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. This is the sum of notes and coins held by the banks to meet the demands for cash by customers and the balances held by the MFIs at the Bank of England, including mandatory reserves – see chapters 5 and 9 for further explanation of balances held at the central bank. All MFIs hold assets which can be turned into cash quickly and without loss (i.e. they are liquid) as a second
little counterfeiting aside) the private sector elasticity of production is zero. Keynes does implicitly qualify this view, describing banks issuing money and supplying credit. His understanding, however, is at least primarily one in which money is created by public authorities. For much of the previous millennia (the first coins were minted about 2600 years ago) the world economy used commodity money, so Keynes is insisting that even this becomes money through state authority: it does not automatically work through some invisible hand, as the classics since Hume had
. Any payment or receipt to the BofE will lead to a corresponding change in banks’ deposits at the BofE. For example, an increase in the public’s holdings of notes and coins will cause them to be demanded from the BofE by the settlement banks and cause a consequent decrease in their deposits at the BofE. Movements in banks’ deposits can occur through
saw the ramifications of this flawed education stretched far beyond the confines of university lecture theatres. We became aware that a degree in economics was a gateway to many important positions in society, whether it prepared you for them properly or not. From this vantage point we can see that all those people who feel locked out of economics have an important point. When someone says ‘I just don’t understand economics’ or ‘economics is not for me’ they are highlighting one of the defining features of society in the modern world. We have coined the term
or dances, or drink alcohol. John Templeton interprets Wesley’s promotion of thrift through the Parable of the Talents.11 Briefly, the parable tells the tale of a man who is going on a journey and chooses three servants to look after his resources whilst he is away. He gives the first servant five talents (coins), the second servant two talents, and the third servant just one talent. The first servant puts the talents to immediate good use and turns the five talents into ten. The second servant has similar success, also doubling his talents and turning two into
’ (Williams 2000 : 439). Marx insists that ‘[i]n its form of existence as coin, gold becomes completely divorced from the substance of its value. Relatively valueless objects, therefore, such as paper notes, can serve as coins in place of gold’ (Marx 1976 : 223–4). In advanced capitalist nations, already in Marx’s day, credit and credit money replaced specie (Marx 1981 : 648, Williams 2000 ), and Marx discusses the possibility of departing from metal altogether (Marx 1973 , Williams 2000 ), although the problems that paper money introduces into the analysis remain, as
, to a job. This problem is deeply connected to the pot of money myth as it concerns the question of how money is created and allocated. Money for nothing A recent poll of 100 MPs demonstrated that 71% wrongly believed that: ‘Only the government – via the Bank of England or Royal Mint – has the authority to create money, including coins, notes and the electronic money in your bank account’. 1 However, in fact less than 3% of money in
pressing in the current day. In many ways the ecological imperative has enabled a discourse around frugality that is less ‘moral’ in a limited Marxist way than it used to be, and more ‘ethical’ in terms of finding ways to live differently for quite practical reasons. Most recently, these concerns have been crystalised in the increasingly mainstream term –Anthropocene. The term, coined by ecologist Eugene Stoermer and atmospheric chemist Paul Crutzen, describes the current geological era, positing it as a massive increase in human influence on the world during the last
unfamiliar. The fundamental claim of marginalism is that a theory of value should be subjective and (although Marshall qualifies this) based on exchange rather than production. For Jevons, ‘ value depends entirely upon utility . Prevailing opinions make labour rather than utility the origin of value; and there are even those who distinctly assert that labour is the cause of value’ ( 1957 : 1). Against this, ‘[t]he mere fact that there are many things, such as rare ancient books, coins, antiquities, etc., which have high values, and which are absolutely incapable of
-Keynesian critique is correct, policy was never Keynesian and his supporters can no more claim credit for the boom than they can accept blame for its breakdown. In as far as Keynesian ideas did influence policy, it was this moderate version. Throughout the period of the Keynesian boom, the neo-classical Keynesian synthesis was Keynesian economics, an economics which purported to reincorporate Keynes’s General Theory as a special case of classics. Samuelson coined the term ‘neoclassical synthesis Keynesianism’ (Davidson 2007 : 208) and provided the textbook version