I hope everyone is getting ready for austerity mark II - the revenge of the billionaires…
Can anyone else reading this article, plus the sometimes fractious comment conversation between Richard and others which follows, make anything of this incomprehensible rigmarole in which they speak? There’s no wonder that so many people suspect that economics as an alleged intellectual discipline has no serious connection to the actual real world. More of a - highly-indulgent - mediaeval argument between schoolmen about angels and pins; and about as comprehensible and useful.
There really ought to be some sort of genuine discipline which addresses the economies of states, couched in commonsense everyday language. But it doesn’t seem to be around at the moment. With all the peculiar fashions in ‘economics’ which come and go, it seems more of a models’ catwalk displaying absurd creations of pretentious game-players, rather than an actually-useful endeavour. And this weird game is supposed to govern practical policies for statespeople? Really?
How about the idea that no-one, at all, really has any idea about how large-scale economics actually works? After decades of wading through this sort of gobbledegook, I certainly haven’t.
I’d like to make some simple plain-language suggestions on this:
First: vast wealth of any kind, above a modest established maximum level, is unacceptable, and should be widely nailed as illegal, and sufficient ground for prosecuting those who amass such wealth heaps, taking away their excess wealth, and obliging them to do community service work for a period, to expiate their crimes, with continued monitoring thereafter, to make sure they don’t get up to the same tricks again. This principle to include both individual people, families, and corporate entities of all kinds: No excessive wealth allowed anywhere, on any excuse.
Second, a crucial provision: if you want to live in a state, and get the advantages of stable order and basic, essential public services provision which that state offers, then you must accept the non-negotiable obligation to help pay for them, strictly equitably; taxes paid being:
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a) Unwaveringly according to personal/corporate wealth: the richer pay more, the poorer less, the very poor none at all till raised from poverty - with all the acres of swindling get-outs swept away comprehensively. Rich gits who attempt to stash their illegal wealth-heaps in off-shore funk-holes being subject to arrest and enforced community service in return for just simple basic living needs allowed, until they disgorge, however long it takes; their sentence period being up to them.
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And b) subject to the rule that above a modest top limit, taxation goes to a hundred percent. No excessive wealth-pools allowed, to anyone.
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And c) the principle that governments’ ONLY legitimate function is to serve the interests of ALL the citizens, EQUALLY, without factionalism being permissible at all.
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And d) all tax-payers have the basic, constitutional right to choose from a list of recipients who may benefit from their money; and a second list of all those who may not; like excessive militarism, or monarchies, for a couple of vexed examples.
Finally: a basic constitutional principle that governments should be chosen according to the strictest democratic principles, operating both at election times, and at all the times between, of the kind which Britain, for example, hasn’t seen in action for at least several thousand years, if ever. The sort of execrable pissmire fake which passes for democracy here right now being rightly seen as the vile con that it is, aggregated piecemeal over time specifically to give the false illusion of at least tolerable democracy, whilst assuring that the real thing is prevented at all costs from happening, ever.
Naturally, these “obviously impossible” conditions can only happen after the victorious conclusion of a comprehensive class-war, in which the commons abolish the ruling ‘elites’ once and for all, recover to the public purse all the pleb-created wealth which the ‘elite’ criminals have stolen, and work continuously thereafter to make sure that ‘elites’ never have a chance to reconstitute themselves, as they always do when permitted.
As I said: all of the above is obviously impossible… until some national population somewhere insists. Then, we may see…
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If I voted at all, this would get my backing.
Economics, as a ‘science’, really is dismal. Also a very ruthless discipline with sharp elbows or the Right Parents essential to advancement. See for example Jonathan Portes. (Who had both.)
My take is that the arguments are as vicious as they are because the factions all realise how little substance there is to any of it. Only shrill and aggressive counterattacks will scare away the equally flimsy opposing forces. Marx was not too far off as a historian. The rest is largely shadow play.
The dominant metaphorical framework, remember, has as its founding assumption an Invisible Hand 
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All excellent thoughts there RG - pretty common sense.
It is incomprehensible rigamarole. on purpose I think. As far as I understand it, the gist of the article is that, as in 2010 onwards, Rishi is getting ready to say that as a result of the Covid crisis, the UK is in some kind of monetary crisis and this means we will need to cut back on public spending. Particularly for things like NHS pay rises etc. There is just no money left in the kitty because we are somehow in huge debt and close to running out of money.
Ergo time to dust off the austerity manuals and have another go with privatising everything they can.
Richard Murphy is pointing out that this argument is a nonsense, pure and simple. He thinks that this idea that money is running out and we have to be careful how the Government spends, is a lie.
The traditional view is that a Govt has to raise money through taxes to fund public spending, and that public works programmes will lead to higher taxes. This has not been true in principle since we ditched the gold standard 50 odd years ago, and has not been true in practice since 2009. Money these days is a purely digital construct. The way things work now is that the Govt simply directs the Bank of England to create whatever money is needed for any public works effort, and - lo and behold! - there is it. In principle the Govt owes that money back to the Band of England, but in practice that is the same thing as owing money to itself, so it’s really an accounting device.
Taxes, these days, are used only to claw back some of the money currently in circulation, to keep some kind of dynamic balance of how much money is “out there” floating around. This is one primary way that the Govt keeps some kind of control of inflation. As Richard says in an excellent thread that discuses all this in detail:
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- Third, spend comes before tax, always.
- Fourth, the government always spends its money, and not taxpayers’.
- Fifth, tax does not fund government spending. Tax is instead used to control inflation, redistribute income and reorganise the economy, but never to fund spending, and that’s true in any country with its own central bank and currency and that never use another country’s currency.
I’ll post the full thread in another post - it’s worth a read. (Here it is)
So worrying about a potential increase in interest rates and what that might mean for the current debt crisis (as Rishi says in the FT) is essentially a steaming pile of BS designed to fool people into supporting more austerity measures and the upward flow of capital from the lower classes to the top 0.001% as usual.
The primary arguments against RM in the blog comments are that he is wrong to think that the Govt can continue to create money at will without risking inflation. To be honest I think there is something to think about there, but I don’t think that the contras are very convincing. Inflation is really a measure of how much money is floating around the system. This has been previously controlled by interest rates, but these days it is controlled also by taxes removing money from the system. Actually, in the technical weeds, RM is arguing strongly that given the direct control over money, tax and interest rates, Rishi pretending to be a victim of the markets is nothing but political theatre.
Anyway. That’s what I get from it. Rishi is using fake arguments about a nonexistent monetary crisis to roll out another round of austerity and privatisation (including no doubt of the actual NHS).
Cheers
PP
Comes a bit clearer from your exegesis, P. Thanks! Still grappling confusedly with a lot of the assertions, though. No idea which are right, which not. It never strikes me as a lucid art, always these fog-inducing ideas which I can’t grasp easily. Keep trying, I guess. 
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