by Serban V.C. Enache
I will let the readers decide.
Here are Mosley’s Birmingham Proposals (1925, back when he was part of the Labour Party), quoted in his book, My Life (pp. 188-189); Black House Publishing Ltd. Kindle Edition.
‘These facts of our recent experience are recognised by modern monetary reformers…. They join with us in deprecating any fall in the general price-level, and aim, as we do, at stability of prices. Here arises the first difference between modern but non-socialist economists and the Birmingham proposals. At this point we carry modern monetary theory through a further stage to what I claim is its logical conclusion. . . . They say they will give extra purchasing power without recourse to the fatal expedient of the fall in the price-level by expanding credit as and when more goods are produced. Mr. Brand, the well-known banker and economist, said, in the course of our recent controversy in The Times: “As the general wealth of the community increases, its purchasing power, represented by currency and bank deposits, will, under a proper currency system, be allowed to increase correspondingly in order to avoid falling prices”. When the goods are produced he is prepared to supply more money to buy them, and consequently no fall in the price-level will result unless the generally accepted quantity theory of money be refuted. But we reply that the goods will not be produced unless manufacturers see markets ready to absorb them. Unemployment haunts us because industry will not produce without markets. Demand must precede supply. Our monetary reformers put the cart before the horse when they say that goods must be produced before the purchasing power to buy them has been created. The modernised bankers like Mr. Brand say to industry, in effect, “Produce more goods and then we will expand credit”. Industry says to the bankers, “Show us first a market and then we will produce the goods.” . . . ‘We part company definitely with these monetary reformers when we advocate that State banks should give a clear lead by the bold and vigorous use of the national credit. We propose first to expand credit in order to create demand. That new and greater demand must, of course, be met by a new and greater supply of goods. Here our socialist planning must enter in. We must see that more goods are forthcoming to meet the new demand. If, by socialist planning, we can ensure a greater supply of goods corresponding to the greater supply of money, inflation and price rise cannot result. On the other hand, the new demand will have mobilised the service of men and machines now idle in the production of urgently wanted commodities”.
Serban V.C. Enache is a Romanian journalist and indie author. Though interested in history, politics, and economics, his true passion is for medieval fantasy fiction. https://www.amazon.com/Serban-Valentin-Constantin-Enache/e/B00N2SJD6O/ He can be reached over Twitter. https://twitter.com/SerbanVCEnache