It's summer. The economy is collapsing. Covid is still rampant. The climate crisis is developing rapidly. Democracy is in peril, but what the heck? It's as if the media, Opposition, and world at large no longer want to talk about such things. We have a few weeks of the silly season ahead of us.
So, I have asked how to use this summer's blogging time. It seems that in response to the fairly successful threads I have been doing on money there are dimensions to this that people think need development.
Particular themes that seem to be requested include:
- The limits to money creation
- Money creation and inflation
- What types of inflation can be controlled
- Tax and controlling inflation
- Money creation and full employment
- Money creation and the exchange rate
- Who owns the national debt
- What would happen if the national debt was repaid
- Why we might need a national debt
- Money creation, saving, debt and taxation
- The multiplier
- Why interest is not an issue of concern
- Why QE need not be unwound - and won't be
I suspect there are more themes, and some of these obviously overlap, but I am keen to know what the questions are. I have time to dedicate to these issues, and it would be good to know what people want.
Might you let me know? There are no promises as to when these things might be done - writing a thread takes a lot of thinking before my fingers ever hit a keyboard - but I want to plan this now. So, if you have a request, lob it in.
And remember, non-money themes are possible. Tax, the Green New Deal, accounting and other issues are all possible too.
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Id like to see some serious fiscal policies considerations for backstopping GND investment programmes. Borrowing/money creation will clearly be the vast majority of spend, but the political economy of such dictates a need to rationalize thinking ahead of inevitable opposition from influential deficit and inflation hawks. It doesn’t seem unfair to say that if the economic case was enough to get it done we’d have seen more action by now.
Thanks
Linking with the IMF statement on global monopoly companies I noted this Guardian article at the weekend:
https://www.theguardian.com/technology/2021/jul/25/cryptocurrencies-could-lead-to-limitless-losses-for-uk-government
Apart from the horrendous use of power in “mining” crypto-currencies, what are the implications of bitcoin in the national economy?
I plan to blog on this
Thanks
I’d like to understand (a) what percentage of the UK population is economically ‘active’ – please include all age groups and discuss what ‘active’ might mean; (b) how many enterprises in all sectors – commercial, govt contractors, CICs, charities, etc. – are ‘growing’, how many are ‘zombie’, and how many are on their way out; and (c) how far the way(s) in which govt re-circulates our money enables (a) and (b). Question (c) is also a way of discussing how much govt actually effects and affects our ongoing economic sustainability.
I am not convinced I can answer those questions
Sorry…
re: active/zombie/performative economic activity. A pity you can’t tackle these related topics, but thank you for your honest answer. Do you know anyone who is tackling these issues? Issues which should surely inform the debate about Universal Basic Income, as well as relative rates of reward for different activities.
Danny Blanchflower – a bit
I’d like to suggest some expansion on “Money creation and the exchange rate”.
Given that foreign exchange flows are usually reckoned (I’ve read anyway) at between sixty and a hundred times the value of international trade, there is obviously speculation galore.
How does this affect Britain’s monetary sovereignty, given that it imports roughly fifty per cent of its food, whereas its exports are largely services which could be conducted anywhere? These used to rely on the rule of English law but given that the current government is doing its best to trash that and it seems it would be happy internationally to bypass it completely by using TTIP style conflict resolution, who will actually want £Sterling in order that the little people don’t starve?
Definitely in my list Peter
It is a pretty complex issue though….
Agreed and thanks, Richard.
Sorry, it’s because I’m struggling that I suggested it….
Money creation and the exchange rate; I am interested in this aspect too.
Now that we are a small, less significant island, why should the world be interested in £Sterling? Is it’s value likely to fall further? UK needs oil & gas as well as food. Who buys that for us? Can the government print increasing amounts of money to pay Norway as the £ value falls. Some of the City’s questionable trading has escaped into the EU. What can be now used to balance the outflow? MMT’s money creation doesn’t seem to help here, does it?
All on my list Norman
One area that I have problems with regarding MMT, is foreign trade.
Warren Mosler’s explanation that exports are a drain on resources and imports are a benefit doesn’t ring true to me. I can see where he’s coming from, but it can’t be that simple!
I don’t agree with Warren. The claim is ridiculous. He forgot to do the double entry. It really does not help
I will note it
How to find inner peace.
