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:
Loading ...Tickets are now on sale for the Funding the Future live event in Cambridge on 28 February. Tickets and details are available here.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
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).
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 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.
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.
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