The Financial Times debate on monetary reform continues
Philip Booth, programme director at the Institute of Economic Affairs, a ‘free market’ think tank said to be funded by tobacco corporations amongst others, recently replied to Martin Wolf’s article, by asserting that Money creation is too vital to be left to the state.
Booth stated that the current monetary system is more stable than if the state created all of the money supply..
Andrew Cichocki writing from Toronto, comments to the FT: “I hardly think housing bubbles and incalculable derivatives are signs of a stable economy, and where did the money for those unproductive activities come from?”
Cichoki addresses Mr Booth’s suggestion that state money creation would be “stealthy”, by doubting that – at present – the public has any knowledge of how much government debt banks buy via money creation, adding:
“On the contrary, the money creation process could be made open and transparent as governments are accountable to normal citizens, and private companies are not”.
Uses of state created money?
Cichoki offers a comprehensive list: creating jobs, building and maintaining infrastructure, scientific research, healthcare and education and we qualify his conclusion:
“The (uncorrupted) state has an incentive to invest in unprofitable public goods, the private sector does not”.