Your daily posts suggest a high (and increasing ?) level of stress. Take some time off away from social media before it consumes you entirely. It’s very unhealthy.
Alice.
Wow
Your presumption is pretty staggering for someone claiming to be in possession of inner peace
You’ve written about all the above countless times, recycling the same stuff over and over.
Every time you just make these massive assertions – which more often than not have no basis in fact or even basic economics. For example, you just claim tax can be used to control inflation.
You certainly do no analysis before you present your work as fact.
Then when people point out the many errors you make, you block them, if you post their comments at all.
Maybe you should, for once, post your topic with a proper economic analysis – including the data and the models used to get your output – rather than some long winded and meaningless explanation. Then maybe, just maybe, you should allow people to point out the inevitable errors you make.
Somehow I doubt this will happen though. Your economics is too poor and your skin too thin.
Toby
When did you have the charm by-pass?
When too did you learn to ignore the significant body of academic literature that supports my analysis?
Come to that, why do you think it appropriate to think that the BoE support my description of the money creation process?
And how do you explain £800bn of QE? Isn’t that the on the ground evidence?
And why ignore the fact that now the IUMF says monetary inflation cannot control; inflation that the only thing that can is fiscal policy?
Why, in other words, didn’t you do any research before posting?
Is that too much to ask?
Richard
“Your economics is too poor and your skin too thin.”
I do not wish unnecessarily to upset the thin-skinned, but may I gently point out that it may be perhaps just a ‘tad’ rich for someone to indulge in such a vituperative comment (notably lacking any facts or analysis), without even being prepared to stand behind their comment with their full name.
Call me old-fashioned …. but to me anonymity should be reserved for whistleblowers, or those with a very good reason for anonymity (and vituperation should be an absolute ‘no-no’ for the anonymous commenter; as a matter of basic human dignity and respect for persons).
The current thinking about money creation and inflation on the right of the political spectrum would, I think, be usefully challenged.
And connections between the Green New Deal and the serious need for quality, well-paid employment would be well worthy of exploration.
I know these are clearly political subjects, but they are major fields of obfuscation that cry out for the clarity you could bring to them.
Thanks
Noted
Saving for a pension has never been less rewarding. Why has it now become so difficult in the private sector and what can be done to improve returns? The UK seems to be out of step with the rest of Europe on state pension provision. Why, and should we try to make state pension the default rather than defined contribution pensions?
A big one….on the list
I think pensions would be a good one too. So far as I can see the cheapest, most efficient and most egalitarian way to do a pension would be to have a decent state pension. Say at the SNP Policy ambition of the EU average which is about £300 per person per week. Those not satisfied with that amount can save extra as they do now. Ultimately the pension is a transfer of income from those in work at the time to those getting the pension. So it is just a case of how that income is extracted – either via tax or by accumulating financial assets that are sold to those in work. The latter isn’t very efficient as a substantial part of the returns get taken in fees and charges by the finance sector. In the discussion about pensions it might also be worth looking at the dependency ratio. In the ‘we can’t afford the pension burden’ narrative then yes there are a lot more pensioners, but at the other end there are far fewer children. So what is the effect when savings on the young are set against extra costs for more elderly? Some parts of Africa have had a situation where half the population were under 20. The UK might have looked a bit similar at times in the late 19th century.
Tim
I plan to do this
Ruchard
Why don’t we already have a great state pension? After all, we’re one of the better economies in the world, by accepted standards. The answer seems to be that having a dreadful state pension forces serious savers into the arms of the private pension companies who will then often discreetly – or not – go Maxwell on their hapless charges. In other words, poor state provision exists to facilitate predation, predation by corporate entities quick to show their appreciation to helpful politicians. This general attitude is a topic which is, I feel, too rarely commented on.
I think one thing which is important in many topics is “how to get there from here”. Pensions are a case in point, while you could spend a lot of time describing a perfect alternative universe with good state provision meaning occupational pensions (and the incentives for them) become irrelevant it is difficult to see how this would be attainable on any reasonable timescale. At least without the sort of authoritarian government which would be unlikely to do things in the public interest.
