Thanks so much everyone for the encouraging comments and thoughtful questions - I have to admit I’ve now lost track and can’t keep up with all the conversations going on in the comments section!
So if you’d like a reply, please DM me with a link to your comment so I can find it and respond
EDIT: Please try to keep it calm and civil in the comments! I've unfortunately had to block someone for leaving more than 50 comments with lots of ad hominem attacks. Play the ball, not the man please!
Push back against austerity arguments? Absolutely - I've been doing so my whole career!
Force people to sit down a listen to an economics class about monetary financing? I don't think so - few would listen, and many of those who did wouldn't understand. It's just not a solid foundation for a mass political movement.
In part, this is a question about political communication. I've written a bit about this issue in the piece linked below, but essentially I'm with Sarah Stein Lubrano in her book 'Don't Talk about Politics'. You don't change minds by convincing people they're wrong in their political/economic beliefs - you change minds by listening to people, and showing them how things can be different. Building trust is much more important on that front than being correct.
Roger Hallam makes some interesting observations along these lines in his recent interview on Novara Media. I haven not read that book, will check it out.
Yeah, Roger is always worth a listen. Especially because his is always evolving his views and perspective. I thought Ash did a much better job interviewing him that Aaron did first time around.
That incident she mentioned about how Roger called a group of lefties at a festival lecture "a bunch of c*nts" is in her book. It was quite formative for her I think.
Grace, I’m a working class woman whose grandpa was a union rep for the miners in north west Durham, about 100 years ago. The pits were owned by the Queen Mother, my family were at the heart of the class struggle and I agree that struggle continues to this day, whilst recognising the better years post war. I consider myself a socialist and have seen enormous political and social changes, particularly after the hideous Thatcher years and the rise of “toxic individualism” (your description on Politics Joe, that I agree with). You also acknowledged the enormity of the task ahead to encourage collectivism as individualism has such a grip on our society. I agree, as someone who campaigned, marched etc over the years I have seen the appetite for such diminish and whilst it is encouraging to hear of local collective action, whether to oppose government or set up systems of support, I do believe that is a huge uphill struggle and should not exclude the MMT movement. I haven’t been forced to learn about MMT but have picked it up along the way and it has certainly had a huge impact on my understanding of how the country’s monetary system works, in large part thanks to Richard Murphy. I tell people wherever I can as I think it’s a very powerful message to mobilise to action. Zack Polanski has certainly picked it up to powerful effect. It is too important to be shunned and I’m honestly at a loss as to why you would do so, particularly as in your view, a key player Richard Murphy is not socialist enough. I would have to disagree with you on that, his whole alternative budget is based on rebalancing the economy to work for the citizens, not the ruling class. You have a large following, I urge you to rethink your position.
I think Grace's point is that Richard Murphy has a perfectly good theory of economics, but a completely inadequate theory of politics. And without understanding the nature of capitalism and the state under capitalism, he just naively thinks if he can persuade the powers that be to accept that doing the things he proposes will be good for people, they'll do them. But the system is propelled by what gets wealthy and powerful people more wealth and power. So that's not going to happen without a popular mobilisation to change the system (which IMO - but not in Grace's - needs to be underpinned and emboldened by an accurate depiction of what money is as laid out by MMT).
I feel as though both perspectives are useful, here. Almost everybody I know buys into fear-mongering over deficits and debts. A lot of people thought austerity was genuinely the most sensible policy option available (because “there is no magic money tree”). For as many times as I see Richard Murphy being bang on the money, I see just as many times him burning bridges by behaving like a patronising ass. That said, I *do* think it would be a lot easier to convince the median person not to vote for an austerity government if they were as convinced as I am that there is usually another way.
I feel as though if we don’t change the conversation over the economic backdrop, that’s another Thatcherite consensus undermining any project of positive renewal.
Push back against austerity arguments? Absolutely - I've been doing so my whole career!
Force people to sit down a listen to an economics class about monetary financing? I don't think so - few would listen, and many of those who did wouldn't understand. It's just not a solid foundation for a mass political movement.
In part, this is a question about political communication. I've written a bit about this issue in the piece linked below, but essentially I'm with Sarah Stein Lubrano in her book 'Don't Talk about Politics'. You don't change minds by convincing people they're wrong in their political/economic beliefs - you change minds by listening to people, and showing them how things can be different. Building trust is much more important on that front than being correct.
MMT merely looks at tax and spend from the opposite lens as the neoclassicists. Without a strong and creditworthy currency, a sovereign issuer cannot spend into an economy. Without taxation and other monetary tools that removes currency from circulation, the currency would have no strength or creditworthiness in the first place. Whether taxation or spending comes first is like a chicken and egg question. Both MMT and Neoclassicists are seeing it through one but different lens.
The state ALWAYS spends by crediting accounts (a reserve add). Taxes are a reserve drain. The state always has first call on resources (whether it chooses to exercise that power or not). The state is the monopoly issuer of the currency and can ALWAYS set the risk free interest rate at zero and unemployment at zero. This changes the nature of capitalism (or in Marxist terms, alters the patten of accumulation, forcing firms to compete for workers, not the reverse). As socialists we need to drive these points home not dither about and making ridiculous statements about taxing the rich to provide revenue to spend on public purpose. Tax the rich for equity and to protect democracy but never, but never for revenue.
Appreciate the response. I think yours is a valuable contribution and I don’t think every angle here should necessarily be focused on macro-economics (it’s not very interesting to many). But I would maintain that the household budget analogy is taken as true by default for most people in the UK. It shapes voting and contributes to the Overton window. In my eyes that makes it a weapon in the class war as much as any other and that’s precisely how Thatcherites/ Neoliberals have used it.
“I would love if we could help _____, but there’s no money left!” Is not a rare thing to hear and it is not always said with malign intention.
For me, the best response to the household budget argument is this Tony Benn quote - "If we can find the money to kill people, we can find the money to help people."
Great response. If Climate Catastrophe were a country about to invade us, we wouldn't argue about tax policy - we'd just spend all the money we needed to defeat them.
I wonder if MMT could be translated into a simple narrative as powerful as the household one so it is not about lecturing? I do think MMT advocates often over technicalise things. Does this have to be a matter of either or rather than both and? We don’t avoid challenging the household budget myth and we listen. Money, released from household propaganda, could be a powerful tool to respond to what we hear, no?
Yes. Economists who teach MMT have powerful stories. But... everyone in the Eurosphere has heard the household budget story since before they could talk.
A simple narrative is to quote Alan Greenspan: "There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody." The point is to radicalize people to realize they've been lied to. Too many go along w/the household narrative and just accept it.
I think you've written about this before but more thoughts are always welcome! I think it's so important to have what I pretentiously like to call a materialist theory of political campaigning.
Why is it that when times are hard socialist ideas don't get traction like they did in the past. I think it's because people don't experience socialism in their communities like we did say before the welfare state when communities had to organise their own welfare.
Obviously the welfare state is vital but it's extremely top down and increasingly run for profit .It doesn't empower communities or show them a different way of organising society. Not in the same way as the Black Panthers in the US organising breakfast for kids did.
I'm on your side but these nagging incongruencies persist: Is the exchange with Richard Murphy an instance of "building trust"? Also when "change-(ing) minds by listening to people, and showing them how things can be different" are you not, in a gentler way perhaps, "convincing people they're wrong in their. . .beliefs"?
Is a distinction being made between the educated class and lesser educated with the latter meriting (requiring?) the gentler pedagogical approach? Is this not a form of paternalism?
Couldn't agree more about Richard Murphy behaving as a patronising arse. He is so divisive in his approach, that he turns people, who do have at least a passing interest in macro economics, away.
His ad hominem attacks on Gary Stevenson are classic examples too.
He's stood at his own personalised barricade, shooting at allies and encouraging that behaviour in others. Pitiful.
Yeah, I agree with you totally. Nevertheless, and despite their stylistic deficiencies, Richard could humbly sit at Gary's feet to learn about communication with the broader public. As so many other people have stated here; the MMT Panacea Cult is obsessed that 'IF EVERYONE ONLY KNEW...' then it'd all turn rainbows and unicorns, but they only have to ask the long-exhausted environmentalists if it was 'lack of awareness' that allowed the climate, the seas or workers' wellbeing to be used as irrational, 'externalised-cost' dumping grounds. Moreover, everyone bought into it whilst sticking fingers in their/our ears and carrying on consuming.
As to costs of entry to Gary's events or the price of the book, I can't say. I guess that he wants to make his campaign self-sustaining or growable, but it's fairly 'open source' and 'free at the point of need' unless you want to attend in person. Nevertheless, he communicates in an accessible way and to demographics where Richard simply fails.
Effectively communicating in the wrong direction has enough in the way of human and institutional resources. Also, Gary's 'People like me are screwing people like you' rings empty for multiple reasons. I feel that he's relatively genuine (aside from an obsession with Kid Starver's genocidal and utterly corrupted Labour).
Yup, solid logic from you there and I'll look up some of your recommendations. Thanks for adding to the conversation more than I might.
p.s. I'm not very clued up about macroeconomics (I suppose like most Chicago School/LSE alumni, then!) but I'm not yet convinced that MMT isn't a disease ridden, mangy sheep in pristine sheep's clothing. Then again, public trust in solution-touting-experts is a damaged thing these days! And I'm not unfond of Richard, but he is unnecessarily a dick in some interactions.
Ah, not so short a reply. I'm engaged in hope for the adoption of good ideas.
