As I mentioned before Christmas, I have been working on a summary of modern monetary theory to be published in our PDF shop.
I initially assumed that this summary could be based on blog posts that had been published here over time, plus transcripts of videos on this subject and some material from the Taxing Wealth report.
However, after involving three people in appraising all the material in question, more than 70 posts appeared worthy of inclusion. Without any additional explanatory or linking material, those posts come to more than 93,000 words, and the text is more than 300 pages long.
I will be honest and say that this does not feel like a summary, and I am not sure it will be particularly helpful. That feeling is heightened because there is some duplication in that content and, on occasion, a lack of structure in the resulting document despite our best efforts to create a flow through the material.
The result is that I am now wondering where to go next, and would appreciate your opinion.
Do we put out all this material?
Or do we start again, using it as the basis for a shorter, 30,000-word (or thereabouts) summary?
Alternatively, might we do both, with the blog post summary available alongside the shorter publication for those seeking a more detailed explanation?
There is a poll below:
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Publishing a series of “stand alone” blog pieces that totals 100,000 words doesn’t make any sense. Each was written in response to a specific issue at a particular moment in time. (Having said that, if you have “done the work”, an archive of posts that are MMT related that is flagged “MMT” might make sense).
On the other hand, a summary is a huge undertaking – in effect, writing from scratch. This would be more useful…… but is it worth it?
I suspect you will get a greater impact if you do another 70 blog posts/videos over the next year or so as/when the mood takes you – or in response to specific things. These might well be re-hashes of existing pieces but, I think would get a bigger audience and greater impact.
Noted
“As a 30,000 word summary (52%, 58 Votes)” is a great option!
Like a dissertation or thesis: Long enough to cover the subject and organized to be easily searchable but short enough to interesting.
I do NOT like duplicate information and duplicate commentary in these types of documents.
Then again, I am a Yank so what do I know! LOL! LOL!
Thanks, and 🙂
Ideally both formats. The summary is useful to spread the word to the flat-earthers and the deep dive for MMT geeks like me who need to understand everything.
I’ve asked before but must have missed it but can you please clarify the contradiction between obligation to clear reserves at the BofE (exchequer sweep) and the existence of CBRA’s? I realise they could arise if there was QE subsequently but there must be debit balances at the central bank to match the liability that is the CBRA’s?
To your last question, there’s no contradiction because the exchequer sweep applies to government accounts, not to commercial bank reserve accounts.
The sweep is designed to leave the Treasury’s operational account at/near zero each day: net receipts are transferred, and any shortfall is covered via debt management/BoE arrangements as a matter of government policy, but not economic neccesity.
CBRAs are the reserve accounts of commercial banks at the BoE. They rise when government spends (it credits bank reserves) and fall when taxes are paid (reserves are debited).
CBRAs don’t need matching “debit balances” elsewhere. The matching entry is on the BoE’s balance sheet: reserves (liability) are matched by assets such as gilts purchased under QE (or other BoE assets).
Thanks. I guess the answer is in the last line, other assets.
TBH a very short summary would be useful for both my local Greens (as they are getting mixed messages) and for my students when they need to know how policy is funded (again, because they’re fed ‘taxpayer pays’. I’m capable of generating one, thanks to this blog, but you’re considerably more authoritative than me.
I think version 3 might be needed then.
I wonder whether to go straight to it.
Would it be helpful to identify your target audience. All those options you offer sound very helpful but perhaps overpowering for the uninitiated. By focusing on specific points perhaps the message will be better understood. I am thinking here of the debunking of the idea that the economy is like the household budget. That message is starting to gain traction.
A guide to the hiusehold analogy then
Or rather “Why government is nothing like a household??
Richard
You are an academic so you know how to ‘tell the story’
I suggest we need something that the proverbial ‘Man (woman) in the Clapham Omnibus’ can easily understand
That may be the third version
I agree. If the purpose is to educate the man and woman in the street, the message needs to be as simple as possible. Anything wordy won’t capture their attention. What we are competing with is a 15 word summary; ‘A Government budget is like a household budget; you can’t spend more than you earn’ Everyone can understand that, even though it’s wrong. My suggestion would be to boil MMT right down to a series of bullet points of the essence of what MMT is and how it differs from a household budget. I probably wouldn’t mention MMT at all but simply stick to the key points that make a Government budget different to a household budget. Here’s my starter for 10:
* Because the UK can print its own money it can never go bust
* Government debt has existed since 1694
* There’s no ‘black hole’ For every debtor there is a creditor including anyone who has savings or a pension
* Cutting Government debt costs taxpayers money, e.g. roads not getting fixed increases car repair bills.
