Welcome to episode 93 of Activist #MMT. Today I talk with Esha Krishnaswamy as a guest on her own show, Late Night with Lenin. Esha has me cold read two pieces written by Lenin more than 100 years ago, and describes why they remain important and relevant. (Here's a link to __PART_TWO__.) Esha is the host of the podcast Historic-ly, which is realistic history, similar to how MMT is realistic economics. You can follow Historic-ly on Twitter at @historic_ly and historicly.substack.com. I’ve hosted eight episodes for her podcast, links to which you can find in the show notes. The Lenin readings don’t start until part two. In part one, we discuss the basics of MMT and how it illuminates the centuries long battle between rich and poor. MMT reveals that when the rich say, "depriving the poor is unfortunate but necessary", what they really mean is "of course we can provide for the poor – we just don’t want to." Importantly, MMT makes this clear to average people, not unlike Martin Luther and his papers nailed to the church door during the reformation. In the same fashion (although with printed paper instead of on social media), Lenin illuminated the same things to average Russian citizens, ultimately leading to a rare successful popular uprising. I admittedly struggle through the readings, with its unusual names and concepts, and early twentieth century Russian history. Even so, it results in very interesting conversation throughout, all anchored by Modern Money Theory. Finally, as a brief aside, both of our incredible theme music was created by Wreck Tech. You can find Wreck Tech on SoundCloud and Spotify. And now, onto my conversation with Esha Krishnaswamy. Enjoy. Resources My 2020 interview with Esha on Historic-ly, Anatomy of a Revolution: Parts one and two Episode 71 of Activist #MMT with graduate student Jane Ball: Government-designed racist zoning to prevent popular uprising, which is part two of a two part episode. This episode was re-published by Historic-ly. 

Activist #MMT - podcast

Ep93 [1/2]: Esha, me, Lenin, and MMT

Welcome to episode 92 of Activist #MMT. Today's part two of my two-part conversation with Fadhel Kaboub about his personal story. Fadhel is an economics professor at Denison University in Granville, Ohio, and the president of the Global Institute for Sustainable Prosperity, an interdisciplinary public policy think tank. The focus of his academic work is how the lens of MMT can inform developing nations. I've written a post filled with links to Fadhel's papers, posts, and appearances, a link to which you can find in the show notes. In part one, we discussed Fadhel's personal story, from childhood through parenthood. Today in part two, Fadhel finishes his story about being parent of three little boys and how music is part of how he raises them. We then turn to his own eclectic taste in music, ranging from Metallica and Guns N' Roses to Tunisian hip-hop. We especially focus on Bob Marley. In the second half of today's episode, we return to academic topics, primarily discussing how Fadhel's work on developing nations relates to the work of John Harvey on exchange rate determination. We end on the topic of the 2011 Tunisian uprising, as discussed in the recent New York Times article in which Fadhel is extensively quoted. Now, let's get right back to my conversation with Fadhel Kaboub.

Ep92[2/2]: Fadhel Kaboub: Bob Marley and MMT

Welcome to episode 91 of Activist #MMT. Today I talk with Fadhel Kaboub about his personal story: his childhood in Saudi Arabia and Tunisia, being a parent, his love of music, and how music has become part of his parenting. Fadhel is an economics professor at Denison University in Granville, Ohio, and the president of the Global Institute for Sustainable Prosperity, an interdisciplinary public policy think tank. The focus of his academic work is on how the lens of MMT can inform developing nations, which we talk about in the second half of part two. I've written a post filled with links to Fadhel's papers, posts, and appearances, a link to which you can find in the show notes. Today's story begins with a nine-year-old Fadhel at the center of a political drama between his two home countries of Saudi Arabia and Tunisia. When his grandparents in Tunisia fell ill, his father rushed home from his job in Saudi Arabia to take care of them. Saudi Arabia's immigration laws require foreign workers to give their employers not only their own passport, but also the passports of all their children. Unfortunately, when Fadhel's father left for Tunisia, the employer decided not to release Fadhel's passport, essentially holding the nine-year-old hostage. His family leveraged the media to shame Saudi Arabia into allowing the little boy to be reunited with his family. To this day, Fadhel has never seen his original passport. We then turn to the story of how Fadhel joined the fifth grade in Tunisia, with children who had a 3.5-year head start in learning French. This is the language spoken during half of the instruction time in the country. The overriding theme of Fadhel's story, however, is how there is no place on Earth where he is not considered an outsider or immigrant. Babies born in Saudi Arabia are only considered citizens if their father is a Saudi citizen. Fadhel's mother was a citizen but his father was Tunisian. When he moved to Tunisia, he had a Saudi accent and was unable to speak French. And now, even though a US citizen, he remains an immigrant. The experience, plus witnessing the experience of his parents and home countries, has greatly influenced and inspired not only his academic work but also his decisions as the parent of three little boys. This podcast, Activist #MMT, is dedicated half to academic concepts and half to the personal stories of how people, both laypeople and academics, came to MMT and how it changed them. The reason I believe these personal stories are so important is because it's not possible to separate the academic concepts from those who develop and promote them. This includes their personal stories: what they care about, and how they choose to use the power they have, or don't have. The idea was primarily inspired by Fred Lee in his 2009 book, A History of Heterodox Economics: Challenging the mainstream in the twentieth century, which was recommended to me by Nathan Tankus. Neoclassical economics would have you focus on only their maths and models, and not the discriminatory behavior of universities and journals, and those that back those universities, journals – and their economists. They would prefer you not look at any other discipline, such as history, culture, sociology, institutions, and especially politics. The entire neoliberal project would have you focus only on the how-are-you-gonna-to-pay-for-it question, and not the minor inconvenience of having to change the very foundation of human society, if we are not to go extinct in the coming decades. I talk much more about this concept of interdisciplinarity, in my introduction to episode 81 with Richard Tye. But for now, onto my conversation with Fadhel Kaboub. This is part one of a two-part conversation. Enjoy. (By the way, my 12-year-old keeps asking to hear the story in the above highlight, over and over again. :) ) By the way number two: At the (very) end of every interview, the introduction is repeated in full but without the theme music. I started this long ago on listener request, for those who find the music irritating or distracting from what I'm saying. Resources Fadhel's 2018 interview with Money on the Left. 

