many ways do not want to be: I prefer being politically independent.
I am a thinker. What I am resisting is dangerous ideas.
And if ideas are good they are never, eventully isolated. But they take time to get acceptance.
Yeah that says it all about the Green Party it’s meant to be highly democratic but its CEO Harriet Lamb (accompanied by Caroline Lucas) feels entitled to unilaterally forge a link between the party and Verdant a Monetarist think tank without even consulting the leader of the party Zack Polanski
The Soviet Union generally made its economic targets about real resources, more tractors. More steel, more crops.
Being very incompetent, bureaucratic and authoritarian they generally screwed up achieving those targets but they did believe that the economy is primarily about the production and distribution of real resources.
The likes of Meadway claim to be Marxist and\or Socialist yet accept the neoliberal framing of the economy being all about money which they claim is in short supply.
I’m glad you’re tacking this issue head-on. The Green Party is offering hope to many, including me, in an otherwise very bleak political landscape, and it is worrying that the this may be nipped in the bud if they don’t manage to break free from the fiscal straight-jacket of neoliberal economics. The GP has always been full of people with good intentions, but also with little understanding of economics, hence they ended up with their fiscal policy being shaped by Positive Money. I don’t actually know if that is currently the case, but if so it’s not likely to last long under the influence of the new green economic think tank. Unfortunately – disastrously – it is likely that MMT will also be excluded if James Meadway has his way. While I love the things that Zack P. is saying about reframing the debate about government spending away from the household analogy, he clearly struggles sometimes (ref: the recent The Rest is Politics interview with Rory Stewart) to coherently and convincingly articulate those ideas. As his leadership tenure is only for a year his impact could be limited and temporary if he doesn’t get reelected. So now is an important time, and your input could be influential and hopefully decisive. Given the increasing relevance of the Green Party it will inevitably become the focus of power struggles between different ideologies, and its internal democracy processes will come under strain and may be manipulated by people who are more used to the aggressive cut and thrust of factional politics that the average GP member.
I wasn’t sure if the GP still adhered to Positive Money-inspired fiscal and monetary policy, so I had a look at their Manifesto for a Sustainable Society, which says:
”EC664 A Green Government will therefore develop and implement a programme of banking reform based on the following principles:
All national currency (both in cash and electronic form) will be created, free of any associated debt, by a National Monetary Authority (NMA) that is accountable to Parliament;
The 1844 Bank Charter Act will be updated to prohibit banks from creating national currency in the form of electronic credit. To finance their lending, investment or proprietary trading activities, banks will have to borrow or raise the necessary national currency from savers and investors;
The NMA will be mandated by law to manage the stock of national currency so that it is sufficient to support full employment, while avoiding general inflation in prices, and taking into account the development of local currencies (Ref. paragraph Economy: EC678);
Any new money created by the NMA will be credited to the account of the Government as additional revenue, to be spent into circulation in the economy in accordance with the budget approved by Parliament;
The members of the NMA will be appointed – for fixed terms – by a Select Committee of Parliament;
The independence and integrity of the NMA will be assured by law requiring NMA members and staff to be free of any conflict of interest; mandating full transparency of NMA decisions; and prohibiting lobbying or undue influence of NMA members or staff by government, financial institutions, corporations or any other private interest”.
I think we can safely say this is pure Positive Money and not MMT!
Change may be 8n hand. But it has not happened as yet. Nor is it clear who might be leading the process of change.
Clearly Positive Money never bothered reading any Keynes! What on Earth do they think he meant with his phrase “animals spirits” with its link to private sector liquidity preferences? The NMA with it’s magical divining rod is as bad as the idiotic Fiscal Credibility Rule where Rachel Reeves fails to understand her anticipation of the future tax take needed over the next five years simply feeds back into the private sector’s view of likely future demand in the economy! Didn’t figure that one out did you James Meadway!
@Jim
“I wasn’t sure if the GP still adhered to Positive Money-inspired fiscal and monetary policy, so I had a look at their Manifesto for a Sustainable Society,”
They can be very slow to update policy documents to match their current thinking.
Their original EU policy document which was extremely critical of the EU (whilst certainly not advocating leaving, rather significant change) was current until, I think, 2024.