I've never seen MMT as an economic replacement for exactly the reasons you put forward - the system isn't broken, it's working exactly as designed. I instead see it as a framework that a new, socialist society can build on. Positing it as a drop-in replacement that will herald "ethical capitalism" is foolish at best
I see no misunderstanding here - I think Grace fully understands MMT and what it offers, but what she's saying is that the tools it offers up are entirely at odds with the goals and machinations of capitalism. Sure, an elected socialist could use those tools to the best of their ability - but without a fundamental rearchitecting of the foundations of our economic system, those tools will be handily countered and stymied by the interests of capital. That isn't to say we shouldn't use it if given the opportunity, rather that simply convincing economists, politicians and businessmen of it's efficacy is a laughable waste of time and any implementation will require significantly more work than "dropping it in"
To say that MMT is free of ideology is naive. As for why Sachs pay Mitchell, I needn't lecture anyone on optics nor suggest that if the height of financial capitalism is willing to entertain the idea, that perhaps it isn't the magic bullet to solve our problems. Capitalism is fundamentally opposed to the idea of the kind of social spending that MMT advocates for and provides tools by which to justify it - no amount of technocratic reasoning or moralistic arguments are going to sway that notion. There is a fundamental reason why we've seen social spending crater and public-private partnerships skyrocket in tandem whilst quality of life nosedives, and it's nothing to do with how we analyse the economy. Our current economic rules are not guidelines that our current society was built on - they're post-hoc rationalisations of an existing social and political order designed to maintain class stratification and concentrate power. As such, the problem isn't the guidelines - it's the structures that they prop up.
If anyone is guilty of falsely thinking that MMT is a cure for the ills of capitalism, it is Richard. In his comments section I said
"You say you don’t believe in class war. Well capitalists certainly do."
He replied saying
"Politely, I have revealed all the weaponry required to win this war: it is MMT.
How are you going to win it?"
He doesn't get that MMT is a tool and you need to actually win control of government so it serves ordinary people before you can use MMT to help those ordinary people.
Zooming out, analytically, I daresay there is a lot of upside for most of the capitalists under MMT policy, UNLESS you're a bank of course! And that is why it is rejected by governments. Trying to throw the banks under the bus is a very quick way to being thrown out of office!
A bit like fossil fuels. Switching to cheaper clean energy would be great for the economy. Unless you're the fossil fuel industry or a power company. And those are also guys you cannot cross and stay in office for long.
There is no MMT policy. It is only a description of how the State funds itself. It is not "a tool".
The UK (and most other countries) is a sovereign, fiat-currency-issuing State with its own Central Bank. It can never default on its liabilities nor be declared bankrupt. It can always pay its debts when denominated in its own currency. Its spending is not constrained by money but by real resources. It has no need to borrow because it is the monopoly creator of the UK's money.
That is it. You can make both right- and left-wing policies on that framework. And since 1971, the UK has done just that. Once Nixon took the US$ off the Gold Standard, there has been no alternative. MMT has been alive, kicking and a valid description of the UK economy for 54 years.
And if Polanski and Blakeley want to overturn the economy, they need to understand that - and sell it to their putative voters. Because if the voters only believe the household analogy, they will not believe the Green's economic manifesto.
I haven't paid much attention to what Richard Murphy says for probably 8 or 9 years, so I'm not sure about him personally, but I really don't see MMT as being presented by it's core proponents as being any kind of replacement for anything. It's an accurate description of how things operate, a "lens" through which to view things. I guess their advocacy for a job guarantee as a more sensible/moral inflation stabiliser probably does to some extent fit into the model of naively believing that state power would be nice to people if only it knew better, but the overarching message of MMT is "This is the reality, let's operate based on reality!". If it's proponents lack a sensible understanding of political economy that's another thing. No need to throw the baby out with the bathwater. Personally I don't see how you can come up with plans of how to use the state effectively to achieve socialist ends, or how you convince people that it's possible to do so, without a "balance the economy, not the budget" approach. So while "the deficit doesn't matter" might make us sound mad now, I think it's a narrative war that has to be won.
I think we're talking at slightly cross purposes. Yes economic orthodoxies absolutely need replacing by things that actually make sense (e.g. MMT). But Grace seems to be saying something along the lines of, "MMT says if we just convince the powers that be to replace their current understanding with the insights of MMT then all will be well, but they fail to understand the wider class war power dynamics at play." I'm saying MMT is mostly a (paradigm transforming) description of how things actually function, not a prescription for what to do, and sits perfectly comfortably alongside a Marxist analysis of state power.
(Essentially she seems to be taking everything Richard Murphy says as being indicative of what MMT says, which given that he's just some guy who happens to agree with MMTs core insights seems a bit odd - but even if it was Warren Mosler saying it that seems no reason to me to reject MMT's insights.)
I'll actually correct my wording there in the spirit of Grace's critique. I said economic orthodoxies "need replacing by things that actually make sense". The fact is they do make sense. For the powerful. And that's why they're economic orthodoxies. "Mainstream economics is elite ideology plus algebra."
You are correct. As an MMT supporter I hate to break it to my fellows that the precise reason the state chooses not to fund human development *fully* by printing money is because it cannot afford to lose the class war to the public. They know full well they can print money.
J. M. Keynes did all this in the 1930s and in a more self-consistent and erudite manner. MMT doesn't add anything much to Keynes. Unfortunately M. Kalecki buried Keynes.
Beyond prescriptions for JG and ZIRP, how exactly does MMT depart from Keynesianism? I’ve struggled to ever understand this point so I’d be grateful if you could elaborate!
I understand your point that MMT can help win the argument against austerity narratives, but you have in your head a contradictory model of progress.
I think you envision an day when governments come to their senses and embrace MMT, thus throwing much of the financial sector under the bus, and dramatically shifting power to ordinary people because the state can now do large scale investment in infrastructure and programmes that will benefit ordinary people.
But you are ignoring the dominant power dynamics that drive government policy. In the competition for political hegemony between capitalists and the working class, capitalists have won.
The working class (and I mean here the bottom 80-ish percent that aren't being well served by capitalism) don't have the political power to get government to do anything substantial on their behalf that would threaten the interests of capital. Like MMT.
Everything is framed around what governments must do to keep the rich onside. It's framed around how to attract investment from global capital. And the corruption and direction of government by capital is on full display every day of the week.
We don't have a functioning democracy. The democratic levers of popular power over government are still there but they don't connect to anything.
Bottom line. You cannot use MMT to fix capitalism because you FIRST have to get control of government by ordinary people in order to have it even entertain implementing MMT.
But I don't think the main reason we have neoliberalism and austerity are because we lost an argument about a description of the macroeconomic system in the 1970s.
I think we have neoliberalism and austerity because corporations and the rich waged a huge, coordinated war against all the institutions that had resisted their power since WW2.
I get the rhetorical value of being able to say "a government's finances are not live a household's finances" but I am pretty sure that this move isn't going to radicalise millions of people to join a movement that will materially challenge the power of capital.
Moreover, the people that something technical like MMT will get the attention of are likely to be educated liberals and they are unfortunately very unlikely to be convinced that rewiring the economy in favour of ordinary people and the climate is going to be in their best interests. Broadly speaking, when push comes to shove, liberals side with the status quo against change that would negatively impact their material conditions.
So sure, you can have MMT there as a technical response when people say "how are you going to pay for it" but I think that it's rarely going to land meaningfully as a way of radicalising the majority of the population because they just aren't interested or motivated by economic technicalities.
As Zack Polanski points out, in politics you win with stories, and a much more potent story is "the rich have taken all your stuff and their greed is killing the planet. We need to unite and use the power of the state to stop them".
I think you are avoiding the argument, and the history of liberalism.
Firstly, it doesn't follow that if you can't get liberals onboard then you lose. I mean, it depends on how you define liberals but I see them as in a class of middle- and upper-middle class people are reasonably well served materially by the current system. Chomsky would usually cast them at the top 20% who the media spends all its time trying to propagandise.
In that context, they are vastly outnumbered by the bottom 80%. So in terms of potential power to combat capitalism, that working class population has all the power it needs.
And btw I am not saying that some liberals aren't persuadable. I was a centre-right liberal most of my life. I experienced some things that forced me to re-evaluate my understanding of the world and I am no longer a liberal.
You also ignore history when you dismiss the argument that this can be won by persuading liberals, rather than forcing their hand. You can look back at the 1930s and see how liberals in Germany sided with fascists against socialists to protect their own material interests (validating my point that material interests are the primary concern for liberals) and you can contrast that with liberals in the US who were forced, by a very powerful movement of socialists, communists and unions, to concede to that movement and radically transform the economy and redistribute power away from the capitalist class.
Now, I know that FDR at the time saw this as a necessary move to actually save capitalism, but that only strengthens the case for actual class conflict from the left because it demonstrates that the capitalist class and their liberal followers were actually incapable of responding to the giant contradictions in capitalism themselves, even though leaders like FDR could see them right in front of their faces. The short-termist nature of capitalist logic meant they couldn't make the long term reforms themselves. They had to be forced by an outside power to do even that.
And this dynamic will play out every time. You can show capitalists that what they are doing is bad for them in the long term but they are powerless to do anything about it because the rules of capitalism dictate that if they try, they will be destroyed in the here and now. And unfortunately, liberals are in exactly the same mindset most of the time.
BTW Thatcher changed her mind on climate change.... And why?
Because she realised that the logical consequence of real action to stop climate change would probably mean the end of capitalism. And capitalism was more important to her than sustaining a liveable planet. That is where this always leads.
> nobody who really understands MMT in any depth thinks uttering a single MmT inspired slogans will change the world
I totally accept that you don' think this. But Richard Murphy seems to. When I pointed out that Grace is right and you don't win a class war by assuming you have control of government first, because control of government is itself contested, he said
> Politely, I have revealed all the weaponry required to win this war: it is MMT.
This is what this argument is about.
To what extent can MMT win control of the state by ordinary people, vs the capitalist class, vs to what extent does that have to be done through more conventional movements of the working class using the labour and their bodies to force capitalists into retreat.
I think Richard is clearly wrong that "all you need is MMT" but as I already said, I think its useful to also have in your back pocket a counter-narrative about how austerity isn't necessary, because that counter-narrative helps to destabilise the common sense around neoclassical analysis and neoliberal policy.
Destabilising that common sense is useful in the long term because it legitimises for more progressive in policy once you have power. It is also useful in the short term because it discredits conservatives. I think psychologically, and tactically, the biggest benefit of discrediting conservatives isn't that they are made to look foolish or something. It's because they are then shown to be the enemy of ordinary people (for anyone that wasn't already on that page). So this argument is effectively a tool of raising class consciousness.
