I have been thinking about something that is so obvious within conventional accounting that almost no one thinks to question it. It is the assumption that labour is a cost.

Every accountant thinks this. A business has sales, and from those sales it deducts the costs incurred in generating them. Those costs include materials, energy, rent, depreciation and, most importantly for many businesses, wages and salaries. What is left after those costs have been deducted is called profit.

But suppose we ask a different question. Suppose that the purpose of a business was not to maximise the return to capital but was instead to maximise the sustainable return to labour. What would accounting look like then?

Oh Lordy. Save us.

Labour is a cost because labour is a cost. It’s the human effort required to get something doe. This is a cost. Which is why it is treated as a cost.

Some people who have no desire to understand modern monetary theory, like Ann Pettifor, for example, suggest this is what MMT proposes, when nothing could be further from the truth.

Only The Sage knows the proper and deeper truth, right?

Secondly, whilst some recipients of this money might prudently use it to pay off their debts, and others might save it, you can be fairly sure that many might decide to spend it almost immediately, but the inevitable consequence of that will be inflation because there will be no more goods and services to buy than there were before the money was created. On this issue, I find myself in the strange position of agreeing with Milton Friedman.

OK, so standard monetarism says it’s both possible and also a bad idea which will lead to inflation.

As MMT makes clear, creating money when there might not be anything to buy with it virtually guarantees inflation, and MMT is almost obsessed with preventing that, and yet this is what Trump is doing. MMT, in that case, provides the only economic framework that shows both how he can do this and why he should not.

It is time people took it seriously.

But only MMT says it’s both possible and also a bad idea.

For, if anyone were in any doubt, monetarism is neoliberal and so poo, right?

Why do this? It is to explore the idea that the supposed certainty that many neoliberal thinkers have about matters to do with economics is entirely misplaced. The idea that anything in economic data has an objective reality is just wrong.

Gonna make planning difficult if we don’t know anything, innit?

Of course, the actual observation itself is Hayek’s Nobel acceptance speech in a nutshell. The Pretence of Knowledge. That Spud uses the core observation of the arch neoliberal to disprove neoliberalism is rather fun, no?

This is what neoliberalism chose to do. For those old enough to remember, the plan was clear from the start. When Thatcher reached office in 1979, her first goal was to destroy British industry

Is it worth reading more of such frothings?

For example, we discussed unemployment and agreed that instead of thinking of it as the absence of useful things to do, we should describe it as a state-imposed prohibition on people doing work society plainly needs because wages have been pushed too high for the worker to do the task.

Worse, this was a deliberate attempt to prevent lives from being saved at sea, and national and international law has long treated this as a priority. I have not bothered to investigate the law, but I suspect it is backed by that.