Reply To: MMT: New Theory, Old Illusion
Roberts well brings out the point that, while the governments can create (whether indirectly via the central bank or directly via the printing press) as much money as they want, they cannot control the purchasing power of that money. If they issue more than the capitalist economy needs for its activities, then it will depreciate:
The MMT and Chartalists propose that private-sector investment be replaced or added to by government investment ‘paid for’ by the ‘creation of money out of thin air’. But this money will lose its value if it does not bear any relation to value created by the productive sectors of the capitalist economy, which determine the SNLT and still dominate the economy. Instead, the result will be rising prices and/or falling profitability that will eventually choke off production in the private sector.
But then he goes and spoils it by talking about a Marxist monetary/financial policy:
Unless the MMT proponents are then prepared to move to a Marxist policy conclusion – namely, the appropriation of the finance sector and the ‘commanding heights’ of the productive sector through public ownership and a plan of production, thus curbing or ending the law of value in the economy – the policy of government spending through unlimited money creation will fail.
Oh dear. Another MMT — Marxist Monetary Policy!
Roberts is in favour of “public service banking”. Asked what it meant, he gave the example of China.
A proper banking service should take our deposits, look after our savings and offer loans to households and small businesses for big ticket items at reasonable interest rates (….) As for investment, take the role of China’s state banking system. Whatever we might say about the autocratic, one party dictatorship in China, its state-owned banks provide credit to support a national investment programme that has transformed China’s infrastructure.
He is also co-author of a pamphlet, It’s Time to Take Over the Banks published by the Fire Brigades Union, advocating the nationalisation of the banks. But that’s no more useful to the working class than MMT.
It gets worse. Just noticed that the same issue of the Weekly Worker also carries an article on “Working Class Trade Policy”:
https://www.weeklyworker.co.uk/worker/1232/working-class-trade-policy/
What next.
