Resistance and change doesn’t come from going along with the (neo-liberal) pack

I get a lot of E-mails that accuse me of being politically naive. The accusations were rekindled by yesterday’s blog – British labour lost in a neo-liberal haze. I imagine if I wrote a blog where I outlined support for Marine Le Pen in the context of a two-way fight against the worse-of-the-worst neo-liberals Emmanuel Macron the accusations would turn uglier even. My support for Brexit was met with similar hostility from a range of (self-styled) ‘progressives’ as being naive and offensive. Why, Brexit was a conservative plot wasn’t it? How could I have missed that? Progressives are now advocating votes for Macron even though they know he is an archetype neo-liberal – the anathema of what they believe. And they tell me every day in these E-mail tirades and other blogs that I should give people like Jeremy Corbyn some slack because he knows better than me that to advocate a major departure from the neo-liberal macroeconomic narrative would be political suicide. So why don’t I just shut up and recognise that politics is beyond my grasp and I should desist. Basically that is the message I get regularly. Well, I am sorry to say, such views completely misunderstand the role of an academic and the way in which resistance is constructed.

Yanis Varoufakis’s article (May 2, 2017) – Why we support Macron in the second round – which was reprinted in the French newspaper Le Monde (May 1, 2017), is a classic example of the tension that exists on the Left side of politics.

He we have the argument – we will support our enemy (who advocates “dead-end, already-failed neoliberalism”) because his (Macron’s) enemy (Marine Le Pen) is worse.

I note that Jean-Luc Mélenchon (who gained 19.6 per cent of the vote in the first round) has taken a different stance – urging supporters not to vote for Macron. He didn’t advocate a vote for Le Pen, rather a protest blank ballot vote. 36.1 per cent of his supporters surveyed said they would put in a blank vote while 29.1 per cent said they would abstain altogether. 34.8 per cent said they would vote for Macron.

The Left is becoming locked into a sort of confused #SansMoiLe7Mai movement – lost in other words.

As a contrary view see (April 29, 2017), Is There a Case for Le Pen? and the follow up (May 3, 2017), The European Crisis, where the author considers that Le Pen mimics the nationalist Charles de Gaulle rather than her racist father Jean-Marie or, earlier, the Vichy Right leader Marshal Pétain.

Remember it was de Gaulle who held the French out of entering closer monetary ties with Germany.

The New York Times article notes that while “perhaps de Gaulle’s style of nationalism is too chauvinist and mystical for our era”:

… our era’s “enlightened” governance has produced an out-of-touch eurozone elite lashed to a destructive common currency, and an experiment in mass immigration that has changed French society faster than integration can do its necessary work.

And Macron is Brussels neo-liberalism elitism personified despite his noises to the contrary. It will be a harsh deregulative agenda with banksters eating at the table and the rest left behind. More of the same.

He was the person who drove the worst neo-liberal aspects of François Hollande’s government.

Workers will face reduced wage outcomes and increased job insecurity and the constant threat of unemployment.

The French situation is somewhat different to politics in say Britain. In a cabinet-based Westminster system, the Prime Minister is a creature of the Parliament. In the French case, the President can be derailed by the National Assembly, which some think means it is okay to vote for Macron as long as the Left win control of the Assembly.

But the same argument could be used for Le Pen.

For progressives, what changes are the most difficult to undo?

Le Pen is accused of being a fascist although an understanding of the term would suggest she is something different, perhaps no less objectionable, but not a black shirt Nazi.

And it is clear that the Macron-style approach is hardly a harbinger of a democratic revival. He supports the Eurozone elite who have trampled democratic intent. Read Varoufakis’s latest on Brexit – The six Brexit traps that will defeat Theresa May.

So which candidate exhibits ‘fascist’ tendencies?

The point is that the situation has become a battle of two evils because the Left has lost its way for exactly the same reasons the constant flow of E-mails accuse me of being naive.

The Left has been seduced by power and the objective is to win (and, ‘then we will act differently’) rather than condition the political milieu through education and principle.

To some extent this dilemma makes me think back to Britain in the 1920s.

The claim that advocating a position that is not well understood or currently politically acceptable, which then justifies Jeremy Corbyn spouting unmitigated neo-liberal macroeconomic nonsense, resonates with what was going on in that period.

Apparently, I am naive or do not have political nous because I advocate positions that the ‘electorate’ are currently unwilling to accept and which guarantee the neo-liberals will remain in office.

Well, there are two points to this.

First, as I have said often over the course of my career, which some have described as being iconoclastic (which I take as a complement even if it hasn’t been meant that way often), my role as an academic is not to provide a marketable package that some aspiring politician can run with and gain electoral success.

If I was interested in that role, I would not sit for hours of my life with my head in books and documents and barely pass words with anyone. I also would have taken a different educational route.

It is often misunderstood what the role of an academic is. I see the role as one where ideas are generated. Sometimes these ideas are abstract, while other times they will have a closer mapping with reality.

The role is to examine the veracity of these ideas – to allow them to transition from conjecture to knowledge. Knowledge has to have some empirical traction – that is, sit with the real world, although I am fully aware of the difficulties and dead-ends that arise in debating what ‘sit’ might mean and how we might determine it.

But when an economist says that governments that issue their own currency have to borrow to spend more than they receive in taxes (as if it is a cardinal law rather than a statement of a particular ideological construction of institutional restrictions) we can safely conclude that is ‘fake’ knowledge. A lie in other words.

So my role is to get things ‘right’ and to present an articulate body of ideas that stand up to empirical scrutiny. The end product is knowledge. Not strategic political information. Knowledge.

But how that knowledge is used is not something that is my professional responsibility (as opposed from my concern as an individual).

It is for other professionals to take that knowledge and craft it in ways that construct a political dialogue. So to suggest that it is politically naive for me to point out that the British Labour Party is lost in a neo-liberal haze and to outline why and what the alternative language and narrative could be is to miss the point altogether as to what my role actually is as an academic thinker.

I am not a political advisor. I am not a strategist. I am not a pollster. I am not a journalist. I am not a marketing advisor. I don’t care what people wear, how they comb their hair, or whether they whiten their teeth or not!

Second, knowledge is, in one sense, for posterity. It predates political change – it has to in the most obvious logical way. Think back to Britain in the 1920s, particularly the period 1924 to 1931 when the Gold Standard was finally scrapped and the ‘Treasury View’ ruled.

A definitive book that is worth reading is that by G.C. Peden (200) The Treasury and British Public Policy, 1906-1959, Oxford University Press, Oxford.

I have also written about this period previously – We can conquer unemployment – which discusses the ‘Treasury View’ in some detail.

Fiscal policy (government spending and taxation) became more significant in the period after the First World War, which had elevated government spending for military purposes but also served to provide improved social infrastructure and social services.

In 1914, for example, total managed expenditure of the public sector was £434 million (20 per cent of GDP). In 1915, this jumped to £1,173 million (44 per cent of GDP). While spending was cut after the war’s end, by 1925, it remained at £1,096 million (28 per cent of GDP).