The big question is how big is that effect on public class consciousness. Because, again, this is a class war and it must be fought as such.
Just a quick note to thank you for taking the time to write your long responses, Alistair. Very few people commenting seem to understand what MMT actually is and how crucial it is that neoclassical economic theory and neoliberal ideology gets rejected by the masses. I don't live in the UK and all this talk of "class war" just feels archaic, quaint and quite misguided. It won't reach the people that need to be reached.
So who needs to be reached? Every mainstream journalist and media figure. We need to reach a pivot point where "people on the telly" flat out reject politicians when they trot up nonsense household analogies. Neoclassical economic theory needs to be laughed at when mentioned. As long as we haven't reached that point, the bogus arguments for austerity will keep landing and people will keep voting against their own interests out of fear and lack of understanding.
MMT isn't something that you "embrace." It's an empirical description of how the US monetary system works. It isn't something that you "strive for," because it's already happening.
That is the empirical description of an economy, like looking through a microscope and describing what you see there. IT'S ECONOMIC.
Then you go off and start talking about "capitalists," "the working class," and "democracy," which only have something to do with economics because economics are used, like a carpenter's tools, to manipulate the political sphere. All of those concepts refer to POLITICS.
I don't know how many Americans conflate economics with politics. Think of the graph paper you used in high school: there is an X axis and a Y axis. If economics is on the Y axis then politics is on the X axis. You can include a gradient from "the most controlled" to "the least controlled." Then you can combine the two in various ways: a less controlled economy with a highly controlled political system.
BUT THEY ARE NOT ON THE SAME AXIS. I wish more Americans would learn that simple fact. It would prevent people like you from mixing them up.
MMT says the government ALWAYS spends by crediting accounts- taxes and bond sales NEVER provide revenue to spend. Our job it to make that plain and not perpetuate Thatcherite myths about the state needing tax revenue. Then we have to campaign for the state to use its power to serve public purpose. We do not need rich people's money. The idea that MMT insights don't add to a progressive cause is mistaken. It is vital. it disempowers he elites. That's why they fear it. They don't fear old Marxists who have been saying the same things for a hundred years. Marx is full of insight but we need more. Much more. We need MMT and socialist activism not economic myths that only apply under a gold standard.
I would argue that elites don't fear MMT at all, they actually understand and embrace it. We have countless examples here in the US that make it evident. The elites that run our government know MMT and they use it to funnel money to the powerful elites. In the last 25 years we've had no debate on how we are going to fund multiple wars, multiple tax cuts for the wealthy, bank bailouts for causing the housing crisis, stock market bailouts because of covid, bombs to kill kids in Gaza, etc. When the elites want something in this country, the government money machine goes error.
Now the second the people ask for something, the elites' propaganda machine kicks into overdrive. We want universal healthcare! How are you going to pay for it? Universal childcare! How are you going to pay for it? Free college! How are you going to pay for it? And on and on. They know how to pay for it, congress appropriates the funds. People here like to say that it's socialism for the rich and capitalism for the rest of us. You could say that it's MMT for the rich and austerity for the rest of us.
While MMT accurately describes how government finances work, it lacks the critique of power. Who is the government working for and why? I feel that MMT is just a part of a wider political debate and not a panacea for the structural problems.
Of course, MMT is part of a wider political debate.
It explains how the monetary system works but that is just the start. Socialists attacking MMT makes no sense.
The elites DO NOT understand or embrace MMT. they are not that clever. Indeed, some Republicans tried to ban it (if such a thing is possible). MMT cannot be 'used' -it describes what *is*. The elites do what they do and they understand what they do in a 'tax revenue funds spending' model. From their perspective some things are worth spending on, such as weapons, others aren't, such as welfare.
Phil is exactly right of course that MMT is descriptive, not prescriptive. However, where that ends is not always clear for some MMTers, and I think Grace makes a fair point about the impracticality of this. I also do NOT think Murphy is a good spokesperson for MMT when he doesn’t even accept certain of its fundamentals (ie, the Job Guarantee is core to MMT). Far better off actually listening to the founders and experienced commentators (eg, Kelton, Pavlina, Phil, etc.). Here’s Bill M making the very same point: MMT is a framework needs a class analysis and value set for its application: https://open.substack.com/pub/realprogressives/p/working-class-mmt?r=13esdq&utm_medium=ios
Couldn’t MMT not only freeze the rent, but bring back affordable public housing? Why would capitalists oppose that, if it meant workers could continue to afford the products of capitalism?
because the more stuff they give you for free the less stuff you have to buy. capitalists are opposed to universal social programs because they are about de-commoditizing life. Capitalists are interested in commoditizing as much of life as possible in order to profit.
This is, as you suggest, against the long term interest of capitalists because it degrades their consumer base, but the way the incentive structures work means that if one capitalist were to try and plan for this they would be outcompeted by those that didn't.
Distinction between what they say they are in favour of and who/what they fund. The latter is always a better indication of what they think is in their interests.
I'm going to try to keep on top of all the comments on this post because it's an important debate and I know lots of people are very passionate about it. But I think there are going to be a lot, so I apologise if I don't manage to get to all of them - I may also re-post responses if I'm asked a similar question twice.
Thanks for sharing your thoughts. I find myself increasingly embroiled in this kind of discussion. Your carefully considered and eloquent response brings together many of the points that I have not quite managed to assemble in my own responses to the theoretical purists with a void where empathy, compassion and social responsibility should exist. I equate this growing void with the sheer selfishness, greed and “no such thing as society” attitude of the utterly reprehensible creature that initially began to put into practice the insane advice provided by the likes of Patrick Minford and his US MMT extremist peers.
I once attended a lecture by Minford, very rapidly forming the view that the man is seriously unhinged.
A couple of years later, as a graduate trainee with British Rail, I saw the full brutality of Thatcher’s Civil War against the working class and particularly, her governments sheer hatred for the working folk of the Midlands and the North.
Now retired after a forty year career in the rail industry, my views on MMT and it’s proponents have refined a little, with added despair and loathing.
Thank you for illustrating how the application of MMT worked out at Orgreave. That was pretty local and carries a long, growing legacy.
Suffice to say Grace, my responses to the MMT zealots has tended towards the slightly less intellectual, punctuated with very carefully selected and precisely deployed expletives.
You deserve great credit for showing us all a better way to engage.
Thanks for this very thoughtful comment Hugh, very interesting hearing about your lived experience of this. And yes it's important to (try to) disagree well!
On a more general note, I have been a socialist for a very long time and an MMT advocate since 2010. MMT provides the answer to the 'how are you going to pay for it?' question and is not a substitute for socialist activism but a complement to it. Nobody thinks that understanding the monetary system solves all our problems. But it sure helps. The idea of pretending that the government budget is like a household budget gets us nowhere. MMT plus socialist activism? Now there's a thought!
This is right. And it also points at the flaw in Richard's "Just do MMT and evil capitalism will be defeated" presecription.
The state is the entity that can do MMT.
But the state is captured by capitalists so it will never do MMT.
Seems a bit obvious but he will not accept this logic.
In fact, when you read his comments, it is clear that Richard is a liberal capitalist. He believes in capitalism. He believes it just needs a tweak called MMT. He believes the reason why governments are resistant is because we happen to have bad and mean people in government right now.
The reason for this view of the world is that, when push comes to shove, liberals prioritise their own privilege and the current order over justice. That is what motivates their faulty reasoning. It's why you cannot get them to see the logical inevitability of the consequences of capitalism. They don't actually want a more equal world if that robs them of some of their privilege.
TBH it's perfectly understandable. I am very privileged myself and real socialism would almost certainly result in me losing a chunk of my material privilege. But I long ago decided this was preferable to my kids living the majority of their lives on a dying planet... And as I type this the loss of privilege is only theoretical so I can still be rational about it!
Yes. Markets are epiphenomena of the state. No state, no money and no markets. Currently the state has been captured by reactionary forces. we need to take it back and re0enbed markets (in Polanyian terms)
Not really. His definition of socialism all falls into social democracy.
Nothing there is anti-capitalist. It is all just "socialism is when the government does stuff".
And the reason this doesn't work is because it ignores the power dynamics at the heart of capitalism that make these socDem utopias logically impossible. Trying to get all these rainbows and unicorns under capitalism is as plausible as nailing jelly to a wall.
This is the central flaw in the arguments of liberal capitalists and socDems. They are constantly trying to find a solution to the equation that allows them to preserve capitalism but avoid all its core pathologies.
And btw that is before you even go near the addiction of capitalism to growth, which it is logically impossible to do sustainably on a finite planet.
It reminds me of the Michael Caine character in Interstellar. He keeps working on a solution to an insoluble maths problem even when he knows it's impossible. Liberals just keep telling themselves that they will get there eventually, even when all the logic and evidence is proving them wrong. Because fundamentally, they like things the way they are. Though they will never admit it in polite company, they dread change radical enough to threaten their own comfort and privilege.
Sounds like a great idea. If only someone who can help with understanding MMT and someone who understands the power of socialist activism could, I dunno, work together maybe?
I am sorry, you got MMT backwards. Minford hates MMT and Thatcher would have. She firmly proposed that government and household budgets were the same, that governments could run out of their own fiat money, and she used that to justify Orgreave and worse. You can start learning about MMT here:
What's funny is Vulture Capitalism led me to pursuing a degree in economics from the MMT lens. I have had similar frustrations with the economic discussion as if it is separate from political interests/powers-that-be. I know you've had enough interaction with avid MMTers to justify writing this, but no one I've interacted with in degree would be so single-minded to say what Mr. Murphy has said. I hope there's a bit of solace in knowing that we're not all like that, and that we agree with you. Polanski is doing a fantastic job of pushing the relevant issues and supporting them with the MMT framework/viewpoint. That's all MMT is after all: a viewpoint. A lens. Love what you're doing, please keep it up!
Perfectly agree with all of this as someone who does use an MMT understanding of economics.
But where I think MMT is useful is in attacking the kind of fake 'left' represented by the opportunists at the top of the labour party—and this is exactly where Polanksi could use it.
