Crusoe is getting excellent advice from Friday, I plan on integrating it all, thank you.
“Friday
This is all very good. I can’t really find anything in these last four chapters worth quibbling with.
I did spot one typo here: eveident
I do think inflation needs more discussion, some people really care about it. You say both systems are not inflationary. I’m not convinced that is always true, but if it is where does inflation come from? And how can it be prevented or stopped?
I have revisited Chapter 1. I think it most important to eliminate commodity money entirely. It is not necessary for establishing a unit of account. Commodity money thinking is the source of the “inherited beliefs” you wish to dispel so why allow it a foot in the door.
“Promises to pay” is better than “promissory notes” but I think “IOUs” is better still. You should introduce them at the point you introduce commodity money, instead of it, which then allows ledgers to naturally develop as a record of who is owed what rather than appear as if by magic.
And I don’t think you’ve made it sufficiently explicit that the bank, er–the Farmers Group, is issuing IOUs (ie. money) based entirely on its good name (ie. nothing) rather than on its stock of barley or IOUs that have been lodged with it. This is another thing that commodity money thinking has trouble understanding.
You want to do this by showing a balance sheet. Tricky without having a whole (boring) Introduction to Accounting section. I think you need a lot more text describing how it actually works (taking deposits enables ex nihilo lending through the magic of accounting). And you want your readers to realise that you are talking about banks without actually saying so. A tall order, I know.”
Friday – thanks! I was just looking at trying to change the commodity money bit – just takes time to get to everything. I love the work of Graeber and Hudson, and want it to be reflected properly.
On inflation – you might have noticed I did an “internet only” section (Ch 5)? I also have a whole section written but that I cut on inflation. I felt it was too obvious for the readers I am aiming at (breadfruit trees with the crop ruined by a cyclone, that type of thing. That actually happened to me in Fiji lol!), but might still use it. I am still reading your comment and will get back to you, thanks again.
Clint Ballinger 
Hi there – I’m sorry I never responded to your question on Richard Murphy’s blog, and now comments have closed and he has moved on. In case it’s not abundantly clear, I’m not an economist or an academic. I’m a novelist and a journalist – I write for the London Review of Books – and what I understand of economics has been picked up as I’ve gone along, usually in response to a particular real-world situation. I’m interested in MMT because it seems to offer both an analysis of the way a modern ‘developed’ economy works, and a prescription for it to work better. Also because it sounds too good to be true (although that doesn’t mean it isn’t true.) But also in the sense that those who promote it suffer from the same two weaknesses as the paradigms they seek to replace (I say weaknesses in the sense that I don’t understand the justification, which may turn out to be my ignorance-based weakness, rather than weaknesses in MMT). One weakness is that economic theory seems to treat national economies as fungible – here is the American economy, it starts in America and stops where America ends; here is the British economy, it starts in Britain and stops where Britain ends, and so on. And that it is possible to make sweeping economic pronouncements about one as if it is true of another. I can see why in some areas that might be fine, but not so in others. The meaning of ‘an economy working at full capacity’, for instance, must be different according to which national economy you’re talking about. The bigger and more broadly-based an economy, the more it makes obvious sense to talk about a direct link between the economy working at full capacity and the comparative global success of that economy. But when you have an economy which is smaller, more asymmetrical, more dependent on, say, external know how, foreign control and imports – as Britain’s is – surely there is a risk of a drive for ‘full capacity’ leaking out, in terms of demand for goods and capital, into the global economy? Is there a ‘British economy’ as such, distinct from the world economy? I did feel it was a bit glib of Richard to respond to this concern – the risk of sterling becoming a flabby currency, the risk that when sterling calls for pizza, they don’t bring it – by upping the ante: well we won’t just convince the British to go for MMT, we’ll convince the world! And we’ll convince them with the climate emergency gun held to their heads!
The other weakness, and for goodness sake explain to me why I’m wrong, is that discursively
MMT seems, like the older economic frameworks it seeks to dislodge, to ignore the way the world has changed since Adam Smith, Marx and even Keynes – changed because of the fantastic success of social democracy, a success which the left seems as reluctant to acknowledge as the right, in establishing what I call universal networks of services for national populations. Universal networks being services that society has come to expect everyone will have access to regardless of ability to pay individually – water and sewage, energy, education, pensions, telecommunications, in some countries public transport, health care and housing. These have all been established in addition to the original universal networks of security and justice. The existence of the universal networks is proof of what a modern society can do when it pools its resources under some form of state direction, often with a great deal of non-state participation. To talk about economics without making the distinction between universal networks and other forms of economic activity seems very peculiar to me, and yet that is what happens: the right as if the networks just came about by themselves, naturally out of the market, and have now become a horrible burden on taxpayers, the left as if their establishment never really happened because it was never perfect and capitalism persists.
I agree with Richard that economics needs to think globally, but for me, to demand every country adopts an MMT outlook and its own Green New Deal ignores the fact that many countries never had much of a deal in the first place. Why is it called the Green New Deal? Because it wants to borrow the glow of the American New Deal of the early twentieth century: useful public works programmes to invest in the communal economy and create jobs. But ‘creating jobs’ is a 1930s baseline. If you really want a new deal for the world in the 21st century, it’s got to be climate-positive, sure, but it’s also got to be about universal networks for everyone. So there you are, I upped the ante myself.
Your book looks interesting.
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