It seems to me we give too much respect to the intrinsic existing processes of the workings of money in our current economy.
After all, in fact, money is all created by humankind – and for a purpose, so it has to work for humankind – that’s all of us.
The reason it works at all is because the rule of law supports it. And that is something else that is man-made.
If money is issued on behalf of us all, as a society, does it actually work for all of us in that society?
Or has the purpose been railroaded by a clever clique?
In the end all the arguments about whether Modern Monetary Theory (MMT) – or indeed the Chicago or Austrian schools – are correct, are of no particular consequence – except in the fact that they do not describe necessarily the unique and definitive way that money works, but actually describe how their proponents want money to work.
This makes MMT political, and, indeed, all the economy political. Because, simply, both money and the economy are human constructs.
It is our state, so it is our money.
If we choose money to be always in short supply then that is indeed our choice. If we choose it to be everlastingly plentiful then that is also our choice.
What nobody can say is that this is the way it always is or has to be.
It is a choice.
So MMT suggests to many how money actually now works, and how misinformation and misunderstandings mean that democracies are thrown off course as to their real powers, but in the end government decides and that is why we have had almost a decade of austerity. The government has organised money to work in a way for the benefit of a minority.
So whilst I consider that MMT describes our current monetary system we have still to recognise that fiat money is our money and we make it work how we want to.
The Tories understand this and have no difficulty with being austere one minute and less so the next – at, for example, the moment of the current 2018 budget. In fact, nothing has changed except the rhetoric.
So government and money is ours – all of ours. Government is effectively a money factory – and with a bank attached!
It is not a force of nature. It is a system we all create by often difficult agreement which is defined by its legal framework.
There is no need for it to be used to represent our resources, but it is increasingly used that way. That is why usually that representation is highly imbued with political construction and constriction.
Fiat money should in fact, be an inherent concept in a democracy and we ought to make sure that everyone in our democracy knows that.
It is not the ‘economy, stupid’ or even the ‘money, stupid’…
When money represents how we want to allocate resources, how we decide to use it, is, in effect, our democracy, ‘stupid’!