So in some ways the more urgent questions are around how to adjust the current system to be more fair, while maybe also keeping it open to more radical change. With tax allowances on pensions, it would be about the alternatives to the lifetime allowance which creates an unfair discrepancy between people’s situation depending on their pension structure (defined contribution or benefit). My instinct is that pensions might be fairer with just an annual allowance, whereas tax-favoured savings (ISAs) are currently structured to benefit the wealthy minority in the absence of a lifetime allowance. But it would be valuable to have the input of a thoughtful accountant.
That is just one example, inheritance tax and capital gains tax need similar consideration.
Bill Kreuse; How can UK possibly be “one of the better economies in the world”? The world may quickly see through the smoke and mirrors!
Housing, land use/ownership.
At the heart of all our lives and possibly at the heart of finance and the economy.
Noted
I’d second that.
Land/property ownership seems to my naive eye to be a very central piece of the ‘puzzle’ (to me) of economics and inequality in the UK.
On my list
I would extend that and say the English speaking world (and esp UK) obsession with houses as a speculative investment rather than something you live in. One reason the UK does so badly is because so much of the available savings are poured into second hand houses rather than anything more productive.
Very much agree on housing/property as a priority. There seems to be a consensus that we need a lot more house building. Peter May’s brief analysis suggests there are enough dwellings to go around in the UK, but cost of mortgages/rent are really the problem. http://www.progressivepulse.org/economics/another-dysfunctional-market-housing.
My (almost bankrupt) council’s suggestion to deal with the “shortage” is a massive building programme which includes digging up green belt land – forget protecting the environment or rewilding. (There is no real shortage, they’re just competing for people leaving London because of Crossrail)
Can this dysfunctional market be stabilised without substantial new building? Can councils, govt and political parties get by without contributions from developers? Can the rest of the economy function without rising asset values? Will there be unintended consequences from GND eg improved property = higher value/mortgage/rent?
On my list
The housing statistics are often confusing, and not assisted by sometimes ill-defined terminology (dwellings, households and so on). From a very brief and superficial inspection of easily accessible information I found quite different figures proposed for the number of dwellings, in different sources. Trying to find some stable ground I alighted on the BRE Trust paper ‘The Housing Stock of the United Kingdom’ (2017). This provides a 2017 UK population of 66m; the housing stock consisting of 27.8m households, with and average number of people per occupied dwelling of 2.41. Assuming the ‘average’ is the ‘mean’, a simple calculation to cross-confirm gave me 27.4m dwellings (presumably). Perhaps someone can explain the disparity. Over 10m of the UK dwellings were pre-1945 (20% are even pre-1919); thus a large proportion of the stock is pre-war, (and pre-World War I). Apparently we have the oldest housing stock in Europe.
I do not have the time to do more extensive background, but what really interested me was to compare the above stats with 1950. The UK then had a population of (say) around 50m, but I am not sure of the housing stock stats, and have not quickly been able to locate them. I do know that we had an appalling slum problem, and MacMillan as PM promoted a big house-building drive; targeting 500,000 per year. A large number of these (often high-rise) dwellings proved socially disastrous (architects and builders were following the prescription of Le Corbusier’s somewhat romantic confection of humanising industrialism; see ‘The City of Tomorrow’; but compare what was actually built in our cities), and many were ill-fitted for the energy turbulence following the OPEC revolution in the 1970s, and were also ill-maintained. This means we are now demolishing our younger housing stock; a proof of failure, but also a bizarre outcome.
My speculation is that although the average occupation per dwelling gradually decreased in the late 20th century (slum clearance), we did not build enough new houses, and with the increase in population over the last thirty years or so, this failure to build will have been compounded, probably made worse by the fact that single occupancy households have become the critical growth point [BRE: in almost the last forty years (1981-2017) new UK house building accounts for only around 25% of the total housing stock]; thus access to the housing stock must be becoming worse, as everone’s anecdotal evidence would confirm. Housing is a mess; and so may be my very rough speculation, but I am confident that better, more rigorous research will simply prove that – housing is a mess.
What are your thoughts on land value tax?
Bringing the financial sector under control to stop the making of money from money?
I think that there are some interesting ideas in both The Bible & The Koran about usury & jubilee, possibly elsewhere as well
Shadow banking seems an area of concern, but it’s quite a complex area I think. . Perhaps a bit of explanation may be useful?
