I read an article in the Financial Times earlier this week (September 23, 2023) -…
It is Wednesday, so only a few snippets only today, while I am working on six lectures I have to give in Helsinki over the next two weeks. The first of those lectures will be a public event. And looking at the weather I am about to undergo around a 45 degree Celsius turnaround from where I am today in Australia to where I will be next week! That is what happens when you go to Finland in the early part of the year. Anyway, here are some items of interest I hope.
Our Green European Journal Article
In case you haven’t seen it, Thomas Fazi and myself have an article out last week (February 16, 2018) in the Green European Journal entitled – Tax havens must be closed, but not for the reasons you think
The article summarises arguments I have made in various blogs (see below) – which can be distilled into these summary insights:
1. Currency-issuing governments are not like households, who are financially constrained and have to ‘fund’ their spending via income, borrowing, prior savings or asset sales.
2. The progressive reaction to the release of the Paradise Papers told us that most progressives still do not understand Point 1. They think the government needs to raise taxes to reduce its reliance on debt while providing public services via expenditure.
3. “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.”
4. “currency-issuing governments such as those of Australia, Britain, Japan and the US can never ‘run out of money’ or become insolvent.”
5. “Do we need the rich’s money?” No.
6. “So should we close down tax havens? Yes!”
Why? The reasons “largely have to do with social justice, inequality and the distribution of political power”.
For more information, please read the article (if you are interested).
The point generalises. Last Friday, I gave a talk at the New International Bookshop in Melbourne about our new book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017).
There was a good audience and during the question time the issue of ‘taxing the rich’ came up. A very oft-repeated ‘progressive’ narrative.
The response I gave was that just as Ayn Rand claimed in Atlas Shrugged that the workers were parasites and relied on the productive skill and zeal of the bosses, the ‘tax the rich’ narrative perpetuates the view that without the rich folks in our society we can have nothing worthwhile.
Which is plainly false.
I said that there are good reasons for decreasing the spending capacity of the rich (via taxes etc) but none of those reasons relate to whether the government has the financial capacity to provide first-class public services to the poor (or the rest of us).
Modern Monetary Theory (MMT) tells us that a currency-issuing government can provide these services if it has the political will.
If the economy is at full capacity then such a government has to divert resources from other uses into a specific service that it wishes to expand.
It would do that via taxation. But the taxation is freeing up real resources to be used in the desired way by depriving the non-government sector of their use.
It is not giving the government extra ‘money’ which enables it to spend.
More generally, ‘taxing the rich’ is supported by a progressive agenda because it reduces the ‘power’ of the rich to exploit the political process for their own purposes.
I have written about this issue previously (among other blog posts on the topic):
1. What matters about the Paradise Papers (November 13, 2017)
2. Solving tax avoidance will not cure the Eurozone of stagnation (December 15, 2014).
3. Off-shore tax havens – be sure we define the issues correctly (July 23, 2012)
This is what I am listening to at present while I work …
I was reminded by a reader (thanks N.) of this great album – Pieces of Man – which was released in 1971. I haven’t listened to it for a long time.
It was the second album from the late poet, musician and author – Gilbert Scott-Heron – who was active in the 1970s and 1980s.
He brought soulful music together with social and political commentary – a powerful mix. He called himself a “bluesologist”.
He had troubles in his life but the music he left is of exceptional value.
Here is an interesting obituary (May 28, 2011) in the New York Times – Gil Scott-Heron, Voice of Black Protest Culture, Dies at 62.
The lyrics are:
Jacky jigsaw pieces
Tossed about the room
I saw my grandma sweepin’
With her old straw broom
But she didn’t what she was doin’
She could hardly understand
That she was really sweepin’ up
Pieces of a man
I saw my daddy greet the mailman
And I heard the mailman say
“now don’t you take this letter to heart now Jimmy
Cause they’ve laid off nine others today”
But he didn’t know what he was saying
He could hardly understand
That he was only talkin’ to
Pieces of a man
I saw the thunder and heard the lightnin’
And felt the burden of his shame
And for some unknown reason
He never turned my way
Pieces of that letter
Were tossed about that room
And now I hear the sound of sirens
Come knifing through the gloom
But they don’t know what they are doing
They could hardly understand
That they’re only arresting
Pieces of a man
I saw him go to pieces
I saw him go to pieces
He was always such a good man
He was always such a strong, strong man
Yeah, I saw him go to pieces
I saw him go to pieces
My correspondent (N.) indicated that we should listen to this when some commentator starts pitching for a UBI rather than a Job Guarantee.
I also love his track Winter in America from the 1974 album of the same name, with classic lines like “Like the forest buried beneath the highway Never had a chance to grow”.
On the Reclaiming the State theme, I will be visiting Europe next week for two weeks.
Two events might be of interest:
1. Helsinki, February 27, 2018 – I will be giving 6 lectures on Modern Monetary Theory (MMT) at the University of Helsinki in late February and early March as part of a new international studies program. The first lecture will be a public event and will be held on Tuesday, February 27, 2018.
2. Barcelona, March 2-3, 2018 – I will be speaking at events organised by the Catalonian-based Ekona coop, which aims to promote innovation in the public and community sphere to move towards a new democracy. It is particularly focused in influencing the European Left to abandon their neoliberal ideas about economics.
I will circulate more details soon of both events.
MMT University Logo competition
I am launching a competition among budding graphical designers out there to design a logo and branding for the MMT University, which we hope will start offering courses in October 2018.
The prize for the best logo will be personal status only and the knowledge that you are helping a worthwhile (not-for-profit) endeavour.
The conditions are simple.
Submit your design to me via E-mail.
A small group of unnamed panelists will select the preferred logo. We might not select any of those submitted.
It should be predominantly blue in colour scheme. It should include a stand-alone logo and a banner to head the WWW presence.
By submitting it you forgo any commercial rights to the logo and branding. In turn, we will only use the work for the MMT University initiative. It will be a truly open source contribution.
The contest closes at the end of March 2018.
That is enough for today!
(c) Copyright 2018 William Mitchell. All Rights Reserved.