From the very start of the pandemic, opinions have been emerging as to how city planning and transport would now change. It seemed every person on the media’s list of experts, was ready to forecast an about-face of some kind.
I can’t see the patronage of public transport or pubs changing one iota due to Covid-19. Both bounced back after 1918, and that flu killed 5% of all people! There won’t be more or less sprawl. Even the big swap-out from busses to bikes, is likely to be short-lived.
What has changed, is our understanding of money. We have all just seen what the Japanese have known for some decades, that governments can print it, run huge deficits, and not get inflation or anything bad.
I buy my groceries from the same supermarket as Professor Bill Mitchell, one of the world’s key exponents of Modern Monetary Theory (MMT). We chat about things in common, like bicycle racing and the local university.
Almost ten years ago, Bill explained MMT to me. At the time I thought it sounded like a trojan horse for communism. But Covid-19 has caused me to rethink it and, of course, its significance for bicycle transport.
The problem with MMT is it is explained by economists — like Bill — with precise language, that to the rest of us sounds like head-spinning jargon. It needs explaining by someone with no knowledge of economics at all. Let me start with my explanation of the origin of money, as it used to be.
Imagine 100 of us are marooned on an island. 90 among us have enough initiative to grow food and build shelters, so we offer to feed and house the 10 in the group with no get-up-and-go. All we demand in return is for them to do a few simple things for us, like cleaning, keeping accounts and breaking up fights, like police.
The bartering that follows, then the grain tax, and eventually the minting of coins, would all grow out of a situation where the 90 of us who have personal drive, generate enough of a surplus of buildings and food that we can afford to carry a few public servants. Those servants might mint the coins, but they would be using gold that the rest of us mined.
As origin myths go, that would be fine if money still represented actual commodities — houses, food, gold, or whatever. However, since 1915, the Australian dollar has been a piece of paper that the government just says is worth something. This calls for a new origin myth about money.
So instead let’s imagine that among the 100 of us, marooned on an island, only 10 of us have any get-up-and-go. The rest are like the telephone sanitisers and hairdressers on The Hitchhiker’s Guide to the Galaxy; if you remember,theywere misdirected to an uninhabited planet, to get them all out of the way. If the ten smart ones among us don’t get their sorry arses into line, fast, the whole lot of us are going to starve!
We have to get 45 of them to start building and 45 to start farming. Since it won’t be as simple as bartering beans for shelter, or shelter for beans, they’re going to need money. So what do we do?
We print the shit, don’t we!
The question then is how we convince people that this paper we’ve printed is anything more than Monopoly money? In scenario one, we could say it was a deed to a commodity we’ve stored for safe keeping, like grain or gold. All we can say in this second scenario, is that it’s a ticket to avoid punishment at the end of the tax year.
We have to tell our 45 farmers, and 45 builders, that if they don’t have any of our “fake” money to give back, at the end of the tax year, we’re going to throw them into a very real gaol.
Money is no longer a deed to some gold. For more than a hundred years now, it has been a ticket to freedom—or more precisely, a ticket to stay out of gaol. There’s nothing fake about it. It’s a very real ticket.
Once you understand this, you get annoyed by politicians saying “there is no money tree” or that deficits must be paid back. They’re speaking of dollars as though they are deeds to real things. Once you understand they’re just tickets, to stay out of gaol, you realise the government can print as many as they jolly well like!
The reason they should print them, is the reason we printed them when we were marooned. They were our trick on the masses to get them all working, before we all starved, or died of exposure. Dollars are printed as carrots and sticks that get everyone off of their arses. For the lazy, they’re a currency to exchange for the basics
of life. For the entrepreneurial, they’re things that can be accumulated, to create wealth. For all of us, they’re tickets we have to hand back, proportionate to our earnings, or else have our freedom stripped from us.
In the pre-pandemic era, people were busy enough making and trading that the government barely needed to intervene. But the pandemic has left us as shell-shocked and disorganised as we would be if we had just been washed up on an island! Now is the time for the government to pay people directly, to do things that are productive.
There is a silver lining in this, because while governments can’t whip their workers to be super productive, they can steer the workforce toward the production of things we all need. All the private sector requires of a product is that it fetch a high price. Left to its devices, the private sector would make video games, cars and farms that grew flowers. When governments buy labour, it can be for nation-building endeavours.
What do we need? Performing arts, architect-designed houses and counselling because we are victims? Screw that shit! We need low-cost high-density housing and safe bike routes, so the poor have equal access to specialised education and jobs. There may be other
things a government can pay to people to do, like treating the sick or teaching our children teaching, but what I can point out, as an architect with an interest in access to jobs for the poor, is the shortage I see in dense housing and safe routes for bicycle transport.
We have a once-in-a-century opportunity here, to make cities that harness their human potential. We’ll piss it up the wall if we talk about money as though it is gold. Lies about austerity, or deficits and paying them back, is ignorant nonsense, rooted in monetary theories from the days when the dollar was a deed to some gold. The dollar, today, is a get-out-of-gaol card. It’s as useful as ever as a means of exchange, but better since governments can print as many
as they need to, to get us all off of our arses.
There is no question as to how we will fund the construction of housing projects and bike routes. We will pay under-utilised businesses and unemployed people with money typed into their bank accounts. The only question is what we will harness our people to do: play video games on the dole, or build things we actually need?