Unless you frame yourself, others will frame you — the media, your enemies, your competitors, your well-meaning friends. George Lakoff (2011) - a memo to Occupy Wall Street
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Hors d'oeuvre:
  • Where would you say money comes from?
  • Does the money in circulation depend on the quantity of gold in the world?
  • UK bank notes are printed "I promise to pay the bearer". If you took a note to a bank and asked to be paid, what would you get?
  • If the government says there is not enough money to pay for the NHS, or benefits, or pensions, is this statement true / false?
  • The contribution of the financial sector to public finances is: a huge positive figure / a huge negative figure.
Stodgy pudding:
  • If the government spends more than it raises in taxes ( a 'Budget Deficit' ), is this just like an individual living off their credit card?
  • Which comes first: savings or investment? Do savings provide funds for investment?
  • What does the term 'Quantitative Easing' mean to you?
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Myth antidotes

  • Money is not stuff. Money is not gold. Money is not paper or coins.

    Money is numbers in computers. Money is a scoring system, just like at a rugby match.
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  • Just as there is no limit to the score at a rugby match, there is no limit to the money that can be spent by the state.

    There are of course resource limits: if the state buys everything, there will be nothing left for anyone else.
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  • Just like the referee at a rugby match, the government spends into the economy by changing the score - the government can buy anything it likes by changing the numbers in the seller's account.

    The rugby teams can't award themselves points - only the referee can. Likewise, individuals, families and businesses can't issue themselves money; only the state can do that.
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  • The idea of a 'budget deficit' is a Frame designed to constrain our thinking - it makes the government sound like a household.

    The value of the 'budget deficit' is the difference between the amount spent by the government and the tax collected. The 'budget deficit' of a rugby match is the total number of points awarded. There is no limit and no meaning to this total.

    A better Frame for the 'budget deficit' is 'non-government savings': it is a measure of the amount of state spending that has not (yet) been taxed back.

    Do we want our savings taxed away?
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  • There is no limit to the number of points awarded at a rugby match. There is never a situation where the score-keeper would need to 'borrow' points from elsewhere: this makes no sense.

    Equally, there is no sense to the issuer of a currency 'borrowing' that currency. Something else is going on. Government 'borrowing' is a mythical Frame designed to subvert our understanding of how finance works (or - rather - works to someone else's advantage).
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  • The finance sector's primary role is to extract wealth from the public domain.

    The finance sector likes to pretend that it makes huge contributions to the UK economy. However, much of finance sector activites amount to 'gaming' the system, though the avoidance of regulation via tax havens and clever clever financial instruments.

    The University of Sheffield calculates that the total cost of lost growth potential for the UK caused by 'too much finance' between 1995 and 2015 is in the region of £4,500 billion, amounting to roughly 2.5 years of the average GDP.

    This research suggests that the UK economy may have performed much better if: (a) its financial sector were smaller; (b) if finance were more focused on supporting other areas of the economy, rather than trying to act as a source of wealth generation (extraction) in its own right.

    This evidence also provides support for the idea that the UK suffers from a form of 'finance curse': a development trajectory of financial overdependence involving a crowding out of other sectors and a skewing of social relations, geography and politics.
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