There are two main problems with existing monetary theory. The first is serious, the second is mainly a technical administrative issue.
The first and most serious problem with monetary theory, which is seldom directly addressed, is the fact that money supply is nearly always controlled by a super-rich and powerful minority and, more to the point, is nearly always controlled in such a way that suits the personal interests of the super-rich and powerful – not the interests of society as a whole.
For the purpose of this essay I’ll use a convention that’s quite well known for describing these two distinct groups, who generally have two distinct interests – the 1% and the 99%. Although not strictly accurate, it gives a sense of the point I’m trying to make. The super-rich and powerful (the 1%), control money supply in a way that serves their interests and their interests alone. All the rest of us, the 99%, effectively have no say in the matter.
The second problem I mentioned, the technical administrative one, concerns the physical control of total money volume. It’s a standard argument of the 1% and their supporters that if too much money is in circulation it produces a scary thing called hyper-inflation. Although this is invariably a vastly exaggerated argument, it nevertheless has some basis in fact and needs to be taken into consideration.
The First Problem
Management of the economy in general, and money supply in particular, is a contentious subject….