Let There Be Money:
"Let There Be Money: Understanding Modern Monetary Theory and Basic Income", Scott Santens
Scott Santens has a great gift of making a succinct convincing presentation, which he does in this booklet with great effect. His opening emphasis is on MMT and taxation, then on UBI. He correctly points out that huge amounts of money were created out of nothing to fund income support in response to the Covid pandemic (p1). It’s the capacity of the economy to produce which determines income potential (p65). He explains the MMT view that governments create money to fund their expenditure and apply taxation to avoid inflation, rather than raising taxes to fund expenditures. He also correctly focuses on the real economy, writing ‘Money isn’t real. People are. Resources are. Money is an invention’ (p31). This all echoes Keynes’s famous saying that ‘anything we can actually do, we can afford’.
He shows convincingly why UBI is superior to the job guarantee proposals of the MMT school (p38 ff). Crucially, he identifies technology and automation as the cause of job and income loss, requiring UBI rather than a job guarantee (p48 ff). MMT funding UBI is superior to QE (p61). Targeted welfare benefits are inadequate (p62,64).
Santens communicates with pithy assertions. These are at times left unjustified. Research confirming his assertions is available elsewhere, and could usefully have been referenced. Whilst he critiques MMT for its JG proposals and its hostility to UBI, he doesn’t cover MMT’s insistence that money creation is accounted as debt which it claims is balanced by other surpluses in the economy. This is an important error in MMT, since this leaves immense debt in the economy. Money is not quintessentially debt, and the better proposal is for debt-free sovereign money to fund UBI. The current substantial holdings of government debt by central banks which are owned by the government, or in the case of the US Fed are required to pay any surplus to the Treasury, which means that this is not debt at all. Private money creation by commercial banks as loans to individuals and businesses remains in debt.
Santens concludes by claiming that an adequate UBI will not happen without MMT. UBI needs MMT and MMT needs UBI. They are joint implications of consistent logic. He’s 100% right.
The book is available here.
Editor ‘The Case for Universal Basic Income'