The nation will also have to find the answer to full employment, including a more imaginative approach than has yet been conceived for neutralizing the perils of automation. Today, as the skilled and semiskilled Negro attempts to mount the ladder of economic security, he finds himself in competition with the white working man at the very time when automation is scrapping forty thousand jobs a week. Though this is perhaps the inevitable product of social and economic upheaval, it is an intolerable situation, and Negroes will not long permit themselves to be pitted against white workers for an ever-decreasing supply of jobs. The energetic and creative expansion of work opportunities, in both the public and private sectors of our economy, is an imperative worthy of the richest nation on earth, whose abundance is an embarrassment as long as millions of poor are imprisoned and constantly self-renewed within an expanding population.
King, Jr., Martin Luther, 1963, Why We Can’t Wait
The growth of the human services should be rapid. It should be developed in a manner insuring that the jobs that will be generated will not primarily be for professionals with college and postgraduate diplomas but for people from the neighborhoods who can perform important functions for their neighbors. As with private enterprise, rigid credentials have monopolized the entry routes into human services employment. But … less educated people can do many of the tasks now performed by the highly educated as well as many other new and necessary tasks.
King, Jr. Martin Luther, 1967, Where Do We Go From Here: Chaos or Community? pp. 197-98
These two questions have fueled my dilettantish but somewhat obsessive study of Modern Money Theory (MMT) for the past few years. But I’ve struggled for a way to concisely explain what MMT is, and why you should care about this (decreasingly) obscure economic theory.
Much of the MMT literature is focused on an intra-discipline fight within Economics. This is a worthy battle but creates an extra challenge for the non-economist, who must first learn a bunch of econ speak just to be able to understand the arguments for unlearning it. The below essay is my attempt to bypass that step and explain MMT directly in language accessible to such a reader. If you find it helpful, please share. Criticism is also welcome.
Many thanks to Mike Konczal, who had the idea of looking outside academia for an MMT explainer, and invited me to write this piece.
Too often the origins of our economic ills are cloaked by a mystical reverence for some autonomous money spirit. The economists behind Modern Monetary Theory (MMT) seek to lift money’s veil by studying the specific actions that occur as money is created, circulated, and destroyed.
For those seeking a grand, unifying sociopolitical economic theory, MMT will disappoint. But as an analytic tool, MMT clarifies who holds genuine power—sovereignty—within society, and how they organize the money system to serve their interests. Unsurprisingly, this is often a story of tremendous cruelty and exploitation.
But the revelation that the rules of money are not immutable laws of nature but are instead created and constantly modified by people opens up possibilities beyond the scope of our current political imagination. The questions become: What sort of society do we want? Do we have the physical resources to support that society? And finally, how the hell do we muster the political will to get there?
In particular, I recommend Pavlina Tcherneva’s lecture. She discusses her research on the Jefes program in Argentina, which provided government jobs to impoverished “Heads of Households” and is about as close as you can get to a real-life full employment program. The program was very successful on a number of levels. Contrary to the intentions of the program’s administrators, nearly 75% of the workers employed were women. They ended up socializing childcare, among other community services. The government preferred for women to stay at home and receive a basic income, but they could only get women to switch to a welfare system by shutting down the Jefes program.
Her talk (~20min) starts at 3:19 & I [awkwardly violate my omniscient videographer duties to] ask some follow up questions about the Jefes program at 1:49:17.
Further reading can be found here & anyone interested in the subject should check out this semester’s schedule of Modern Money Network events. I’m the house videographer again this year, so if you can’t make it live, do check for the edited videos on youtube — hopefully I’ll be a bit more prompt getting them posted this time around!