A structured approach for progressive political ambitions – Part 1

I am stuck in London courtesy of the terrorist policies of Donald Trump and his Israeli gang mates. I arrived at Heathrow on Saturday expecting to be home by last evening only to learn that all flights via Doha were indefinitely suspended. Big problem. I was lucky to find a hotel room at the airport where I am bunkered down for a few days before a rebooked flight on another airline is possible. Luckily, I have been able to find a flight with another airline and will leave London on Tuesday (fingers crossed). Anyway, that was a bad end to a good week’s work in London. Apart from the public launch of the new policy research group, MMTUK, which was a good evening, catching up with MMT activists in the UK, I had several meetings with various people. Those discussions must remain confidential here. However, I decided to write up some ideas that are relevant to how I think a progressive ambition can be politicised in an acceptable manner. The challenge for such an ambition is to shift the population’s focus from an obsession with financial constraints to a recognition that it is the availability of resources that matters. There are several related aspects to this challenge. This is Part 1 of a two-part series on that topic.

Progressives in the UK have tied themselves up in a straitjacket where their fears are always summarised by the epithet – ‘the City’ – which refers to a paranoid obsession that if a British government dares do anything that upsets the financial markets (The City), the latter will use its global powers to force up interest rates, destroy the British pound and force the government back into an austerity mindset.

How that actually can happen if the combined Treasury and Central Bank work together and use their currency-issuing capacity is not usually specified.

It doesn’t have to be because most people have been conditioned to believe that the global financial markets are all powerful and the national, currency-issuing government is subservient and has to fall into line.

So just the mention of the City is sufficient to make something politically difficult.

Nations have lived through that fiction since the 1970s and we provided extensive detail about that in our 2017 book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017).

I was asked last week at one meeting to consider a scenario where a progressive political party is elected to office in Britain and immediately sets about implementing its widespread agenda, which might include renationalisation of privatised utilities (particularly transport), increased investment in social housing, revitalisation of the NHS, and more.

What would happen? What would the financial markets do?

My response was that the answer has to start with a planning strategy, implemented many years before the election day.

It would not turn out well if a political party just won an election based on progressive policies and immediately set out to implement the program.

The reason?

Read on.

An essential shift in focus from financial constraints to real resource constraints

My argument was that economists in industry and the financial markets and the financial media are continually pumping out their fictions about the use of fiscal policy and its consequences, which pressure government to implement policy frameworks that benefit them, usually at the expense of the vast majority of the population.

That has been obvious from our decades long experiment with neoliberalism.

Capital reconfigured the state to act in its interests rather than act as a mediator in the class conflict between labour and capital that was apparent in the immediate Post WW2 period.

Neoliberalism renders the state an agent for capital and a whole narrative structure is conducted to make that objectionable situation appear to be TINA so that the people will go along with it.

The problem is that the population (including the ‘voters’) have been so indoctrinated by decades of misinformation that the vast majority actually believes in the fictional construction, without really having the slightest clue about the theoretical elements that are used to justify it and the failings of those elements.

Our ‘intuition’ has been manipulated by a relentless campaign funded by Capital such that we have been conditioned to think that the financial capacity of the currency-issuing government is really akin to our own finances.

We have been conditioned to extrapolate our own experience as households into a ‘knowledge’ we think applies to government.

We know that are financially constrained and have to earn income, borrow, run down prior saving, or sell assets, in order to spend.

And, we have been led into then drawing the conclusion that the same constraint applies to government, which then conditions how we try to understand taxation, bond issuance, interest rates, exchange rates and more.

However, this ‘knowledge’ is wrong at the most elemental level but serves as a powerful political brake on government activity and allows the media and economists to run the financial markets fear story.

It allows the UK Chancellor to stand up in the Commons and prattle on about her non-negotiable approach to her fiscal rules, as if these rules are like the laws of physics – immutable and all encompassing.

As a consequence, the task for a progressive political party has to begin with education, long before any election opportunity.

Its responsibility must be to provide the public with an alternative narrative about the intrinsic capacities of a currency-issuing government and the constraints it actually faces – long before it seeks to outline a progressive policy manifesto.

The mistake progressive parties make is outlining the manifesto before the population has been offered this alternative narrative.

The result is then predictable – the How to pay for it reaction is inevitable.

Game over.

First, the narrative has to shift from an emphasis on financial constraints to a focus on real resource constraints.

The fiction that the government is just a ‘big household’ has to be exposed.

Such a narrative doesn’t construct the capacities and the limitations of the government in terms of ‘fiscal rules’ but, instead, shifts our attention to what matters.

Instead of prompting us to continually respond to policy suggestions with the ridiculous: How will you pay for it? – the new narrative will arouse our curiousity and attention in terms of:

Can things be done?

What does it take to get things done?

Where will the workers and equipment come from to build and offer what we want?

In other words, shifting the focus to resource constraints by advancing the understanding that Keynes’s elaborated on in his BBC Radio Address on April 2, 1942:

For some weeks at this hour you have enjoyed the day-dreams of planning. But what about the nightmare of finance? I am sure there have been many listeners who have been muttering: “That’s all very well, but how is it to be paid for?”