On the list
Scottish independence, if it happens, will throw rUK into economic turmoil.
It’s the major political economy question facing Europe and America outside of climate change.
On my list
This might be covered within one of the sections already mentioned in the article but, just in case it isn’t, something on the sectoral balances – i.e. if the Govt. is in deficit then the rest of the economy is in surplus and vice versa – would be very useful. You have previously shown graphs on this, I think.
Regards,
Craig
What about tax received in relation to money input to the economy. If there was no tax taken we would probably get high inflation. It the tax take was 100% then the economy would just stop. Are there any signs to look for if either of the above are lightly to happen?
Neither is
Is private equity taking over more businesses in the U.K.? What is the significance of that, if so, and what are likely effects?
Thanks
My suggestion for you is the (rather wide!) subject of injustice in the UK.
If many people feel that they live in an unjust society, this has a poisonous effect on their lives. Access to justice is surely one of the fundamental pillars of any society calling itself civilised?
You admirably cover many of the injustices that flow from economic mismanagement and false ideas about the economy, and I am thinking more of these two areas:
1. The criminal justice system.
This has been systematically underfunded over recent years and judges have complained about the delays this has caused. The fastest growing crime is fraud, but the chances of the police actually investigating a case of fraud is vanishingly small.
2. The lack of reasonably prompt redress when public bodies make serious errors.
Examples are legion.
* The tainted blood scandal in the NHS goes back to the 1980s and is still not resolved.
* The Grenfell House fire and the obvious lack of adequately enforced proper standards relating to building construction.
* The post office Horizon scandal and the hundreds of falsely-accused sub-postmasters, where many were jailed, and some took their own life.
* The many well-reported hospital maternity unit scandals.
Victims are left with a bill that will bankrupt them, or an unsaleable flat, or a jail sentence, or premature death, while those responsible move on to bigger and better jobs, or retire early on generous pensions.
That is too wide for what I am envisaging
Sorry
I’d say that the biggest threat to our society now is that posed by the notion that we don’t have the money to sort out our problems – Covid, the environment, cancer – you name it.
What we have been seeing is the biggest misallocation of money in our history – for example the money invested in on line shopping etc., to effect changes in behaviour dwarfs ALL other investment according to some accounts I’ve seen. All for extractive purposes.
I’d like to see a neat and comprehensive theory or exposition of MMT that robustly answers the questions that critics shove its way – exchange rate interactions etc. A 360 degree review/primer with answers/rebuttals and suggestions to try it out. Then it needs to be ramped up and aimed at politicians 24/7.
That’s all I can add although I agree with others here that the future of paid work is in jeopardy and we don’t want the rich to be lending their money to us as an investment option.
I think that’s a pervasive theme
Thanks
One thing I’ve never understood about tax is why governments talk about tax rises to pay for public spending / pandemic etc etc when the tax take could easily be increased by closing the huge number of loopholes (avoidance schemes) . Or am I being too simplistic?
No….
How inflation is measured? CPI, CPIH, RPI etc and how it’s impact is variable at an individual level.
Noted….
What about the role of cooperatives, if any, in the modern economy as a challenge to monopolistic power?
Noted!
Excellent idea! (imho)
I think if falls nicely into a key theme which Richard has been presenting (apologies if that seems like putting words in his mouth) – that of reinvigorating our democracy, and that’s not always about politics.
Should we reverse privatisation & bring utilities back into public ownership.
‘The Rentier’
Noted
Startups and VC in my opinion are a component of business that is underscrutinized and I would like to know what you make of them or if they have any valence or relationship to your themes. I think they bear looking at both for the ones that are “real”, have a subject expertise and “really do business” and the ones, if any, that are like shell companies where it’s a pretense that they’re a music app or a healthcare app. Some of them definitely do their formation in a secrecy jurisdiction, but I guess that is no surprise. They seem to have a teflon effect relative to journalists/critics who look at Amazon, the massive publicly traded, people looking at hedge funds, people looking at shell companies, people looking at Goldman Sachs. I guess because they don’t use leverage and claim to have a subject matter, they’re seen as “good” businesses.