Being able to appeal to the establishment economic narratives is exactly how they are able to misrepresent their political economy as something resembling progressivism. These people are able to use the received wisdom of the political sphere about spending and debt to sell their "this is all we can do if we are sensible progressives" narrative; and plenty of people who are principally on the left lap it up. Just look at the 'soft left' of the Labour party, it's like catnip to them.
MMT goes right to the heart of how much of a lie that is, how ineffectual these people really are, and just what their place on the political spectrum actually is.
So I agree completely that MMT is technocratic and unable to accept the realities of power in society—but I think it is still a useful tool in fighting the right wing economic narratives that have taken hold on the left since the neoliberal revolution and that we should use it to discredit fake progressives.
I responded to this point on comms in a few of the comments above so I won't repost - but suffice to say that 'how are you going to pay for that?' is just one of the arguments they'll use against a left policy agenda. There's also 'the rich will just leave' and 'businesses will stop investing'. Countering these arguments isn't just about showing that there's a coherent alternative - its about showing that the ruling class will say anything to hold on to their wealth and power, and organising people to fight back against that rather than engage in pointless debates with those in charge.
On the subject of 'the rich will just leave' and similar arguments, I'd very much like to hear you talk more about this issue, Grace.
While my economics understanding is a bit shaky, it seems to me that rich people, and especially big corporations, leaving opens up a gap in the market that would almost certainly quickly be filled by smaller businesses and less wealthy people looking to scale up their business, property holdings or whatever. Is this a reasonable assumption?
Yes - if we can support the creation of such alternatives. I've written quite a bit about the importance of the social, cooperative, and community economy and how we can support the development of grassroots alternatives to the monopoly capitalist model. We need to think creatively about public ownership, employee/community buyouts, and strengthening the co-op movement. There's a good amount on this in the last section of Vulture Capitalism!
We don't need the rich. Find Stephanie Kelton's 15-minute TED talk in which she goes over this. One thing I haven't heard mentioned is that the state can create/fund replacement businesses and run them AT A LOSS. There is no need to make a profit or even to break even.
This is an incredibly important debate. Very well unpacked the essential viewpoints each of you are bringing to this. Academia often get stuck in their lane and Richard has a real mastery over MMT.
Would love someone to visually show these interplaying concepts.
Another great post, our critique of MMT is spot on in highlighting that economic policy is never simply about technical truths but about class power and ideology. Even if MMT accurately describes monetary operations, the state’s fiscal choices are shaped by who holds power and whose interests prevail. Just as Ricardian economics rationalized laissez-faire to consolidate bourgeois interests, today’s fiscal debates are framed to protect entrenched elites in finance and industry.
Historically speaking one of the best books I have read about the ideological underpinnings of economics is Rajani Kanth who makes this point forcefully in "Political Economy and Laissez-faire: Economics and Ideology in the Ricardian Era", noting that “political economy was never merely analytical; it was prescriptive, serving to legitimate the social order required for capital accumulation.” [According to Noam Chomsky the book was so good he lost his position at the University of Utah over it...]
Your reminder that austerity, subsidies, and corporate welfare are not “rational” policies, but class strategies is crucial. MMT’s insights into monetary sovereignty are useful, but without confronting ideology and power, they are ultimately technocratic tools that leave the underlying relations of domination untouched, which is - of course - their purpose.
Your analysis also resonates for me with Italian economist Clara Mattei’s fascinating "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism." Mattei shows that austerity has never been a neutral policy but a class strategy, first institutionalized at the Brussels Conference (1920) and reinforced at the Genoa Conference (1922). There, economists and policymakers framed austerity as “scientific” necessity, but in reality, it was designed to discipline labor and secure capitalist stability after the war. Her book demonstrates that austerity’s rationale has always been ideological — a way to preserve the capital order by curbing democratic demands for redistribution.
Thanks for this thoughtful comment - I love Clara's work and did an event with her a while ago in Berlin, we had a great discussion on the overlaps between our two books. And I haven't read the Kanth book but sounds right up my street! Will take a look
Right on! And beautifully expressed. Thanks for articulating what I’ve been feeling about MMT proponents for a number of years now: they’re technically correct but they often have little grasp of the relationship between economics, money and class power in capitalist societies.
I'm old enough to have been raised by my very left-wing father in the 1950s to understand that the government spends first and then works out how to get its money back. ("Render unto Caesar...")
The policies of the elected government determine how the government manages the economy it creates with its spending. How does it distribute the tax burden? How does it influence the investment opportunities? Etc.
If you understand the spend and tax narrative, you cannot fail to understand the need to proactively manage the economy, which directly addresses the power imbalance between the classes.
As always, I can only completely agree with your analysis.
From a Marxist-Leninist perspective, the very term "socialism" contains a revolutionary, not a reformist, idea; in short, a socialist society cannot be achieved through elections, but only through a revolution.
These attempts to "improve the conditions" of workers within the confines of capitalism are ridiculous, because, as you rightly say, if you don't change the economic system, everything else is just smoke and mirrors.
No, that's not what I meant, but if you want to use certain terms, you also need to know what they mean. The term "socialism" intrinsically includes the term "revolution," because, by definition, every state serves the interests of the ruling class. Therefore, either the working class becomes dominant and then eliminates the state as we know it, or it can only remain dominated, as is currently the case.
This doesn't mean that many things can be done from a reformist perspective, and that we can't start with these. But we must be clear that, as long as we "play" within the capitalist framework, the rules are imposed by the ruling class.
'The term "socialism" intrinsically includes the term "revolution," '
I would noy agree with this. The term 'socialism' means lots of different things to different people, in practice. For example, for some it only refers to ownership of the 'means of production' (socialism = public ownership) for others it is about relationships not ownership per se. Your version of socialism uses the term as a dual (opposing) term to capitalism. That's fair enough but that usage is far from universal and you can end up talking at cross purposes. I would self-define as a socialist but that doesn't mean I would argue that the private sector for -profit sector should be zero, only that the mix of ownership structures should best serve public interest, broadly defined.
Of course, there may be different interpretations of socialism, but the one I'm referring to is "scientific socialism," based on Marxist historical materialism.
My definition of socialism is the original Marxist one, as a transitional phase toward communism, as opposed to "utopian socialism," which ignores class struggle and modes of production.
Scientific socialism envisions a complete opposition to capitalism, precisely because, as long as there is a state protecting the interests of a capitalist ruling class, any attempt to change the rules of the game is fruitless, as our recent history has amply demonstrated, with all reformist attempts failing miserably.
I'm sorry to say that when JFK just gave the slightest nicks to capitalist power [steel and oil magnates are examples], he got an awful haircut just a few months afterward. That is the future we face, or it will be climate catastrophe. Read all about it in The Devil's Chessboard. Part of the problem w/such wealth disparity is that those on the top can always find someone to pay to "take care" of a problem.
I couldn’t agree more with this. As with many monetary reform advocates, including pre-MMT, they presume the very thing that is the problem, namely control over the state. What’s more I tend to think that if you imagine you suddenly have control of enough of the state to implement your preferred monetary reform, you wouldn’t necessarily start with money, rather than health, education, credit allocation etc. I count myself as a bit of an occasional monetary geek, and it’s an interesting intellectual exercise to ponder what is money etc. But to think that if you could just somehow magically change that one thing then all the other dominoes will fall, is to rest in a mental construct that is unrelated to struggles of the real, concrete world we are trying to understand and change.
MMT doesn't "start with money", so there's a bit of good news for you.
MMT starts with the real resources in the economy. Improving "health, education, credit allocation" depends on the resources available. If the people are available then employing them is what's needed. That does take money, but bringing workers into employment is an economic benefit. MMT just points out that if money is needed to employ resources, there is no constraint.
Thanks so much everyone for the encouraging comments and thoughtful questions - I have to admit I’ve now lost track and can’t keep up with all the conversations going on in the comments section!
So if you’d like a reply, please DM me with a link to your comment so I can find it and respond
EDIT: Please try to keep it calm and civil in the comments! I've unfortunately had to block someone for leaving more than 50 comments with lots of ad hominem attacks. Play the ball, not the man please!
Brilliant Grace. Just brilliant. No need to reply.
Push back against austerity arguments? Absolutely - I've been doing so my whole career!
Force people to sit down a listen to an economics class about monetary financing? I don't think so - few would listen, and many of those who did wouldn't understand. It's just not a solid foundation for a mass political movement.
In part, this is a question about political communication. I've written a bit about this issue in the piece linked below, but essentially I'm with Sarah Stein Lubrano in her book 'Don't Talk about Politics'. You don't change minds by convincing people they're wrong in their political/economic beliefs - you change minds by listening to people, and showing them how things can be different. Building trust is much more important on that front than being correct.
https://graceblakeley.substack.com/p/why-i-stopped-going-on-tv
Roger Hallam makes some interesting observations along these lines in his recent interview on Novara Media. I haven not read that book, will check it out.
Yeah, Roger is always worth a listen. Especially because his is always evolving his views and perspective. I thought Ash did a much better job interviewing him that Aaron did first time around.
That incident she mentioned about how Roger called a group of lefties at a festival lecture "a bunch of c*nts" is in her book. It was quite formative for her I think.
Do you trust Trump? Why not?
Because he isn't correct. He lies.
A liar cannot build trust.
Grace, I’m a working class woman whose grandpa was a union rep for the miners in north west Durham, about 100 years ago. The pits were owned by the Queen Mother, my family were at the heart of the class struggle and I agree that struggle continues to this day, whilst recognising the better years post war. I consider myself a socialist and have seen enormous political and social changes, particularly after the hideous Thatcher years and the rise of “toxic individualism” (your description on Politics Joe, that I agree with). You also acknowledged the enormity of the task ahead to encourage collectivism as individualism has such a grip on our society. I agree, as someone who campaigned, marched etc over the years I have seen the appetite for such diminish and whilst it is encouraging to hear of local collective action, whether to oppose government or set up systems of support, I do believe that is a huge uphill struggle and should not exclude the MMT movement. I haven’t been forced to learn about MMT but have picked it up along the way and it has certainly had a huge impact on my understanding of how the country’s monetary system works, in large part thanks to Richard Murphy. I tell people wherever I can as I think it’s a very powerful message to mobilise to action. Zack Polanski has certainly picked it up to powerful effect. It is too important to be shunned and I’m honestly at a loss as to why you would do so, particularly as in your view, a key player Richard Murphy is not socialist enough. I would have to disagree with you on that, his whole alternative budget is based on rebalancing the economy to work for the citizens, not the ruling class. You have a large following, I urge you to rethink your position.