Let me begin by telling you how I tried to answer an eminent architect who pushed on one side all the grandiose plans to rebuild London with the phrase: “Where’s the money to come from?” “The money?” I said. “But surely, Sir John, you don’t build houses with money? Do you mean that there won’t be enough bricks and mortar and steel and cement?”

“Oh no”, he replied, “of course there will be plenty of all that”.

“Do you mean”, I went on, “that there won’t be enough labour? For what will the builders be doing if they are not building houses?”

“Oh no, that’s all right”, he agreed.

“Then there is only one conclusion. You must be meaning, Sir John, that there won’t be enough architects”. But there I was trespassing on the boundaries of politeness. So I hurried to add: “Well, if there are bricks and mortar and steel and concrete and labour and architects, why not assemble all this good material into houses?”

But he was, I fear, quite unconvinced. “What I want to know”, he repeated, “is where the money is coming from”.

To answer that would have got him and me into deeper water than I cared for, so I replied rather shabbily: “The same place it is coming from now”. He might have countered (but he didn’t): “Of course I know that money is not the slightest use whatever. But, all the same, my dear sir, you will find it a devil of a business not to have any …”

Had I given him a good and convincing answer by saying that we build houses with bricks and mortar, not with money? Or was I only teasing him? …

For one thing, he was making the very usual confusion between the problem of finance for an individual and the problem for the community as a whole …

The first task is to make sure that there is enough demand to provide employment for everyone. The second task is to prevent a demand in excess of the physical possibilities of supply, which is the proper meaning of inflation. For the physical possibilities of supply are very far from unlimited. Our building programme must be properly proportioned to the resources which are left after we have met our daily needs and have produced enough exports to pay for what we require to import from overseas …

Where we are using up resources, do not let us submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income, with no other denominator of values but this. I should like to see that war memorials of this tragic struggle take the shape of an enrichment of the civic life of every great centre of population …

Assuredly we can afford this and much more. Anything we can actually do we can afford. Once done, it is there. Nothing can take it from us.

It is a long quote but distils down to “Anything we can actually do we can afford”.

Please read my blog post – Anything we can actually do, we can afford (January 29, 2024) – for more discussion on this point.

The point is that the population must be moved from asking the how to pay for it question to interrogating politicians about productive resource constraints.

Reframing the situation and developing a new language

As part of the shift in focus, the education challenge will involve a shift in language and framing because we know that the way the arguments are framed and the language and vocabularies that are deployed is highly significant in determining whether the new views are accepted or not in the public discourse.

This is a crucial part of the program.

The following blog posts discuss these matters:

1. Framing Modern Monetary Theory (December 5, 2013).

2. The role of literary fiction in perpetuating neo-liberal economic myths – Part 1 (September 11, 2017).

3. The role of literary fiction in perpetuating neo-liberal economic myths – Part 2 (September 12, 2017).

4. The ‘truth sandwich’ and the impacts of neoliberalism (June 19, 2018).

5. Exploring the effectiveness of social media (September 5, 2018).

I wrote this up for an academic audience (co-authored with Dr Louisa Connors) in the Journal of Post Keynesian Economics – Framing Modern Monetary Theory (June 14, 2017).

Conclusion

In Part 2 we will discuss the necessity to build a resource planning capacity.

To give this shift in focus to resource constraints a legitimacy, the progressive group also has to build a resource planning structure that allows the political ambitions to be appraised within the decentralised resource capacity of the nation.

It is one thing to identify unmet demand across a nation – so many houses needed here, new transport infrastructure there, and so on.

That is a relatively easy task.

The challenge is to translate all the unmet demands for government investment into a feasible plan that is informed by how many productive resources are available in each location to actually service those needs.

This involves developments in cybernetics, the socialist calculation debate, AI etc.

We have examples of how this approach has been very successful in a past era and with the advances in technology it is entirely feasible now to adopt these frameworks.

Further, in addition to shifting the focus, the group has to express the purpose of fiscal policy as being to advance the notion of community well-being and fiscal functionality.

Fiscal policy aims should never be expressed in terms of achieving specific financial targets that are considered to be ‘sustainable’ within the neoliberal construction.

People have to be directed to understand that the government doesn’t actually control the fiscal outcome that the national statistical office publishes.

The operation of the automatic stabilisers mean that the spending and saving decisions of the non-government sector (consumers, business firms, exporters, importers) determine the outcome and the discretionary policy settings of government are only one influence.

Advancing that knowledge further militates against holding non-negotiable fiscal rules out as sacrosanct goals – ends in themselves.

We need to be taught to understand the purpose of fiscal policy as being to advance well-being and environmental sustainability and the actual financial outcomes are, in fact, a rather uninteresting artifact of that pursuit.

Part 2 will elaborate on all those points.

That is enough for today!

(c) Copyright 2026 William Mitchell. All Rights Reserved.