Tony Benn , one time Labour MP, Labour Cabinet minister, and leader of the democratic left in Britain died yesterday. He was an inspiration to many and will be sadly missed. The best tribute I can make is to post these two videos, the first a 10 minute history lesson for neo-liberals, of him in full flow.
Some quotes:
“Education is our core weapon……If people knew what was happening they wouldn’t accept what was happening…the Government doesn’t want people to know…”
“Every single generation has to fight the same battles again and again. There is no final victory and no final defeat.”
“I am very proud I was in the Labour Party of 1945. Our manifesto was very clear. It said the interwar slumps were not acts of God….it was the direct result of too much economic power in the hands of too few men who behaved like a totalitarian oligarchy in the heart of our democratic state. They had and they felt no responsibility to the nation”.
“…in wartime there are no economic arguments at all. I’ve never heard a general say I can’t bomb Baghdad this month because I’ve exceeded my budget. You just do whatever is required. We should adopt the principle you do whatever is required in peacetime too. People want jobs, they want income they want education, they want health care , they want to be looked after if they are old”.
Sounds great!
The second is an interview he gave to Michael Moore:
“If you can have full employment by killing Germans, why can’t you have full employment by building hospitals?”
Tony Benn spoke passionately about the NHS, saying that there would be a “revolution” if it was removed – and also argued for full employment.
Modern Monetary Theory: Real Economics 
The situation we’re in now is summed up brilliantly by this quote from Tony Benn: “I am very proud I was in the Labour Party of 1945. Our manifesto was very clear. It said the interwar slumps were not acts of God….it was the direct result of too much economic power in the hands of too few men who behaved like a totalitarian oligarchy in the heart of our democratic state. They had and they felt no responsibility to the nation”. IMHO the best way to remove that economic power wielded by the few is to implement a full reserve banking system as espoused by Positive Money!
A FRBS is one option. Going back to the type of banking regulation that was considered normal before the deregulation of the 80′s is another.
The difference between MMT and PM isn’t over a FRBS. MMT uses the principles of double entry bookkeeping. PM doesn’t.
Under DEBK every transaction has to be counted twice. Once as a change of an asset. Once as a change of a liability. Therefore, no matter how complicated the system all financial liabilities and assets have sum to zero. That gives a powerful insight into the nature of debts. Including the so-called national debt which can just as well be termed a national asset, or perhaps an international asset. In other words the debts of the government sector are exactly equal to the assets of the non-government sector.
The government, therefore has to take on financial debt so that everyone else can acquire financial assets. The size of the government debt isn’t a problem. The size of everyone’s financial assets can be if they aren’t matched to the availability of goods and services. Too much one way creates inflation. Too much the other creates recession. Its not just the size that is important. Its the willingness of the non government sector to spend them which matters too.
Therefore the spending pattern of the private sector has to be compensated by spending and taxing by government to ensure the economy works correctly.