I think Grace's point is that Richard Murphy has a perfectly good theory of economics, but a completely inadequate theory of politics. And without understanding the nature of capitalism and the state under capitalism, he just naively thinks if he can persuade the powers that be to accept that doing the things he proposes will be good for people, they'll do them. But the system is propelled by what gets wealthy and powerful people more wealth and power. So that's not going to happen without a popular mobilisation to change the system (which IMO - but not in Grace's - needs to be underpinned and emboldened by an accurate depiction of what money is as laid out by MMT).
Music to my ears
🙏🙏
I feel as though both perspectives are useful, here. Almost everybody I know buys into fear-mongering over deficits and debts. A lot of people thought austerity was genuinely the most sensible policy option available (because “there is no magic money tree”). For as many times as I see Richard Murphy being bang on the money, I see just as many times him burning bridges by behaving like a patronising ass. That said, I *do* think it would be a lot easier to convince the median person not to vote for an austerity government if they were as convinced as I am that there is usually another way.
I feel as though if we don’t change the conversation over the economic backdrop, that’s another Thatcherite consensus undermining any project of positive renewal.
Push back against austerity arguments? Absolutely - I've been doing so my whole career!
Force people to sit down a listen to an economics class about monetary financing? I don't think so - few would listen, and many of those who did wouldn't understand. It's just not a solid foundation for a mass political movement.
In part, this is a question about political communication. I've written a bit about this issue in the piece linked below, but essentially I'm with Sarah Stein Lubrano in her book 'Don't Talk about Politics'. You don't change minds by convincing people they're wrong in their political/economic beliefs - you change minds by listening to people, and showing them how things can be different. Building trust is much more important on that front than being correct.
https://graceblakeley.substack.com/p/why-i-stopped-going-on-tv
MMT merely looks at tax and spend from the opposite lens as the neoclassicists. Without a strong and creditworthy currency, a sovereign issuer cannot spend into an economy. Without taxation and other monetary tools that removes currency from circulation, the currency would have no strength or creditworthiness in the first place. Whether taxation or spending comes first is like a chicken and egg question. Both MMT and Neoclassicists are seeing it through one but different lens.
There is no chicken and egg.
The state ALWAYS spends by crediting accounts (a reserve add). Taxes are a reserve drain. The state always has first call on resources (whether it chooses to exercise that power or not). The state is the monopoly issuer of the currency and can ALWAYS set the risk free interest rate at zero and unemployment at zero. This changes the nature of capitalism (or in Marxist terms, alters the patten of accumulation, forcing firms to compete for workers, not the reverse). As socialists we need to drive these points home not dither about and making ridiculous statements about taxing the rich to provide revenue to spend on public purpose. Tax the rich for equity and to protect democracy but never, but never for revenue.
Hear hear! Well said.
Appreciate the response. I think yours is a valuable contribution and I don’t think every angle here should necessarily be focused on macro-economics (it’s not very interesting to many). But I would maintain that the household budget analogy is taken as true by default for most people in the UK. It shapes voting and contributes to the Overton window. In my eyes that makes it a weapon in the class war as much as any other and that’s precisely how Thatcherites/ Neoliberals have used it.
“I would love if we could help _____, but there’s no money left!” Is not a rare thing to hear and it is not always said with malign intention.
For me, the best response to the household budget argument is this Tony Benn quote - "If we can find the money to kill people, we can find the money to help people."
Great response. If Climate Catastrophe were a country about to invade us, we wouldn't argue about tax policy - we'd just spend all the money we needed to defeat them.
1000%
I wonder if MMT could be translated into a simple narrative as powerful as the household one so it is not about lecturing? I do think MMT advocates often over technicalise things. Does this have to be a matter of either or rather than both and? We don’t avoid challenging the household budget myth and we listen. Money, released from household propaganda, could be a powerful tool to respond to what we hear, no?
Yes. Economists who teach MMT have powerful stories. But... everyone in the Eurosphere has heard the household budget story since before they could talk.
A simple narrative is to quote Alan Greenspan: "There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody." The point is to radicalize people to realize they've been lied to. Too many go along w/the household narrative and just accept it.
This point is so crucial.
Thanks Ed - probably could have added this to the initial post but it was getting too long!! Maybe a follow up is due
I think you've written about this before but more thoughts are always welcome! I think it's so important to have what I pretentiously like to call a materialist theory of political campaigning.
Why is it that when times are hard socialist ideas don't get traction like they did in the past. I think it's because people don't experience socialism in their communities like we did say before the welfare state when communities had to organise their own welfare.
Obviously the welfare state is vital but it's extremely top down and increasingly run for profit .It doesn't empower communities or show them a different way of organising society. Not in the same way as the Black Panthers in the US organising breakfast for kids did.
So true Grace, "building trust is much more important...than being correct."
I'm on your side but these nagging incongruencies persist: Is the exchange with Richard Murphy an instance of "building trust"? Also when "change-(ing) minds by listening to people, and showing them how things can be different" are you not, in a gentler way perhaps, "convincing people they're wrong in their. . .beliefs"?
Is a distinction being made between the educated class and lesser educated with the latter meriting (requiring?) the gentler pedagogical approach? Is this not a form of paternalism?
Couldn't agree more about Richard Murphy behaving as a patronising arse. He is so divisive in his approach, that he turns people, who do have at least a passing interest in macro economics, away.
His ad hominem attacks on Gary Stevenson are classic examples too.
He's stood at his own personalised barricade, shooting at allies and encouraging that behaviour in others. Pitiful.
Yeah, I agree with you totally. Nevertheless, and despite their stylistic deficiencies, Richard could humbly sit at Gary's feet to learn about communication with the broader public. As so many other people have stated here; the MMT Panacea Cult is obsessed that 'IF EVERYONE ONLY KNEW...' then it'd all turn rainbows and unicorns, but they only have to ask the long-exhausted environmentalists if it was 'lack of awareness' that allowed the climate, the seas or workers' wellbeing to be used as irrational, 'externalised-cost' dumping grounds. Moreover, everyone bought into it whilst sticking fingers in their/our ears and carrying on consuming.
As to costs of entry to Gary's events or the price of the book, I can't say. I guess that he wants to make his campaign self-sustaining or growable, but it's fairly 'open source' and 'free at the point of need' unless you want to attend in person. Nevertheless, he communicates in an accessible way and to demographics where Richard simply fails.
Please forgive the short reply:
Effectively communicating in the wrong direction has enough in the way of human and institutional resources. Also, Gary's 'People like me are screwing people like you' rings empty for multiple reasons. I feel that he's relatively genuine (aside from an obsession with Kid Starver's genocidal and utterly corrupted Labour).
Yup, solid logic from you there and I'll look up some of your recommendations. Thanks for adding to the conversation more than I might.
p.s. I'm not very clued up about macroeconomics (I suppose like most Chicago School/LSE alumni, then!) but I'm not yet convinced that MMT isn't a disease ridden, mangy sheep in pristine sheep's clothing. Then again, public trust in solution-touting-experts is a damaged thing these days! And I'm not unfond of Richard, but he is unnecessarily a dick in some interactions.
Ah, not so short a reply. I'm engaged in hope for the adoption of good ideas.
Your Substack is a much needed antidote to the nihilism brought on by political doom scrolling.
Thanks Riri!
I've never seen MMT as an economic replacement for exactly the reasons you put forward - the system isn't broken, it's working exactly as designed. I instead see it as a framework that a new, socialist society can build on. Positing it as a drop-in replacement that will herald "ethical capitalism" is foolish at best
I see no misunderstanding here - I think Grace fully understands MMT and what it offers, but what she's saying is that the tools it offers up are entirely at odds with the goals and machinations of capitalism. Sure, an elected socialist could use those tools to the best of their ability - but without a fundamental rearchitecting of the foundations of our economic system, those tools will be handily countered and stymied by the interests of capital. That isn't to say we shouldn't use it if given the opportunity, rather that simply convincing economists, politicians and businessmen of it's efficacy is a laughable waste of time and any implementation will require significantly more work than "dropping it in"
To say that MMT is free of ideology is naive. As for why Sachs pay Mitchell, I needn't lecture anyone on optics nor suggest that if the height of financial capitalism is willing to entertain the idea, that perhaps it isn't the magic bullet to solve our problems. Capitalism is fundamentally opposed to the idea of the kind of social spending that MMT advocates for and provides tools by which to justify it - no amount of technocratic reasoning or moralistic arguments are going to sway that notion. There is a fundamental reason why we've seen social spending crater and public-private partnerships skyrocket in tandem whilst quality of life nosedives, and it's nothing to do with how we analyse the economy. Our current economic rules are not guidelines that our current society was built on - they're post-hoc rationalisations of an existing social and political order designed to maintain class stratification and concentrate power. As such, the problem isn't the guidelines - it's the structures that they prop up.
But what Alistair is saying is this 👇🏻
But there is a difference between questioning the narrative and understanding the narrator.
Most people do the first.
Very few do the second.
Because once you study the narrator, something becomes clear:
He does not lie to deceive you.
He lies to shape you.
He lies to teach you what to fear.
He lies to teach you what to admire.
He lies to teach you which deaths matter and which disappear into statistics.
And the most effective lie is not the spectacular event but the quiet assumption.
That America is stabilizing.
That resistance is irrational.
That obedience is pragmatic.
That power is wisdom.
These are not arguments.
They are atmospheric conditions.
You do not notice the weather.
You simply breathe it.
You think you are "questioning everything."
But if you question the facts while preserving the frame, you are still inside the story they wrote for you.