Even for the ones that have a subject matter, they’re the vanguard of privatization at the very least. So that’s interesting. Health apps figure prominently into Pilger’s NHS film. Softbank/Greensill is a startups story. Deliveroo gets some attention, but is the portfolio-company form itself serving some structural purpose either for tax evasion or something else? I hammer this as much as I can because a bell goes off that it’s an equally important area to other topics in fraud and critical approaches to capital’s businesses, but with less smart analysis. (Not counting the vast hagio press writing uncritical stories about Series B’s and C’s.)
Thanks, I appreciate your considering it.
I will muse on how to build that in…
The question I would like to have answered is…
What is(are) the most effective way(s) to fund Green New Deal policies here in the UK and to deal with the UK’s extra-territorial emissions?
The former is already on the list
I will add the latter
Hello Richard.
I’d be very interested to read your thoughts on the following. Given the long history of MMT and related ideas, which you and others write about so persuasively, why is it so hard for those ideas to get traction within governments, the media and the public? What vested interests are being protected? How do we ever get past those barriers?
Thank you.
I wish I knew the answer to that
What those who believe MMT / QE is transformative think is that the world spins the other way around from that taught to almost all in the economics profession. So we spend and tax, not tax and spend. This is a Copernican revolution, and they take time. A great many people have whole careers invested in the existing logic and they are not giving that up easily
How about a bit of logic to refute “Tax Payers Money” myth:-
Assume there is no money. No one could pay taxes as there is no money and so no banks or moneylenders to borrow from. Logically the government has to print money and spend it, only then can the government collect taxes.
Agreed…
I understand that the government doesn’t need to raise taxes to pay for public services, but what about local governments/councils?
Do they need to tax to generate income or is taxation in local settings also just for redistributive purposes?
With the government on a mission to cut funding to services further what can councils do locally to mitigate this? How do they generate income rather than reducing services? What role does taxation play in that, if any?
(In other words, what can we do at a local level while we wait for Scottish independence/Labour to become less crap???)
Only governments that have their own currency can create money and so devolved and local government is constrained by the money it can raise / is given
Just as Westminster wants, of course
They could follow the example of Preston and give priority to local spending, and they could implement a local currency and a local bank too.
How do we get people to begin the journey of better understanding money and the economy?
I think there are a lot of people who are kind, caring and would like a better society but are not going to spend much time reading about economics.
If one person says Richard Murphy is a professor and says MMT works, and tax does such and such, another person can say someone else is also a professor, says MMT doesn’t work, and tax does something different entirely.
How do we get people beyond thinking like – ‘the government has access to all the professors, universities, civil servants and companies, and the government says the country has no money and needs austerity. I don’t really know much about it but the government must be right, I guess.’
I think the very first step to new understand is the most difficult. Once on the road to Damascus, so to speak, then I think it’s a different situation entirely.
Thanks.
Thanks
What are the limits to full employment with an open immigration policy such as the UK had while in the EU ?
It would be possible under a green new deal, with appropriate training, to absorb many of the currently unemployed into the work force. However such an expansion of capital deployment under the EU regime, for instance, would have resulted in absorbing labour from poorer countries and bypassing the domestic unemployed.
The alternative is going well isn’t it?
Why don’t you justify crashing the economy first?
I struggle with the money supply and full employment argument. As I understand you money can, and should be created until full employment is reached. At that point taxes need to be introduced to withdraw money from the economy.
If this is right I would like to know who should be taxed and by how much. The practicality of a chancellor increasing VAT by say 5% because we have full employment would I suspect cause riots.
Did raising interest rates ever cause riots?
Were you around when base rate went to 15% in the 90s, albeit briefly?
Was there rioting?
There was not. So why claim a tax increase would create what that could not?
“Did raising interest rates ever cause riots? “
Because a rise in interest rates and a rise in taxes are not the same!!!! Massively disingenuous for you to suggest that they are
Tell me how they impact households differently
What is the difference in £1 not available because of tax from £1 not available because more interest is paid?
Yes indeed, I was around.
In my experience all tax increases are unpopular, thinking of poll tax (maggie) and the fuel escalator which seems to have scared chancellors for years following the protests. Tax increases have to be sold to the tax payers. Just saying, sorry we put too much money into the economy now we want it back would not sound very convincing to most, I suspect.