Let’s see what I can do.
I do agree with this, to reach a wide audience it needs to be simple and brief and avoid the ecomomic theory label – more why the government can pay for what we as a society need to function fairly and how the current narrative is a lie. It’s so much about how to seize the attention of the uninitiated. Links can always follow for those who seek a more in depth analysis
I think that gaining a reasonable understanding of MMT takes some time and it was not until quite recently that I came across the number 0 and its history as well as its fundamental importance in our understanding of the world. It took some time to be embraced by western thought and plays a key role in double entry accounting as well as the whole digital world. I think that trying to get to grips with MMT is similar to this and needs clear explanation. Therefore having both shorter and longer formats would be really helpful imo.
Thanks
I voted for a 30,000 summary – something I can give to friends – something we can read together and try to understand. I don’t know where you get the energy for all the work you do! 🙂
Would 10,000 be better?
Most likely
I like 30,000 words as I imagine this document to be a dissertation or thesis for public consumption.
Just because I cannot read “War & Peace’ or “Gone with the Wind” in one setting, it did not stop me from reading both books many times.
A 10K summary will help the MAJORITY of people who need to and want to think differently about the economy and the politics of care.
Those who want more info and a more in-depth analysis have already found you.
Target those who are busy and time poor first.
I am looking at 5k right now…
Yes. Even 30,000 leads to TLDR; syndrome for many, sadly (but they’re people we need to reach).
Noted.
And I am inclining to agree.
Alternatively, does a summary, whose description you agree with, already exist for you to link to at the top of your blog?
No…
I have not found it
I have my own twists on this
I think it should be for you to decide as it is your time and and energy that’s needed.
However, I wonder if you have used NotebookLM?
I suggest trying to make it do the work. Open a new notebook and input the current report then ask it to produce a new version having removed the duplications but keeping the structure and all the information. There is a setting where you define just what you want.
I haven’t tried it on anything this long so it may not work. But it may work….
Good luck and thanks
I am told Claude AI does it better….
But it would still need editing.
I must confess that I use NotebookLM already for everything Richard writes that I find interesting. I have already included in my “Richard Murphy Notebook” nearly all of Richard’s PDFs – from his store. (Apologies Richard for the relatively meagre donation I made for the privilege of trying out this experiment!). I must say, it works perfectly well for me as a searchable archive of potential answers to any point I’m not sure about on MMT – and other aspects of Richard’s thinking.
In case anybody else wants to try using this system, there are limits to the FREE version as follows: –
In 2026, the free version of NotebookLM (referred to as the “Standard” version) includes the following limits per individual Notebook:
Number of Sources: A maximum of 50 sources can be included in a single Notebook.
Word Count per Source: Each individual source has a limit of 500,000 words.
Total Word Capacity: When maximizing the 50-source limit at 500,000 words each, a single Notebook can process roughly 25 million words.
File Size Limit: For local file uploads, each source is also limited to a maximum size of 200MB.
I’m not entirely sure if the FREE version would accommodate the 90,000 words of additional material we’re discussing today. According to the above, it should do. However, I did try to go up to the 500,000 word limit for an individual source on one of my other Notebooks and it drew the line on that particular project.
Finally, I have indeed found that, as Richard says, the output (In this case the MMT Guide) would certainly need careful proof reading. It responds so incredibly quickly to prompts that it can very occasionally make mistakes.
I hope this is of some use.
Noted
Thanks
A sentence got missed when I copied this over. It will also produce summaries for you.
This is fantastic news. Thank you so much. On account of the Green Party / Polanski, now more than ever we need quick, easy to digest, and as short as possible explainers. When the messages of MMT reach the more unfamiliar but curious, it’s so important to have something for them to go to when life is too busy for anything too heavy or time consuming. I firmly believe if the veil can be lifted for a large enough chunk of the population, anything could happen. People don’t like being lied to. And the indignation from finding out they have been could be very mobilising.
I voted for both formats, but only if it’s an ideal world with enough time and resources to do both. Otherwise, I’d definitely vote for short, clear and concise, based on the reasons given above.
Thanks
Maybe also a recommended reading list?
I have just finished listening to ‘Trade Wars are Class Wars’ by Matthew Klein and Michael Pettis… I can’t remember which contributor here suggested it but Thank You!
It’s now my second favourite economics book 🙂
Empirical economic information explained in plain English followed by concrete policy recommendations. A thing of beauty.
We did this before…but I have never found a way to post it.
I don’t like the MMT label – you have often said its not really a theory – more of a description of what money is in country with its own currency.
