I just watched this really good video about the difference between Keynes and MMT. This guy has a lot of good videos, btw! https://youtu.be/ZGFpBU37riM?si=wvBFmDyf42aIy-sp PS: I miss the classes. I have been missing because I'm back to school!

In this short video Varoufakis concludes that “(A)ny attempt to privatise money is bound to end in tears and to empower an oligarchic circle.” https://x.com/yanisvaroufakis/status/1892126022901825915?s=46&t=eh5OcTtyn_6HfqBZAXHzmQ

I think that is what actually happens. Check out my short video explanation. Play at fast speed, I talk slow! https://stephenhinton.org/2025/01/22/how-money-and-real-capital-work-together/

I have recently read J Doyne Farmer's book "Making Sense of Chaos". He uses agent-based models in his descriptions of complexity economics. That seems to be a superior strategy to using aggregate models. For example, the bottom-up agent centered nature of an agent-based model might be superior from a design perspective because it can help account for how individuals interact with institutions, and what kinds of design decisions we need to make when designing institutions based on complex systems analysis. Are there any advantages to using aggregate models? Any drawbacks of agent-based models?

Over a decade ago, when I first became interested in the nature of the money system and before I had any knowledge of economics, I was absorbed by the efforts of several different kinds of people and activist-groups, calling for the abolition (after the 2007-8 crash) of fractional reserve banking. Today, having seen Steve’s lectures, his double-entry book-keeping and read more widely, I now realise that call was wrong. How do you abolish something that doesn’t exist? Perhaps the easiest objection to the money-multiplier model, and to the consequent idea of fractional reserve banking, is that it departs from reality. It claims that the average depositor (averaged over households and firms, rich and poor) has a very strong liquidity preference, holding unused in their deposit account about nine times their regular spending (between inflows of income). It surely sounds unlikely that the average depositor is a miser, firmly unwilling to increase their day-to-day spending despite having an abundant ability to do so. A more technical objection is that, as Steve has quoted from Mankiw’s 2016 textbook, the deposits are demand deposits. The bank legally owns the money but of course it also owns a demand-liability to return it immediately on request. So the depositor still has title to the value of the money. Yet Mankiw says that such demand deposits can correctly be lent by banks to borrowers who are able to spend them. So these borrowers are spending money whose value is owned by someone else, someone who has a legal claim on it. Since when can you spend someone else’s money? Mankiw has an escape route from this problem, which he seemingly chooses not to take. His miserly depositors seem to have surprisingly little avaricious appetite for acquiring more money. They are seemingly content to forgo the interest they could earn by putting their horde of money in a term-deposit account. This would, of course, correct the dubious legality of the borrower spending someone else’s money - that person has given up any current claim to it, in return for interest payment. So Mankiw’s depositors are not only misers but stupid ones, happy to stare a financial gift-horse in the mouth.