The application of Modern Monetary Theory to provide freedom from Want and Idleness through bringing the required degree of urgency to tackling the Climate Emergency

I regularly re-read Full Employment in a Free Society written by William Beveridge during the Second World War.  Beveridge’s contention was that a government should ensure that there is sufficient total outlay (consumption) in the economy to provide full employment where full employment refers to freedom from both Want (material needs not being met) and Idleness (psychological needs not being met).  In this short paper I attempt to synthesise his ideas with those of Modern Monetary Theory to provide a blueprint for a post- Neo Liberal world in which the government generates full employment by addressing the crisis facing the human race due man-made global warming.

BACKGROUND

1. Consumption is the sole end and purpose of all production
2. All members of the community shall be free from Want; that is they should have an income sufficient for a healthy subsistence – adequate, food, shelter, clothing and warmth along with opportunities for leisure and personal growth
3. Idleness is not the same as Want, but a separate evil, which men[sic] do not escape by having an income
4. For those who are capable, employment provides the means by which production is achieved which in turn supports consumption including consumption which ensures freedom from Want; employment also provides freedom from Idleness
5. Money serves as a medium of exchange, as a store of value, and as a unit of account.
6. As productivity increases the volume of production required to deliver the consumption necessary to provide freedom from Want no longer provides sufficient employment to prevent Idleness
7. As productivity and idleness increases labour’s share of GDP decreases leading to an accumulation of wealth by asset owners (money as a store of value) and increased income inequality
8. A government that issues its own money can pay for goods, services, and financial assets without a need to collect money in the form of taxes or debt issuance in advance of such purchases.
9. A government that issues its own money is only limited in its money creation and purchases by inflation, which accelerates once the real resources (labor, capital and natural resources) of the economy are utilized at full employment;  this demand-pull inflation can be controlled by taxation and bond issuance, which remove excess money from circulation
10. The emphasis since the 1970’s on shareholder primacy has led to a culture which prizes short term financial results and production over consumption and drives companies to sabotage customers, employees and the community
11. To avoid catastrophe countries must drive to zero (or negative) carbon emissions as quickly as possible (10 – 20 years and not 30 – 40 years) and must make immediate progress not back end targets
12. The technology solutions required to drive to zero or negative carbon emissions are known but not economic in the short run

THEREFORE

1. A primary responsibility of government shall be to ensure that all members of the community are free from both Want and Idleness (full employment)
2. For those able to work employment shall be the primary way to ensure freedom from Want and Idleness
3. When the employment required to ensure freedom from Want is not sufficient to ensure freedom from Idleness, the government shall generate additional consumption of products and services that provide benefit to the whole community sufficient to ensure freedom from Want and Idleness 
4. The government shall issue its own money to fund the consumption required to ensure freedom from Want and Idleness
5. The government shall use taxation and the issuing of bonds to prevent demand-pull inflation resulting from excess money circulating after the real resources of the economy are fully employed
6. The government shall ensure that the consumption it funds through the issue of its own money shall be purposeful leading to a) freedom from Idleness, b) an increase in labour share of GDP and c) a reduction in income inequality; the consumption funded by the government shall include the provision of lifelong education, health and social care 
7. The government shall use taxation and robust legislation to ensure that shareholders and executives are not incentivised to maximise profits at the expense of consumers or the community at large
8. The government shall use the reversal of the growth of carbon and other greenhouse gases in the atmosphere to provide the consumption required to provide freedom from Want and Idleness; directly, through subsidies or by funding the learning necessary to allow alternative zero carbon technologies to displace existing carbon emitting technologies

Author: David Madigan

A fifty something engineer, husband and father who probably thinks to much about politics and doesn't understand why politicians don't approach the issues of the day the way that I would. View all posts by David Madigan