I disagree
“Tell me how they impact households differently”
1) not everyone has borrowings or a mortgage
2) debt is often written off so the burden falls on the lending entity not the individual
Tax – falls on everyone and HMRC will prosecute through non payment.. except of course rises in income tax (or your idea of a tax which flows through bank accounts) will encourage evasion through cash payments for the self employed which is a big problem.
Other tax rises like VAT are regressive.
So tax rises and interest rate rises are very different and will definitely not be received in the same way. Also reducing disposable income in the face of inflation will be so unpopular politically the outcome will be spending cuts.. so really we are back to Keynesian boom/ bust economics.
So, you want a mechanism for controlling Britain that only hits those who have to borrow
Why do you want to hit those who by definition do not have capital in society?
Tell me why you instead like a system that rewards those with capital?
You agree a. Is fair
Why do you want to unfair?
You asked me why rises in interest rates and rises in taxes are not the same. I have explained. I also say that in a period of inflation increasing taxes will be nigh impossible when people’s purchasing power is in decline. I also say the more likely course of action will be cuts in spending..and therefore the MMT noise is really Keynesian boom bust economics revisited.
To which you say “So, you want a mechanism for controlling Britain that only hits those who have to borrow”
What a bizarre statement.. as if people are not taxed already!!.. the issue really is there is no magic money tree without consequences.. and increasing taxes to stem inflation just won’t fly with the vast majority of the electorate.
You have revealed four things
The first is you want to control inflation by penalising those already least well off
Second, you want to bias those well off
Third, you don’t understand monetary policy can no longer work
Fourth, social justice is of no concern to you
Please do not call again
Hi Richard,
I’ve heard assertions that annual tax revenues raised in Scotland from all sources is about £65 Billion which goes to the UK Treasury, while the amount returned to Scotland via the Barnett formula is about £35 Billion.
Do you think these figures are realistic? Is it possible to make a reasonable assessment of the figures? Can such assessments be substantiated? I’d be very interested in your views on this.
PS I thoroughly enjoy your blog (and many of the commenters).
I am not sure what our data sources are Ron
I can assure you that a great deal more than £35 billion is spent on Scotland
Richard
I’ve suggested this before but I think we need to consider that use of MMT understanding can give a future government a competitive advantage compared to other countries shackled to more limiting constraints on investment and services.
Agreed
What about the proportion of Bank Credit in the economy vs central bank created money? Could bank credit be broken down into mortgage vs non mortgage credit?
I would like to know how much economic activity is driven by retail/investment bank credit and explore what this means for society?
Would have more central bank created money vs retail bank credit be better or worse for society etc?
Fair questions
Haha, looks like you’ve opened a can of worms with your request here Richard! It sounds like you’ll be occupied for several decades – but it’s good to see so much enthusiasm.
I don’t know if this would be something you’d be interested in – I’ve had on my mind for a week now a comment made on the radio (not a reliable source of info!) about how bad for the the environment tourism is – I can’t remember the details, the person said something like it contributes 16% to global warming in Scotland.
Now, Scotland has a huge tourism sector – it’s a large part of the economy (I believe) (and one that I’d like to think wouldn’t be such a major part if we were to ever get independence) – is this something a country should look to reducing as part of a GND, or is it a case of infrastructure investment could mitigate the detrimental environmental impact? I know that many hotels are reducing impact by e.g. reducing laundry etc – but is it transport maybe that’s the biggest contribution? (Assuming the radio told me true).
I suppose what I’m thinking of is: what type of balance of industries would be good for an economy run with a GND in mind? If we were able to shape it? You can’t reach where you are going if you don’t have a goal!
Tourism is bad in a sense because all travel burns energy
But domestic tourism is far less bad than foreign tourism
Are there compromises to make?
Can we be completely puritan? I doubt it….
[…] Monday I asked what it was that readers thought I should be writing about as the relatively quiet weeks of summer stretch before me. So far there have been over 80 comments, […]
Hi Richard, I’ve been enjoying your blog and videos lately.
TL;dr: what carrots or sticks should we use, if either, upon employers to induce them to offer more secure/permanent/full-time/stable jobs?
