Have you noticed how things we used to be able to do are beyond our capabilities now?
We finally reached a point where we were able to provide free university education. Then we grew wealthier, and some countries couldn’t afford it anymore.
Some of us still have universal public health care systems, but they’re increasingly a chronic burden. Maybe they made sense once, but it’s only a matter of time before they go. Sure, Cuba can do it, but they’re poorer than us.
If we were to believe most politicians, we’d be under the mistaken impression that government not investing today does future generations a favor. Leaving communications systems underdeveloped, road and transport networks crumbling, education and public health systems deteriorating, our cultural institutions eroding, developments in science and technology stagnating, and so on, will supposedly free future generations of any burden that might otherwise be imposed upon them.
There appears to be a considerable degree of compatibility between Marx and various Kalecki- and Keynes-influenced approaches to macroeconomics. Compatibility, of course, does not imply that all these theoretical approaches stand or fall together. It simply suggests, to the extent that the compatibility exists, that it is possible to see them all as fitting within an overarching, open analytical framework. In this post, the compatibility is considered in relation to the private-sector monetary circuit of a capitalist economy.
We saw in parts 2 and 3 that funds initially enter the economy through either government spending or bank lending. In the future, we will take a closer look at these activities. For now, it is enough to understand that these funds, once created, can be used for various purposes, including spending.
It was seen in parts 1 and 2 that government, as our collective agent, is able to use its currency to attract some workers and resources to the public sector. This enables it to carry out important functions. One of these functions is to shape and regulate the monetary and banking system.
For government to carry out its functions, it needs to employ some people and obtain various resources.
Most national governments coordinate the division of resources between public and private use through the operation of a currency that they themselves issue.
A national currency can be established through a few steps.
Many activities require cooperation at the society-wide level.
As a community, we need to agree upon a set of rules and regulations, and arrange for their supervision and enforcement.
Questions that arise include: