I would suggest there are three things we know.
The first is that climate change is real. The result is that nothing can stay the same.
The second is that neoliberalism has reduced most people to living in states of profound insecurity. Ignore that poverty is supposedly being beaten. This is almost for nought if the result is disabling fear for future well-being. This cannot persist because people will not tolerate it. We are seeing that, very widely.
Third, our economic and social orders do, then, have to change, and profoundly. This is not an option. It is an absolute necessity. And what we know is private capital has ceased to be available for active investment it is now almost solely directed to rent seeking. In that case it is only state created funding that can create this process of change.
To put this another way, what may be the biggest programme of change ever known in human history is required in very short order. We need new energy systems; transformation of our housing stock; new transport infrastructure; radically different approaches to food that might even require rationing if we cannot create change any other way; different ways of working and new ways of using leisure time. As I suggested, everything must change....
How to do all this? Only state created funding can create the finance needed for this change. What we need is not just a Green New Deal but Green Quantitative Easing too to fund it. If this was wartime funding would be found for the crisis we face. It always has been. Well, this may be worse than war. This is life itself we are fighting for, on all fronts. The time for prevarication is over. The time for pussy- footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change. And, if need be, to restrict money creation for other reasons....
How to do all this? Only state created funding can create the finance needed for this change. What we need is not just a Green New Deal but Green Quantitative Easing too to fund it. If this was wartime funding would be found for the crisis we face. It always has been. Well, this may be worse than war. This is life itself we are fighting for, on all fronts...."Green quantitative easing"? When tried, quantitative easing has been a bust. It's a path to nowhere. Prefacing QE with "green" does exactly what?
"Overt money financing"? It's got a nice ring to it. And happens to be the way to get the job done.
Naked Capitalism
The Reality Is Everything Must Change
The Reality Is Everything Must Change
Richard Murphy, a chartered accountant and a political economist, Professor of Practice in International Political Economy at City University, London, Director of Tax Research UK, a non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum. Originally published at Tax Research UK
3 comments:
This is the time to create money for change. And, if need be, to restrict money creation for other reasons.... Richard Murphy [bold added]
The most natural and ethically unimpeachable method to reduce the ability of the banks to safely create new deposits/liabilities for fiat is to abolish their privileges - leaving the banks 100% private with 100% voluntary depositors.
I'd like Richard Murphy's piece better if I could understand what is his stated political stance.
He starts quoting Kenan Malik with approval. For Malik the question is not how to create a centrist bulwark against populism, the question is to give people's legitimate disaffection a progressive shape. He clarifies his own leftist or leftish stance further: Otherwise the left will either remain standing on the sidelines ... or be driven ... to promote illiberal notions
Fair enough. One may agree or not with Malik, but his position is clear: he sees himself as a leftist, not a centrist. He says as much in the passage Murphy quoted.
But then Murphy concludes with this:
This is not left or right as we know it.
And this not centre either.
This is the new politics. Born of necessity.
So, what is it? Is it left, as Malik says? Is it centre? Is it right? Is it left, or right or centre as we don't know them? Progressive? Regressive? Up? Down? Both? Neither?
If Murphy doesn't really agree with Malik, why then quote him?
You are fighting for life? On all fronts? MMT can save you! Or maybe not?
Comment on Richard Murphy on ‘The Reality Is Everything Must Change’
The crisis is real, says Richard Murphy. No, it’s not Trump, Brexit, trade war, or WWIII but climate change, a disabling fear for future well-being, a broken economic and social order, and not to forget, “private capital has ceased to be available for active investment it is now almost solely directed to rent seeking.”
Everything has to change. “Since that process will be incredibly expensive this requires capital and if that means state investment and co-ownership, so be it.”
How to achieve all this? Perhaps you think the workers are broke, the pensioners are at the subsistence level, and the middle class is indebted over both ears, let the rich pay for it!
No, wake up, get real! “The time for pussy- footing with new taxes to extract a little more from the rich is yesterday’s news. There is no time for that. This is the time to create money for change.”
This is the time for MMT. How does MMT solve all problems and save humanity? Essentially by deficit-spending/money-creation i.e. by increasing the public debt. MMT claims that this is a historically tried and tested method which does NOT cause inflation, an unbearable interest burden, or any problems for future generations. A state with monetary sovereignty and taxing power can never go broke, can prevent inflation, and there is no real debt burden because we owe the debt to ourselves, after all, one man’s debt is another man’s asset. That’s an eternal accounting truth.
So, what holds us back? It’s neoliberalism, the ideology of the ruling Oligarchy, which calls for budget balancing, austerity, and other tortures for the people.
MMT looks like sound economics and economics looks like sound science. Richard Murphy looks like a competent person. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum.
Yes, all looks good. Every scam looks good. Every fraud comes with the aureole of salvation.
MMT is simply poor economics and economics has been poor science since Adam Smith/Karl Marx.
This is the fact of the matter. The macroeconomic Profit Law reads Qm=Yd+(I−Sm)+(G−T)+(X−M). With regard to the government’s budget, it boils down to Public Deficit = Private Profit, i.e. (G−T)=Qm. This piece of pure economic analysis translates into the scientific insight that MMT’s foundational sectoral balances equation is false, and into the political insight that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. In other words, “progressive” MMT policy is a political fraud.
MMT is a refuted economic theory and its proponents are either stupid or corrupt or both.#1, #2 MMTers are NOT friends-of-the-people but propagandists of the Oligarchy.#3 MMTers will NOT save humanity.
Egmont Kakarot-Handtke
#1 MMT: Time to say goodbye
https://axecorg.blogspot.com/2018/12/mmt-time-to-say-goodbye.html
#2 Economics: A pointless left-right wrestling show
https://axecorg.blogspot.com/2018/11/economics-pointless-left-right.html
#3 Richard Murphy: the MMT fraudster dressed up as realist
https://axecorg.blogspot.com/2018/06/richard-murphy-mmt-fraudster-dressed-up.html
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