Combining MMT and Real Capital thinking in one table

I'm going to run through my thinking here and it will be rough, so please excuse that. I have a hunch (Nordhaus) that this may be a productive edge to explore, and welcome your thoughts.

If follows on from

@Steve Keen

s presentation to Jeremy Corbyn, where it opens up for spending on that which is important and needed, this gives a framework to do it (rough I know but small beginnings).

The table runs left to right. Black is money, Red is liability, blue is real capital, increasing or decreasing (with a - sign). It represents the government budget. You will need to know the basics of real or multi-capital to get this. https://stephenhinton.org/2024/01/28/real-capital-an-explainer/

The first column is the national budget, planning to spend first and then get back all or some via tax (MMT),

The last two are mixed real and financial - social capital is organisations, and these all have financial identities that pay tax on their operations, as well as get gov, benefits/contracts, Human capital is people with social identity numbers who get benefits and pay tax and are employed in social organisations.

So we have represented the money side of things. However, the national budget expects a use of real capital - biological like wood, food etc and mineral. This is processed in the built capital.

You can see already that national accounts do not take into the real capital capacity available, or the drawing down effects of the operations of the social capital, the organisations.

At the end of the year (effects) there will be an economic status of the government account, but also the social capital (GDP).

However, there will also be status of real capital - soils and forests degraded by harvesting, mineral reserves down, by mining, and of importance, the effects of economic stress on the human capital.

This is where MMT comes in. It would be better to, when producing national budgets, to include a real capital focus. You could demand of firms that they declare their real capital impacts per dollar of operation. You could factor in economic stress and budget to minimise it. There are a lot of things you can do if you see it this way,

Does the ag sector have the capability to produce food for all?

Can it do it without degrading surface water and biodiversity?

Does the infrastructure have the capability to provide for all basic needs - transport, housing, food, jobs, broadband, etc.

Are there people to do what is needed?

Is the hydrological status of our country good enough to provide water?

It might be possible to model all of this in Ravel, we have started on a forest model with

@Tom Schatteman

Your feedback appreciated. And help to put it into Godley tables.

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