And that is the final stage of occupation:
When the empire no longer needs to defend its lies because you are defending its worldview.
Once you reach that point,
They do not need your agreement.
They only need your confusion.
A confused public is easy to steer.
A confident public is dangerous.
This is why they reveal small scandals and hide structural truths.
This is why they admit old crimes and sanctify new ones.
Questioning everything is the beginning.
Understanding who benefits is the breakthrough.
And stepping outside the frame is the only form of freedom left.
If anyone is guilty of falsely thinking that MMT is a cure for the ills of capitalism, it is Richard. In his comments section I said
"You say you don’t believe in class war. Well capitalists certainly do."
He replied saying
"Politely, I have revealed all the weaponry required to win this war: it is MMT.
How are you going to win it?"
He doesn't get that MMT is a tool and you need to actually win control of government so it serves ordinary people before you can use MMT to help those ordinary people.
Zooming out, analytically, I daresay there is a lot of upside for most of the capitalists under MMT policy, UNLESS you're a bank of course! And that is why it is rejected by governments. Trying to throw the banks under the bus is a very quick way to being thrown out of office!
A bit like fossil fuels. Switching to cheaper clean energy would be great for the economy. Unless you're the fossil fuel industry or a power company. And those are also guys you cannot cross and stay in office for long.
There is no MMT policy. It is only a description of how the State funds itself. It is not "a tool".
The UK (and most other countries) is a sovereign, fiat-currency-issuing State with its own Central Bank. It can never default on its liabilities nor be declared bankrupt. It can always pay its debts when denominated in its own currency. Its spending is not constrained by money but by real resources. It has no need to borrow because it is the monopoly creator of the UK's money.
That is it. You can make both right- and left-wing policies on that framework. And since 1971, the UK has done just that. Once Nixon took the US$ off the Gold Standard, there has been no alternative. MMT has been alive, kicking and a valid description of the UK economy for 54 years.
And if Polanski and Blakeley want to overturn the economy, they need to understand that - and sell it to their putative voters. Because if the voters only believe the household analogy, they will not believe the Green's economic manifesto.
I haven't paid much attention to what Richard Murphy says for probably 8 or 9 years, so I'm not sure about him personally, but I really don't see MMT as being presented by it's core proponents as being any kind of replacement for anything. It's an accurate description of how things operate, a "lens" through which to view things. I guess their advocacy for a job guarantee as a more sensible/moral inflation stabiliser probably does to some extent fit into the model of naively believing that state power would be nice to people if only it knew better, but the overarching message of MMT is "This is the reality, let's operate based on reality!". If it's proponents lack a sensible understanding of political economy that's another thing. No need to throw the baby out with the bathwater. Personally I don't see how you can come up with plans of how to use the state effectively to achieve socialist ends, or how you convince people that it's possible to do so, without a "balance the economy, not the budget" approach. So while "the deficit doesn't matter" might make us sound mad now, I think it's a narrative war that has to be won.
I think we're talking at slightly cross purposes. Yes economic orthodoxies absolutely need replacing by things that actually make sense (e.g. MMT). But Grace seems to be saying something along the lines of, "MMT says if we just convince the powers that be to replace their current understanding with the insights of MMT then all will be well, but they fail to understand the wider class war power dynamics at play." I'm saying MMT is mostly a (paradigm transforming) description of how things actually function, not a prescription for what to do, and sits perfectly comfortably alongside a Marxist analysis of state power.
(Essentially she seems to be taking everything Richard Murphy says as being indicative of what MMT says, which given that he's just some guy who happens to agree with MMTs core insights seems a bit odd - but even if it was Warren Mosler saying it that seems no reason to me to reject MMT's insights.)
I'll actually correct my wording there in the spirit of Grace's critique. I said economic orthodoxies "need replacing by things that actually make sense". The fact is they do make sense. For the powerful. And that's why they're economic orthodoxies. "Mainstream economics is elite ideology plus algebra."
“Balance the economy, not the budget” is an excellent rallying cry.
It's a Stephanie Kelton phrase - I can claim no credit!
You are correct. As an MMT supporter I hate to break it to my fellows that the precise reason the state chooses not to fund human development *fully* by printing money is because it cannot afford to lose the class war to the public. They know full well they can print money.
J. M. Keynes did all this in the 1930s and in a more self-consistent and erudite manner. MMT doesn't add anything much to Keynes. Unfortunately M. Kalecki buried Keynes.
Lol
Beyond prescriptions for JG and ZIRP, how exactly does MMT depart from Keynesianism? I’ve struggled to ever understand this point so I’d be grateful if you could elaborate!
https://moslereconomics.com/wp-content/uploads/2020/11/Seven-Deadly-Innocent-Frauds-of-Warren-Mosler.pdf
Enjoy!
Could you summarise?
Keynes did not do 'all this' in the 1930s.
https://www.tandfonline.com/doi/pdf/10.1080/02692171.2018.1475139
I understand your point that MMT can help win the argument against austerity narratives, but you have in your head a contradictory model of progress.
I think you envision an day when governments come to their senses and embrace MMT, thus throwing much of the financial sector under the bus, and dramatically shifting power to ordinary people because the state can now do large scale investment in infrastructure and programmes that will benefit ordinary people.
But you are ignoring the dominant power dynamics that drive government policy. In the competition for political hegemony between capitalists and the working class, capitalists have won.
The working class (and I mean here the bottom 80-ish percent that aren't being well served by capitalism) don't have the political power to get government to do anything substantial on their behalf that would threaten the interests of capital. Like MMT.
Everything is framed around what governments must do to keep the rich onside. It's framed around how to attract investment from global capital. And the corruption and direction of government by capital is on full display every day of the week.
We don't have a functioning democracy. The democratic levers of popular power over government are still there but they don't connect to anything.
Bottom line. You cannot use MMT to fix capitalism because you FIRST have to get control of government by ordinary people in order to have it even entertain implementing MMT.
Ok, fair enough.
But I don't think the main reason we have neoliberalism and austerity are because we lost an argument about a description of the macroeconomic system in the 1970s.
I think we have neoliberalism and austerity because corporations and the rich waged a huge, coordinated war against all the institutions that had resisted their power since WW2.
I get the rhetorical value of being able to say "a government's finances are not live a household's finances" but I am pretty sure that this move isn't going to radicalise millions of people to join a movement that will materially challenge the power of capital.
Moreover, the people that something technical like MMT will get the attention of are likely to be educated liberals and they are unfortunately very unlikely to be convinced that rewiring the economy in favour of ordinary people and the climate is going to be in their best interests. Broadly speaking, when push comes to shove, liberals side with the status quo against change that would negatively impact their material conditions.
So sure, you can have MMT there as a technical response when people say "how are you going to pay for it" but I think that it's rarely going to land meaningfully as a way of radicalising the majority of the population because they just aren't interested or motivated by economic technicalities.
As Zack Polanski points out, in politics you win with stories, and a much more potent story is "the rich have taken all your stuff and their greed is killing the planet. We need to unite and use the power of the state to stop them".
I think you are avoiding the argument, and the history of liberalism.
Firstly, it doesn't follow that if you can't get liberals onboard then you lose. I mean, it depends on how you define liberals but I see them as in a class of middle- and upper-middle class people are reasonably well served materially by the current system. Chomsky would usually cast them at the top 20% who the media spends all its time trying to propagandise.
In that context, they are vastly outnumbered by the bottom 80%. So in terms of potential power to combat capitalism, that working class population has all the power it needs.
And btw I am not saying that some liberals aren't persuadable. I was a centre-right liberal most of my life. I experienced some things that forced me to re-evaluate my understanding of the world and I am no longer a liberal.
You also ignore history when you dismiss the argument that this can be won by persuading liberals, rather than forcing their hand. You can look back at the 1930s and see how liberals in Germany sided with fascists against socialists to protect their own material interests (validating my point that material interests are the primary concern for liberals) and you can contrast that with liberals in the US who were forced, by a very powerful movement of socialists, communists and unions, to concede to that movement and radically transform the economy and redistribute power away from the capitalist class.
Now, I know that FDR at the time saw this as a necessary move to actually save capitalism, but that only strengthens the case for actual class conflict from the left because it demonstrates that the capitalist class and their liberal followers were actually incapable of responding to the giant contradictions in capitalism themselves, even though leaders like FDR could see them right in front of their faces. The short-termist nature of capitalist logic meant they couldn't make the long term reforms themselves. They had to be forced by an outside power to do even that.
And this dynamic will play out every time. You can show capitalists that what they are doing is bad for them in the long term but they are powerless to do anything about it because the rules of capitalism dictate that if they try, they will be destroyed in the here and now. And unfortunately, liberals are in exactly the same mindset most of the time.
BTW Thatcher changed her mind on climate change.... And why?
Because she realised that the logical consequence of real action to stop climate change would probably mean the end of capitalism. And capitalism was more important to her than sustaining a liveable planet. That is where this always leads.
https://theecologist.org/2018/oct/17/who-drove-thatchers-climate-change-u-turn
You cannot persuade these people to give up on their bedrock values of hierarchy (with them at the top) and greed.
> nobody who really understands MMT in any depth thinks uttering a single MmT inspired slogans will change the world
I totally accept that you don' think this. But Richard Murphy seems to. When I pointed out that Grace is right and you don't win a class war by assuming you have control of government first, because control of government is itself contested, he said
> Politely, I have revealed all the weaponry required to win this war: it is MMT.
This is what this argument is about.
To what extent can MMT win control of the state by ordinary people, vs the capitalist class, vs to what extent does that have to be done through more conventional movements of the working class using the labour and their bodies to force capitalists into retreat.
I think Richard is clearly wrong that "all you need is MMT" but as I already said, I think its useful to also have in your back pocket a counter-narrative about how austerity isn't necessary, because that counter-narrative helps to destabilise the common sense around neoclassical analysis and neoliberal policy.
