The Gower Initiative for Modern Money Studies (GIMMS) describes itself as “part of a growing international movement which challenges the economic orthodoxy of the last four decades. We are supported by distinguished economists and many other experts who have played a vital role in offering advice and guidance in the development of this project.”
Gimms’ founding was welcomed by respected left-wing economists, who agree that MMT (Modern Monetary Theory) needs to be well understood in the UK.
Next month, GIMMS is holding an important event in Birmingham at which “founding proponents” of MMT will join authors to discuss macroeconomics and “challenge our preconceptions about how money works” to “develop solutions to the pressing economic, social and ecological issues we face.”
GIMMS’ press release states:
Bernie Sanders and Alexandria Ocasio-Cortez in the US are leading the charge for a Green New Deal combined with a ‘Job Guarantee’. Ocasio-Cortez, who is being advised by MMT economists (in particular Professor Stephanie Kelton) is openly talking about MMT in the public domain. In response there has been a surfeit of bad articles rubbishing MMT which suggests that the orthodox view is feeling challenged as MMT begins to make a dent in economic orthodoxy.
Unfortunately, the UK is still some way behind on the curve despite GIMMS’ efforts. GIMMS has contributed to improving the situation, but also Professor Stephanie Kelton is involved in a project with Mariana Mazzucato [Labour adviser, Professor in the Economics of Innovation and Public Value at UCL and founder-director of of the UCL Institute for Innovation & Public Purpose].
Professor Kelton said of GIMMS:
I value GIMMS’ input into this global effort to change the economic paradigm towards one which puts public purpose as its primary goal. As such I am sure that the GIMMS team will play an important role in promoting a better understanding of economics and the policy space which exists for addressing the future challenges we face.
Professor Kelton has visited the UK twice, giving presentations at the British Library and the UCL. The talks, titled “The Public Purse” and “Rethinking Fiscal Policy”, can be viewed below:
The GIMMS statement continues:
The event will aim to challenge the predominant view among left-wing progressives that a progressive agenda can be delivered by bringing home the magic money tree in the Cayman Islands to pay for public services and a GND. Our goal will be to present the realities of modern money in a post-gold standard era – an essential understanding if left-wing progressives are to break out of the ‘household budget’ framing of the money system (essentially a monetarist one) and deliver a truly progressive agenda using MMT as the descriptive lens.
If you are free on that day tickets are available. There is a small charge as our funds are limited and it will cover the cost of the Birmingham venue and other associated expenses on the day.
Tickets are priced at £11.25 (of which £10.00 goes towards GIMMS’ costs and the balance covers Eventbrite’s fee) and can be ordered here.
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Said it before but what needs to happen is for an explanation of MMT (and the dismantling of the arguments against it) to be presented as a TV documentary.
Nothing else will raise a ripple in the stagnant pond of public awareness.
Oh… but only if it can be done without adding to the terrible stress MPs already struggle under… MIND is so concerned they’ve made a public statement on the subject today.
Been on News 24 and everything.
Now I feel terrible in case I might have said anything to upset the overpaid overprivileged overcossetted incompetent snowflakes.
Interesting word ‘Progressive’ in the post-truth era of identity politics. Usually applied to themselves by anyone who reads the Guardian or works for the BBC.
I find the ‘chaotic economic wisdom’ of Max Keiser (Russia Today) much more critical & a more accurate assessment current economics post 2008. Alastair Darling take note as in QE money does grow on trees, you can just print it!
While mmt provides no help against resource exploitation, I would argue that living within our means is best helped by bringing back the gold standard. It is the best and only credible system for floating exchange rates and will allow us to pay a universal income once automation takes hold.
Knowledge of mmt will also expose the Tory/LibDem lies about we can and can’t afford. It will also help people to understand that imports are a benefit and exports are a cost.
”I would argue that living within our means is best helped by bringing back the gold standard.
