3 Mar 2013

The Positive Money System - in plain English

The Positive Money people have just released a short (28 page) document that you can download here, called "The Positive Money System - in Plain English".

Please - Read it! They have made a real attempt to get rid of the technicalities, and explain their proposals in understandable English. And if you want the details, you will find them in the 330 page book "Modernising Money : Why our monetary system is broken and how it can be fixed". I was pleased to see that you get the book in a Kindle edition too, although unfortunately this option is only available for UK customers.

For me, the propositions made by Positive Money make perfect sense. But I won't try and summarize them myself, because they have done that so well in their Plain English version.

But I am aware that there are some Monetary reformists who are convinced that there is something fundamentally flawed in the proposals - in particular, some of the people in the Modern Monetary Theory movement.  Despite repeated attempts, I've not been able to see what the problem is with the Postive Money proposition - at least when applied in the UK system.  I can understand that the situation in the USA is somewhat different, because the Federal Reserve is not a nationalised Bank like the Bank of England - it is literally a consortium of private banks. This may complexify the analysis. But, for the UK, what's the problem?

If there are any MMT proponents reading this who think there are problems with Positive Money's approach, could you please leave comments here so that we can have an open discussion? For me, one of the real problems is that there are quite a few different people who know that there is a real need for monetary reform, but unfortunately, they can't agree on a clearly defined approach to fix the problem. For me, that is the beauty of the Positive Money proposal - it is extremely concrete. And the Modernising Money book goes into a very full analysis of precisely what would have to happen to fix the system.

But I would ask any critics to first read the 28 pages of the Plain English text, or preferably read the full book. I don't want to have to explain the details of something which is already out there.

On the other hand, if there really are problems, let's hear about them.

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