Changes to RBA Act will further entrench the depoliticisation of economic policy and reduce democratic accountability
Today, I consider the latest development in the entrenchment of neoliberalism in the Australian policy…
It is my Wednesday blog post and my relative ‘blog day off’. But there has been an issue I want to write briefly about that has come up recently and has become a recurring theme. I am writing today to put the matter on the public record so that spurious claims that arise elsewhere have no traction. As our Modern Monetary Theory (MMT) work gains popularity, all manner of critics have started coming out of the woodwork. There is now, quite a diversity of these characters, reflecting both ends of the ideological spectrum and places in-between. The mainstream economists and those who profess to be ‘free marketeers’ bring out their big guns pretty quickly – inflation and socialism/Stalinism. Standard stuff that any progressive proposal to use government fiscal policy gets bombarded with since time immemorial. Easily dismissed. More recently, those who claim to be on the ‘progressive’ side of the debate have become more vociferous in their attacks, sensing, I suspect, that MMT have supplanted their relevance as the defenders of the anti-neoliberal wisdom. These characters resort to all sorts of snide-type attacks ranging from accusations of anti-Semitism (which I have covered previously), siding with Wall Street, ‘America-first corporatist sycophants’ (latest ridiculous book from G. Epstein as an example), giving succour to fascists and the Alt-Right, and that sort of stuff. Today, I want to address that last claim, which recently has been raised by a number of so-called progressive critics.
One of the other interesting aspects of the mainstream MMT opposition has been the two-part nature of it.
We have seen key mainstream economists (Summers, Krugman, Blanchard, etc) come out with rather lurid statements about MMT – Summers called it “grotesque” and then, soon after, they publish Op Ed articles or Working Papers outlining how monetary policy has run its course and a period of fiscal dominance must come next.
And they offer analysis that is core MMT and, certainly not, core mainstream New Keynesian macroeconomics, which they have extolled the virtues of for years.
This is a version of the ‘we knew it all along’ dodge that is also being observed, as these characters struggle to maintain their credibility when their mainstream ideas have been shredded of all credibility by the events over the last 20-30 years.
But that is not what I want to write about today.
Here is the issue.
Core MMT economists (and that means the original team plus those who came soon after but are prominent) are getting invitations to speak all around the world now as more and more people, organisations and government agencies are seeking to learn about MMT and its implications for them.
Next week, I will be in Europe speaking to some large financial institutions including Amundi (Paris), Pimco (Berlin) and then a workshop at the European Central Bank, financial market interests in London, and more.
In addition to these events, I am doing public workshops as follows:
1. September 17, 2019 – MMT Framing Workshop (PINE Maastricht – 18:00 to 19:00)
2. September 17, 2019 – Reclaiming the State (PINE Maastricht – 20:30 to 22:15)
3. September 21, 2019 – MMT – Green New Deal Edinburgh (MMT Scotland – 10:00 start)
4. September 21, 2019 – Modern Money workshop – how the economy actually works (MMT Scotland – 14:00 start)
5. September 23, 2019 – Brighton Labour Party Fringe Event (GIMMS – 14:00 start).
6. September 24, 2019 – London (GIMMS note time change to an 18:30 start).
So, one can appreciate the diversity of the audiences involved.
In early November, I have been invited to do a speaking tour in Japan. The invitations came from two very different groups.
The first, from a university professor, who was a senior advisor to Shinzo Abe – a “special advisor to cabinet” but left that position because of disagreements over economic policy.
This story – Meet the intellectual muscle behind Japan’s prime minister (June 6, 2017) describes this academic.
His role in the conservative LDP government was to give advice on “disaster prevention” – he has a background in civil engineering but in recent times has become a key voice in promoting MMT within Japan.
He is very well connected in conservative circles, edits a conservative magazine that recently devoted almost the whole issue to MMT, and is now leading a lobby group that is opposed to neoliberalism and globalism.
He has contacts to the top of the Japanese government and can muster massive media interest.
He was behind my colleague, Stephanie Kelton’s recent visit.
I will come back to this soon.
The second invitation came from a Leftist group, broadly organising themselves under the banner of the – Rose Mark Seal Campaign – which advocates “anti-austerity policies in pursuit of providing choices for voters and to supplant Abe Cabinet’s poor economic policies.”
Importantly, they provide support (via the granting of a conceptual “Rose Mark Seal”) to “to candidates who adopt the ‘anti-austerity economic policy’ regardless of which political parties they belong to.”