For what its worth , ChatGPT offers this as a ‘plain English’ summary of MMT:
”
Modern Monetary Theory (MMT) is an economic framework that says governments that issue their own currency (like the U.S., UK, or Japan) don’t face the same budget constraints as households or businesses. They can always create more money to pay for things, so they can’t “run out” of money in their own currency.
The key limit, according to MMT, isn’t government debt or deficits—it’s inflation. Governments should spend to achieve real goals (like full employment, healthcare, or infrastructure) as long as there are unused resources in the economy. Taxes aren’t primarily for funding spending; instead, they help control inflation, redistribute income, and give value to the currency.
MMT also often supports a job guarantee, where the government acts as an employer of last resort to ensure full employment.
In short: deficits aren’t inherently bad, money creation is a policy tool, and inflation—not debt—is the real constraint. ”
That’s a couple of hundred words rather than 90,000 – and along with others here – it must be your judgement Richard as to your target audience, and at what length to pitch it to them.
That is wrong, though. Inflation is a secondary constraint. The real constraint is real resources. ChatGPT has read the critics, not MMT.
Yes – I thought that, – it does mention ‘as long as there are unused resources’ but gives most emphasis to inflation
Whilst I would certainly appreciate a summary, I have read enough of your posts that I feel like I understand MMT at least from a casual ‘man on the street’ level. What I would like to see is a summary of the biggest critisms of MMT addressed, like when people say it will lead to hyper inflation etc. Maybe we could find some quotes of conservatives, labour politicians saying why it can’t work and you could explain why they are wrong?
This feature will be a part of anything I produce, I assure you.
Could ChatGpt not format something based solely on your work Richard? The prompt might take a bit of finessing but it could be worth the effort.
I will tear this. But it will still need finessing
While I would be very happy to read a comprehensive guide to MMT — because I’m interested in knowledge for its own sake — for me, the point of that understanding would be to refute common neoliberal falsehoods. So, the shortest account that offers cogent arguments to do that would be my first choice.
Noted
I’ve forwarded your MMT glossary entry to several sceptics.
I’ve just reread it and it is a very good overall summary.
Thanks
I’m of the opinion that 3000 to 5000 words would be the right length – with links to further in depth reading
Noted
Stuff the whole lot into Notebook LM or Gemini Pro. They’ll take about 1 million tokens (approx 750,000 words). Ask it to spit out all the options you’ve considered. You can then review, edit (or get the AI to edit) and you’ll have all the options available. You could add MMT for 5 year olds, whatever. AI is very good at this.
If I may, I would like to request that your MMT guide on the descriptive theory aspects address the following issues.
Many of the topics discussed in MMT to date, particularly those that have not yet been fully explored, seem to focus primarily on normative explanations and assumptions.
For MMT to gain broader credibility, effectively analyse policy decisions, and address pushback from orthodox economists, it must transition from normative assertions to quantitative and dynamic analysis. This is especially important when answering questions such as: What impact will policies have on the economy, and over what timescale? How will uncertainty (i.e., risk) be modeled in allocation decisions? What fiscal responses will be needed under uncertainty? And, crucially, how will MMT allocate resources to start-ups where the value of intellectual property (IP) is difficult to quantify?
These questions require the use of dynamic models under uncertainty, as well as open-economy mechanics that align with MMT principles, in order for MMT to make its case and be of practical use to policymakers.
Additionally, MMT seems to specifically exclude intangible resources, particularly Intellectual Property (IP), opting instead to focus on measurable resources like land, labor, machines, energy, and physical raw materials.
Yet, one of the most valuable British-owned and created resources is Intellectual Property, a fact that still holds true today. Whether it’s the steam engine, radar, the electric motor, or the first stored-program computer, the UK has long been at the forefront of developing transformative innovations.
Allocating capital to start-ups in these fields involves huge, unquantifiable risks, and often requires multiple rounds of investment from different entrepreneurs. These innovations, however, have been globally transformative.
The fact that IP is not considered a real resource in MMT appears to be a glaring omission: one that must be addressed if MMT is to be brought into the 20th century (and beyond). This, of course, requires accounting for uncertainty in a more nuanced way.
In its current form, MMT appears cautious e.g. prioritising macro economic stability over direct investments in high-risk, high-reward innovations.
It is crucial that MMT accounts for such disruptive, transformational investments, which necessarily require a more sophisticated approach to uncertainty, if it is to support future growth and innovation.
Would MMT have allocated capital to the weaving loom, knowing that it would have caused permanent unemployment for so many weavers? Would MMT policy makers chosen innovation over the Luddite resistance?
I think you will find this is what Steve Keen is beginning to look at in depth, and is hoping to set up an Institute to do. So, noted, but boucne this at him.