I thought that old one was pretty accurate, but obviously wouldn’t sit comfortably with their current EU advocacy.
The current policy can’t be changed except by a vote at conference (not by the leader, not by the CEO, not by the MPs, not by any think tank). The Economy Policy Working Group are working under a mandate from conference to revise the Economy Chapter. When it is brought back to conference, only then will policy change if the chapter is voted through by a majority.
Green Party policy, as a democratic party, is determined by national conference and published in the Manifesto for a Sustainable Society. If James Meadway and others want to change policy (of which like you I disagree with), then they have to convince the majority of Green Party members. I think that pointing out that government is not like a household and can finance within the confines of available resources, any project they like and fiscal rules are complete nonsense will be clear. I am sure members will see this obvious economic reality and adopt a sane economic policy after suitable discussion.
But the differences have to be out in the open to assist that
Indeed the “closet Monetarism” supporters in the Green Party need to be pointed out so that Green Party members can ask them why they support Fiscal Credibility Rules like Labour’s Fully-Funded Rule when simple logic tells you the quantity of money created in an economy always has to be related to the real resources available and not some arbitrary rule. That relationship, of course, has to be constantly monitored as such by the government. The rising unemployment in the UK especially amongst the young is very strong evidence the Starmer led Labour Party doesn’t understand this simple logic too busy kow-towing to a rich elite.
https://www.theguardian.com/business/2025/dec/15/young-people-bearing-brunt-of-uk-jobs-downturn-thinktank-warns
Of course Green Party members can take the view of a Green Party councillor I asked how the Green Party was going to fund its “greening” of the UK who actually responded by saying it was above his pay grade!
Richard you have been consulted on the proposed new Economy Chapter and we will send it to you again for comment once it has been revised further.
Thank you.
I have seen the chapter. It is an improvement.
It remains very hard to support, and a deep hostage to fortune for the party.
Perfectly put Richard – and very important.
Like PSR, I have come to the firm conclusion that I will not vote for any party which does not clearly and explicitly adopt this economic policy – even if it means not voting at all.
As it stands, I would have real problems voting for the Greens. They know that.
Declaration of interest; I’m a Green Party ordinary member of a few years – so biased.
My economic knowledge is very limited and I follow Richard (as well as Stephanie Kelton) to improve it.
I’m not in any working group, not an expert, and haven’t delved into the party’s historic economic policies. I joined for other reasons but I do understand that robust economic policy must underpin those reasons (hence my interest). My background is science and systems, and I apply logic in my attempts to understand economics.
It seems to me that Zack is on a learning curve, maybe similar to my own, and the party is evolving policy all the time. As you all know, our policy is decided by members and it’s up to all members to influence that policy, we’re attempting to do that and I appreciate anyone willing to assist in that process. I know of no other political party with a policy manifesto so close to my views or one that offers a superior economic policy to achieve them. Therefore, my intention is to help the Greens achieve electoral success.
I have a couple of questions for those of you who’ve declared they won’t vote Green; if there was an election tomorrow which UK party would you vote for and in what way is their economic policy better than the Green Party of England and Wales?
I would probably vote to keep Reform out. Here that would not be Grreen. If it was a Green I might do so, with reservations. I have never voted without massive reservations. I am not a natyral party member.
That is logical, however it’s by no means certain which party would be best placed to keep Reform out. At the last General Election Greens succeeded from 3rd and 4th places against the previous election.
I always prided myself on being a floating voter, deciding only at GE time but the climate emergency changed that. Being a passive observer felt like betrayal of future generations but I would always reserve the right to disengage my support if the party position conflicts with my principles.
This is exactly why I am a fan of Additional Member systems of PR. Under your favoured option, you would still be constrained to vote for one of the parties with a good chance of getting elected in your multi-member constituency with only a few seats available.
Under an AM system, a party with small but nation-wide support could win at least one seat. You could pick a manifesto much closer to your ideal.
Ironically we should be aware that even fascists aren’t above using MMT albeit in a disguised form in Nazi Germany:-
https://www.nakedcapitalism.com/2013/12/philip-pilkington-hjalmar-schacht-mefo-bills-restoration-german-economy-1933-1939.html
Not a Green party member (though seriously considering joining) and would certainly vote for the Greens tomorrow.