The fiscal deficit jumped from 5 per cent of GDP in 1914 to 30 percent by 1916. With unemployment high in the early 1920s the deficit remained high (around 7 per cent of GDP) and the resistance to using fiscal deficits to increase growth and reduce unemployment was strong in Britain in the 1920s.

The dominant view was that ‘budgets’ had to be balanced such that spending could only be backed by taxation.

But with unemployment stuck at persistently high levels, the Lloyd George government established the ‘Cabinet Committee on Unemployment’, which proposed increasing discretionary fiscal deficits to generate spending growth and reduce unemployment.

The Treasury resisted the proposals and the ‘Treasury View’ became one where unemployment was considered to be caused by higher than profitable wage levels rather than a deficiency of aggregate spending.

This view was dominant. The Government of the day established the infamous ‘Committee on National Expenditure’ which was chaired by Sir Eric Geddes a British businessman and Conservative politician.

Geddes became infamous himself, not only for the so-called ‘Geddes Axe’ (the expenditure cuts resulting from his Committee Report) but also because of his vehemence against the Germans that influenced the outcomes of the Versailles process

He was firmly in the “Make Germany Pay” camp and claimed while electioneering in 1918, declared that “Germany is going to pay. We will get everything you can squeeze out of a lemon, and a bit more. The Germans should hand over everything they own.”

A very good account of this Committee is found in McDonald, A. (1989) ‘The Geddes Committee and the Formulation of Public Expenditure Policy, 1921-1922’, The Historical Journal, 32(3), September, 643-674.

The result was that British government spending fell dramatically in 1921 and the economic situation worsened. The government’s fiscal deficit disappeared but so did employment growth.

The ‘Treasury View’ was articulated by one of its employees, economist Ralph Hawtrey. Hawtrey’s views were conservative and not out of kilter with what goes for mainstream (neo-liberal) macroeconomics these days.

In his 1913 book, he argued gainst the view that government spending was beneficial (p.260):

The underlying principle of this proposal is that the Government should add to the effective demand for labour at the time when the effective demand of private traders falls off. But the writers of the Minority Report appear to have overlooked the fact that the Government by the very fact of borrowing for this expenditure is withdrawing from the investment market savings
which would otherwise be applied to the creation of capital.

In modern language – the ‘crowding out’ claim.

[Reference: Hawtrey, R.G. (1913) Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations, Constable and Company Ltd, London. LINK]

These views were embodied in a major Treasury statement published in 1925, which advocated sound finance and balanced budgets.

In his 1925 paper, ‘Public Expenditure and the Demand for Labour’, Hawtrey clearly outlines the ‘Treasury View’ that the existence of unemployment (p.40) :

… means that at the existing level of prices and wages the consumers’ outlay is sufficient only to employ a part of the productive resources of the country.

[Reference: R.G. Hawtrey, ‘Public Expenditure and the Demand for Labour’ (1925) 13 Economica: 38-48 JSTOR Link.]

The problem is excessive real wage levels impeding profitability.

Should the government engage in public works expenditure, all that would happen would be the “money borrowed … [by the government] … must come out of the consumer’s income … The effect of this diversion of a part of the consumers’ outlay into the hands of the Government is to diminish by that amount the effective demand for products”.

Why? Because investment is lower as a result of the Government taking the savings of the consumers.

In modern language – loanable funds theory and crowding out. The belief that there was a finite level of savings independent of the national income was dominant before Keynes’ General Theory in 1936 was published.

The ‘Treasury View’ rejected the idea that public works programs were beneficial – they apparently provided the state with no capacity (revenue) to pay for the outlays.

For the rest of the 1920s, the full employment that had reigned during the pre-war period never returned.

My blog (cited above) – We can conquer unemployment – examined the 1929 election in detail.

As the Great Depression started to bite, and tax revenue fell, the ‘Treasury View’ was that spending had to be cut to keep the fiscal balance at zero.

And so it went. Public spending fell in 1932 by 2.7 per cent, and then by a staggering 5.6 per cent in 1933. GDP slumped 7.2 per cent in 1931 and the unemployment rate exceeded 20 per cent (doubling almost in the course of the year).

The ‘Treasury View’ was still dominant. When the so-called National Government (a coalition between the Conservatives and the Liberals after the Labour Party withdrew because they refused to agree to mass austerity) was formed amidst the crisis of 1931, the response was to enforce the ‘Treasury View’.

Tax hikes, spending cuts were made and the crisis deepened.

The crisis spread to the sterling and in September 1931, the Bank of England were in trouble with a shortfall of foreign exchange (trying to defend the value of the pound).

At that point, Britain went off the Gold Standard – forever.

But the narrative was almost identical to what we read and hear on a daily basis today.

Excessive deficits, excessive support for the unemployed, unemployed should search harder, public spending is wasteful, it takes good money away from the private sector and all the rest of it.

History tells us that Britain was in crisis throughout the 1930s, even after Keynes published his 1936 General Theory. The downturn in 1937 and 1938 was particularly severe and the ‘Treasury View’ remained a dominant feature of policy.

It was not until Britain went to war and was forced to increase spending and fiscal deficits (including a substantial rise in borrowing) that growth was restored and the experience of the next several years conditioned the political debate significantly with respect to macroeconomics.

By the end of the War, the ‘Treasury View’ had given way to the ideas of Keynes and there was a wider political acceptance of the use of deficits to stimulate growth.

The point is that Keynes and others were introducing ideas in the 1920s and throughout the 1930s that had little political support and were totally at odds with the prevailing ‘Treasury View’.

In his 1926 paper, The End of Laissez-Faire – Keynes had argued strongly against the view that the ‘free-market’ capitalism would deliver superior outcomes.

In that paper, he said (p.14):

I believe that the cure for these things is partly to be sought in the deliberate control of the currency and of credit by a central institution [‘the state’]

In his work as a member of the Committee on Finance and Industry 1930 (aka ‘The Macmillan Commitee’) he was strident in his criticism of the ‘Treasury View’ proponents such as Arthur Pigou, D.H. Robertson and Lionel Robbins.

Austrian school economist Friedrich von Hayek wrote in his 1944 book The Road to Serfdom that the Macmillan Report “served as a venue in which J. M. Keynes challenged the ‘Treasury View'” because the foundations of the Post War Full Employment framework (nationalisation, bank regulation, protection, use of deficits) were laid.

But it was not until the Second World War finished that these interventions really became embedded in peace-time policy.

So were Keynes and his associates politically ‘naive’?

Were they without political nous?

Should they have just gone along with the ‘Treasury View’ and argued around the edges – the modern ‘austerity lite’ approach of the British Labour Party and other Left parties?

Were they ignorant raising a coherent theoretical body of work in contradiction to the mainstream of the day?


You can answer the questions yourselves.

