Radio MMT – Episode 79 Bill Mitchell: Marx & Socialism

This Post Has 6 Comments

1. Bill
   listened to your excellent interview

   further to you comments re Aust Inst and the professional economist’s published letter.
   This comment appeared in their online magazine
   “70 of Australia’s leading scientists have signed an open letter calling on the Australian Government to implement a 25 per cent tax on gas exports.
   The tax, suggested by the Australian Council of Trade Unions, could raise $17 billion annually, money scientists argue would help make Australia a scientific powerhouse again.”

   The same reasoning behind their request to economists.

   https://thepoint.com.au/new/260813-we-are-at-a-critical-point-in-the-climate-crisis-australian-scientists-call-for-25-gas-export-tax

2. Dear Graeme D. (at 2026/08/13 at 3:52 pm)

   I was invited to add my signature to the ‘Letter’ but declined given it talked about raising taxes to fund essential services.

   Catastrophic framing.

   best wishes
   bill

3. It’s good to see Bill linking MMT and socialism. I was Socialist and Marxist inclined long before I started to take more of an interest in economics. I probably still would sign something like even though I know that the economics isn’t quite right. The politics is correct though.

   This example shows that the relationship between MMT supporters and others on the left can be rather strained on the question of taxes and spending.

   Some in the MMT camp (and I don’t mean Bill) seem to think there is no relationship at all. I sometimes point out that there obviously is if you rearrange the terms of the sectoral balance equation.

   I don’t usually get thanked for my efforts even though I say that this doesn’t mean that G = T or even that G has to defined by T.

   I do say that taxation enables meaningful government spending even if it doesn’t fund it. I then get accused of playing with semantics!

4. Peter Martin: Please don’t think I’m picking on you Peter, but I believe there is no link between MMT and socialism. In Australia, we live in an MMT world, and we have a neoliberal economy (an economy institutionally based around chrematistic principles) and nothing that looks remotely like socialism. The sectoral balances equation holds in any type of economy, as does the fact that a currency-issuer has no spending constraint, only a purchasing constraint (i.e., only so much real stuff for sale in the currency-issuer’s own currency).

   I also believe that Bill separates MMT and his advocacy for socialism very well. If you read most of Bill’s blog pieces, there is no mention of socialism. Many of his pieces refer to unemployment and the ever-present capacity of a currency-issuing central govt (CICG) to maintain full employment (an MMT reality). I don’t like putting words into another person’s mouth, but Bill believes a CICG should net-spend to maintain full employment because unemployment is morally unacceptable (an ethical reality), not because it has anything to do with socialism.

   Of course, Bill does not hold back on his criticism of the current system and his preference for socialism. That is his right. I couldn’t agree more with Bill on his criticism of the current system. I am a bit at odds with Bill’s preferred system of ownership and means of resource allocation. I think there is still an important place for the market, although markets should be much more regulated than they are at present. I see markets, not as mainstream economists see them (i.e., as mechanisms where numerous buyers and sellers are free to act and where, subsequently, welfare-maximising outcomes are generated), but as one of many indispensable communication mechanisms. Communism fails in a modern economy (succeeds in a hunter-gatherer society) because it dispenses with markets. Neoliberalism eventually fails because it sows the seeds of its own destruction. In particular, it configures economic systems so that markets become a mechanism where costs generated and imposed on the rest of society by individual actions can be externalised and social benefits can be privately captured and internalised. That is a self-destructive system. The fact the neoliberal economies tend to outlast communist economies (i.e., reach second-base rather than collapse at first-base) is no proof that neoliberalism is an ideal system. Thus, while I differ to Bill in terms of the means to achieving various ends, I think I am aligned with Bill on the ends. (Note: Bill does not see markets in the same way as mainstream economists, but almost certainly does not see markets in the same way I do).

   I also think there is a danger linking MMT with socialism, which is why Bill is at pains to make the distinction between the two. Explicitly linking the two makes MMT look like a socialist agenda. It is not. It is an accurate description of the monetary system we possess. If some people oppose socialism in any form and believe, for example, that any unemployment resulting from market forces is ‘natural’, then widespread knowledge of MMT – that is, knowledge of the net-spending capacity of a CICG – will prevent such a person from blaming ‘a lack of money’ as the reason why a CICG cannot do anything about it. They are forced to reveal their true colours. Many politicians can presently hide behind the myths regarding modern money and taxation. Exposing politicians and commentators for what they really are and think is an important function of MMT education.

   As for “… taxation enables meaningful government spending even if it doesn’t fund it”, it can also enable wasteful and inappropriate government spending. Billions of dollars will be spent to prepare Brisbane for the 2032 Olympic Games, including a new stadium in a green space that apparently is culturally significant to the local Indigenous people. When the time comes, many poorer Australians will almost certainly be unable to afford tickets to see the various events. A lot of those Australians will be poor because they will be unnecessarily left to rot in an unemployment queue due to inadequate net-spending by the Australian Federal Government. Again, a case of MMT informing us that the spending of a CICG is not fiscally constrained, but teaching us nothing about how the CICG should spend and what they should spend money on.

5. MMT includes a description of fiat monetary operations. Whatever ideological prescription is overlain or imposed thereafter, be it productive capitalism, financialised capitalism as we have today under a neoliberal theology, a mixed economy with state socialism controlling the natural monopolies plus markets for inessentials or communism, functions as per an MMT understanding of free floating fiat money.

   It’s the denial of the reality of fiat monetary operations, as propagandised into or understood but publicly denied by those in charge of currency issuance, that stands in the way of the possibility of the many having good things. Money availability is not the problem but resources are.
   I have noticed with the recent rise in prominence of the Democratic Socialists of America that the counter party neoliberals can’t bear to utter the word socialism. In that true Yankee euphemistic way they have labelled socialism as state capitalism. Well they still want the plebs to keep thinking that the state must operate at a profit/surplus don’t they?

6. @ Phil,

   I’m OK with a little “picking on”. 😀 I agree with you and take your point that MMT is largely descriptive and apolitical. If anyone really wants to produce a relatively successful economy with a small government, low taxation, and other features which might appeal to the political right then a study of MMT wouldn’t go amiss. I wasn’t really meaning any more than that Bill is raising the subject of Marx and Socialism on his MMT blog. Although I should mention that Bill has written extensively on the link between Marx and MMT previously:

   https://billmitchell.org/blog/?p=48410

   I’d suggest that the the one part of MMT that could require a socialist economy and government is the Job Guarantee. The right don’t like it for obvious reasons. However, neither have the left taken to it with any real enthusiasm. I can’t see that changing any time soon.