What about the workers?

The fact that the HMRC thinks that the recent, proposed National Insurance rises

could lead to the breakdown of struggling families

means at least that somebody is thinking of them, even if, remarkably, it is only the UK’s tax authority.

(Government seem to have ceased to take either workers or struggling families into account.)

I consider we should reorientate today’s thinking from the rather Marxist and old fashioned narrative of capital and workers. It doesn’t mean that Marx didn’t have a point, but in acknowledging even if tacitly, dialectical materialism he recognised that he was on a journey of discovery and one which was likely to evolve.

Unsurprisingly it has. I suggest we should acknowledge that the overwhelming majority of us work.

Look what HMRC go on to say:

There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

Further they also forecast the increase would impact companies’ decisions on hiring staff, and setting salaries.

The people hit by this National Insurance rise are it seems, both capitalists and workers. And those who aren’t? Predominantly landlords, investors and financiers.

In other words people skimming off a layer from the rest of us in order to benefit themselves.

Still, when we know too that taxes do not finance government we get a rather different outlook.

No longer is value produced only in the private sector. When we are so often told by the right that without the private sector we could not afford the NHS for example, in fact the reverse is true. Without a healthy labour force, the economy, as we are seeing, collapses.

Value being produced only in the private sector actually looks very much like the right adopting the ideas of old fashioned Marxism.

A left wing response getting lost in workers versus capital is a pretty meaningless decline into identity politics, since broadly we all work and usually we have some form of pension investment that is skimming in order to provide future income.

Labour in its widest sense produces the value in society for sure, but what it does not do is create the money that is used to allocate and motivate that labour.

Government does that by decree and it orientates and motivates the labour resources – the workers and the work they do – that it considers society requires.

And that is what so many of us workers are unaware of.


    1. Andrew Dickie -

      I half concur, except that you still include the ‘theory’ word – a word that has allowed anti-MMTers to dismiss it as no more than a cranky theory.

      But MMT is actually a description, as validly describing the workings of reality as a chemical process is described by a “before and after” equation.

      Accordingly, I would opt for changing it to MMM = Modern Monetary Mechanism or Machinery (Mechanism is preferable, I think), allowing it to be further TLA’d into ‘3M’ (a two-letter acronym, I agree), permitting us to contrast 3M (factually correct and useful) with
      M3 (a not particularly useful example of the obsession of monetarists with the amount of money, and the alleged danger of inflation, rather than MMT/3M’s concern with the behaviour and function of money in the economy.)

      1. B. Gray -

        Your point about the word theory is well taken. While there is nothing inherently wrong with the word theory, the problem is it is widely misunderstood and misused in context by those unfamiliar with the scientific method, which, unfortunately, is the majority of people (and virtually all politicians).

        A theory is a fact based framework for explaining observations or phenomenon in the real world, of which MMT does a very good job. A theory presents concepts in a way that is testable through empirical research and/or gathering of evidence that can either support or refute it. When a theory is accepted as valid, there is no practical difference between the terms “theory” and “description”, as the theory perfectly describes the workings of reality.

        An accepted theory must be supported by empirical data and observation, as opposed to a hypothesis, which is an assumption about the cause of a particular observation that has not yet been tested. Many people conflate theory and hypothesis in their arguments, and hence the perception problem (evolution v. creationism, climate change deniers, etc.)

        An untestable, or unchallengeable framework is neither theory nor hypothesis but rather a belief, which pretty much sums up most of today’s neoliberal junk economics.

      2. Schofield -

        Simply resolved by calling it the Money Cycle Model (theory to be found under the bonnet) versus the Taxpayers’ Money Model (no theory to be found under the bonnet).

    2. Andrew Dickie -

      Reading back your comment, I see I overlooked your excellent point about including taxation in your MCT (Money Cycle Theory).

      Taxation could, and should, be covered by my MMM or 3M.

      Such a renaming ties in to my much earlier suggestion that the PSBR, or the whole process of the Government’s alleged ‘borrowing’, should be renamed ‘Sustainable Government Finance’ – sustainable, because the Government can always create all the money it requires, within the constraints set out by MMT/MCT/MMM/3M, whatever we choose to call it!

      1. Peter May -

        I’ve always like ‘Sustainable Government Finance’, but I fear ‘MMT’ has got traction – even from those who are trying to belittle it.
        Afraid I’m not keen on Modern Cycle Theory not only because I too don’t like the theory bit which is susceptible to the accusation of being ‘only theoretical’ – but it also makes me think of Lance Armstrong!

        PS 3M is an also an American conglomerate -so not clear cut…

  1. Peter May -

    @B Gray
    Thanks -well put.

Write a reply or comment Comments Policy

Your email address will not be published. Required fields are marked *

Name *