Why Don't Governments Just Print More Money? | MMT Myth | IEA Interview

This week on the IEA Podcast, Lord Frost, Dr Kristian Niemietz and host Callum Price dig into the Bank of England’s decision to hold rates at 3.75% — and whether the Governor should still have his job after the near 10% inflation disaster of 2021-22. With three wildly different scenarios on the table and the spectre of rates hitting 5.5%, the question is whether the Bank is still too soft on inflation and too cosy with a Government that desperately needs good news.Then the team turns to wealth taxes. Kristian has published a new IEA paper demolishing the case for them — and the arguments are sharper than you might expect. Britain already raises more from wealth-related taxes than almost any OECD country. Wealth inequality has been broadly flat since 1990. And even the most optimistic wealth tax proposal would raise, at best, 1% of GDP — nowhere near enough to fund the endless list of promises its advocates attach to it. The real question is why this idea has consumed so much of the national conversation when it solves almost nothing.Finally, the Government’s plan to effectively ban traditional tumble dryers in favour of slower, less effective heat pump models. Is this net zero policy, EU alignment by stealth, or simply Ed Miliband picking your appliances for you? The team argues it is a perfect microcosm of everything wrong with British economic policy — a rich country solution imposed on a country that simply cannot afford it. Subscribe to the IEA on YouTube and on Substack at iea.org.uk for more.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this Institute of Economic Affairs podcast, Callum Price is joined by Kristian Niemietz, IEA Editorial Director, and Arun Advani, Director of the Centre for Analysis of Taxation and a former Wealth Tax Commissioner. The discussion centres on the IEA’s new paper, “Fool’s Gold: The Case Against the Wealth Tax,” covering why the idea has gone from niche curiosity to political obsession, what the evidence actually says, and why both guests conclude a wealth tax is, at best, a bad idea within the normal range of bad policy ideas.The conversation examines the core problems with a wealth tax in practice: the valuation difficulties, the risk of capital and people leaving the country, and the fundamental contradiction at the heart of the wealth tax campaign, which simultaneously promises to cut taxes on working people, fund the NHS, finance the climate transition, and reduce inequality. Advani draws on the Wealth Tax Commission’s findings, including the estimate that a 1% tax on wealth above £10 million could raise around £10 to £12 billion, but notes that behavioural responses mean the real figure would be considerably lower. Niemietz argues the real cost of the wealth tax debate is its opportunity cost: every hour spent on a policy that will not work is an hour not spent on things that would.The final section turns to what should be done instead. Niemietz points to the genuine drivers of falling wealth inequality in the post-war period: wider pension saving and rising home ownership. He argues that liberalising planning rules and building more homes, at the scale Britain managed in the 1930s, would do more to spread wealth than any tax on it. Advani adds that fixing the existing, poorly designed taxes on capital income and transfers would be a more productive use of political energy than building an entirely new tax from scratch.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

Modern Monetary Theory has taken the internet by storm. From viral Twitter threads to bestselling books, MMT promises that governments can spend freely without the usual constraints — that money can be printed to fund hospitals, green energy, and public services without consequence. But is any of it true? In this episode, Christopher Snowdon sits down with economist and author Emmanuel Marjorie, who spent years studying MMT from the inside, to find out.Emmanuel lays out the most charitable case for MMT — the steelman version its own proponents rarely articulate this clearly — before systematically dismantling it. From the theory's flawed inflation model to the accounting mistake at its very foundation, the conversation exposes why a theory that sounds intuitive to millions of people online falls apart under even basic scrutiny. As Emmanuel reveals, MMT was not disproved by its critics — it was undermined by an error its founders never acknowledged.If you have ever wondered why governments do not simply print more money to solve their problems, or why you pay tax if the state can create currency at will, this is the episode for you. Emmanuel's new book, If You Can Just Print Money, Why Do I Pay Taxes?, is out now (https://emaggiori.com/mmt/) The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this Institute of Economic Affairs interview, Dr Christopher Snowdon speaks with Roger Bate, Fellow at the International Centre for Law and Economics and former IEA Fellow, about the failures of the World Health Organisation during COVID and the case for fundamental reform — or outright replacement. They discuss the International Health Reform Panel, a new group co-chaired by former WHO insider David Bell and former UN Assistant Secretary General Ramesh Tacker, which is pushing for a first-principles reassessment of what a global health body should actually do.Roger sets out how the WHO’s funding model has shifted dramatically over its 80-year history, with over 80% of its budget now coming from voluntary donors including the Gates Foundation, Bloomberg Philanthropies and the