This English video lets you know very clearly what this group stands for. They also provide a – Prospectus – in English
They are seeking to tap into what I see as a growing progressive revolt around the world against neoliberalism.
The Campaign is led by Professor Tadasu Matsuo of Faculty of Economics, Ritsumeikan University, and other associates.
It is interesting that they offer this sort of specific endorsement to any candidates for office irrespective of their party affiliation and qualify that on their Japanese language site with this statement:
(meaning: – Note that this does not mean recommending the candidate for anything other than economic policy).
Which is interesting because they cooperated with the conservative group (who brought Stephanie Kelton to Japan) to help raise funds and organise events for that visit.
Now, why am I writing all that detail?
The reason is because some young Leftists in the US (the so-called Libertarian Socialist Caucus (LSC) of the Democratic Socialists of America (DSA)) have circulated a document and are currently voting on whether it should be made public and the recommendations acted upon (which include denouncing Stephanie Kelton for siding with Fascists and mounting a progressive boycott of the upcoming MMT conference in New York).
The document is rather like something one would read in a junior school essay where a class of very enthusiastic students discover the world of Google, find some information, interpret in a binary way (black-white, good-bad, etc) and produce a document that contains some facts, but, also contains a lot of ignorant, half-fetched conclusions that detailed analysis would disabuse them of.
The allegations are that the Professor who invited Stephanie Kelton to do some lectures in Japan, is a member of the far- or ultra-Nationalist Right, and this proves that MMT economists are giving succour to these extreme, anti-progressive views.
It seems that any of the core MMT group will be similarly denounced if we visit Japan to meet the demand for our services in educating policy makers about MMT.
One of the problems here is that it takes a lot of time to screen invitations, especially when there are language and cultural barriers.
For example, I have been invited to Pakistan in December to be the Distinguished Speaker at the annual conference staged by the highest profile research and teaching institution in that nation.
It took be some time to establish the bona fides of the invitation before I accepted – and there was, as you can imagine, a lot of English information available given it was Pakistan.
In the case of the Japanese invitations it is quite difficult to ascertain who is who and what they stand for.
You can read about the nuances of the LSC denunciation nonsense here – Statement on Kelton Visit to Japan.
My own research into the bona fides of my invitation from these groups has been rather extensive and has drawn on the services of friends and contacts in Japan, some who are native speakers and can help me with cultural and language nuances.
The current situation is that I have found that the LDP connected invitation is not reflecting a primary association with the Alt-Right in Japan. It is from conservative forces who are united in replacing austerity and hardship for the Japanese people with progressive fiscal policies.
The nuance here is that the political situation in Japan is not binary as the LSC characters have made out.
There are far right-wing elements in the LDP but, historically, in Japan’s postwar ideological history, the political right has implemented economic policies that we would consider to be progressive Left-wing initiatives, while the political Opposition Left, has promoted and supported neoliberal policies.
We know that well don’t we? All the Social Democratic parties in the West that lead the charge on implementing neoliberal economic policies. Syriza was the exemplar.
In Japan, the conservative LDP has implemented its policies that promote larger government, universal health insurance, etc…), while the left-wing opposition parties have continued to advocate balanced fiscal outcomes and smaller government.
Within the LDP, there are members from the centre-Left members and members to the far Right.
The centre-Left group within the LDP is pushing for a balanced fiscal position while implementing leftist policies on diplomacy and human rights. On the other hand, the right-wing within the LDP has implemented hawkish policies in diplomacy and other areas, while advocating ‘Keynesian’ economic policies.
Some of the LDP Diet members work closely with opposition Left MPs to advance leftist economic policies while often being hard-Right otherwise.
So it is very nuanced.
Who are the progressive enemies here?
It is this complexity that has led to growing interest in MMT from both sides of the political spectrum.
There were, what we might call Alt-Right elements, linked to Stephanie Kelton’s visit, unbeknown to her. They were brought in to defray the expense of the tour.
Despite some conservative groups promoting policies that were close to the framework we set out in our book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017) – anti-austerity, anti-neoliberal globalism, but internationalist, my research into the bona fides of the invitations has discovered some things I am deeply disturbed about.
