Funding the Future Kings, knights and the magic money tree
Nov 15, 2025
Explore the intriguing parallels between royalty and money creation in this discussion. Discover how knighthoods emerge from sovereign authority, much like money is generated by government spending. Delve into the consequences of excessive money issuance leading to inflation, and the dangers of under-creation that results in stagnation. Unpack the processes by which both honours and money can disappear and how informed judgment is essential in their creation. Ultimately, trust in the state reveals the existence of a 'magic money tree' for societal benefit.
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State Power Creates Value
- Money and knighthoods are both created ex nihilo by acts of state authority that rely on public trust.
- Richard Murphy argues their value depends on restraint, legitimacy, and wise judgment to avoid devaluation.
Value Depends On Scarcity And Restraint
- Both honours and money require careful supply management so their worth isn't diluted by excess.
- Excessive creation causes inflation for money and cheapens honours, so restraint preserves meaning and function.
Modern Money Is Created On Demand
- Government spending creates money by instructing the Bank of England to record payments, not by drawing on a preexisting stock.
- Murphy equates a keyboard entry creating pounds with a sword tap creating a knight to illustrate modern money creation.