• Contact
  • About
  • Authors
DONATE
NEWSLETTER SIGN UP
  • Login
Bylines Scotland
  • Home
  • News
  • Politics
  • Lifestyle
  • World
  • Health
  • Environment
  • Opinion
No Result
View All Result
  • Home
  • News
  • Politics
  • Lifestyle
  • World
  • Health
  • Environment
  • Opinion
Bylines Scotland
Home News Scotland Economy

Putting citizens at the centre of Scotland’s economic policies

A call for a new model to derive economic policies. Modern Monetary Theory (MMT) is a practical-based model that looks after the welfare of a nation's citizens

Jim ByrnebyJim Byrne
03-09-2022 08:00
in Economy, Opinion, Scotland
Reading Time: 5 mins
A A
Photo by George Allison. Printed with permission

Photo by George Allison. Printed with permission

677
VIEWS
Share on FacebookShare on Twitter

Individuals without an iota of knowledge confidently put forward economic policies: the need for austerity to pay back Covid ‘debts’, the need to raise interest rates to control inflation, the need to cut tax to encourage growth.

The fact that there is little empirical evidence to back any of these assertions is neither here nor there. In fact, often the empirical evidence points in the opposite direction. Current inflation isn’t caused by too much money chasing too few goods – so reducing borrowing cuts inflation? The causes of current inflation include external shocks and Brexit.

Maybe they are right to be confident in their assertions; it’s what students are being taught in our universities. It’s what I learned during my honours year studying politics and economics as part of my social science degree. And it’s what I believed myself – until recently.

Conversion to a citizen’s economic model

Over the last year I’ve experienced a conversion. I’ve got to the point where everything I read or hear from politicians or media commentators about how the UK economy works, and how to fix it – sounds to me like patent bull.

Admittedly, I’m not an economist; I’m an interested individual with education in orthodox economic models but with a ferocious desire to find out how we – specifically Scotland – can move forward in a way that puts citizens at the heart of our economic policies. How do our economic policies serve the needs of our citizens rather than the needs of arbitrary targets such as interest rate levels, deficits, ‘debt’ and control of the money supply? Our current economic models aren’t working.

But, I hear you say, if you are not an economist, how do you know they are not working?

Children in poverty; a planet being destroyed; widening inequality; political populism; a cost-of-living crisis, an erosion of human rights; everything that moves, or doesn’t move, regarded as an asset. Assets designed to generate profits: public transport, energy, health, water, land, homes, even care homes.

Tinkering with models that don’t reflect reality

And we have a level of hopelessness among not just those at the bottom of the heap, but those who regard themselves as left-leaning progressives. Many seem rudderless in their response; they can’t seem to see beyond the pervading orthodoxies; they suggest we tinker with the model – not replace it with something else. And sadly, it’s been like that since the latter half of the 19th century.

Neo-liberal economics. It has an attractive logic and simplicity; you pull one lever, and this happens; pull another lever, the economy settles back into equilibrium. You can even use mathematics; graphs can be drawn, and assertions made. Put numbers in here – and we predict that this happens. But it doesn’t.

Economies are too complex for such simple models. And the assumptions the models are based on have changed radically since the model itself was posited. Even back then, the model wasn’t a reflection of reality.

Glasgow. Arden. Housing estate. Kyleakin Road. 10 January 2016.
Business

Affordable housing crisis may have a long-term detrimental effect on the Scottish economy

byCharlie McCarthy
1 August 2022

Modern monetary theory aims to explain how the economy really works

So how about this for an idea? Figure out how the economy works by looking at what it is doing – in practice. But who knows how it works in practice? Not orthodox neo-liberal economists. Perhaps ask people with experience in trying to manage it – or experience of trying to make money from it? People like Mark Carney who ran the Bank of England (BoE), he has an inkling of how it works. And former hedge fund manager, academic and economist Warren Mosler also has an inkling of how it works. It was Warren’s experience that led him to bring together the ideas that became – a new model to derive policies from – a model called modern monetary theory (MMT).

I’m not able to say that MMT accurately describes how the economy works or that it is the right way to think about the economy; but what I can say is that it tries to understand the real economy – not a theoretical one. And importantly, it is based on a different set of assumptions about what economic policies are for. They are not for controlling arbitrary figures related to interest rates, deficits, or debts. They are about looking after the welfare of a nation’s citizens. Whether I am right or wrong, that’s an aim I find attractive for an independent Scotland.

It’s time we all learned about economics. I recommend the following.

The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy by Stephanie Kelton [2021, John Murray press, ISBN 9781529352566]

Soft Currency Economics II (MMT – Modern Monetary Theory Book 1) by Warren Mosler [2013, CreateSpace Independent Publishing Platform, ISBN 13: 9781482735437]

Value(s): Building a Better World for All by Mark Carney [2021, HarperCollins Publishers
ISBN: 9780008421090]

Scotonomics Podcast run by Kairin Van Sweeden and William Thomson [https://thehub.scot/+Scotonomics]


Mockup of gazette cover

Our monthly gazette is now available free to all newsletter subscribers

    Sign up! 
Tags: MMTScotland
Previous Post

Maria Chamberlain’s incredibly personal Holocaust family memoir is a must-read

Next Post

But where are you from really?