One of the agendas of some of the conservative elements in Japan (who are otherwise anti-austerity and anti-neoliberal) is to engage in what I see as the equivalent of Holocaust denial. In their context, it is questioning the historical account with respect to the – Nanjing Massacre – and the role of so-called – Comfort Women – in Korea, China and the Philippines during WW2.
There is a literature denying the evidence that the Imperial Army acted to enslave women as ‘sex slaves’ and massacred hundreds of thousands of Chinese (and others) at Nanking in late 1937, early 1938.
The conservative magazine that I mentioned above has published, it seems, one article along those lines.
So while advocating economic policies that are 100 per cent progressive and one can align with – even though they are being proposed by elements in the LDP – I see being involved with groups (for example, accepting invitations to visit Japan) who are associated with historical revisionism of this ilk to be unacceptable for a progressive person.
But it takes a lot of effort to work through the complexity of the multitude of invitations I (and we) receive now as interest in MMT has risen significantly.
To avoid any confusion and mixed signals about the Japanese tour, I have developed a set of protocols.
I have written to the LDP-linked Professor who represents one of two groups that have invited me to speak in November indicating that the magazine article I noted above must be withdrawn.
I do not think it brings any credit to anyone and I do not wish there be an association between our MMT work and those sorts of viewpoints.
I have also made it clear – to avoid any allegations that I am mixing with the Alt-Right or ‘nasty’ influences that:
1. All events are to be open to all and promotional literature freely available.
2. I will not appear at any events that carry any association with certain people, groups or publications (I specified the specific entities involved here).
3. All funding sources should be disclosed and I will then be able to assess whether they are acceptable.
4. I will not have private meetings with a range of people (I specified).
5. I will only give interviews to the standard international media and the main mastheads in Japan.
I am also doing some events for the Rose Mark Seal Campaign, which should disabuse any critics of making allegations that I am giving any succour to any Fascist group.
Those arguments are as spurious as the anti-Semitist allegations recently launched against me because I support my friend Chris Williamson in his struggle against the British Labour Party.
In general, I will always engage and talk to conservative politicians, especially if they are in government. I do that regularly, both in Australia and elsewhere.
Education enlightens people.
It would be ridiculous for a person like me to not do that if my aim is to influence economic policy to deliver progressive outcomes by extending the number of people that have an MMT understanding.
But, as I noted above, I will not engage with people who, for example, deny that major shocking historical events occurred, in order to avoid learning from the mistakes our forbears made.
That is the line I am drawing in my upcoming Japanese speaking tour.
The – Foundation for Monetary Studies Inc. – aka The MMT Foundation serves as a legal vehicle to raise funds and provide financial resources for educational projects as resources permit and the need arises.
The Foundation is a non-profit corporation registered in the State of Delaware as a Section 501(c)(3) company. I am the President of the company.
Its legal structure allows people can make donations without their identity being revealed publicly.
The first project it will support is – MMTed (aka MMT University) – which will provide formal courses to students in all nations to advance their understanding of Modern Monetary Theory.
At present this is the priority and we need some solid financial commitments to make this project possible and sustainable.
Some sponsors have already offered their generous assistance.
We need significantly more funds to get the operations off the ground.
In order for FMS to solicit tax-exempt donations while our application to the IRS is being processed, the Modern Money Network, Ltd. (“MMN”) has agreed to serve as a fiscal sponsor, and to receive funds on FMS’s behalf.
MMN is a non-profit corporation registered in the State of Delaware, and is a federal tax-exempt public charity under Section 501(c)(3) of the Internal Revenue Code.
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Please help if you can.
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I love the concept of Playing for Change but I like what they produce even more.
Here is one my favourite Jimi Hendrix songs (written by Bob Dylan) – All Along the Watchtower.
Electric Ladyland remains one of my favourite all-time albums. I purchased it in 1969 (we always got albums on delay in Australia) from the only import record shop in Melbourne (Bourke Street), which was run by a musician Keith Glass, who I subsequently got to know when I starting playing professionally around the city.
On the Playing for Change version, we see that John Densmore pops up playing drums by the beach.
And Cyril and Ivan Neville with Ivan on the Hammond.
And those Lakota Singers and Dancers.
And the lead Sitar break.
And the Bizung Family Drums.
And master percussionist Yu Hatakeyama.
It is just all happening.
And that is what Playing for Change does.
And the sun is shining outside too, today.
And here is the original Jimi Hendrix version.
It has original Rolling Stones member, Brian Jones, playing percussion.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.