I’d agree. However, I cannot for the life of me have any sort of conversation or watch Max Keiser wax lyrical about returning to the gold standard without this scene invading my thoughts…
https://youtu.be/LS37SNYjg8w
The conservative demand during the 1930’s global capitalist stagnation crisis for a “return to the Gold Standard” is a key factor which shackled attempts to use Keynsian demand management economic methods to get industry moving again . The Gold Standard is the most irrational means of establishing “real values” and stabilise currencies imaginable. A heap of precious metal is an entirely irrational measure or storage method of value – a hangover from pre-capitalist societies. Which is why Britain and the USA had to abandon the Gold Standard straightjacket in the 1930’s to try and use state-led economy-boosting economic strategies – the most successful being the Roosevelt NEW DEAL – ie, massive state-led spending on productive infrastructure and resulting jobs. Only the hugely greater “military Keynsianism” of WW2 , and massive destruction of old capital stocks – and the revolutions in productive technology arising from the wartime economy and state-supported R&D (mass production using ever-greater automation, dances in chemicals, computer development, etc) actually “solved” (for a while) the profit crisis at the root of the 1930’s Slump of course – but The Gold Standard, with its irrational fetishization of a pretty generally useless yellow metal, actually WORSENED the 1930’s Slump.
Keiser is a snake oil salesman of dodgy economic nonsense – both the Gold Standard nonsense, but particularly the Ponzi scheme con trick of “virtual Currencies” – Bitcoin (and others) – which Keiser peddles constantly on RT – and has allegedly benefitted vastly from, as a major holder, and presumably, SELLER, of Bitcoin, to gullible punters who bought at a 20,000 dollar per Bitcoin peak price , and now find each Bitcoin they foolishly bought is worth a fraction of that entirely speculator-driven pseudo “value” !
“Imports are a benefit and exports are a cost” only if the trading partner nations have equal economic and military power IIRC.
The more powerful always takes advantage of its power in a capitalist system (see: Trump v. the world, British Empire v. the world, China v. the world)
And when did we reconcile ourselves to a capitalist system?
Sometime before I was born and everything I have learned since informs me there will be no democratic change. Socialism could only exist in a post apocalyptic world where America was no longer a military power. Closer to home, I doubt Corbyn will be allowed to govern, the thought that real Socialism would be possible in this country is laughable.
Sadly “Modern Monetary Theory” is complete economic nonsense, despite it’s ever growing popularity. It expands into fantasy economics from one true economic fact , ie, that a state with a sovereign currency can, within distinct limits, print new money to boost its level of economic activity (Quite true, Quantitative Easing in the UK alone created hundreds of £billions to bail out the banks after the 2008 Crash) , to the totally UNTRUE claim that a state with a sovereign currency can create UNLIMITED amounts of new money to boost its economic activity to any desired level at all – with no resulting inflationary effects ! If only !
It is quite correct that governments with sovereign currencies can, and do, create money , and the entire capitalist banking system has always operated by creating money “out of thin air, via issuing loans for which they have no balancing real cash or assets in their balances. But it is unfortunately a demonstrable fact that if this new money does not generate the creation of real extra value in the economy, eventually foreign holders of the ever-expanding mass of currency will not be willing to exchange as much of their own currencies for it, or accept its current stated value against purchases of their real physical goods. In other words, beyond a certain point creating over-ambitious amounts of new money really does cause the value of ones currency to plummet on the international money markets relative to other currencies , and hyper inflation would take off on a Weimar Republic or Zimbabwean scale.
That supposed “Left wingers” (not that “People’s Quantitative Easing enthusiast, Richard Murphy, is any sort of Left winger – he is a Liberal Christian moralist – an ACCOUNTANT – NOT an economist . ) have bought into MMT , a sort of “magical neo-Keynsianism”, just shows the dire state of political theory and economic understanding on what passes for the “Left” in the UK and USA . A “Left ” that is manly just “Left Liberalism” with a socialistic verbiage coating. If only printing more cash could lift capitalism out of its current dead-end stagnation the thousands of £billions of Quantitative Easing carried out across the Western Economies since 2008 (and by another ten years in long-term stagnant Japan), the global economy would have returned to health by now. Sorry, Left Liberals , but the stagnation of the global capitalist economy is deeply systemic, and part of a long cycle of such crisis – the last one being in the 1930’s . The root cause being the crisis of profitability caused by the Falling rate of Profit that Marx identified as lying at the root of the periodic major capitalist crisis. Last time the entire system was trapped in such a crisis of profitability it took WW2 , and the destruction of vast numbers of people, vast amounts of existing capital, and the revolution in productive efficiency arising from the wartime advances in productive technology, before capitalism took off again , into its 1945 to 1970’s “Golden Age” of growth.
