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I do not agree with this. As a political economist, the claim makes almost no sense to me.

Putting your trousers on one leg at a time makes no sense to the Super’Tater either.

The psychology of asset-backed money is that money is in scarce supply, and for the state to use it then it denies a resource to the private sector, thereby potentially constraining beneficial activity in that sector, with the substitution of state activity in its place.

If you simply removed “money” from that and substituited “resources” then of course it would be true. There would also be no MMT either…..

4 thoughts on “Well, yes”

  1. That is why I pay so much attention to the details within MMT and money more broadly. But, at the end of the day those technicalities, which all eventually come down to the nature of double-entry bookkeeping because that is the only way in which money is really recognised to exist, are irrelevant if the understanding of those entries is wrong, and this is what matters.

    Presented without any hint of irony..

  2. Dear Mr Worstall

    “Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich. […]

    “But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut.” […]

    “So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and…er, burn down all the forests. I think you’ll all agree that’s a sensible move under the circumstances.”

    ― Douglas Adams, The Ultimate Hitchhiker’s Guide to the Galaxy

    Brings new meaning to Magic Money Tree.

    DP with spelling correction.

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