I think the Greens are the best electoral vehicle right now to bring about a better understanding of what money is (with MMT) and how to use it to deliver what we might call a Politics of Care. They are not there yet but from the outside looking in it seems like that’s their direction of travel, with Verdant being a potential well meaning but misguided backlash to that worth keeping an eye on.
Realistically I don’t think Greens can build to a win between now and the next election. What I do think they could do however is get in to an electoral position much stronger than Nigel Farage has enjoyed to date, and be the primary challengers for the next one. All the while they can score policy wins along the way, just like Farage has done. I truly believe this is possible if they stay authentic and don’t try to triangulate or appease.
The question is would we get 2 elections if Farage’s fascistic party (and I do believe them to be fascists) win the next one? I think the answer to that is yes; the reason being it is one thing to be a fascist, and something entirely different to effectively dominate and destroy democracy entirely. I’m sure they would do a lot of damage, but I don’t think they’ll successfully block future elections, imprison the opposition etc. even though I’m sure they’d want to.
@ Pete Lihou
The situation for intelligent people is they would like to vote Green but what’s the point if the party doesn’t know how to fund the large sum needed to “green” the economy! Simply not good enough to wear hearts on sleeves without donning thinking caps! Certainly allowing not very bright Monetarists claiming to be Marxists to take command of your party isn’t the way forward either!
I am inclined to agree.
As a Green Party member since 1977 and a strong advocate of MMT as set out by Richard I find today’s blog very disturbing.
I understand that the Economics and Finance Policy working group is completely in line with MMT. To that effect the working group took the policy to the the October GP conference and it was in principle voted for. That unfourtunately Green MP Carla Denya’s support worker had not posted the voting paper to her until a few days before Conference. Carla asked that the paper be put back until the the next national conference in 2026. In the meantime the national leader Zack Polansky would by promoting the policy in the interim, untiil it is past.
I do find it disrespectful that a group within the party seems reluctant to engage fully in making its case in the existing way of making policy through the Working Group and, contributing to the comments process on this blog.
Due to Parkinsons Disease I cannot get to national conference’s any more, so Im limited in what I can do.
I have been in correspondence with that group. I appreciate they have moved. I am not convinced they are fully in line with MMT. They are not. Not yet. And the party is not. They could do a lot more.
Sorry to hear about your Parkinson’s Bernard. I appreciated your previous comments on Richard’s blog. I take the view that most professed Marxists are contemptous of the views of other people which is why people like James Meadway and Grace Blakley always run away from answering questions about their understanding of MMT. As it turns out neither of the above two are actually Marxists but right-wing Monetarists in their support for so-called “Fiscal Credibility Rules”. It’s the same in so-called Marxist China where government bonds are now issued to finance spending!
I’m ex-Labour, prospective Green, but cannot vote for any party with neoliberal economic policies. The Greens have a few years to get this sorted out. They will probably fail if they don’t. I cannot understand why they haven’t adopted Richard’s approach to taxing wealth, MMT, and redistribution. They have nothing to lose. The proposals are well documented and all possible counter arguments have been dealt with. In short, they are looking a gift horse in the mouth. I hope they don’t regret it.
I should write about this.
Yes! Especially with Labour due to be slaughtered in next May’s council elections because the leadership doesn’t understand MMT and adopted James Meadway’s stupid Fiscal Credibility Rule!
Depressing…
The world is changing fast but people aren’t keeping pace… not even those who are supposed to be leading us towards a better future. What chance have we got, then, to see society evolve instead of collapse?
It looks like collapse will have to come first, it looks like people can only wake up to reality when that reality crumbles before their own eyes and only then will they consider and trust the value of true reforms. Sad.
But Richard, if, by any chance, the Party does invite you to help it create the better future we all need, don’t refuse the offer! It would be felt like a betrayal to those like me who have become hopeful rather than defeated about the future thanks to your work and your powerful presentation of it.
I have offered help already.
I do not share confidential advice or discussion though.
But the result is not what I would desire.
Thanks for this comment, Richard. I hope that (weak) ‘process’ doesn’t win over (good, ie MMT-aligned) ‘policy’. But in terms of getting a policy approved within GPEW, there’s a huge need to educate membership and avoid ‘procedural capture’. I’m trying to do my own ‘little bit’ to assist this in my local Party, at least.