Quite clearly, without that resistance during the 1920s and 30s to the ‘Treasury View’ and the production of new knowledge which supplanted the ‘fake’ knowledge embodied in the dominant policy ideas of the day there would have been no dynamic for political change.

That change came as a result of the demonstration during the Second World War that the ‘Treasury View’ was erroneous. Its prediction capacity was about zero.

Its application made things worse.

But it took a long time for that to become obvious and tractable to the political classes even though Keynes and others were highly critical of the political classes at a time when their ideas had no political currency.

That is a lesson for all of us.

Academics have a role to play for posterity and to produce a body of work that can be drawn on during the period of resistance but also once the tide has turned in the political sphere.

Without an on-going Modern Monetary Theory (MMT) critique the options available for activists to oppose neo-liberalism are limited and will not be game changing.

That is why I write (other than because I like to).

That is enough for today!

(c) Copyright 2017 William Mitchell. All Rights Reserved.

This Post Has 65 Comments

  1. A sterling response.

    I think we collectively spend far too much time justifying the status quo and our unwillingness to resist. I am personally guilty of it, when I talk about economics and am met with confusion, derision, or silence, I feel afraid to appear foolish or emotional even though I know MMT to be the truth and Neoliberalism to be false and destructive.

    I strongly wish there was a group of people working to make MMT part of our political reality. I would sign up in an instant.

    Does anyone else feel this way? Do we need to start real MMT community?


  2. I believe my comment from yesterday was among those which prompted today’s blog. It’s not my place or any other MMT neophyte to accuse you of political naiveté. I’m here to read about your worldview, not to attack it. Being unqualified to comment on anything within your realm of expertise, I responded solely to your treatment of the possible political applications of metaphor:

    >One would have thought that Jeremy Corbyn, a self-styled progressive leader would seek to situate his narrative and attacks on the Conservatives within this metaphorical space rather than play the game by the rules set by the neo-liberals and use the language they have crafted to advance their agenda.

    Change doesn’t come from going along with the (neo-liberal) pack, I agree. That pack is your enemy, they see you as their enemy, and appeasement leads nowhere good. They’re also the gorilla in the room, the power and the money behind every bad thing that happens in the world, and they aren’t shy of using every weapon in their arsenal to keep that power.

    You have developed an explosive new framework with which to view the world. That is why I read your blog, and it is why I suspect everyone new to MMT sticks around. At the moment, that explosive is sitting on a lab bench being poked at by interested people as a curiosity, and derided by those who have everything to lose should it be adopted wholesale. Teaching new undergraduate students MMT in opposition to mainstream theory is the equivalent of training economic mujahideen or guerilla fighters – they need to be *believers* in your framework, because they will need to fight every step of the way in their professional lives.

    Weaponised metaphors would go some way to help them, as well as the ragtag army of internet keyboard warriors who sing your praises at every opportunity. The neoliberal metaphors you quoted are memetic weapons. They drag concepts of personal and household financial competence – states of mind that many people hold as key personality traits – and twist them to suit the agendas of the rich and powerful. Neoliberalism exists as the dominant framework largely because people thinks it makes sense, reality be damned. I believe something similar needs to happen to MMT concepts for them to be accepted by people who do not think about macroeconomics in any depth at any time of their lives. Memes need to be pithy and they need to resonate. MMT memes have the additional burden of having to shake off any association with the left-right duality – any opposition to neoliberalism *will* be seen as leftism, and there are decades of very potent metaphorical weapons waiting around to nuke you should that association ever take hold.

  3. Hear, hear.

    The appeasement approach ignores the fact that once you accept one untruth, you have pretty much accepted every untruth and will quickly find yourself believing things that are mutually inconsistent.

    Like a navigator with a wildly swinging compass, your actions are very likely to be self defeating.

  4. “He didn’t advocate a vote for Le Pen, rather a protest blank ballot vote.”…. That’s how Trump won the USA presidential election. What’s your opinion about what Trump has done so far? What do you expect him to do from now on?…. What kind of transformations would you expect Le Pen would try to impose on France if elected? The National Front has neofascist roots not just nationalist-populist roots.
    Macron comes from a generation of socialists who fell for the neoliberal crap. Many in Europe went through the same process, since the 1980s. If a socialist can become a neoliberal, surely the same person (and others) can then evolve back into a social democrat. He only needs to be aware of the expectations that the French people have and the danger that if he fails he will not only compromise democracy in France but the whole EU project.

  5. “I strongly wish there was a group of people working to make MMT part of our political reality. I would sign up in an instant.”

    There’s a bunch of us posting comments in “The Guardian (Australia)” whenever subjects like the budget come up.

    If you want to “spread the word”, it’s a widely read forum where you can really make a difference.

  6. Dear Bill

    I agree totally with you that it isn’t your role to tailor your advice to public opinion or elite opinion. I was only trying to point out that politicians can’t afford to ignore public opinion. Even if Corbyn were converted completely to MMT, he might be forced, for electoral reasons, to water down his convictions. A politician should think more in terms of results than purity of conviction. As the Dutch proverb has it, een half ei is beter dan een lege dop. Better to get half of what you think is necessary through compromise than to get nothing by insisting on full implementation of one’s principles.

    As to France, if Marine Le Pen were to be elected, she would be a paper tiger because the Front National has practically no seats in French parliament. Unlike the American President, the French President, although independent of parliamentary confidence, does not have the power of veto, which reduces her bargaining power considerably. The French parliament can reject every proposal put forward by Le Pen, but she can’t reject parliamentary resolutions. In France, not a single euro can be spent and not a single law can be adopted without parliamentary approval. The election of Le Pen could mean political deadlock. I still would vote for Le Pen if I were a French citizen, but I wouldn’t have high hopes for her ability to implement her agenda.

    Regards. James

  7. Anthony Kresnel and John Armour,

    There are several groups, but none particularly coherent that I have found. The members do not want to put their heads over the parapet for fear of being accused of radicalism. Many hide behind nomes-des-plumes.

    You need to do some internet searching. I found some that are to my mind helpful, and there is, by the way, an international MMT symposium being held in Kansa City, Missouri, in September. I don’t think it is my place to publish on this blog any of them as I risk it being deleted by Bill’s dreaded sword of Damocles. Just look. They are out there.

    I would very much like to get together some like-minded people in the UK. The difficulty is that there are very strong privacy laws here, and people don’t want to give out their addresses or phone numbers over the internet.

    Any suggestions gratefully received if Bill will allow.

  8. i agree with markh comments that a some cut through framing metaphors are needed to help the acceptance and understanding of mmt.i read a leftist blog and an mmt advocate submits comments which are allways belittled by the partisan regulars who seem incapable of giving up the neoliberal economic assumptions and these are mostly educated and intelligent is very dissapointing.i first read bills work five or six years ago and allthough i am only a self educated old fellow who had to think a bit about what he was saying before the penny dropped,i still remember the excitement i felt when i thought about the implications for society but these faux leftists will not budge.
    so as bill says this may be a long process of education and the simpler the message the better.