Destabilising that common sense is useful in the long term because it legitimises for more progressive in policy once you have power. It is also useful in the short term because it discredits conservatives. I think psychologically, and tactically, the biggest benefit of discrediting conservatives isn't that they are made to look foolish or something. It's because they are then shown to be the enemy of ordinary people (for anyone that wasn't already on that page). So this argument is effectively a tool of raising class consciousness.
The big question is how big is that effect on public class consciousness. Because, again, this is a class war and it must be fought as such.
Just a quick note to thank you for taking the time to write your long responses, Alistair. Very few people commenting seem to understand what MMT actually is and how crucial it is that neoclassical economic theory and neoliberal ideology gets rejected by the masses. I don't live in the UK and all this talk of "class war" just feels archaic, quaint and quite misguided. It won't reach the people that need to be reached.
So who needs to be reached? Every mainstream journalist and media figure. We need to reach a pivot point where "people on the telly" flat out reject politicians when they trot up nonsense household analogies. Neoclassical economic theory needs to be laughed at when mentioned. As long as we haven't reached that point, the bogus arguments for austerity will keep landing and people will keep voting against their own interests out of fear and lack of understanding.
We have MMT right now. Its already implemented.
MMT isn't something that you "embrace." It's an empirical description of how the US monetary system works. It isn't something that you "strive for," because it's already happening.
That is the empirical description of an economy, like looking through a microscope and describing what you see there. IT'S ECONOMIC.
Then you go off and start talking about "capitalists," "the working class," and "democracy," which only have something to do with economics because economics are used, like a carpenter's tools, to manipulate the political sphere. All of those concepts refer to POLITICS.
I don't know how many Americans conflate economics with politics. Think of the graph paper you used in high school: there is an X axis and a Y axis. If economics is on the Y axis then politics is on the X axis. You can include a gradient from "the most controlled" to "the least controlled." Then you can combine the two in various ways: a less controlled economy with a highly controlled political system.
BUT THEY ARE NOT ON THE SAME AXIS. I wish more Americans would learn that simple fact. It would prevent people like you from mixing them up.
None of those are good excuses for sloppy thinking on our part.
Glad you're pushing this view in those circles!
Of course, but this isn't about why the state choose to, it's about public understanding as a means to furthering our goal of changing the system.
MMT does not say the state CAN print money.
MMT says the government ALWAYS spends by crediting accounts- taxes and bond sales NEVER provide revenue to spend. Our job it to make that plain and not perpetuate Thatcherite myths about the state needing tax revenue. Then we have to campaign for the state to use its power to serve public purpose. We do not need rich people's money. The idea that MMT insights don't add to a progressive cause is mistaken. It is vital. it disempowers he elites. That's why they fear it. They don't fear old Marxists who have been saying the same things for a hundred years. Marx is full of insight but we need more. Much more. We need MMT and socialist activism not economic myths that only apply under a gold standard.
I would argue that elites don't fear MMT at all, they actually understand and embrace it. We have countless examples here in the US that make it evident. The elites that run our government know MMT and they use it to funnel money to the powerful elites. In the last 25 years we've had no debate on how we are going to fund multiple wars, multiple tax cuts for the wealthy, bank bailouts for causing the housing crisis, stock market bailouts because of covid, bombs to kill kids in Gaza, etc. When the elites want something in this country, the government money machine goes error.
Now the second the people ask for something, the elites' propaganda machine kicks into overdrive. We want universal healthcare! How are you going to pay for it? Universal childcare! How are you going to pay for it? Free college! How are you going to pay for it? And on and on. They know how to pay for it, congress appropriates the funds. People here like to say that it's socialism for the rich and capitalism for the rest of us. You could say that it's MMT for the rich and austerity for the rest of us.
While MMT accurately describes how government finances work, it lacks the critique of power. Who is the government working for and why? I feel that MMT is just a part of a wider political debate and not a panacea for the structural problems.
Of course, MMT is part of a wider political debate.
It explains how the monetary system works but that is just the start. Socialists attacking MMT makes no sense.
The elites DO NOT understand or embrace MMT. they are not that clever. Indeed, some Republicans tried to ban it (if such a thing is possible). MMT cannot be 'used' -it describes what *is*. The elites do what they do and they understand what they do in a 'tax revenue funds spending' model. From their perspective some things are worth spending on, such as weapons, others aren't, such as welfare.
"The elites DO NOT understand or embrace MMT" in public. Seems to me like some do understand, and even let it slip out sometimes.
Can you give any examples of it slipping out...?
Phil is exactly right of course that MMT is descriptive, not prescriptive. However, where that ends is not always clear for some MMTers, and I think Grace makes a fair point about the impracticality of this. I also do NOT think Murphy is a good spokesperson for MMT when he doesn’t even accept certain of its fundamentals (ie, the Job Guarantee is core to MMT). Far better off actually listening to the founders and experienced commentators (eg, Kelton, Pavlina, Phil, etc.). Here’s Bill M making the very same point: MMT is a framework needs a class analysis and value set for its application: https://open.substack.com/pub/realprogressives/p/working-class-mmt?r=13esdq&utm_medium=ios
You're doing great work. Thanks Grace
Thanks Charlie!
Couldn’t MMT not only freeze the rent, but bring back affordable public housing? Why would capitalists oppose that, if it meant workers could continue to afford the products of capitalism?
PS I’m all for socialist / communist revolution
Because the Brit ruling class (like the American one) is more interested in class war.
because the more stuff they give you for free the less stuff you have to buy. capitalists are opposed to universal social programs because they are about de-commoditizing life. Capitalists are interested in commoditizing as much of life as possible in order to profit.
This is, as you suggest, against the long term interest of capitalists because it degrades their consumer base, but the way the incentive structures work means that if one capitalist were to try and plan for this they would be outcompeted by those that didn't.
I thought Musk and Bezos favour a UBi (probably paid for by MMT) because they know without it, no one will buy their crap.
Distinction between what they say they are in favour of and who/what they fund. The latter is always a better indication of what they think is in their interests.
I'm going to try to keep on top of all the comments on this post because it's an important debate and I know lots of people are very passionate about it. But I think there are going to be a lot, so I apologise if I don't manage to get to all of them - I may also re-post responses if I'm asked a similar question twice.
Thanks for reading!
Hi Grace,
Thanks for sharing your thoughts. I find myself increasingly embroiled in this kind of discussion. Your carefully considered and eloquent response brings together many of the points that I have not quite managed to assemble in my own responses to the theoretical purists with a void where empathy, compassion and social responsibility should exist. I equate this growing void with the sheer selfishness, greed and “no such thing as society” attitude of the utterly reprehensible creature that initially began to put into practice the insane advice provided by the likes of Patrick Minford and his US MMT extremist peers.
I once attended a lecture by Minford, very rapidly forming the view that the man is seriously unhinged.
A couple of years later, as a graduate trainee with British Rail, I saw the full brutality of Thatcher’s Civil War against the working class and particularly, her governments sheer hatred for the working folk of the Midlands and the North.
Now retired after a forty year career in the rail industry, my views on MMT and it’s proponents have refined a little, with added despair and loathing.
Thank you for illustrating how the application of MMT worked out at Orgreave. That was pretty local and carries a long, growing legacy.
Suffice to say Grace, my responses to the MMT zealots has tended towards the slightly less intellectual, punctuated with very carefully selected and precisely deployed expletives.
You deserve great credit for showing us all a better way to engage.
Many thanks
MMT can do one
Cheers,
Hugh
Thanks for this very thoughtful comment Hugh, very interesting hearing about your lived experience of this. And yes it's important to (try to) disagree well!
it’s taken me 62 years to learn that 😁
Hi Hugh, it sounds a little like you might be confusing MMT for monetarism. To be clear, Minford has no connection to MMT whatsoever.
I reckon so...:-)
On a more general note, I have been a socialist for a very long time and an MMT advocate since 2010. MMT provides the answer to the 'how are you going to pay for it?' question and is not a substitute for socialist activism but a complement to it. Nobody thinks that understanding the monetary system solves all our problems. But it sure helps. The idea of pretending that the government budget is like a household budget gets us nowhere. MMT plus socialist activism? Now there's a thought!
This is right. And it also points at the flaw in Richard's "Just do MMT and evil capitalism will be defeated" presecription.
The state is the entity that can do MMT.
But the state is captured by capitalists so it will never do MMT.
Seems a bit obvious but he will not accept this logic.
In fact, when you read his comments, it is clear that Richard is a liberal capitalist. He believes in capitalism. He believes it just needs a tweak called MMT. He believes the reason why governments are resistant is because we happen to have bad and mean people in government right now.
The reason for this view of the world is that, when push comes to shove, liberals prioritise their own privilege and the current order over justice. That is what motivates their faulty reasoning. It's why you cannot get them to see the logical inevitability of the consequences of capitalism. They don't actually want a more equal world if that robs them of some of their privilege.
TBH it's perfectly understandable. I am very privileged myself and real socialism would almost certainly result in me losing a chunk of my material privilege. But I long ago decided this was preferable to my kids living the majority of their lives on a dying planet... And as I type this the loss of privilege is only theoretical so I can still be rational about it!
Yes. Markets are epiphenomena of the state. No state, no money and no markets. Currently the state has been captured by reactionary forces. we need to take it back and re0enbed markets (in Polanyian terms)
https://moslereconomics.com/wp-content/uploads/2007/12/Money-and-MMT.pdf
I don't think its quite that simple. https://www.taxresearch.org.uk/Blog/2025/12/01/is-my-work-aimed-at-preserving-capitalism/
and his entry on socialism seems pretty reasonable - https://www.taxresearch.org.uk/Blog/glossary/S/#socialism (I'm not qualified to say how accurate it is, more pointing out that he appears to view it favourably if anything)
Not really. His definition of socialism all falls into social democracy.
Nothing there is anti-capitalist. It is all just "socialism is when the government does stuff".
And the reason this doesn't work is because it ignores the power dynamics at the heart of capitalism that make these socDem utopias logically impossible. Trying to get all these rainbows and unicorns under capitalism is as plausible as nailing jelly to a wall.
This is the central flaw in the arguments of liberal capitalists and socDems. They are constantly trying to find a solution to the equation that allows them to preserve capitalism but avoid all its core pathologies.