Capitalism is now destroying the planet, and no simplistic money printing snake oil magical Keynsianism is going to save it as a system. Only socialism , with a new sustainable high tech Green economic model, will save both the planet and a dynamic technological society. MMT is just liberals daydreaming a route forward , WITHIN capitalism.
Do your economic homework, Skwawkbox, you are promoting liberal snake oil pseudo economics here.
I agree with your argument Jpenny. However, I see an advantage in using it ‘carefully’ within the current system. It would allow us to change macroeconomics towards green/social interventions by allowing payment of a national living wage and giving some, much needed education on economics to the people at large.
I certainly wouldn’t propose mmt for a real Socialist society.
“the totally UNTRUE claim that a state with a sovereign currency can create UNLIMITED amounts of new money to boost its economic activity to any desired level at all – with no resulting inflationary effects ! If only”
I don’t think anyone would propose that. Some kind of Keynesian stimulation, together with public ownership is necessary. I don’t care what you call it.
equal economic and military power have nothing to do with it apart from the imposition of unbalanced trade treaties. Countries only export so that they can get needed imports. They’ve been telling factory workers they have to make stuff to sell abroad, it’s nonsense, let someone else break their spirit making stuff. We could just buy it and employ our workers in green/socially beneficial jobs and pay them a living wage under mmt.
Complete fantasy, lundiel ! Why would a German factory producing , say, computers, or cars, or steel, accept a wodge of our (apparently limitless) £pound notes – simply created out of thin air by the Bank Of England, as a meaningful payment ? What could the German factory owner buy with the £notes we gave him ? Whilst our UK workers are all apparently happily engaged in “beneficial jobs” which don’t produce all those tiresome things countries sell to each other – goods and useful services (and in the UK’s case , parasitic financial “services” and snake oil consultancy services ). The relative value of country’s currency ( vis a vis, Euros, dollars, etc) does relate to a broad estimate by users of other international currencies (via the international money markets) , of the real value of outputs produced by the state issuing that currency. No state can simply issue as much currency as it wants to buy other county’s stuff ! That would be like using “Monopoly Game” pretend money in a shop and expecting the shopkeeper to give you a TV or bag of groceries in return for nothing more than a printed bit of paper ! Still, your naïve nonsense is actually no different to the more complicated magical neo-Keynsianism nonsense spouted by the entire MMT industry of liberal fantasists.
I never claimed any such thing. It was a merely an example of the wasteful use of peoples lives to gain imports we need.
If you don’t use a limited form of mmt or similar economic theory that allows public debt and you live in a capitalist society with little mineral/fuel resources, then you can’t afford universal health or welfare.
And yet you don’t accept that the imposition of unbalanced trade treaties – clearly the mechanism I alluded to – voids the “imports are a benefit/exports are a cost” contention?
No. A fact is still a fact even if another action negates it.
It’s like saying “you have to spend before you tax” isn’t true…which taxes pay for spending insinuates.
I am not actually the least surprised that Skwarkbox is peddling this nonsense. It fits perfectly with the overriding quest of the Cobynista fake Left in all spheres (EU arrangements likewise) to find solutions to the country’s ills which on the one hand makes them feel “truly progressive” (easily achieved), yet on the other hand – and more importantly – preserves the capitalist status quo, setting the capitalist class at ease that Labour will in no way disrupt the existing order of things.