One idea I’ve been wanting to ask you about —Â and responding to this blog is probably the best chance I’ve had so far —Â is about job security/certainty. More specifically, I am interested in the means by which, if at all, we can or should be incentivising employers to offer permanent positions to appropriately qualified/skilled applicants. Vacancies for skilled and semi-skilled permanent positions seem to be becoming rarer. They are certainly becoming more competitive. Job insecurity affects all age brackets, but it is particularly detrimental (with wider knock-on effects) for those who are in the parenting age (say, 25-50 years old). I think of this as a very fixable policy problem. But what exists, in the toolbox of tax powers, to disincentivise employers from offering jobs which aren’t especially secure or permanent?
Maybe I am on the wrong track. Maybe it’s not the role of the state —Â and certainly not through tinkering with the tax system —Â to force employers to do anything, and maybe employers will just make back whatever inconveniences or losses they incur as a result of any such intervention by lowering wages. Maybe you disagree that it is a problem at all: that there is no problem with job insecurity (and, perhaps relatedly, vocational immobility: by which i mean the inability to move professions and retrain on the job with any sense of security).
If you think I am on the wrong track or if you disagree with the problem I identify, that would be nice to know too.
I fear this one is beyond tax
This is about society, the economy, neoliberalism, and the way the rate of change is increasing
Can tax be credible when fighting all that? I am not sure….
Thank you for considering it anyway. I’m going to give it some more thought. Keep up the good work.
Are you really of Ely?
Following on from what Phil Twiss has said, should there be controls on bank created money or the ability of private banks to create money such as the credit controls that used to exist pre Thatcher to prevent or restrict certain forms of lending eg Buy to Let, and control property prices?
Noted
How does money creation relate to trade between countries and exchange rates?
I’m fascinated by the idea of MMT but what is to stop any country with a sovereign currency from creating money? Surely there must be a limit on the effectiveness of MMT placed by exchange rates and which goods and services aren’t produced nationally?
Sorry if you’ve already covered this, I read a lot of the blog posts but haven’t read the book yet!
On my list to do
What about external shocks to the economy? I don’t really understand this.
I think MMT alone cannot save the economy from external shocks. What can?
What I’d really like to know is how fragile the economy is to these external shocks? I’m thinking about food shortages starting to show in supermarkets, and ever more frequent flooding, as much as Brexit and Covid.
Thanks
Politics has to do that
Economics can’t
Hi Richard. A friend challenged MMT asking why then did the Labour government need the IMF loan in 1975. Could you possibly explain this for him – and me? Thanks
First, it diod not need the loan, as it turned out
Second, the logic of the gold standard and fixed exchange rates was then in use and now we have floating rates
We are in a very different world now
I would like you to try to produce an England only equivalent of GERS, WERS and the NI equivalent (I cannot remember its name).
GERS hunting season is almost upon us, we all know that the figures presented are tosh, but can this be proven by extrapolating an English version then comparing all 4 to ONS figures for the UK to identify anaomolies?
Interesting, but not possible from available data I think
I would like to understand the constraints of MMT and why, for instance, countries like Cuba and Venezuela have not been able to create more progressive successful economies using their own currencies. What is the nature of the relationship between a fiat currency and the US dollar?
OK…
But let’s be clear – bo9th are the same: the dollar is being used to undermine both and that is why their own currencies cannot function
A currency subject to economic warfare from a large neighbour has little hope
Thanks, that’s what I thought, but how do they do it and are there implications for Scottish independence and currency?
Why?
If the US dollar is being used to undermine other currencies in the region, I want to understand the way that happens because when Scotland becomes independent the English government may wish to undermine the Scottish currency in a similar way.
Because the English government may wish to undermine the Scottish currency in a similar way.
It may….but given the number of Scots living in England do you think that would win support?
I’d like to see some way of making all these topics feel relevant for small and micro businesses. Especially your ideas on accounting properly for environmental and social impact. Most of those I speak to think this is all just a matter for ‘big business’.
How we do things matters, but so does what we do.
For example, I’m getting fed up of seeing food waste being turned into expensive alcohol, instead of being used to produce energy (the place where we need to make the biggest change) or feed the soil, of God forbid, feed people. But this won’t change unless people understand how to account for the impact of their choices.
One for me to use on because the small business impact is very different from the big business one