He backs Modern Monetary Theory.1 I do not. He is a Quaker. I am not. Nevertheless, I’ve a soft spot for economist Richard Murphy.
(I give my reasons in a short intro to his February post on risible accounting in a LSE report saying Scottish Independence cannot work.)
Today I catched Mr Murphy warming up to a post on Covid-19 with this:
It’s indisputable that we have lived in a society that has for centuries seen a fight between the owners of capital and those who provide their labour to make a living.
This is not a Marxist observation. It’s a statement of fact which Marx also observed. Those who can make financial returns to create an income have always competed with those who must work to share the spoils of what is produced by effort to meet our needs and wants.
The way capital extracts that reward from production varies. Rents, interest, dividends, excess pay, royalties, corruption, tax abuse and more are used to extract a return not matched by effort. But what cannot be denied is that this happens.
What is also undeniable are three things. The first is that society has tolerated this, partly because the owners of these rights have had significant influence over successive governments.
The second is that a successful narrative has been woven around the ownership of capital that suggests those fortunate enough to be possessed of it are ‘worth it’. Just watch ‘The Pursuit of Love’ on the BBC tonight for current evidence of that.
Third, control of the media by capital2 has led to those who work for a livelihood being, broadly speaking, satisfied by this arrangement. An income, the suggestion that with effort they could get more, and the promotion of well-being through consumption has achieved this.
And so the status quo has been maintained. The post-war consensus challenged it, but it remained intact, as the last forty years have shown. There is reason for that. What has kept it going has been the silent partner in the tripartite economic arrangement we live in.
That silent partner has been nature. Those who have studied economics will know that it refers to the ‘free gifts of nature’. The world is assumed by conventional economics – which is what we still have – to impose no cost and to require no return.
The result has been obvious to see. The rewards to economic activity have gone [not?] to labour, but in increasing part to capital, with not a care about nature. And the cost has been enormous. The environmental degradation of our planet is obvious.
- It’s my understanding, which I don’t pretend to be comprehensive, that MMT is at odds with the notion of money, even in fiat currencies, being rooted in and ultimately answerable to objective value. A Marxist critique of MMT is set out in this useful document by Michael Roberts. That said, it is my understanding that some wings of MMT – this for instance – say Mr Murphy is, if not a flat out heretic, not fully onboard with its tenets.
- “Control of the media by capital” is of course a recurring theme on this site. See my recent post, Britain decides.