This stance lies at the absolute heart of contemporary left-liberalism which sadly dominates the Corbynista so-called Left. These charlatans does not want to touch real change with a bargepole. Heaven forbid they should propose economic planning and a substantial extension of public ownership which would actually shift the ownership of our entire society.
Ultimately all of these snake-oil solutions will come to nothing when the Labour government is blown off course by adverse capital flows and abandons anti-austerity at the behest of those who will continue to own our economy (or at the command of the supranational organisations which they control, as in 1976).
The New Left Review argues that Neo-Liberalism is in a structural crisis in the US.
Perhaps Neo-Liberalism has painted itself into a corner with its drive for CHEAP LABOUR which is restricting commodity purchase and some suggest it is only the unsustainable levels of personal debt (the old credit card) which is just about keeping economies ticking over.
I often wonder if borrowing by Govts is a regular blood transfusion which keeps capitalism going (Govts mean security) so perhaps as socialists we should kick capitalism in the economic bollacks!
Democratic public ownership of banks and land.
A windfall tax on the Big Business legal theives – £1b on each of the top 200 companies to be paid in 7 days failure to comply £2b and no need for borrowing.
State–led public investment which will feed the private sector supply chain.
And of course make the rich pay their tax and end all tax avoidanance and close tax havens.
A financial transaction tax of 1% which will bring in trillions globally instead of the piddling Robin Hood Tax.
As Stevie Wonder and The Beatles sang:
“We can work it out!”
Solidarity!
You Hayekian Thatcherites are all ignoring what AI and clean energy bring to the party.
AI will be able to replace not only the workers but the capitalists themselves.
Without the need to import fossil fuels and with UBI the norm we’re more than halfway to genuine socialism.
The argument for it by then will make itself.
The techie 1% see it – they’re buying land in New Zealand and building bug-out compounds and bunkers because they foresee violent revolution – but we can achieve the transition without killing them.
No innovation without capitalism? Bollocks – the universities provide the brains, capital just hires them.
Choice and distribution needs markets? Foldable phones won’t fail at launch because without the impetus to be first to market testing can be comprehensive.
The touted benefits of capitalism never did exist but fifty years ago it was a relatively easy sell. Now we see their insatiable greed and refusal to pay taxes.
The Euro isn’t working well under capitalism but in any international socialist grouping a universal currency can work perfectly. Translators and communications are improving so fast a world government will become a realistic and IMO very desirable possibility – maybe even a necessity – well within the century.
Capitalism will seem like a quaint historical aberration before your grandchildren’s grandchildren are our age.
A hundred years ago we were virtually serfs and lived in hovels. We live better now than kings lived two centuries ago.
Only a couple of possibilities for the future – wealth inequality continues to increase until we murder them in their beds – or they concede a social society of equals and they get to live as comfortably as the rest of us.
Pretty much my dream but I’m not under any illusion that it stands a bat’s chance in hell unless America is removed from the equation.
The US is subject to the same influences as the rest of us.
Yes, they believe themselves an exception, they have the god delusion in spades and they’re dedicated American Dream believin’, cowboyin’, gun-lovin’ ubercapitalists for now but more see the dream getting out of reach every year – hence Trump.
When the third or fourth tranche of AI redundancies hits – this time doctors, teachers, lawyers, accountants etc. they’re not going to believe employment is coming back and they are going to see that capitalism has failed.
The US, being a tech front-runner, might even flip first and lead the charge. Unbelievable until you think it through, isn’t it?
Doctors, teachers, lawyers and accountants tend to be smarter than coal miners and rust belt victims so another Trumptard bullshitter is unlikely.
Eventually the US, like everyone else, will come to understand that socialism is the only way for their kids to have a future.
———————————————
“No. A fact is still a fact even if another action negates it”
negate definition: 1. to cause something to have no effect: 2. to show something to be wrong or to be the opposite of what was thought, or to cause something to…
Negating a ‘fact’ disproves a theory relying on it, no matter what you’ve read.
Oh and as part of state-led public investment 1m green jobs in areas of industrial decline!
