Austerity, monetary theory and campaigning
The Production of Money: How to Break the Power of the Banks, by Ann Pettifor, Verso £12.99
DESPITE THE TENTH ANNIVERSARY of the financial crash, few lessons have been learned. Austerity policy, uncontrolled growth of the secondary banking sector and financial bubbles in many markets make a new crisis certain, says leading radical economist and Labour advisor Ann Pettifor. Speaking about her new book, The Production of Money, subtitled How to Break the Power of Bankers, the leader of the highly influential Jubilee 2000 Coalition that mobilised huge international support for cancellation of poor country debt, explained that she is on a similar mission to expose the truth about money. Once people realise how money is really created the household budget balancing myth will be destroyed.,
Nearly 50 people crowded into a Labour meeting in the small Suffolk town of Leiston (pop. 5,000) recently, to ply her with questions and enthusiastic applause. While the cause of rewriting monetary theory - in the tradition of 18th century banker and speculator John Law to Keynes and the post-Keynesians - may take awhile, the political implications of her message are loud and clear.
If there is a money tree for the bankers and DUP there is one for vital public services. Nationalisation is fine by her. Even Labour’s fiscal stability rule which means spending on nurses or schools will have to be constrained while railways, roads and bridges are seen as more properly productive, came in for a lashing. The radical anti-austerity message is alive and kicking, and Pettifor is one of its most accomplished advocates.
Keynes famously said, “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” Though some of us would argue for a different tradition based on a theory of value and capital accumulation, as well as money, to understand capitalism and crisis, Keynesians of various kinds dominate the anti-austerity policy discussion. Pettifor’s book is central, cogent, accessible and well worth a read.