I am pleased to announce that Funding the Future is now involved in promoting another event. We are not the lead organisers on this occasion, because William Thomson of Resilient Economy is, but what he has put together is an event on 18 December this year, in central London, entirely dedicated to discussing modern monetary theory (MMT) and to broadening the MMT community in this country.
Full details are available here.
The accessible location will help attendance, but the event will also be available online at a relatively modest cost if you can't get to London a week before Christmas.
Knowing William, it will also be available for access after the day if you have paid for a streaming ticket, but I will confirm that in due course.
Right now, the only confirmed speakers are William, Patricia Pino of MMT UK, and me, but there will be others, and the opportunity to submit a paper is open. So, if you have something relevant to submit, say so when you buy a ticket, and you may have the opportunity to make a presentation.
The intention is to help the cross-fertilisation of ideas, build a community, advance understanding, get to know each other better, and explore how we can push MMT closer to the mainstream in this country at a time when doing so might be absolutely critical.
Event details are available here, and if you are on Facebook and want to share the link there, the link for that is to be found here.
Tickets for the day cost £50. I understand this includes lunch and some teas and coffees, which makes it a bit of a bargain as far as I can see.
I think this is a really significant opportunity, which is why I jumped at the chance to take part as one of the sponsoring organisations. If you have any questions, post them here, and I very strongly suspect that William will be online to help. Alternatively, if you want to email him or his team in an organisational capacity, the links are available through the pages I note above.
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I would like to see evidence presented that increasing tax is a significantly better control knob of inflation than the other two obvious alternatives. So far all I’ve seen is unconvincing assertions that all central bank committees are some combination of wrong, bad people, and ill-edcuated.
I suspect that the truth is that all three major tools, the two fiscal ones, and the monetary one need to be used in judicious combination.
There are three reasons why I argue that taxation should be the primary instrument for controlling inflation.
First, we have evidence that it works. Between 2010 and 2020, for example, the UK experienced prolonged periods of stable inflation despite interest rates being close to zero. Taxation continued withdrawing purchasing power throughout that period. Other factors also mattered, but this experience demonstrates that high interest rates are not essential for controlling inflation.
Second, taxation is much more direct than monetary policy. It withdraws purchasing power from the economy and can be targeted precisely where necessary. It affects everyone, shapes economic behaviour and can be adjusted rapidly. To help achieve this, I have suggested replacing National Insurance with a tax on financial flows through bank accounts, which could provide an almost immediate mechanism for managing demand. The technical details can follow once the principle is accepted.
Third, and critically, taxation can be socially just. Higher interest rates reward those with financial wealth while penalising borrowers, particularly younger people with mortgages. Monetary policy therefore has an inherently intergenerational dimension, transferring income towards those who are already wealthier. Taxation, by contrast, can be designed to be progressive and fair. Even indirect taxes could be redesigned to achieve this.
Of course, government spending also matters, particularly in addressing supply shortages. But that does not justify prioritising interest rates.
Taxation offers historical evidence of effectiveness, greater precision and the possibility of social justice. Those are three compelling reasons for making it our primary instrument for managing inflation.
Understanding that so far as its own currency is concerned , government can create the money it needs, and that only government and banks making loans create money in the economy , seems to be the overwhelmingly important concept to become generally understood.<p>
This maybe not the whole of ‘MMT’, but it is something the Bank of England has stated in its 2014 quarterly. But BBC and all media continue to explicitly or implicitly deny this – and promote the household analogy. <p>
This deliberate disinformation should surely be subject civil or even criminal sanction?<p>
But ‘MMT’ also seems to be used as a slur to discredit the truth of where money comes from<p>
‘MMT’ sometimes seems to be dubbed a ‘cult’ – and to avoid this I wish there could be a conference to just focus on the narrower ‘where money comes from’ – and get BoE to contribute, and get BBC chief economics correspondent , FT, as well as RM etc .
Noted.
William? Any response?
Agree as well. This is very much an MMT campaign/ activist event. We have a much broader educational event in Edinburgh that Richard spoke at last year. Many of the talks cover money (and where it comes from). http://www.scoteconfest.org, and there are other events from a ‘real-world’ perspective. Maybe Andrew’s idea might be an action from this meeting. It is a good one!
The obvious reason why interest rates are not good at controlling inflation is that they do not withdraw spending from the economy they simply move it around.
The comment from the early 80’s was from the sellers of consumer electronics that they had pensioners queueing out of the door as high interest rates were funnelling cash into their pockets that had been taken from younger home buyers
Agreed
Brilliant.
Agree that a second heading is needed to make this more accessible and spread the word, as suggested above.
Thank you
Thanks for highlighting your involvement, Richard, and for giving us a very good summary of the event!