Absolutely. Except that in good old conservative Britain you get people voting against an offshore wind farm on the grounds it’s an eyesore that spoils the view.
Only in Britain?
Skwawkbox Steve,
is there no way to add comments in consecutive order so we don’t have to trawl through a whole thread for new replies?
I think we could all manage to direct replies to individuals with @user’s name. I’d prefer most recent first to save scrolling but others might prefer oldest first.
Or maybe everybody else prefers the site as it is?
Say so if I’m the only one who thinks this format is crazy.
Having scanned through the above comments it is clear to me that very few commentators on MMT understood a word of what was being said.
The first thing anyone should ask themselves is how does money enter the economy in the first place and what are the current constraints?
Constraint: Quite simply, they are the ability of the borrower to pay back the loan.
In today’s terms – if there were no borrowers there would be no economy.
When we talk of government spending, the reality is that a government such as ours, unlike those in Europe, can spend directly into the economy and it really is nonsense for it to borrow its own money.
The capitalst parties ‘tell’ us that we have to raise taxation before we can spend, until of course it suits them to ignore it such as spending on wars.
Talking in terms of budgets makes absolutely no sense for government in a fiat money system, as there is no limit on spending within the the confines of the British economy, the real limits of the economy are the human resources and raw materials available – which would then create inflation.
It should be obvious that the policies the present government are not working as they are cutting public spending to so say balance the budget when inflation is currently almost non existent.
What also should be obvious, is that if our government can issue money as debt, it can also issue it as public spending.
The government could but chooses not to, which is a political choice, spend directly into the economy, should inflation get above set limits, then money could effectively to taken out of the economy by taxation.
And it is as simple and uncomplicated as that.
Taxation and interest rates are the sole means of controlling inflation at present, the difference being that money is issued as debt, benefiting the banking system rather than the people of the country.
We bailed out the banks, when we have a crisis in the NHS suddenly we are broke. People are being conned by corrupt politicians and their apologists who want to keep the situation as it is.
Famous Sir Josiah Stamp Quote
“Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.”
~ Sir Josiah Stamp
(1880-1941) President of the Bank of England in the 1920’s, the second richest man in Britain
Speaking at the Commencement Address of the University of Texas in 1927
Ref: The Legalized Crime of Banking (1958) by Silas W. Adams
It has been an interesting read of the comments here on this thread. It is very clear that for many people there is a considerable amount of confusion about what MMT is and how a modern money system actually works and yet they still feel qualified to comment having relied for the most part on misinformation and press opinion not based on any reality.
The reality is that MMT represents how things work this very minute. It is not an alternative system or something to implement or aspire to in the future. It is simply a description of the workings of the fiat monetary system which has existed since Bretton Woods and the era of fixed exchange rates was abandoned in 1971. It provides a lens through which a currency issuing government can understand the policy choices that are available to it whatever brand of politics it espouses. It is neither left nor right simply a description.
As someone who cares deeply about the challenges we face from climate change to delivering social and economic justice it offers hope for creating a fairer and more equitable world and indeed protecting future generations from the worst effects of climate change. I am not claiming that MMT is a magic bullet but an understanding of it offers the best hope we have for managing change.
Instead of knocking it, disputing its verity or talking in an uninformed manner about it after reading badly written articles in the press and by self styled experts let’s all take the time to learn what MMT really is so we can make an informed judgement. There are plenty of excellent resources on the internet and I can recommend the GIMMS website for anyone who wants find out more – it has FAQS, fact sheets, videos and much more for those wanting to extend their knowledge.
Personally, I don’t fancy our chances if we can’t at least open our minds to the realities of MMT.
Prue Plumridge, we don’t need to be doctors to understand the need for the NHS and every voter doesn’t need to understand MMT – what they do need to know is that the Tories are lying about tax & spend and about the need for austerity.
They need to be told this VERY LOUDLY by the most highly-regarded economists – not politicians, not the guy down the pub and not by commenters on this or any other blog.
Not just one or two economists but all who care about the future of society – I’d hope that means all of them who don’t disagree with MMT.