On the substantive topic, have you read: https://www.tandfonline.com/doi/full/10.1080/00213624.2025.2533726 ?
(Sorry if you already read – and maybe commented or linked – it: I’ve been abroad for >2 months in circumstances where it wasn’t practical to follow your blog regularly, or hardly at all actually. I did get withdrawal symptoms, by the way!)
Thanks
I’m a green member. I find it frustrating that people like Richard don’t join and make these points from within a political party that can actually get elected and change national policy and where policy is decided democratically.
I don’t understand the fence sitting. But anyway…
With Gary Stephenson in particular, I don’t see incompatibility with MMT even if he is not fully articulating it. He states money is created by government and this produces private wealth. His concern is mainly about how this money has a tendency to trickle up without taxation on the wealthy. I feel you should discuss these questions with him. He doesn’t seem to have any fiscal rule and seems an open intelligent person.
I think also your funding the future and budget ideas all seem about ‘raising’ money, so in appearance they seem like they are funding spending. It makes it difficult to see what the difference is with the ‘marxist’ economists you talk about. Is it just about having any fiscal rule as opposed to a needs based rule?
Thanks, but it seems you are new here and you have a lot of catching up to do.
First, on party membership. I am not “fence sitting”. I choose to argue ideas rather than join a party because the economic framework I am advancing applies regardless of which party is in power. Parties change leadership, priorities and compromises; macroeconomic realities do not. I engage with parties – including the Greens – but I do not believe intellectual independence is strengthened by formal membership. Others, reasonably, take a different view.
On Gary Stevenson, I agree with you that there is far more compatibility with MMT than some assume. His core claim – that government money creation produces private wealth and that, without taxation, it tends to accumulate at the top – is entirely consistent with MMT. Where I differ is that he sometimes leaves the monetary mechanics implicit, which allows others to read his work through orthodox lenses. I would welcome serious engagement with him precisely because he is open and thoughtful. He has not responded: the fault is not mine.
On “raising money”, this is a persistent misunderstanding. My proposals are not about funding spending in an accounting sense. They are about changing behaviour, reallocating resources, and controlling inflation and inequality. Tax does those things. It does not “pay for” spending for a currency-issuing state. See a blog post in the morning.
Finally, the difference with some Marxist critiques is not cosmetic. It is about agency and constraint. I reject the idea that the state is financially constrained in the way households are. I also reject the idea that we can ignore inflation, capacity and institutional design. A needs-based rule without macro discipline is not progressive; it is reckless. The challenge is to design democratic fiscal rules that serve need without pretending money is scarce.
I’ll make it very clear to any Greens that follow this blog. If you continue to treat money as a scarce resource you will not get my vote when the time comes and I will vote tactically
I was just trawling for Meadway’s recent output and found this. Are you being misquoted Richard?
“Richard Murphy, founder of the Tax Justice Network, has said that both McDonnell and Reeves’ debt-focused rules “guarantee austerity”. To take the country away from this, different fiscal rules would need to be adopted.”
https://leftfootforward.org/2025/11/what-do-progressives-want-to-see-in-the-autumn-budget/
The reference to me, linking me to an organisation I parted company with a long time ago, reads weirdly. So does the quote. What I actually said is hard to work out.
At the moment, & if they could continue their march up the polls at current rates, it’s not impossible that the Greens could end up being the main contender to Reform at the next election. If that should happen then the hopes of all who believe in a more progressive politics will rest with them. It is vital, therefore, that they don’t mess it up with some hotch potch of popular sounding ideas that don’t actually deliver, or the whole notion of any kind of alternative economics will be dashed upon the rocks (“Oh, we tried that nonsense before & it didn’t work”). If the concern is that the Meadways of this world form think tanks that hijack the Green Party, then surely the obvious counter to that is that yourself, Steve Keen and / or any other “real” economists out there form your own thinktanks, that seek to drive policy in the “right” direction….?? Isn’t a big part of the problem nowadays that we have these thinktanks (negatively) influencing policy? So where are “our” thinktanks? Who will create them, if not you?
As one of my sons noted today, “Funding the Future is a think tank, isn’t it? We just never say so.”
It’s been going for twenty years now.
That’s my best answer.