  9. According to its website the Australian Workers Party advocates a Job Guarantee and the use of a currency-issuer’s monetary sovereignty to target genuine full employment with price stability. I am wondering whether it would be better to connect with them than to work with the Greens, who don’t seem interested in these priorities.

  10. RE John Armour’s comment; Funnily enough Nigel Hargreaves[ in UK] and I have started to look for a group to join or contribute to. Just recently we have heard of a couple of outlets, ones I think Bill can live with. There is a google group,”Modern Monetary Theory UK” I was accepted for this week.!forum/modern-monetary-theory-uk

    [Bill notes: I edited out a link. Murphy is not an MMT economist]

    It really is difficult to make much headway but I persevere, mostly on The Conversation, and the Guardian too.

  11. Perhaps it is not our unwillingness to resist, but that the situation of the world is desperate. The fact that the debt narrative is part of our everyday reality, because debt-both public debt, corporate debt and household debt-has become a major concern for everybody which we all have to deal with. Next to the increasing disparities of wealth and health in the world. And, wouldn’t it be strange if these things that are going on would not have an emotional effect on us? For me, to engage in micropolitics is a way to avoid the paralysis of hopelessness. It is the most viable candidate at the present time, countering the seductive fascisms of “one fits all” and its evil sidekick, the single story told as though it is the only one.” Thus, as Bill writes, his job as academic provides us with knowledge, facts and ideas because micropolitical and macropolitical go together. One is never without the other. They are processual reciprocals. To talk to people about economics, the EU or this so called democracy is breaking the tyranny of the single story that habitually appears in their thinking, and yes, this “breaking” almost always provokes anger and the likes. It is as such uncomfortable, each time anew. “Revolutions” as such, were and never will be comfortable! That’s why it needs soldiers!

  12. I think many of us out here really appreciate that Bill spends so much time with his head in documents in an almost Trappist monk-like state; we all benefit from Bill’s generosity in sharing his learning with us and the rich historical insights and information that often form part of his blogs – I for one would not have even the limited understanding I now have if it were not for this blog and one or two others I read.

    I know Bill insists that he is not a political campaigner -BUT he does the occasional ‘economics in the pub’ session, spoken at a National Health Party meeting in the UK and speaks to the unemployed in Australia. So maybe a little bit of a campaigner peeks out from behind the documents no wand again!

  13. Even some of us with barely any economics background continually read Bill’s blog. Though extremely difficult to wade through all the concepts, in the end, MMT seems like the only worthy framework or perspective from which to view and judge the political and economic horizon. (Thanks to engaging twitter dialogue, MMT tenets, which at one point was a two-step-forward-one-step-backward type of thing, now become clearer by the day.)

  14. Anthony Kresnel and Nigel,
    There is a new Australian party, the New Democracy Party, which advocates MMT and a Job Guarantee. I think they only started this year, but good to know someone is headed in the right direction. None of the existing parties seem able to make the leap.

  15. Slight change of topic
    Does anyone have the sectoral balances of Australia ?
    Also where is the best place to find such info ?

  16. Today a straight MMT line would not convince many people as it is too jarring but that does not mean it cannot be used. First, as Bill points out, is NOT to adopt the other side’s discourse. Neo-liberal speak a la Corbyn is a grave mistake and probably stems from complete misunderstanding of government finance. A discourse based on real resources is possible: “we are a rich country and it is shameful we have so many poor people, such disrespect for the environment, etc, and of course we can afford to raise living standards, provide proper education and healthcare, and have a clean environment. We have achieved these things in the past and the sky didn’t fall in when deficits were necessary. Are political opponents in favour of poverty, environmental destruction, bad healthcare?” Part of the challenge is to phrase the message properly and have it repeated endlessly everywhere by all allies: political parties at all levels, unions, student groups, anti-poverty groups, groups supporting public healthcare, the environment, and so forth.
    It would also be a mistake to believe it was easy for the sound finance side to dominate discourse today. Pro-business think-tanks took decades and a great deal of money to work out their message and coordinate its repetition everywhere, even by supposed socialists.
    All the positive things we want will only happen if political movements demand them. MMT provides the tools (functional finance, floating currency, the job guarantee) to get there. Unfortunately the political movements are not there yet. Neither is the propaganda messaging. I am in England at the moment and the drivel in the media about Corbyn, the best of the lot, is amazing. Time to get busy folks. Read Bill’s blog then get out there and do what has to be done to move the political agenda forward, not backward as is currently the case.

  17. It’s hard to take this stance seriously when you openly advocate for the likes of Trump and LaPen.

    Perhaps we need to return to feudalism or Nazism in order to create the proper dynamic for progressive change. And we can tell those marginalized how they’re doing their bit.

  18. Thanks Dr. Mitchell for bringing the topic up. Thanks everyone for your comments, I learned quite a bit from you.

    We waited Obama to go to the left for 8 years. Even though the nation was to the left of him, he stayed on his neoliberal course. He hired Harvard crook economists and listened to their fraudulent knowledge/religious beliefs about the free market. I supported him in 2008 but I became disillusioned when he turned out to be a republican (yes, a republican; the current right-wing is in the mental hospital). Hillary Clinton lost because of him. Democrats got slaughtered in 2016 election because of him. Western democracies have deteriorated because of the kind of fake knowledge neoliberalism he listens to. Now he takes 400k from bankers to give a speech. What a crook.

    Just today, I learned that Trump is implementing Christian Sharia Law and hiring contraception denier to head some family planning position in the US gov. You can safely say that there is no way the Clinton would do something like that.

    However, a neoliberal paves the way for demagogues like Trump. Even if you elect Clinton, next time we will get someone like Trump, maybe someone even worse. It happened in the US, and now this is happening in France and the UK. Appeasing the neoliberals only delay the inevitable (or maybe even exacerbate the inevitable). It is better to be radical and correct rather than do appeasement. People can smell insincerity and they will not turnout. Voting Clinton just to stop Trump turns our democracy into a farce (which you could argue that it has been that way for a long time). I love how many people’s expectation is so low that they vote to regress slower rather than change direction. Come to think of it, we cannot even vote to change direction because there was no choice to do that! Great democracy! Let’s topple government to export it! Oh wait, we specifically toppled democracies around the world through regime change policies. =(

    What bothered me during 2016 election as well was that Clinton kept saying she is a progressive. Electing her will permanently stain the progressive word so that it would mean people who are warmongering friend-of-corporate-lobbyists establishment insider bankster puppets who can’t send an email without a security crisis. I couldn’t even listen to her for more than 5 seconds because she was so fake and insincere. People learned after Obama that they had been conned, and DNC & media decided to give Americans more of the same. I say DNC and the corporate media because they did their best to silence progressives and Bernie Sanders. Now they come out and act innocent when they were the ones who silenced real change and gave annoying orange free coverage just to raise ratings.