European Commission rather than nation states. He argues this has left the organisation aligned to donor priorities rather than public health needs, contributing to its failures on COVID — from dismissing the airborne nature of the virus to going along with Chinese-style lockdowns while abandoning its own pandemic playbooks. The conversation also covers the ongoing pandemic treaty negotiations, the WHO’s damaging stance on tobacco harm reduction and vaping, and the question of who should lead the organisation next.Roger and Christopher discuss whether the WHO can be reformed from within or whether a replacement organisation is needed, the role of billionaire philanthropy in distorting global health science, and why budgets for tuberculosis, malaria and HIV are being squeezed to fund pandemic preparedness plans modelled on the very response that failed. Roger argues the most momentous event since the Second World War has gone almost entirely without honest evaluation — and that without one, the next pandemic will repeat every mistake of the last.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this Institute of Economic Affairs podcast, host Callum Price is joined by Managing Editor Daniel Freeman and Energy Analyst Andy Mayer to discuss the latest UK unemployment data, the impact of artificial intelligence on the labour market, and the Government’s recent energy market reforms.The episode opens with the latest jobs figures, which showed unemployment falling to 4.9% — but with the bulk of that drop driven by people leaving the workforce altogether rather than finding work. The panel examine the role of the Employment Rights Act, rising employer National Insurance contributions, and the equalisation of the minimum wage for younger workers, arguing these policies have made hiring significantly more expensive and are contributing to rising economic inactivity, particularly among 18 to 24 year olds. The panel also touch on the Unite Union staff strike against their own union and the broader implications of expanded trade union access rights. A new Centre for American Progress report on AI and the UK labour market is then assessed, finding little disruption to employment so far, with the counterintuitive example of programming jobs actually rising since the rollout of tools like ChatGPT.Andy Mayer then walks through Ed Miliband’s proposal to reform the renewables obligation system, which would shift older wind farm contracts from market-linked pricing to the contracts for difference model. Mayer argues that while the reform may produce more price stability, it is unlikely to deliver lower bills and risks undermining the price mechanism in the electricity market, leaving Britain with a consistently expensive energy system. The panel close by discussing what a sensible alternative energy mix might look like, with nuclear identified as the only viable firm, low-carbon power source.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this episode of the IEA Podcast, Callum Price is joined by Editorial Director Dr Kristian Niemietz to launch a new series on the IEA Insider Substack: Millennial Liberalism. The series, inspired by the IEA’s 1985 anthology The New Right Enlightenment, brings together young classical liberals to share how they came to their ideas in a generation overwhelmingly hostile to free markets. Kristian explains why liberals of any era have interesting origin stories worth telling, while their left-wing peers rarely do, because being left-wing at a young age has become the default rather than a deliberate choice.The conversation digs into the polling that defines the moment. More than one in three young Britons hold a positive view of communism, two-thirds back BLM, and around half favour reparations for the transatlantic slave trade. Kristian argues this is not boomer slop from the right wing press but the sincere answers of millions of young people, and he dispels the comforting myth that this generation will grow out of it. The data shows older millennials in their early 40s already think indistinguishably from teenagers, meaning the traditional rightward drift with age has effectively stalled.Callum and Kristian also explore why the old left-right map no longer fits, with progressives driving cancel culture and the British right increasingly defined by NIMBYism and a refusal to build anything. They discuss what unites today’s young classical liberals with the boomer-era thinkers who came before them, the intellectual sources they still draw on from the Chicago and Austrian schools to Robert Nozick, and what gives Kristian hope that liberalism can survive as one credible option among many, even if it never becomes the majority view.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this Institute of Economic Affairs podcast, Callum Price is joined by Director General Lord Frost and Editorial Director Kristian Niemietz to discuss the week in economics. The episode covers findings from the IEA’s landmark public opinion report on British attitudes to economic growth, a new poll from the New Statesman on the gender gap in political attitudes among young people, an IPR report on NHS reform, and the SNP’s proposal to cap prices on essential food items.The panel examines the IEA polling which found that most Britons believe the UK is wealthier than comparable economies such as the United States, Australia and Singapore, when in fact it lags behind most of them significantly. The discussion moves to the generational and gender divides in political opinion, with Kristian noting that Britain is something of an outlier internationally, where young people across the board have moved left rather than following patterns seen in France or Germany. On the NHS, the panel critiques the IPR’s report arguing against a move to an insurance-based funding model, questioning whether it engages seriously with why some health systems outperform others and what role market mechanisms and incentives play.The final segment takes on the SNP’s pre-election pledge to introduce price caps on staple foods including bread, milk and eggs. Kristian sets out why price controls distort the signals that coordinate supply and demand, and Lord Frost and Callum explore the practical consequences, including reduced supply, gaming of the system by producers, and the likelihood of follow-up interventionist legislation to paper over the failures of the original policy.