Initial reaction to Stuart Kells ‘Alice™’ book

I haven’t finished reading Kells’s book about modern money, yet already I’d say it’s unusual in its clearly-phrased revelations and dramatic in what's implied by the tangled and tortuous tale it tells.

I note that, despite saying much of what MMT says, that term doesn’t seem to be mentioned by Kells at all - it's not in his list of acronyms nor in his Index. I wonder if that’s a deliberate act, since MMT is arguably mis-named, describing the practice rather than the theory of modern money.

At this stage, I can’t do any better in summarising than Kells does himself, in the final page of his Introduction - which I think is worth quoting in full. He talks of the book’s two key protagonists Kate Jennings and Ian Shepard, saying -

“Kate and Ian had both been students at Sydney University in the late 1960s and early 1970s. Four decades later, in the aftermath of the 2008 financial crisis (GFC), ABC journalist and broadcaster Phillip Adams interviewed Kate about the broken culture of finance and the causes of the GFC. Ian heard the interview and just had to get in touch.

He and Kate met and combined forces in a fight against the financial status quo. In 2014, that fight reached a surreal climax when Ian and his supporters went head-to-head with a consortium of the largest private banks, including financial giants J P Morgan and Citigroup.

The legal fight would have profound implications for the biggest financial market in history. It would also recast America’s system of patenting and innovation. The stakes were so high that the foremost names in IT and consumer products - names such as Google, Amazon, Facebook, IBM, Adobe, Microsoft and Hasbro - joined in, as did the US solicitor general.

Today, Ian Shepard’s and Kate Jenning’s discoveries about finance remain acutely relevant. The foundations of the global financial system are still dangerously fragile, and the system is still deeply one-sided - stacked to benefit a small number of large private banks at the expense of customers and taxpayers.

In today’s world of fintech, cryptocurrencies and private equity, Ian’s and Kate’s insights are an indictment of private greed and government negligence. They are also a diagnosis of the likely causes of the next big financial crisis. And they provide a compass and a key to a fairer, safer and more democratic financial future.”.

The book echoes much of what Steve has revealed, through Minsky and double-entry accounting. It repeats and amplifies ideas debated much here at Skool - about the built-in flaws and deficiences of our modern money system, and ways to remedy or reform them - suggesting some of the same solutions. Crucially, it seems to reveal skulduggery in the financial system on something of an industrial scale - which does not seem to (yet) have grabbed the headlines.

I think Kells's book gains particular power in two ways, compared with a theoretical or academic analysis of the current state of the finance system. It’s a factual and documented story and it’s written by an outsider, observing without any conceivable axe to grind, who has come upon things afresh and is utterly bowled over by a sequence of multiple discoveries. A recommended read, I'd say.

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