This is the sixth in a series of essays on the politics of care and economics of hope. The others are listed at the end of this essay.
As with the other essays, I acknowledge the input of my wife, Jacqueline, into this essay.
If money is just an accounting entry, why do we spend so much time worrying about it?
After all, nobody lies awake worrying whether there are enough metres or kilograms. They are simply units we use to measure things.
If money is just the unit we use to organise economic activity, why does it dominate politics?
The answer is that money may be an accounting system, but access to it determines access to almost everything else.
If you have enough money, you can buy food, housing, healthcare, education, transport, security and leisure.
If you do not, your choices become very limited.
Money is not wealth.
But in the society we have built, it is the key that unlocks access to wealth.
That makes it immensely important.
Why are governments so obsessed with money?
This is where many people become confused.
Governments often behave as though they are households.
They talk about “running out of money”.
They tell us they must “live within their means”.
They insist they have to “balance the books”.
But governments that issue their own currency are not households.
They create the money everyone else uses.
So why do they act as though they cannot?
There are several reasons.
First, many politicians genuinely misunderstand how modern money works. They have absorbed the same myths as everyone else.
Second, talking about a shortage of money is politically useful.
If politicians said, “We could afford this, but we choose not to do it,” people would ask why.
Instead, saying “There is no money” shifts the blame onto economics rather than politics.
It makes choices sound inevitable.
Third, money is a way of allocating power.
Who gets funding?
Who does not?
Which regions prosper?
Which services survive?
Which industries expand?
Money decides all these things.
Control over money is therefore also control over society.
But surely there must be limits?
Of course there are.
The mistake is thinking the limit is money itself.
Suppose every hospital in the country suddenly wanted twice as many surgeons tomorrow.
Creating the money would not create the surgeons.
Training takes years.
The real constraint is the availability of skilled people.
Exactly the same applies to housing.
If there are not enough builders, bricks or timber, writing bigger numbers into bank accounts will not solve the shortage.
The constraint is always the real world.
Money merely helps us organise it.
So why does government worry about deficits?
Because deficits are visible.
Unused potential is much harder to measure.
A budget deficit appears as a single number.
The fact that hundreds of thousands of people are unemployed, millions are underemployed, schools need repairing, rivers are polluted, carers are exhausted and children are going hungry does not appear in a single number.
Yet those are the things that really matter.
The obsession with financial balances often distracts us from asking whether we are making the best use of the country's real resources.
What should government worry about instead?
A government should ask very different questions.
Do we have enough people in work?
Are those who want to work able to do so?
Are people adequately housed?
Are children well educated?
Is the population healthy?
Are we protecting nature?
Are we investing for the future?
Are we reducing inequality?
These are questions about real outcomes.
Money should be judged by whether it helps us achieve them.
The simple summary
Money is only an accounting system.
But because it determines who gets access to real resources, it has become a symbol of power.
Governments often pretend that money is scarce because that makes political choices appear unavoidable. It allows them to say, “We can't,” instead of admitting, “We won't.”
The real question is almost never, “Can we afford it?”
It is, “Do we have the people, skills, technology and natural resources to do it without creating inflation or damaging the future?”
Once you understand that, politics changes.
The debate is no longer about finding money.
It is about deciding what kind of society we want to create, and then using our real resources wisely to make it happen.
Other essays in this series
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The principles outlined above are very applicable to this horrendous story of the US-UK pharma deal.
It could just be seen as a story about eye-watering sums of money – but as Chakrobortty points out at the beginning of his article, it is really a story about who or what “government” is FOR (answer – US Pharma shareholders).
Streeting and Starmer of course are safely out of the line of fire. How convenient.
This makes your current change of direction extremely relevant. This scandalous horror story is about far more than “money”.
https://www.theguardian.com/commentisfree/2026/jul/02/keir-starmer-britain-pharma-deal-covid
https://www.theguardian.com/society/2026/jul/01/us-uk-drug-deal-could-result-in-229000-excess-deaths-in-england-analysis-suggests
This deal always stank.
Now it stinks even more.
I had not read about this. Thank you for highlighting it. It stinks.
This utter contempt for the views and wellbeing of voters, suggests they aren’t relying on election success to stay in power.
Illustration of shortage of real resources. My son the builder says there is currently a great shortage of bricklayers, and as a result they are being paid more than lawyers. And that’s in the North of England.
Perhaps good bricklayers are worth more than lawyers, given what each produce. (Potential conflict: I am legally qualified. My husband has laid many bricks. We live in the north east of England).
🙂
The quantity of money matters – basic economics – that is why your analogy with metres fails.
When did the quantity theory of money last have anything useful to say?
I have neighbour who is conservative (small C ) about economics. I used this argument with him.
Having money gives people the power to decide what is done with it. If we have a ‘small state’ the power to create much of list-housing, schools, training medical staff etc is limited. The larger non-state sector is not likely to want to spend much on these things but will spend more on property, shares, conspicuous consumption such as yachts.
I think he finally got it, by Jove.
Glad to see you are better. Don’t over do it.
I am knackered and trying to heed your advice
What do we understand by the words “National Debt”? – there’s the “money” version, a misnamed and largely irrelevant obsession, as you say.
Then there are the:
Health debt
Social care debt
Homelessness debt
Justice debt
Education debt
Poverty debt
Employment debt
Inequality debt
Disability debt
Energy debt
Pollution debt
Carbon debt
(and so on…)
Plus some more abstract, harder to measure but EQUALLY IMPORTANT debts like happiness, and well being,
These debts are real, most can be measured (but government chooses not to measure them), and they are getting bigger. They directly destroy human lives. But as you say, we are obsessed with an astoundingly irrelevant misnamed thing called the (money) National Debt which makes or breaks governments by means of completely spurious political and economic chicanery.
I suppose wealthy people aren’t really aware of these other debts, because they aren’t impacted by them (yet). They just want low tax bills and safety from peasants or immigrants with pitchforks.
Very good
How can countries primarily in the global south who have large debts in US$ escape from this indebtedness to be able to potentially run their economies under an MMT framework as fiat currencies? Is the only realistic option to have debt relief before it might becomes realisable?
They can’t. I have never said they could. The option is for the World Bn ak to take over their sovereign debt and redemoninate it in their local currency.
Once upon a time…
Jubilee 2000 – https://en.wikipedia.org/wiki/Jubilee_2000
https://daily.jstor.org/debt-forgiveness-and-jubilee-2000/
And now debt relief, and overseas aid have become almost dirty words in mainstream politics – part of the growing glossary of things even Labour refuses to talk about.
How we have fallen!
Κύριε ελέησον
T.A.R.A.!
Might non-monetary debts matter too?
Might the money-in-debt countriesof the global south etc. be owed so much for the natural and presonal resources which have been exploited/stolen from them?
Good question – and much the debt does related to purloined money
I worked on this for years
Excellent. Some very useful explanations and ideas here. Richard’s essay would make the basis for a really good discussion in the classroom or a short TV documentary.
I honestly feel the question posed recently concerning the direction and purpose of this site is constructive. A consensus is forming whereby an Approach focusing on “The Real Economy” explained by MMT is foundational & the key to greater awareness of Economics as Political choices made by a few powerful people. This approach is simple and is waking people up .
Thanks
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