You think; and you communicate – to those who listen, but sadly not enough in MSM – but I hope you don’t tank!
In a certain sense (and no disrespect at all: we need thoroughness, which is what I value in your work) there’s a need for an Aaron to your Moses. But not one who succumbs to the temptation to make a golden calf …
A popularizer, someone with a platform who can give the catchy slogans, sound bites and memorable images and (simplified?) stories for the ordinary citizens/voters who’ve imbibed neoliberal claptrap from their youth. Visionary rhetoric AND coherent ideas. Maybe Zack can be this, but big maybe…
Now that is interesting.
We will need to discuss that.
Important and timely post, Richard.
I dearly hope that Zack P, and other key GP figures are taking notice.
I enjoy reading your blogs and they make a lot of sense even thou i dont understand why your wise words aren’t filtering into politics, on a positive note ive joined the green party. It might take a long long time but im determine to introduce common sense into politics.
The political landscape over the last 200 years has been getting worse if thats possible !! its going to be painful but it may be worth it
Good luck! And enjoy.
@ Cyndy Hodgson
” I’m quite sure that Richard, along with the likes of Gary Stevenson, Grace Blakeley, James Meadway, and probably Stephanie Kelton too.” Perhaps you could finish t6hat sentence, please?”
Apologies for the incoherence!
What I was supposed to be conveying was my conviction that the Green Party (perhaps more than any other) is open to influence from these people and, as another has suggested, the direction of travel is absolutely towards fully embracing MMT.
But, two of them are implacably opposed to it, and a third is indifferent.
@ Pete Lihou
Perhaps I can clarify.
The central issue before Green Party members is a large amount of money will be necessary to mitigate the effects of climate change and remedy other social ills yet some in the party (including self-declared Marxists) are scared stiff of the many (as opposed to the few) seizing the power to regulate the means of production of money!
“The central issue before Green Party members is a large amount of money will be necessary to mitigate the effects of climate change and remedy other social ills yet some in the party (including self-declared Marxists) are scared stiff of the many (as opposed to the few) seizing the power to regulate the means of production of money!”
Your comment pin points a problem for all left political parties. And my reason for being here is to try to help all those on actual or metaphorical doorsteps trying to persuade the electorate to vote for a party that will introduce a paradigm shift in economic policy in this country.
In order to do so, and avoid another neoliberal (or worse) government at the next election, we desperately need consensus on policy and the ability to articulate what, to many ordinary people is high brow, esoteric, theorising akin to counting the number of fairies on a pinhead.
We need to imagine what the opposition would (really) say to counter our proposals and develop compelling arguments that people will understand.
They don’t currently get that the nation’s economy isn’t like a household budget because whenever we declare the ability to create money, the retort is “but what about inflation” or “what about the bond markets”.
We saw Rory Stewart tear a strip off Zack Polanski over the question of ‘debt’ interest, the retort is “how are we going to pay for it?”
There’s little or no understanding of why we even issue bonds if we then have to pay interest on them that becomes a debt ‘burden’. It’s like me asking you for a favour and then charging you for helping me. Why not just create all the money electronically? And how will fiscal policy actually control inflation in the real world when much is caused by external factors like Russia’s war on Ukraine?
People like me aren’t asked to be on working groups because we aren’t experts but we can and do amplify the messages that those on the front line doorsteps need, and those messages do eventually reach policy makers. However, we need to have messages we can sell to defeat those on the right, and currently the debate is too esoteric for the doorsteps, metaphoric or otherwise.
But unless the truth is told how is the narrative ever changed?
@ Schofield
“The situation for intelligent people is they would like to vote Green but what’s the point if the party doesn’t know how to fund the large sum needed to “green” the economy! Simply not good enough to wear hearts on sleeves without donning thinking caps! Certainly allowing not very bright Monetarists claiming to be Marxists to take command of your party isn’t the way forward either!”
Intelligent people will understand that if they agree with most of what a party is trying to achieve but see some issues that need greater expertise, it is more profitable to get on board and help than sit on their hands and say “what’s the point”. The end result should be a party that does what said intelligent people desire and that is highly unlikely to come about if those who can contribute don’t. It’s not like the party is resisting and I do not believe it to be in the clutches of zealots who will only entertain their brand of economic theory, we Greens want what will work, and what makes logical sense to the electorate.