    Many people voted for Clinton because she is lesser of two evils and that the alternative will implement policies that will hurt many people, especially the most vulnerable. I am just sorry to say that I think it is better to get the economics right. In the meantime, the poor will suffer, as they always have. They suffer because of the complete failure and incompetence of the top universities in this nation. Let’s be clear, the blame should fall on them. In my mind, educated people in general are not blameless, they are educated so it is their responsibility to learn proper economics so that fake knowledge and regression cannot persist.

  19. Dear Sam (2017/05/05 at 3:32 am)

    I have never openly advocated for Trump or Le Pen.

    best wishes

  20. John Doyle, glad to have you aboard the UK MMT group express. Some of us have tried to convince Corbyn and McDonnell that their economic line is wrong and misguided, but they have refused to take notice. McDonnell even wrote to me saying that he understood. A few days later, he contradicted himself. I don’t have great hopes for him.

  21. Dear Mark Kinnear

    Send me a private E-mail and I will send you a spreadsheet.

    best wishes

  22. Great article again Prof Bill ……

    Irony is always apparent in all of the critiques posted of you and the development of MMT …..

    What disappoints/frustrates/angers me is that the Left can’t see the Irony embedded in their adoption of Neo Liberalism now that there is a Real Economic Alternative …….

    The thing I found really helpful in this Blog was the extra details relating to the Pre Great Depression history ….

    It gives me another piece of information to inject into my range of narratives I post in order to promote MMT and point out the obvious flaws, blatant lies and disturbing naivety of the destructive Neo Liberal Mythology that dominates our Political and Social Discourse.

    I am one of the people that post/promote MMT on The Guardian (as Reg Oblivion that connects to my Climate Change Posts and Radio Dystopia twitter account) , and as myself on Facebook, to, The Australian Independent Media Network, The Australian Labor Party, Bill Shorten, Tanya Plibersek, Chris Bowen, Tony Burke and Anthony Albanese and the NSW Left. To the Greens Richard Di Natale and Sarah Hanson Young …….

    Lately I have focused on the rubbish about The Liberals and the Debt Deficit “Blow Out” Labor or the Greens use to try and score Political Points ……

    I try to explain that doing this undermines the ALP’s ability to implement their own Fiscal Policies ……

    and write things like,

    “It always leaves the ALP “on the defensive” and “dancing to the Tune played by the Liberal Party/Coalition/LNP or whatever the call themselves this week” ……

    I think I have posted on here before, some of the terms I use, usually “Neo Liberalism is a destructive Ideology masquerading as Responsible Economics” …….

    Though it might not be much, I do feel engaged in trying to promote what I see as the Missing Economic Link in the push back to Neo Liberalism ………

  23. If it took a gruesome world war, preceded by the Great depression, to shoehorn Keynesianism into the political equation, what hope MMT?

  24. I read the New Democracy Party’s website. Their policy proposals sound great. I wonder why they and the Australian Workers Party don’t join forces.

  25. “I read the New Democracy Party’s website.”

    It is interesting there is not one human face visible on the website yet they ask for financial support.

    Who are they? Who has set the party up? Where are they?

  26. Nicholas and Henry,
    They’ve only just started, so give them a chance. It takes a lot to setup a political party from scratch and it’s important with this one to get it right. I found out about it from Steven Hail’s ‘Green Modern Monetary Theory and Practice’ Facebook page, so that’s legit enough for me. Donations are purely voluntary, Henry, there is no membership fee at all.

  27. Hi Bill,
    Continuez à combattre le bon combat !
    (excusez-vous une mauvaise traduction de Google)
    Best wishes.

  28. John Doyle, Bill and Larry,

    I do take Murphy with extreme caution. He is not economically trained, but is an economist by appointment, and although he does not embrace MMT he does understand the sectoral balance and where money comes from. He used to have the ear of John McDonnel but sadly no more as far as I can make out.

  29. There is a dilemma when the reality is that one of two people will win — one with ignorant economic understanding but progressive social/environmental views; the other with ignorant economic economic understanding and a mean spirited approach to everything else also. A protest vote is effective only in a system in which a blank vote is actually counted as cast (or includes a none-of-above option) so the winner must receive a majority of votes cast. That is not the case in the US. No clue in France.

    Lacking that, the choice is getting terrible everything vs terrible some and doing what we can to help people eventually see through the lens that MMT makes available.

  30. Larry, thanks for the approval. I haven’t done much about it yet. And no I’m not sure just how far Murphy goes towards MMT. But he’s on our side I feel.

  31. From Spain what some we saw is that Bill´s thoughts are not naive, au contraire they are enlightening. What it is naive is to think that you can make any change significant in policies without rejecting the neoliberal frame where these policies are formulated.
    Thanks Bill continue with your superb work .

  32. Jan Stuart, Thanks for the party name. I had forgotten it, so now I have enrolled.

  33. “I am now pitching my hopes that Marine Le Pen will win the French elections and take France out of the Eurozone. Not because I have the remotest attraction to her policies. But at this time of history, the disruption to the elites has to continue and start creating the dynamic for the Left to reinvent themselves.”

    I should say that I’m a big fan and supporter and read your blog every day. Your work is invaluable, and a major contribution to a progressive thought destitute of economic ideas.

    But I just can’t get with this Naderesque idea of making things worse to make them better. Not a problem theoretically, but in reality it affects many people adversely. If that makes me hold my nose to vote for Clinton, at least there is a wing of her party receptive to these ideas, and a chance that some of those may achieve a position to wield some influence.

  34. Alasdair MacIntyre during his Revolutionary socialist phase highlighted the relationship between academic intellectual and workers in his 1959 article ‘What is Marxist Theory For?’

    “A working class movement without intellectuals is apt to despise theory. Because it despises theory, it has no perspective, no sense of a way forward beyond immediate needs and demands. It fights upon this or that issue and is defeated more often than it need be because it lacks any larger strategy”.

    The Anglo Saxon world has always had an embedded mistrust of academia and intellectuals- Michael Gove speaking on behalf of the British people in “having had enough of experts” as a recent example but without academia and the public intellectual, no progressive movement can ever, well, progress. But where else do we see the big ideas of progress countering neo-liberalism and neo-liberal framing? The political parties?

    Rather than descending into the internecine back biting and arguments that has hindered the Left since year dot, we should be be trying to form a movement, an alliance. MacIntyre’s article still has a message for us today. Academics such as Bill, Randy Wray and the other foremost MMT economists have laid a sound theoretical framework and a paradigm shift in Economics which if implemented would have radical, almost revolutionary implications. It is up to us in the political movement to get the message across, tirelessly work to create the paradigm shift in thinking and understanding how an economy can potentially work to the benefit of all, not just the neoliberal few. And whilst disagreements in good faith develop theory, it is of vital importance that these disagreements does not descend into the classic leftist in-fighting.

