Paul Mason demonstrates all too clearly why much of Labour don’t ‘get’ money

Paul Mason has written an article in the ‘New Statesman’ on the Green New Deal (American style) and concludes:

So the best thing for the US left to do would be to issue a new FAQ explaining, in detail, how to pay for the Green New Deal. The British Labour Party, which issued its own, paler imitation of the Ocasio-Cortez plan today, operates by necessity in a world where the Office for Budget Responsibility and the Institute for Fiscal Studies subject every proposal to the meat-grinder of neoliberal economics. Reforming these institutions and changing the methodologies of both the Treasury, the Bank of England and the OBR are issues McDonnell and his co-thinkers have been engaged with for years. They long ago moved out of the world of hit and hope.

I confess I expected better. Paul Mason misses the fact that it is not ‘hit and hope’ it is actually the way money IS created – the neoliberal deceit is the ‘fact’ that we tax and spend.

The Treasury has after all, admitted as much as, indeed, have the Bank of England in September 2017:  “Regarding whether taxation is necessarily required to finance government spending the answer is no, it is not. Along with raising money by taxation, governments can borrow money and they can create money outright.”

He seems to have an obsession as to value (a Marxist money idea, which itself seems to hark back to the idea that Capitalists pay their workers in company tokens/money that is only redeemable at the same company’s shop). Value is what we all impart – and it has, I suggest, nothing to do with money. Even if money can allow us to demonstrate how we value things, money in and of itself is not intrinsically valuable. Resources are, which of course, money is often used to reflect, but it is the resources that are valuable, not the money.

He goes on:

Modern Monetary Theory gives no account of where economic growth or profit comes from other than within the monetary system itself. Unlike Marxists, who believe value is created in the production process, the MMT crowd believe it can be created by the interplay of fiscal and monetary policy.

He really doesn’t get it. He is trying to get the fiat monetary system to be the source of something it is not capable of. It is just the scoring system.

Indeed I’m not sure Bernie Sanders (of whom Alexandria Ocasio-Cortez was a great and Green New Deal supporter) gets it either, if this tweet is anything to go by:

Money is simply a promise, backed up by the rule of law.

To my great and disappointed surprise Paul Mason is, I fear, a long, long way off monetary understanding and still seems wedded to the 1980s (if not well before).

I confess I never imagined that he thought on similar lines to the Taxpayers’ Alliance…..


  1. MigT -

    We seem to have arrived at a phase where the pundits must at least acknowledge MMT, but get it wrong. Next they’ll have to get it right. Then they might or might not have legit’ counterarguments.

    First they ignore you… etc.

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