ROSS ASHCROFT interviews HOWARD NICHOLAS
The explosion of quantitative easing, the epic monetisation of debt and the rise of cryptocurrencies, frothy stock markets and furlough schemes, all seemed to imply we have an endless supply of money. But it also means that we now see money very differently.
But has this got us any closer to understanding what money really is? Or does it now simply mean that we know the price of everything but the value of nothing?
Host, Ross Ashcroft, met up with Economist and Associate Professor at International Institute of Social Studies, Howard Nicholas, to discuss.
Apocalyptic euphoria
When we think of the term apocalypse, what often comes to mind is a set of events that lead to a catastrophe. But in reality, if you go back to the Greek, the term actually relates to the discovery of new knowledge.
As an economist who has studied the theory of money for many years, Howard Nicholas, is recently said to have experienced a ‘eureka’ moment of apocalyptic euphoria. Indeed, it could be argued that Nicholas has created a new paradigm about our understanding of how money is created and what its function is.
The one thing that Nicholas posits is missing from books about the theory of money, is its primary function. The starting point for Nicholas is his rejection of the notion taught in economics that price is determined by supply and demand.
What’s been missing in most studies is the fact that we use money to set prices, thereby assigning it a value that reflects the real values of goods and services produced. Nicholas says that it’s therefore “utterly nonsensical” when people say we can create value by printing money.
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