Richard Murphy on Neoliberalism

I have my differences, not least on the nature and causes of the Ukraine war, with Richard – tax specialist, MMT (modern monetary theory) champion, Quaker, birdwatcher, former professor at a Sheffield University I too once taught at, denizen of the lovely city of Ely, and much besides – but he’s far and away MMT’s best advocate. ¹

He’s won me over, formerly hostile on the fallacious ground that MMT goes against the labour underpinnings of (exchange) value when it is neutral on the subject. ² I see it and Richard’s daily posts as the crispest answer to the neoliberal falsehood, akin to the once self evident ‘truth’ of the sun orbiting the earth, that money stands alongside nature’s bounty and the human labour required to retrieve and convert it to use-values as a necessary, finite and naturally determined input to wealth creation. In reality, money in the form of a fiat currency acts as an enabler for labour and plant. It is impossible for the government issuer of such a currency to run out of money the way a local government, business firm or household can. One corollary being that sovereign governments do not have to raise tax revenues (or borrow from Markets they reify) in order to spend. Rather, they spend by creating the money to do so as streams of noughts on treasury computer screens.

Inflationary consequences? That’s where tax comes in, or should do, to withdraw money from circulation once an economy is running at full capacity and in danger of overheating. That this does not happen is due not to any finity of money supply, but to political choice. ³

Of late Richard has taken to producing infographics on core economic themes. I’ll post past examples in due course. Meanwhile, here’s today’s.

Infographic: Neoliberalism

While the final bullet of frame 1 raised my eyebrows – neoliberalism, born to and inseparable from the age of monopoly capital, only pretends to favour competition – Richard, responding to a comment to that effect, correctly notes that “I have to acknowledge the theory”. In reply to his reply – a rare intervention on my part – I liken neoliberalism’s lip service to competition to the US empire’s lip service to freedom.

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1. Richard now rarely refers explicitly to MMT on the ground, if I understand him correctly, that the term, now generating more heat than light, has outlived its usefulness.
2. The confusion arises in a textbook conflation of map with terrain. Money represents value but is not in itself value. Even the Marxist Left gets fooled by this, and I once had a published Marxist author deride MMT in terms normally used by the most vulgar sector of mainstream comment – “magic money tree”.
3. Here too I disagree with MMT advocates (as opposed to MMT itself) who often strike me as naive. Take Stephanie Kelton, leading light and author of The Deficit Myth, in which she speaks repeatedly of how awareness of MMT would allow governments to deploy economic resources, labour included, at full capacity. In this she shows no awareness of (a) governments having long ago been appropriated by corporate oligarchy and (b) the more fundamental truth that the capitalism she never challenges needs unemployment for its disciplinary effect on wage labour. To his credit Richard Murphy has shown, over the six years I have been aware of him, growing acknowledgement of such realities.