This afternoon (11 March), PRIME’s director Ann Pettifor is speaking at the Labour Party’s ‘The Future of the Scottish Economy’ Conference in Glasgow – the latest in the party’s series of regional economic conferences.
Ann’s speech today focuses once again on the issue of why austerity is not the answer. This raises touched on in her latest book, “the Production of Money“, but the main lines of her argument were set out nearly two years ago (7 April 2015) in a blog article, “Is there no such thing as public money, only taxpayers money, as PM asserts? Was £375bn of QE raised from taxpayers?”. These arguments, as updated, still form the basic “speech-notes” for today.
That article began:
At the heart of the politically inept responses to the 2007-9 Great Recession is an ideologically-driven and mendacious conviction: that while society can afford to bail out a systemically broken banking system, Trident and the HS2 railway extension, it cannot afford to finance the NHS, higher education, skilled apprenticeships, an expansion of broadband and the arts.
The “there is no money’ mantra suggests that governments and their central banks do not have the powers to address economic failure, youth unemployment, energy insecurity, climate change, poverty and disease. The only money available for these activities, allege some politicians, is taxpayers’ money. These same politicians do not explain how first £375bn was found to bail out the banks; and then an additional £55bn was raised (‘out of thin air’) by the Bank of England to subsidise banks through the government-initiated Funding for Lending scheme.
We disagree with the ‘there is no money’ mantra. Within a sound financial and monetary system, there need never be a shortage of money to meet society’s needs. There may be limited resources, and limited brainpower but there need never be a shortage of money.
Alas, the decline and fall of David Cameron and George Osborne has not led to any material change in the repetition of the Conservatives’ (but not only the Conservatives’) false mantra. Theresa May and Philip Hammond and almost all of the media continue to parrot the tired and false austerity clichés as if they were true, so we need to return time and again to explain why these are indeed untrue…
So for ease of reference, here is the link to her 2015 article on “public money”.