Jim Byrne

Jim Byrne

Jim Byrne runs an award-winning web design and accessibility auditing business. Jim is also a musician and songwriter. With his wife Pat Byrne he runs Jim & Pat's Glasgow West End Chat podcast.

Related Posts

Scotland with the potential to be a plant-based society
Opinion

Scotland the Kind

byGill Bird
2 December 2023
Police Scotland in front of former Primer Minister of Scotland
Opinion

The public has lost patience with Police Scotland and Operation Branchform

byMartin Roche
29 November 2023
David Cameron and scales justice representing his return to the UK Government
Opinion

Play the ball, not the man

byPeter Cook
27 November 2023
Ceasefire peaceful march in Armistice Day 2023
News

Peace march on Armistice Day 2023 in Edinburgh

byRobin Tudge
12 November 2023
Illustration of a tax return mountain with a man ready to climb it
Opinion

Can I claim that back?

byMartin Roche
4 November 2023
Next Post
Old photo of mums

But where are you from really?

PLEASE SUPPORT OUR CROWDFUNDER

Subscribe to our newsletters
CHOOSE YOUR NEWS
Follow us on social media
CHOOSE YOUR PLATFORMS
Download our app
ALL OF BYLINES IN ONE PLACE
Subscribe to our gazette
CONTRIBUTE TO OUR SUSTAINABILITY
Make a monthly or one-off donation
DONATE NOW
Help us with our hosting costs
SIGN UP TO SITEGROUND
We are always looking for citizen journalists
WRITE FOR US
Volunteer as an editor, in a technical role, or on social media
VOLUNTEER FOR US
Something else?
GET IN TOUCH
Previous slide
Next slide

LATEST

Standing legs with vote symbols representing the responsibility of choosing a leader

We must take responsibility for choosing our leaders

11 December 2023
Portrait of Jackie Porter

Jackie of the Special Operations Executive

10 December 2023
Dover, United Kingdom. Prime Minister Rishi Sunak visits a Border Force cutter boat in the Dover Strait. Picture by Simon Dawson / No 10 Downing Street

Stop the boats! The draconian Rwanda plan

9 December 2023
Education system represented by a child in a school blackboard

PISA evidence suggests Scottish approach to curriculum is less effective than England’s

8 December 2023

MOST READ

Behaviour modification represented by a brain in a light bulb with books in the background

Scottish Greens vote to ban ‘Behaviour Modification’ practices for disabled people

4 December 2023
Ravenglass in Cumbria

Supporting the bereaved – what not to say

2 December 2023
Police Scotland in front of former Primer Minister of Scotland

The public has lost patience with Police Scotland and Operation Branchform

29 November 2023
Education system represented by a child in a school blackboard

PISA evidence suggests Scottish approach to curriculum is less effective than England’s

8 December 2023

BROWSE BY TAGS

Afghanistan Charity Christmas Climate Change Covid19 Defence Devolution Edinburgh Election EU European Movement Ferry Fish Farms Glasgow Halloween History Holyrood IndyRef2 Labour LGBT+ LizTruss MargaretThatcher Monarchy music NATO NHS Poverty PressRelease ProEU PublicHealth Russia SarsCoV2 Scotland ScottishIndependence SecurityAndDefence Shape of Things to Come ShipBuilding SNP Tories Twitter Ukraine UKSupremeCourt Universal Basic Income Vaccines WarInUkraine
Bylines Scotland

We are a not-for-profit citizen journalism publication. Our aim is to publish well-written, fact-based articles and opinion pieces on subjects that are of interest to people in Scotland and beyond.

Bylines Scotland is a trading brand of Bylines Network Limited, which is a partner organisation to Byline Times.

Learn more about us

No Result
View All Result
  • About
  • Authors
  • Complaints
  • Contact
  • Donate
  • Privacy
  • Network Map
  • Network RSS Feeds
  • Submission Guidelines

© 2023 Bylines Scotland. Powerful Citizen Journalism

No Result
View All Result
  • Home
  • News
    • Scotland
    • World
  • Politics
    • Council Areas
    • Europe
    • Holyrood
    • Rest of UK
    • Westminster
  • Lifestyle
    • Arts & Entertainment
    • Christmas
    • Culture
    • Foodie Friday Recipes
    • Halloween
    • History
    • In memoriam
    • Literature
    • Out & About
  • Business
    • Trade
    • Transport
  • Health
  • Environment
  • Opinion
  • Donate
  • Newsletter sign up
CROWDFUNDER

© 2023 Bylines Scotland. Powerful Citizen Journalism

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In