Contribution to GTI Roundtable On Money
An exchange on the essay Money for the People

Jonathan Harris

It seems to me that the critical issue, as stated by Mary is the following:

Control of the money supply and, more generally, the monetary system confers a tremendous amount of power. Can we entrust the state with it? Neoliberals warn of the dangers of state intervention in a market-based system. Proponents of social and local economies likewise harbor suspicions of the state, particularly its distant and opaque bureaucratic apparatuses. But without an expanded role for the state, many people will continue to fall through the gaps in the market and voluntary sectors. However, since many states have proven to be inefficient, corrupt, and autocratic, a public money system would be acceptable only if it were more robustly democratic.

This makes me a little wary of schemes for 100% reserves, state management of loans and mortgages, etc., especially if proposed as panaceas for excessive throughput growth, climate change, and other ecological destruction. The vast and urgent problems we face require policy solutions at every level: community, businesses and cooperatives, state and local, national, global. Major progress on this is essential, and if accomplished, will undoubtedly affect monetary systems, from local currencies to national central banks. But it seems to me that progressive reform and “robust” democratic initiative comes first, and can accomplish a lot through specific initiatives, local cooperative institutions, and state and national-level regulation, plus perhaps the creation of state public banks, even within the current monetary system. But until there is significantly more progress, we should be careful about some of the Fed-bashing rhetoric coming from the right as well as the left. Direct control of monetary policy by the current US Congress would be an unmitigated disaster, for example. Publicly created money can easily be used for military expenditure, destructive fossil fuel-based development, large-scale corruption, etc., and with the current administration, these would be significant threats.

This is not to argue against the positive vision set forth by Mary Mellor and with variations by many of the commentators, just to sound a note of caution about the need to focus on developing a movement to support practical and positive policies, and letting the monetary implications follow these. For example, large-scale provision of credit for the installation of solar systems on a no-money-down basis would be enormously beneficial, but can be done at various levels of government through budget process as well as based on private/community initiatives without a scheme for the central bank to provide such funds directly.

Jonathan Harris
Jonathan Harris is Director of the Theory and Education Program at the Tufts University Global Development and Environment Institute, and President of the United States Society for Ecological Economics. He is co-author of Environmental and Natural Resource Economics: A Contemporary Approach and Principles of Economics in Context.

Cite as Jonathan Harris, contribution to GTI Roundtable "On Money," Great Transition Initiative (August 2017),

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