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this episode of Free the Power, the IEA’s occasional series looking at free market solutions to problems in climate and energy policy, IEA energy analyst and COO Andy Mayer speaks with Catherine McBride, CEO of the Great British Business Council and lead author of the report Premeditated Industrial Destruction. They discuss how three quarters of UK energy is not electricity but oil, gas and coal, and why decades of green regulation have quietly hollowed out Britain’s industrial base. The conversation takes in the collapse of the chemicals sector, the carbon border adjustment mechanism, flawed emissions accounting, and why the UK’s claimed 50% emissions cuts shrink to 19% once imports are factored in.Catherine and Andy examine the specific industries that have been lost or are disappearing, from aluminium smelting and titanium dioxide production to ceramics and cement, and why highly productive industries are being replaced by low-productivity service jobs. They debate the role of the emissions trading scheme, the windfall tax on North Sea producers, and how the Government’s planning and licensing regime has made the UK uniquely hostile to domestic energy extraction compared to Norway and the US.The episode closes with Catherine’s three priorities for any future government: lifting the windfall tax and other levies on North Sea producers, scrapping the licensing restrictions that prevent new wells, and reversing the net zero framework that she argues has made no measurable difference to global emissions while destroying competitive industries. She also highlights the critical minerals sitting in old coal mine tailings across the UK and the safety risks of the proposed carbon capture pipeline through the Peak District.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

Britain wants growth. 87% of the public support it, cutting across age, income, and political affiliation. But there is a catch: most people do not believe they will ever actually see the benefits. While nine in ten expect big corporations and the wealthy to gain from a growing economy, barely half think it will improve their own lives. That gap between wanting growth and trusting it explains almost everything about British politics right now.Matthew Lesch, public policy fellow and country manager at Freshwater Strategy, joins the IEA podcast to walk through a major new polling project of 3,000 people and a series of focus groups. The findings are striking. Two thirds of Britons think the country is heading in the wrong direction. Most believe their living standards are lower than their parents’. And when asked where the UK would rank if it were a US state by income per capita, the average guess was seventh. The real answer is 51st.What does the public actually want? Lower energy bills, tax cuts for workers, more housing, and public services that work. Not ideology, not abstract GDP targets, just tangible improvements to daily life. Lesch breaks down the six political tribes driving opinion, explains why Reform and Green Party voters have more in common than anyone expects, and sets out what it would actually take to build a public mandate for pro-growth reform in Britain today.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe

In this Institute of Economic Affairs podcast, host Callum Price is joined by Director General Lord Frost and Editorial Director Kristian Niemietz. The episode covers the Home Office’s decision to revoke Kanye West’s travel authorisation, the Green Party’s push for rent controls ahead of local elections, and new evidence on the employment effects of the minimum wage.On the free speech and visa question, the panel examines whether the government was right to bar Kanye West from entering the UK, whether non-citizens should enjoy the same speech protections as British nationals, and how visa denial powers tend to be applied inconsistently along political lines. Kristian argues the same standard applied at the border should mirror what would be permissible to say domestically, while Lord Frost contends governments retain a legitimate interest in controlling who enters the country, provided it is done within clearly defined rules.The conversation then turns to rent controls, where Kristian sets out why near-unanimous economist consensus against them exists, distinguishing between first and second generation controls and explaining why both produce misallocation and supply problems. The panel also discusses Ryan Bourne’s recent Times column on the minimum wage, arguing that political pressure has pushed it far beyond the level at which negative employment effects can be avoided, and that the policies most often defended as helping low-paid workers tend in practice to harm them most.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe