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The latest news from Positive Money

September 15, 2017

This week the IPPR Commission on Economic Justice launched their interim report on the British economy. Issues raised include:

  • low productivity
  • low investment
  • the gap in the government’s finances,
  • inequality,
  • regional imbalances and
  • environmental degradation

Robert Macquarie (Positive Money) comments that the report describes how poorly the values of a fair, democratic and sustainable system are served by the current economic framework.

He sees an opportunity to ‘direct the debate towards areas that risk being overlooked’.

A stronger case could have been made for environmental and social issues to be placed at the centre of a reform agenda.

Monetary policy and the money system has played a relatively minor in the Commission’s work so far. Positive Money has submitted research to parliament which shows wider problems with current monetary policy. Quantitative Easing (QE) since 2009, by the Bank of England’s own admission, has pushed up the prices of assets held mostly by the wealthy, with predictable effects on inequality.

QE generating funds for productive investment would be a ‘promising possibility’.

Macquarie then says that in a critique of the economy, the environment must feature as a central pillar, not as an afterthought. He cites an OECD analysis which concludes that a more equal society actually benefits economic growth. The need to develop a ‘wider range of policy instruments’ to reduce our impact on the climate is pointed out – in particular, providing finance for green investment. He ends:

“That’s why at Positive Money we are pushing for precisely the kind of ‘radical change’ the Commission authors want to see. Our proposals for public money creation place it beyond doubt that QE and low interest rates should not be where the debate ends on monetary policy. In particular, a form of ‘green QE’ – on which we are producing a proposal – would see the Bank of England deploy its vast financial resources to turbo-charge the environmental transition”.

 

 

 

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