And btw that is before you even go near the addiction of capitalism to growth, which it is logically impossible to do sustainably on a finite planet.
It reminds me of the Michael Caine character in Interstellar. He keeps working on a solution to an insoluble maths problem even when he knows it's impossible. Liberals just keep telling themselves that they will get there eventually, even when all the logic and evidence is proving them wrong. Because fundamentally, they like things the way they are. Though they will never admit it in polite company, they dread change radical enough to threaten their own comfort and privilege.
But the state is already "doing MMT." It's a description of what is already happening in the monetary system.
The capitalists are merely using MMT to gain their unbelievable amounts.
Sounds like a great idea. If only someone who can help with understanding MMT and someone who understands the power of socialist activism could, I dunno, work together maybe?
Hi Henry, thanks for the clarification, that’s much appreciated. I might be a retired sixty something but I’m determined to learn more about economics
I am sorry, you got MMT backwards. Minford hates MMT and Thatcher would have. She firmly proposed that government and household budgets were the same, that governments could run out of their own fiat money, and she used that to justify Orgreave and worse. You can start learning about MMT here:
modernmoneybasics.com
Much appreciated Janus
What's funny is Vulture Capitalism led me to pursuing a degree in economics from the MMT lens. I have had similar frustrations with the economic discussion as if it is separate from political interests/powers-that-be. I know you've had enough interaction with avid MMTers to justify writing this, but no one I've interacted with in degree would be so single-minded to say what Mr. Murphy has said. I hope there's a bit of solace in knowing that we're not all like that, and that we agree with you. Polanski is doing a fantastic job of pushing the relevant issues and supporting them with the MMT framework/viewpoint. That's all MMT is after all: a viewpoint. A lens. Love what you're doing, please keep it up!
Thanks William! So wonderful to hear you found the book inspiring :)
Perfectly agree with all of this as someone who does use an MMT understanding of economics.
But where I think MMT is useful is in attacking the kind of fake 'left' represented by the opportunists at the top of the labour party—and this is exactly where Polanksi could use it.
Being able to appeal to the establishment economic narratives is exactly how they are able to misrepresent their political economy as something resembling progressivism. These people are able to use the received wisdom of the political sphere about spending and debt to sell their "this is all we can do if we are sensible progressives" narrative; and plenty of people who are principally on the left lap it up. Just look at the 'soft left' of the Labour party, it's like catnip to them.
MMT goes right to the heart of how much of a lie that is, how ineffectual these people really are, and just what their place on the political spectrum actually is.
So I agree completely that MMT is technocratic and unable to accept the realities of power in society—but I think it is still a useful tool in fighting the right wing economic narratives that have taken hold on the left since the neoliberal revolution and that we should use it to discredit fake progressives.
I responded to this point on comms in a few of the comments above so I won't repost - but suffice to say that 'how are you going to pay for that?' is just one of the arguments they'll use against a left policy agenda. There's also 'the rich will just leave' and 'businesses will stop investing'. Countering these arguments isn't just about showing that there's a coherent alternative - its about showing that the ruling class will say anything to hold on to their wealth and power, and organising people to fight back against that rather than engage in pointless debates with those in charge.
On the subject of 'the rich will just leave' and similar arguments, I'd very much like to hear you talk more about this issue, Grace.
While my economics understanding is a bit shaky, it seems to me that rich people, and especially big corporations, leaving opens up a gap in the market that would almost certainly quickly be filled by smaller businesses and less wealthy people looking to scale up their business, property holdings or whatever. Is this a reasonable assumption?
Is this a reasonable assumption? In a word, yes
Yes - if we can support the creation of such alternatives. I've written quite a bit about the importance of the social, cooperative, and community economy and how we can support the development of grassroots alternatives to the monopoly capitalist model. We need to think creatively about public ownership, employee/community buyouts, and strengthening the co-op movement. There's a good amount on this in the last section of Vulture Capitalism!
We don't need the rich. Find Stephanie Kelton's 15-minute TED talk in which she goes over this. One thing I haven't heard mentioned is that the state can create/fund replacement businesses and run them AT A LOSS. There is no need to make a profit or even to break even.
This is an incredibly important debate. Very well unpacked the essential viewpoints each of you are bringing to this. Academia often get stuck in their lane and Richard has a real mastery over MMT.
Would love someone to visually show these interplaying concepts.
Thanks luke!
Another great post, our critique of MMT is spot on in highlighting that economic policy is never simply about technical truths but about class power and ideology. Even if MMT accurately describes monetary operations, the state’s fiscal choices are shaped by who holds power and whose interests prevail. Just as Ricardian economics rationalized laissez-faire to consolidate bourgeois interests, today’s fiscal debates are framed to protect entrenched elites in finance and industry.
Historically speaking one of the best books I have read about the ideological underpinnings of economics is Rajani Kanth who makes this point forcefully in "Political Economy and Laissez-faire: Economics and Ideology in the Ricardian Era", noting that “political economy was never merely analytical; it was prescriptive, serving to legitimate the social order required for capital accumulation.” [According to Noam Chomsky the book was so good he lost his position at the University of Utah over it...]
Your reminder that austerity, subsidies, and corporate welfare are not “rational” policies, but class strategies is crucial. MMT’s insights into monetary sovereignty are useful, but without confronting ideology and power, they are ultimately technocratic tools that leave the underlying relations of domination untouched, which is - of course - their purpose.
Your analysis also resonates for me with Italian economist Clara Mattei’s fascinating "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism." Mattei shows that austerity has never been a neutral policy but a class strategy, first institutionalized at the Brussels Conference (1920) and reinforced at the Genoa Conference (1922). There, economists and policymakers framed austerity as “scientific” necessity, but in reality, it was designed to discipline labor and secure capitalist stability after the war. Her book demonstrates that austerity’s rationale has always been ideological — a way to preserve the capital order by curbing democratic demands for redistribution.
Thanks for another great post.
Thanks for this thoughtful comment - I love Clara's work and did an event with her a while ago in Berlin, we had a great discussion on the overlaps between our two books. And I haven't read the Kanth book but sounds right up my street! Will take a look
Right on! And beautifully expressed. Thanks for articulating what I’ve been feeling about MMT proponents for a number of years now: they’re technically correct but they often have little grasp of the relationship between economics, money and class power in capitalist societies.
Thanks Nick!
I'm old enough to have been raised by my very left-wing father in the 1950s to understand that the government spends first and then works out how to get its money back. ("Render unto Caesar...")
The policies of the elected government determine how the government manages the economy it creates with its spending. How does it distribute the tax burden? How does it influence the investment opportunities? Etc.
If you understand the spend and tax narrative, you cannot fail to understand the need to proactively manage the economy, which directly addresses the power imbalance between the classes.
As always, I can only completely agree with your analysis.
From a Marxist-Leninist perspective, the very term "socialism" contains a revolutionary, not a reformist, idea; in short, a socialist society cannot be achieved through elections, but only through a revolution.
These attempts to "improve the conditions" of workers within the confines of capitalism are ridiculous, because, as you rightly say, if you don't change the economic system, everything else is just smoke and mirrors.
Thanks as always Edoardo
Revolution or bust it is for you then...
In the meantime we need to do something now. Taking on the 'government is like a household myth' is a good start.
No, that's not what I meant, but if you want to use certain terms, you also need to know what they mean. The term "socialism" intrinsically includes the term "revolution," because, by definition, every state serves the interests of the ruling class. Therefore, either the working class becomes dominant and then eliminates the state as we know it, or it can only remain dominated, as is currently the case.
This doesn't mean that many things can be done from a reformist perspective, and that we can't start with these. But we must be clear that, as long as we "play" within the capitalist framework, the rules are imposed by the ruling class.
'The term "socialism" intrinsically includes the term "revolution," '
I would noy agree with this. The term 'socialism' means lots of different things to different people, in practice. For example, for some it only refers to ownership of the 'means of production' (socialism = public ownership) for others it is about relationships not ownership per se. Your version of socialism uses the term as a dual (opposing) term to capitalism. That's fair enough but that usage is far from universal and you can end up talking at cross purposes. I would self-define as a socialist but that doesn't mean I would argue that the private sector for -profit sector should be zero, only that the mix of ownership structures should best serve public interest, broadly defined.
Of course, there may be different interpretations of socialism, but the one I'm referring to is "scientific socialism," based on Marxist historical materialism.
My definition of socialism is the original Marxist one, as a transitional phase toward communism, as opposed to "utopian socialism," which ignores class struggle and modes of production.
Scientific socialism envisions a complete opposition to capitalism, precisely because, as long as there is a state protecting the interests of a capitalist ruling class, any attempt to change the rules of the game is fruitless, as our recent history has amply demonstrated, with all reformist attempts failing miserably.
The 'success rate' of revolutions is hardly awe-inspiring.
There is no straightforward solution.
I'm sorry to say that when JFK just gave the slightest nicks to capitalist power [steel and oil magnates are examples], he got an awful haircut just a few months afterward. That is the future we face, or it will be climate catastrophe. Read all about it in The Devil's Chessboard. Part of the problem w/such wealth disparity is that those on the top can always find someone to pay to "take care" of a problem.
I couldn’t agree more with this. As with many monetary reform advocates, including pre-MMT, they presume the very thing that is the problem, namely control over the state. What’s more I tend to think that if you imagine you suddenly have control of enough of the state to implement your preferred monetary reform, you wouldn’t necessarily start with money, rather than health, education, credit allocation etc. I count myself as a bit of an occasional monetary geek, and it’s an interesting intellectual exercise to ponder what is money etc. But to think that if you could just somehow magically change that one thing then all the other dominoes will fall, is to rest in a mental construct that is unrelated to struggles of the real, concrete world we are trying to understand and change.
Quite!!
MMT doesn't "start with money", so there's a bit of good news for you.
MMT starts with the real resources in the economy. Improving "health, education, credit allocation" depends on the resources available. If the people are available then employing them is what's needed. That does take money, but bringing workers into employment is an economic benefit. MMT just points out that if money is needed to employ resources, there is no constraint.