I’m about halfway through reading “Just Money” by Ann Pettifor at the moment. It’s only a short book, but it covers a lot of ground in terms of what money is, where it comes from, how it is being used now, and how it could be used to better achieve some of the progressive human goals we all want to see. Early on in the book, Ann explains the potential implications of the monetary system that has been developed over the centuries. She provides a pretty good description of what our monetary system could or should be used for (building a ‘just and productive economy’) rather than what it is currently being used for (largely financing speculative asset bubbles):
“Monetary systems are one of human society’s greatest achievements. The creation of money by a well-developed monetary and banking system was a great civilizational advance. As a result there need never be a shortage of finance for private enterprise or the public good. There need never be a shortage of money to invest in and create economic activity and full employment. There need never be insufficient money to tackle energy insecurity and climate change. There need never be a shortage of money to solve the great scourges of humanity: poverty, disease and inequality, to ensure humanity’s prosperity and wellbeing; and the ecosystem’s stability.
The real shortages we face are first, humanity’s capacity: the limits of our individual, social and collective corruptibility, integrity, imagination, intelligence, organisation and muscle. Second, the physical limits of the ecosystem. These are real limitations. However, the social relationships which create money, and sustain trust, need not be in short supply in a well regulated and managed monetary system.
Within a sound monetary system we can afford what we can do. Money enables us to do what we can do within our limited natural and human resources.”
The last point there is a key one – we can afford to do what we can do (within the limits of natural and human resources). Money is not a resource that is scarce like oil or coal. You or I can run out of money, but the economy as a whole cannot. This is why the infamous Liam Byrne note saying “there’s no money left” was so imbecilic. In a properly-managed system, there would always be enough money to ensure what we can do is done.