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 the 22 years that Swami Durga Das has managed New York’s River Fund Food Pantry, he has never seen hunger like this. Each Saturday, hundreds of hungry people descend on the pantry’s headquarters, an unassuming house on a residential block. The first people arrive around 2 am, forming a line that will wrap around the block before Das even opens his doors.
“Each week there’s new people,” Das told MSNBC.com. “The numbers have just skyrocketed.”
The new clients are diverse—working people, seniors, single mothers—but many of them share something in common: they represent the millions of Americans who fell victim to food insecurity when the Great Recession hit in 2009, but didn’t benefit from the economic recovery.
And the worst may be yet to come.
Food activists expect a “Hunger Cliff” on November 1, when automatic cuts to food stamp benefits will send a deluge of new hungry people to places like the River Fund Food Pantry, which are already strained.
Now, I bow to no one in my appreciation of female beauty and fancy clobber but I could not wrench the phantom of those children from my mind, in this moment I felt the integration; that the price of this decadence was their degradation. That these are not dislocated ideas but the two extremes are absolutely interdependent. The price of privilege is poverty. David Cameron said in his conference speech that profit is “not a dirty word”. Profit is the most profane word we have. In its pursuit we have forgotten that while individual interests are being met, we as a whole are being annihilated. The reality, when not fragmented through the corrupting lens of elitism, is we are all on one planet.
To have such suffering adjacent to such excess is akin to marvelling at an incomparable beauty, whose face is the radiant epitome of celestial symmetry, and ignoring, half a yard lower down, her abdomen, cancerous, weeping and carbuncled. “Keep looking at the face, put a handbag over those tumours. Strike a pose. Come on, Vogue.”
Suffering of this magnitude affects us all. We have become prisoners of comfort in the absence of meaning. A people without a unifying myth. Joseph Campbell, the comparative mythologist, says our global problems are all due to the lack of relevant myths. That we are trying to sustain social cohesion using redundant ideologies devised for a population that lived in deserts millennia ago. What does it matter if 2,000 years ago Christ died on the cross and was resurrected if we are not constantly resurrected to the truth, anew, moment to moment? How is his transcendence relevant if we do not resurrect our consciousness from the deceased, moribund mind of our obsolete ideologies and align with our conditions?
The model of pre-Christian man has fulfilled its simian objectives. We have survived, we have created agriculture and cities. Now this version of man must be sacrificed that we can evolve beyond the reaches of the ape. These stories contain great clues to our survival when we release ourselves from literalism and superstition. What are ideologies other than a guide for life? Throughout paganism one finds stories that integrate our species with our environment to the benefit of both. The function and benefits of these belief matrixes have been lost, with good reason. They were socialist, egalitarian and integrated. If like the Celtic people we revered the rivers we would prioritise this sacred knowledge and curtail the attempts of any that sought to pollute the rivers. If like the Nordic people we believed the souls of our ancestors lived in the trees, this connection would make mass deforestation anathema. If like the native people of America we believed God was in the soil what would our intuitive response be to the implementation of fracking?
I’m a bit late in blogging this news and now there’s only 10 hours left to back the project. Do it! Your money supports the printing of a full-color booklet documenting the destruction of America’s public schools currently taking place under the guise of “reform.” Copies will be given to unions & community groups to use for fundraising and organizing, but won’t be for sale online. But a $10 Kickstarter pledge gets you a physical copy. (My video will be available for free.)
The propaganda machine of the Global Education Reform Movement (GERM) is sophisticated and insanely well-funded, and has nearly succeeded in masquerading the gutting of our public school system as a “progressive” movement. The actual fruits of GERM include undermining teachers unions and democratic school boards through privately run charter schools; a counterproductive obsession with standardized testing and unidimensional “accountability”; and the shuttering of dozens of schools in cities across the country. The research supporting GERM ranges from non-existent to fraudulent. Rarely do these reforms benefit students, quite often the reverse, though the billionaires who fund the movement do stand to profit both directly and indirectly.
My video will be an attempt at a counter-narrative exposing the pernicious role that billionaire philanthropists and their foundations play in the “education reform” debate. The video will be based on an essay in the booklet by Joanne Barkan, who has done excellent reporting on the subject, and will feature images from Katrina Ohstrom of abandoned Chicago schools. This project is my first foray into the film essay, a form I’ve long admired. I hope I can do the material justice. Stay tuned!
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!