  35. “But I just can’t get with this Naderesque idea of making things worse to make them better. ”
    A Le Pen presidency would not be worse than a Macron presidency. Neoliberalism has done immense damage and is a very great evil. A right-wing nationalist with somewhat left-wing economic policy positions would not be worse than a continuation of business-as-usual.

  36. “A Le Pen presidency would not be worse than a Macron presidency”…. A Neofascist Party “would not be worse” than a Centrist Party led by a former Socialist who is also a Federalist and who may as well have been allured by Neoliberalism, but just as the European Socialists became Neoliberals in the past they are best positioned to guide the EU back into a Social Democratic system?

    The radical left has no traction in the EU or anywhere else, the radical right and the populists (worryingly) seem to have a far better chance to succeed, but fortunately they are not…. so far. Neoliberalism must be abandoned, but it’s Social Democracy that can replace it through a democratic process. There is no hope whatever for a radical leap. MMT supporters must come up with an evolutionary plan for the replacement of Neoliberalism. Waiting for a revolution is a waste of time. Hence the MMT program must take the shape of a set of policies that can be transformative through a process, not a take-it-or-leave-it proposition.

    The Bolshevik tactic of destroying the whole frame of society to then rebuild it under the protection of a Dictatorship (nominally of “the proletariat” but in fact of the party structure), following a specific model to be enforced willy-nilly on one and all, is a bankrupt proposition. Let’s learn from the Neoliberals who would have loved to have hundreds of Pinochets protecting the introduction of their model around the world, but in the end they had to come up with a system that allowed them to introduce their “reforms” step by step in democracy. Although they are still unhappy with the results, mind you, they have certainly advanced to a considerable extent. Destroying their construct and “world order” will require an equal amount of time: 30 years or so perhaps.

  37. “The Bolshevik tactic of destroying the whole frame of society”

    A Le Pen presidency would have zero prospect of “destroying the whole frame of society”. How could it do that? The French presidency is a limited office. A Le Pen presidency would, however, increase the probability of France leaving the Eurozone (a good thing), and it would weaken the stranglehold of neoliberal elites in France and in Brussels (another good thing). The left needs to get organized so that it can shape the direction of a non-neoliberal future, and not just vacate the field to a party that is right-wing nationalist on cultural issues and somewhat left-wing on certain economic matters. But a Macron presidency would be even worse than a Le Pen presidency because it would consolidate terrible policies and waste yet more time before the necessary corrections can be made.

  38. I have just followed a link from an economic discussion on NHAParty facebook page. This has proved very worthwhile and informative and I will be bringing it up at the next Green Party meeting locally.

  39. When it comes to Macron, the Varoufakis Article did note that he was openly opposed to the 2015 bailout deal to the point that he compared it to Versailles. What the Merkel Administration did in response was have him kicked off the negotiating team. It may bode well for Greece, but Hollande was also anti-austerity yet he buckled.

  40. It is not only bad economics but bad politics not to tackle the household anology directly.
    Any spending commitment will be challenged by the media and political opponents on
    the basis of how are you going to pay for that.Without some attempt to explain monetary
    soveirgnty you fashion a rod and bend over for a beating.
    Having said that it does not mean that Mr Corbyn is neo liberal.There are many aspects to
    the free market faith .Some such as Welfare promotes idleness and poverty , or the very
    successful high rates of tax on high earners in the post war settlement are the counter productive
    politics of envy seem to find traction amongst contributors here.

  41. Dear Bill Mitchell Friends & Members of the MMT Family:

    More specifically, I am writing this post to respond to Henry and Nicholas, but also wanted to acknowledge Jan’s kind words about the New Democracy Party. I note that Jan did reach out via the NDP website and I thank you for your valuable feedback Jan.

    In response to the questions posed by Henry and Nicholas:

    Nicholas: The Australian Workers Party was born first as The Labour Coalition and preceded the launch of NDP by about 1.5 years. More precisely, whilst the founders of AWP were developing a social and online presence, NDP was developing the digital infrastructure to mount an effective ‘clicks and links’ and face-to-face campaign in the 2019 election. I have personally reached out to the leaders of AWP, some of who are FB mates of mine, however, as they have not got back to me I don’t know, (at this point) how we can collaborate, although I am not dismissing that possibility.

    If you read the NDP website carefully you will note we do talk about a new leadership style and approach. We have a distributed leadership structure very deliberately. And, although I was intimately involved in developing the concept model of NDP I never wanted it to appear as having one or a couple of leaders. It doesn’t, because that old style of leadership is part of the reason why open and democratic society is in such a mess and suffering from such lousy leadership. Other than that, centralising power in any one individual or small group has inherent dangers associated with it for those individuals and the quality of the decision making as well. I could write about this at some length, but if you reflect upon what is good about distributed leadership you will readily appreciate why this approach is more relevant for these times. Equally, we have an empowered, democratic but responsible educational approach towards policy development in NDP. And yes, we are committed to a range of other social, civil and human rights positions, which are reasonably well represented in our main website.

    I note since Iain Dooley joined AWP that they have embraced an MMT approach to economics and that is great. Iain did attend a couple of NDP National Executive Council meetings before going off and trying to start up a party with Tim Jones of March Australia fame rather than join us. (Of course that is fine too.) I am not sure if Tim is with Iain in AWP, but I hope he is because I think they can both make a useful contribution in AWP. I wish them both well. And of course, the more political party’s that embrace MMT the better for us all.

    Henry: As to your post, “It is interesting there is not one human face visible on the website yet they ask for financial support. Who are they? Who has set the party up? Where are they?”

    Yes, it is interesting that there is not one human face visible on our website. There are a couple of reasons for this. The first one is because when we do upload all the human faces of the NDP representatives you will see many faces. It is not just because we have a distributed leadership structure that this is the case. Rather, it is because we are building representation across all 150 electorate branches before 2019 and I am sure you can appreciate it does take a bit of time to do that. What I can tell you is that before the end of 2017 you will see many human faces and stories about NDP members right across the various states and territories in a range of online and media forums. As Jan correctly points out, we really have only started providing a partial public face, however, over the next couple of months I can promise you that you will see much more than you see now.

    As to, “financial support” and the requests for it on the main website. Yes, it is normal for any political party to ask for financial donations. What I would recommend is that if you need to see images of people and bios before you make a decision about this then be patient and will have that opportunity. It is coming pretty soon. I also wanted to reassure you that there is nothing inappropriate about what we are doing, rather, we are organising nationally across all jurisdictions and regions and, as you can imagine, that does take time.

    Who has set the party up and where are they? The party is continuing to be set up by many people right across Australia in every state and territory. Why are we doing it this way? Most of the answer to that question I have provided an outline to already. The rest of the answer comes from a careful reading of our website and over the rest of this year.

    As I am sure the readers of this post can appreciate, there are many people who are keen to put down, attack or undermine a new political party that intends on conducting its political battles in a hereto uncontested space. This is also part of the reason why NDP has been quietly going about the business of building ‘a base’ across every electorate and state and territory. We do not intend on just driving much needed positive political change across our nation and in our communities, we aim to completely rewrite the way political battles are won and lost. The democratic contest needs to be truly democratic and we aim to achieve that.

