Last week I looked at how, for modern day purposes, monetary policy started around 1750. The liberal view arose that the best monetary policy was no-policy; that is, no policy beyond the steady coin production of each sovereign’s Royal Mint. This new laissez-faire view of monetary policy changed once it was realised that the mechanism didn’t work in practice as it did in theory. Modern Monetary TheoryThere is a known and substantially correct story in academia – albeit ‘heterodox’ academia – about money, monetary policy, and the relationship between public finance (fiscal policy) and money. While governments sub-contract monetary policy to semi-independent central banks, MMT suggests that monetary policy is in reality undertaken by nations’ Treasuries.