I know that it’s not what
I know that it's not what they really think but they argue as if they did. Their deeper argument is more subtle and involves the whole banking system including, crucially, the Bank of Exchange which as the state central bank does have the power to "create money out of nothing". They don't really think that a single bank can create money out of nothing, nor that all the banks together could without the involvement of a state central bank.The contradiction in their position comes out in what the supporters of the same idea in Switzerland are arguing: that banks there should still be allowed to lend but only from savings accounts and what they've borrowed from other banks or the central bank. But as a loan would still involve double entry book-keeping it should still, on the PM argument we care discussing here, involve banks creating money from nothing but they don't argue this. In fact, the description of what they think should happen is what happens now except that now banks can also lend money deposited (from outside) in current accounts (which are in effect also loans, from the depositor to the bank).This seems an unecessary restriction on banking lending from a capitalist point of view. In fact, by restricting credit it could slow down business activity and the accumulation of capital which capitalism is all about. Which is one reason why fellow banking reformer Ann Pettifor is opposed to it:https://www.opendemocracy.net/ourkingdom/ann-pettifor/why-i-disagree-with-positive-money-and-martin-wolfShe wants banks to continue to be able to, as she would put it, create money out of thin air (in fact, to continue more or less as they do now subject to more regulation). She also makes the relevant point that the PM theory is derived from Monetarism.