    I should also say NDP is not in this to get a couple of seats for a couple of people. We are in the political game to win government as that is the only way we can achieve the public policy goals we have set ourselves. If you think about this what this means is a lot of work for a lot of people up to the 2019 election.

    I also wanted to take this opportunity to make a personal ‘shout out’ to the huge contribution people like Bill Mitchell, Steven Hail, Phil Lawn, Randy Wray, Warren Mosler, Pavlina Tcherneva, Scott Fullwiler and Stephanie Kelton have made to defeating the flawed economic narratives of our times. Some of these people have been hugely valuable in the development of the policy positions of the New Democracy Party and deserve to be appropriately acknowledged.

    These people are truly committed to building a positive future for humanity and it is important to underline their ongoing and valuable contributions in that goal.

    If those who read this need to talk to myself or meet other NDP members in your region please feel free to reach out. We are not that hard to find. You should also note that there is a place on the website to do this.

    For all those who are truly committed to building a sustainable future my best wishes.

    Rod Upward

  42. Hi Rod, thank you very much for outlining the history and purpose of the New Democracy Party. I will get in touch via the NDP website. It would be good to connect with NDP members who live close to me.

  43. Hi Rod, I tried sending a message through the NDP website on a couple of different web browsers but I encountered server errors. Is there an email address that I could send a message to?

  44. I think that Neil Wilson is right – he says that John McDonell is advised by the New Keynesians and their ridiculous fiscal rules. I attended a Labour economics conference in May 2016. Jonathan Portes was there, convincing us that we needed fiscal rules. The economists present agreed that it was “true” when I said from the audience that
    government was a sovereign issuer of currency, but the message is not getting through to McDonell.

    I still have faith in Jeremy Corbyn however. Listen here to how he handles Yvette Cooper (2015)

    I am sure in my mind that he is easily educable, and would change if properly advised.

  45. Addition to my last comment. The video that I linked also demonstrates the very aggressive and ignorant attacks that anyone would suffer when trying to push forward an alternative. The only thing missing from this is Lord Adair Turners argument, that as a sovereign issuer, the government can just spend money without issuing any debt, overt monetary finance. That is the bit that Jeremy needs.

  46. Government is the issuer of the currency yes, but government must control the flow of currency, especially through taxation. Inflation is not just a myth or just a scaremongering device invented by the Neoliberals to tighten government expenditure. But MMT does take that into consideration, as far as I can see.

  47. The French elections seem to confirm the trend in the Netherlands and UK local elections.
    The populist right seem to have peaked and are in decline (until the next financial crisis)
    The real story in Europe is the collapse of traditional social democracy .
    I agree broadly with Bill that it is the result of their exceptance of neo liberalism in
    government and the resulting failures in protecting the interests of the majority.
    But there seems to be little traction for alternative ideas from the electorate even my
    labour supporting friends whose feelings for Corbyn seem to run from disappointment
    to hatred and would happily vote for EU supporting libdems in seats where they have more
    chance of winning.As I have commented before in their guts they are pro( neo liberal) EU
    while denouncing austerity .Herseutic affect as Bill has commented before is a prime mover.
    Inside or outside the EU the European 1% are triumphant.

  48. Alpo: Inflation is not just a myth or just a scaremongering device invented by the Neoliberals

    However, many aspects of the inflation narrative are myths that deny the facts about inflation and government spending.

    All government spending proceeds by the “printing of money”.

    The issuing of corporate welfare in the form of bonds has no effect on the inflationary pressures caused by government spending.

    In the long run, Government must run a deficit at least sufficient to cover increased savings, increased bank credit (reserve ratio), increased GDP and probably current account deficits.

    That hyper inflation is caused by a collapse in the supply of some critical economic input, like food or fuel.

    That an over supply of money will lead to increased production and/or savings before it leads to inflation.

    That neoliberal “remedies” do little to “control” inflation, case in point being the housing and energy markets in Australia. Neoliberalism just sees these as “intractable” problems, where any attempt to address them is highly likely to crash the whole economy.
    That instead neoliberal “remedies” just create heightened unemployment.

  49. Bill’s job is to say it as he sees it as it is from an academic perspective.

    I supported le pen over ex rothschilds banker neoliberal-don’t care who hears that out for 2022 the young/precariats have greatest support for le pen and are loos8ng the most from the status quo.things will only get worse with macron’s plan for fiscal contraction.although i applaud his call for universal unemployment insurance-im stunned it doesnt exist already.

    Btw the treasury view would be correct up until sterling was taken off the gold standard.

  50. Former socialists/social democrats who became neoliberal can be reverted to social democracy.

    Current neofascists who are dressing up their authoritarianism and anti-democratic stance with a coat of populism and chauvinism, are still neofascists and should be the target of any person who loves democracy…. whether that person is a Keynesian of this or that hue, or whether s/he espouses any other economic model for society. Hating neoliberalism so much that you are ready to destroy democracy to achieve its demise is something that will drive most people away from you….. Hence Macron’s stunning victory.

    Now, it’s up to Macron to show leadership and intelligence and understand that the path forward for the EU is through recovering the values and program of Social Democracy.

  51. Hi Brendanm,
    I am not a neoliberal, in fact I have also joined the campaign to get rid of it, doing whatever I can within my possibilities. Politically I am a Social Democrat and I support Keynesianism and the more recent derivations of it, such as MMT (I am even happy with some Marxist ideas, such as increasing the role of companies organised as cooperatives in the economy). Yes, I understand the position of MMT and I basically agree. Now, the fundamental alteration of the current mainly neoliberal economic status quo will not be achieved overnight, hence it’s essential to establish an evolutionary path for its replacement. Above all, it’s fundamental to also establish a political path that can be successful. In this regard I suggest to:
    a) Target a major party. Forget trying to establish a new “MMT-based” party from scratch, it won’t work.
    b) A major party won’t embrace MMT as a full, ready-to-use package. So organise the current “theoretical package” into a set of easily applicable policies that can be introduced step by step. Give priority to those that are easier. A full package can only be introduced in Democracy with an overwhelming support by a large majority of voters. Support that must remain so for a long period of time. Expecting that to happen is unrealistic in most circumstances, if you add the obvious resistance of the threatened neoliberalism, it becomes next to impossible. In the past, the solution has been to “suspend democracy for the good of the necessary revolution” (that was the advice of Fidel Castro to Salvador Allende, for instance), but such moves have a very bad history, and I would recommend not to even think about it.

    Which party is currently best suited to start introducing MMT principles into a real political program? I would say the Greens. Can the Greens take over the left-centre left side of politics (= overcome Labor)? Unlikely in the foreseeable future. If so, how can the Greens be a possible vehicle for the introduction of MMT policies? At the moment it can be through their influence on Labor especially in the Senate, but this influence must be such that it will carry the support of the Labor left. The Labor left itself can be targeted directly with MMT ideas. This process should aim at shifting Labor farther away from whatever residual neoliberalism they may have. Yes, Labor now is not the same as Labor in the 1980s-90s, even Keating is currently moving on.