I am engaging.
@ Pete Lihou
There were supposed to be intelligent people in the Labour Party but look what happened pretend Marxists landed them with the Fiscal Credibility Rule and along with Brexit we arrive at a deterence of investment:-
https://www.independent.co.uk/news/uk/politics/uk-unemployment-rates-rise-politics-reeves-latest-b2885214.html
What reason have we to hope that a majority of Green Party members are going to be any smarter than Labour Party members especially given the behaviour of its CEO Harriet Lamb and Caroline Lucas joining the board of Verdant being set up by a former pretend Marxist instrumental in getting Labour to adopt the Fiscal Credibility Rule?
Objectively this has to be a wing and a prayer situation!
@ Pete Lihou
Here’s the Green Party’s 2024 Manifesto section on Public Sector Debt:-
“Choosing to trap us all in a self-imposed fiscal straitjacket is a false economy. It is clear that
investing in protecting our climate now will save vast costs in the future. Investing in our public services and infrastructure is essential to a flourishing future for us all. As Greens we will never allow an obsession with fiscal rules to stop us investing in the public transport, schools and hospitals we all rely on – nor from taking the steps necessary to protect the climate for our children and their children. Investing in the green economy of the future
will be expensive – the Climate Change (CCC) Committee has estimated we will need an £50bn
per year – but delaying action will be far more costly, both in human terms as the climate
breaks down, and in terms of the damage to infrastructure caused by extreme weather events. But the savings will be substantial too. The CCC estimates that by the end of this parliament this extra investment will be offset by reductions in day-to-day spending, including due to the extra efficiency of electric vehicles.
Greens will not allow our country to be held back by fiscal rules that don’t serve us all – we’re
prepared to tax wealth and carbon emissions and prepared to borrow to invest in a fairer future. We do however acknowledge that public expenditure can only be expanded as far as the economy has the capacity to absorb it without triggering dangerous levels of inflation. This would be our overriding fiscal rule.”
https://greenparty.org.uk/about/our-manifesto/2024-manifesto-downloads/
Having put this in your manifesto for the party’s CEO Harriet Lamb and Caroline Lucas to then accept seats on the board of Verdant the think tank being set up by James Meadway one of the architects of Labour’s Fiscal Credibility Rule and now being one of the main factors causing a rise in the UK unemployment rate is amateurish to say the least! The Green Party needs to urgently take corrective action on this!
I have heard rumours that this think tank is not Meadway’s creation. The Greens were creating it/did create it, and then Meadway got involved. I wonder what the recruitment process was?
No that definitely sounds incorrect. This is James Meadway’s initiative.
Your evidence is?
I don’t think anything in the manifesto is in direct contradiction with James Meadway’s beliefs.
What many don’t realise is also that the manifesto was retrospectively amended at Autumn 2024 conference so our official position is slightly different. So one of the sections quoted actually reads as follows (subtle but important differences):
‘Public Sector Investment’
‘Greens will not allow our country to be held back by fiscal rules that don’t serve us all –
Greens will invest in a fairer future and are prepared to tax wealth and carbon emissions.’
I think that directly contradicts all Meadway stands for.
As pithy paragraphs go, this is one of your best:
“A government that issues its own currency is not financially constrained in the same way as a household, firm, or local authority. It does not need to “find” money from markets before it can spend. It creates money through spending and withdraws it through taxation. The real constraints are inflation, real resources, skills, technology, and ecological limits, not the bond market’s mood.”
Thanks
Yes it is good, very succinct!
Richard,
Good blog and great contributions.
I am not a GP member, nor would it make sense for me as I am far too riddled with inconsistencies however it would be nice to see your taxing wealth report & MMT get inserted into mainstream media and political thinking.
However to run a modern complex state like the UK requires a range of MMT policy tools at BoE, HMT and others and it is at this level that I wonder are their gaps and is “think tank” like work required?
An example might be driving UK productivity. Another might be measuring various forms of constraint in resources? Another might be imports?
Some tools might need substantial revision eg CPI.
Hopefully this makes sense
@ Nadine Storey
Has James Meadway recanted then and said the Fully-Funded Rule for current spending was a daft idea given it’s obviously a contributor factor in the rise in UK unemployment?