    It’s a process, it won’t be easy, it won’t be quick….. but, in my view, it’s he only way to succeed in Democracy.

  52. “But a Macron presidency would be even worse than a Le Pen presidency because it would consolidate terrible policies and waste yet more time before the necessary corrections can be made”….

    Hi Nicholas,
    Now we will see what Macron will actually do both in France and in the EU. He knows what Social Democracy is all about and he obviously also know what Neoliberalism is all about. In spite of his relative youth, he also knows that a failed Democracy leads to Authoritarianism, and in Western Europe Fascist Authoritarianism is most likely.

  53. Jan Stuart,
    That party brochure is just a shell. Emails don’t work, but donations do! Suspicious.
    I contacted the New Democracy Foundation, similar looking site, founded in 2007, but not a PP.
    The contact there has complained to the electoral commission about it trading off them and soliciting donations.
    But it’s not illegal. They have been unable to get in touch, so it’s not just me.
    If you have any contacts please let us know. Thanks

  54. Reply to Alpo May 9

    The Greens had the opportunity to take MMT, or at least a Jobs Guarantee, to the last Fed election but lost their nerve. Greens leaders have committed the party to neo-liberal economic ideology. This in part has lead to the split in NSW.

  55. Reply to Guy Hoschke:
    As far as I can see Left Renewal (a NSW faction within the Greens) has a Marxist inclination, which is not directly reflective of the position of the majority of the Greens, except perhaps the emerging Victorian faction known as Grassroots Greens. I don’t see how MMT can be classified as a Marxist economic theory, to me it looks pretty Keynesian. Keynesianism is a form of Capitalism, a much better and fairer form of mixed-economy Capitalism. Although some Marxist ideas (such as cooperatives) can be successfully incorporated into a mixed-economy Capitalism, that does not make such form of Capitalism actually Marxist. In my view the (mainstream) Greens are far more likely to adopt MMT ideas than even Labor, well, for as long as they are unable to form Government and can influence politics from the side lines anyway. For a Party of Government, such as Labor, the situation is entirely different. At this point in the evolution of our form of Capitalism, with still so much Neoliberal crap to be found absolutely everywhere, you can start shifting the economic paradigm only step by step, one reform after another. In this context, major reforms such as the job guarantee should be left for later, when you have some good indication that the majority of the People have already embraced the idea, they find it natural, just, much needed and, psychologically “affordable” (even the Libs are now starting to see this with their new concept of “good debt”, although that smells more like a stunt than anything else coming from somebody like Morrison and Turnbull). Trying to impose a major restructuring of the economic thought against the will of the majority can’t be done in Democracy, it can only be done under a Dictatorial regime. I lived in a Fascist Dictatorship and I will do all what I can to prevent this country to plunge into such a nightmare, whether the Dictatorship is red, black, blue, or green.
    Economic theory is one thing, the reality of politics is an entirely different matter, and if you are constrained by the fundamental requirement to introduce change through Democracy, then the task requires much smart thinking, patience, social networking and strategic acting.

  56. Response to John Doyle:

    My name is Rod Upward and I am the National Secretary of the New Democracy Party. I am confused by John Doyle’s response, (above) dated the 10th May, because I actually responded to him on the 7th May, (above) as well as emailing him when he sent me through an email on 10th May. I have also emailed John and spoken to him again today.

    There was nothing suspicious about the donations working and the contact us not. It was simply a server side glitch that meant emails were not being sent for around two weeks from the contact us page. I note John suggested he tried to join but could not, however, for the last month people have been joining NDP every day without any problems. I have advised John to reapply as there is no record of his application. If he is serious about being a member then he will fill out the application.

    John informed me today that he is an architect and it may be simply coincidence that the founder of the New Democracy Foundation, (Luca Belgiorno-Nettis) also graduated with a Bachelor of Architecture, before going on to become the Managing Director of Transfield Holdings ..

    I have also spoken to the representative of the New Democracy Foundation after John Doyle said he contacted them. The New Democracy Foundation have asked us to change the name of the New Democracy Party, because they believe it competes with their brand for donations. There is considerable controversy attached to that proposition. Relevantly, they are a think tank and we are a political party. They have informed me that they will challenge the name of New Democracy Party with the Australian Electoral Commission.

    Interesting times …

  57. I suppose neither politicians or media in France looked at the candidates’ economic possibilities from a sectoral balance perspective.
    France has booth Current Account and budget deficits. Macron have promised to balance the budget. Then he should balance the CA, how? France have CA deficits since the beginning of the 2000s.
    Will he try go for harsh internal devaluation Greek style? Lower CA and Budget deficit at the same time.

    Sectoral balances are on overview simple mathematics, addition and subtraction. Everybody “knows” economics, addition and subtraction, just like a household. Almost as “simple” as pedagogy, everybody “knows” how kids should be teached.
    I couldn’t be an impossible thing to learn the public about Sectoral balances, not much more complicated than the household approach.
    Once you see the Sectoral balance situation you see that the Euro and S&G pact is impossible. Then you can point at e.g. USA and show how they did grow to be the world’s mightiest nation “despite” constant budget deficits.

  58. The public is right in its approach to economy, it is like a household. But not as they have been lured to believe the artificial credit & debit columns of finances, but the available real resources.
    They have in one sense right that taxes “finance” public sector. If you start off with only a private sector that is fully employed and want a public sector you must carve out room for that by curtailing the private sector. Straightforward way to do that is with taxes. One could call it to “finance”, instead of buying stuff from the private sector the public buy collectively from Public sector.
    So, one can’t say it’s not like a household and that taxes don’t “finance”, when people instinctively know it is. And they are right about it, but with the wrong definitions.

    Then there is the money for nothing thing which is a harder pedagogic task, but hardly impossible.
    One can’t say something isn’t financed and something materializes out of nothing, it defies normal logic. One must avoid point out that people have been fooled for decades, that they are stupid fools. It’s tough to admit one have been fooled.
    It doesn’t have to be too simple, even stupid people can dig into complicated conspiracy theories.

  59. “Forget trying to establish a new “MMT-based” party from scratch, it won’t work.”

    Why not? Every major party has to start somewhere.

    Also you overlook the fact that starting a new party and influencing existing parties are not contradictory aims. The advantage of a new party is that it has the freedom to advocate vigorously and boldly on issues that are currently being neglected by major parties.

    A new MMT-informed party wouldn’t necessarily have to become a major party itself to have a major impact on political debates. That is a worthy goal and it could be how it unfolds, but it isn’t essential. A new party will make a worthy contribution if it publicizes important ideas that are currently largely unknown or poorly understood, and if it mobilizes and connects people who currently feel unrepresented. That process could motivate major parties to shift their thinking.

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