Ep91[1/2]: Fadhel Kaboub: From childhood to parenthood

Welcome to episode 90 of Activist #MMT. Today's part two of my two-part conversation with author, researcher, and entrepreneur, Brian Hanley, about his paper, The False Premises and Promises of Bitcoin. The paper, published in 2013 and last updated in 2018, is essentially a summary of Bitcoin and cryptocurrency through an MMT lens. (Here's a link to https://activistmmt.libsyn.com/ep9022-brian-hanley-the-false-premises-and-promises-of-bitcoin.) Brian and I continue with his list of several important claims made by Bitcoin’s creators and advocates, and why they’re wrong – and in fact, bitcoin and cryptocurrency are based on a fundamental misunderstanding of how modern economic and banking systems work (coupled with anti-government ideology). We also go in depth into why Bitcoin makes credit impossible, and why that’s so critical. We end today’s episode with the decidedly non-MMT topic of nuclear power. Brian has done research on the biological effects of radiation, and is a strong supporter of nuclear power being a primary ingredient in dealing with the climate crisis. He talks about how nuclear power and radiation are badly misunderstood by the public and media. Now let’s get right back to my conversation with Brian Hanley.

Ep90[2/2]: Brian Hanley: The False Premises and Promises of Bitcoin.

Welcome to episode 89 of Activist #MMT. Today I talk with author, researcher, and entrepreneur, Brian Hanley, about his paper, The False Premises and Promises of Bitcoin. The paper, published in 2013 and last updated in 2018, is essentially a summary of Bitcoin and cryptocurrency through an MMT lens. (Here’s a link to PART_TWO with Brian.) I’ve always been interested in Bitcoin but never took the time to understand or read about it. I just noticed the strong and even emotional views about it online, both for and against. On May 12, 2021, however, a tweet by Tesla CEO Elon Musk, caused the worldwide price of Bitcoin to decrease by 17% in two hours. This caused the wealth of every single Bitcoin holder to lose a total of $170.6 billion. I suddenly became extremely interested in Bitcoin. I initially thought – actually, strongly suspected – that Musk’s tweet was part of an effort to deliberately manipulate the price of Bitcoin. My guest disagrees. Regardless, it’s obvious that if such devastation can be caused in only a couple hours, by a single tweet by a single billionaire, then the very foundation on which Bitcoin and cryptocurrency sits must be called into question. My fascination with this incident eventually led me to Brian’s paper, among other MMT-informed sources about Bitcoin, links to which you can find in the show notes. Setting aside energy usage, there is nothing inherently wrong with Bitcoin or cryptocurrency. It’s something to invest in and if you know what you’re doing and choose to do it, then you can make a bit of money off of it. The problem comes in falsely believing that Bitcoin and its ilk are in any way related to the money issued by national governments, and especially that Bitcoin can somehow replace the money of a government – or even more absurdly, the entire world. It betrays a fundamental misunderstanding of how modern economic systems work. Were a government to adopt Bitcoin as its official currency, as just tragically (kind of) happened in El Salvador, then the government would make the personal wealth of every citizen vulnerable to another potential tweet by another billionaire. Those who choose to invest in Bitcoin choose to take that risk. Those who are unlucky enough to be among the nearly 7,000,000 citizens of El Salvador, that risk and vulnerability was just foisted upon all of them. Bitcoin is backed not by gold or state power, but entirely by the group psychology of all Bitcoin holders and those that influence them. In other words, Bitcoin only has as much value as its holders believe it has, not unlike any other fad or mania, such tulip bulbs in the 1600s and Beanie Babies in the 1990s. [For more on this concept, see Brian’s June 2021 post, Bitcoin is mania, pure and simple. ] A topic Brian and I discuss that I don’t think we cover sufficiently is the double-spending problem. When a dollar bill or nickel is spent, it physically changes hands. This is something we can keep track of easily and know for sure that it was only spent once. Digital money – digital anything – can be easily duplicated many times over. So how can it be ensured that a Bitcoin was only spent once? This is where the blockchain comes in. Every transaction ever made, with every Bitcoin, is permanently and publicly logged onto the blockchain. Although it’s impressive that Bitcoin has solved this problem, the solution is also a reason why Bitcoin is so inefficient and energy hungry. Every few seconds, a new transaction is added to the blockchain, a process that must traverse every existing transaction, duplicating the information onto every block in the chain. This algorithm is central to the system and the foundation to eliminating double spending. The other reason it’s so energy hungry is the manner in which new Bitcoins are generated, with each new coin requiring more computing power than the last. Finally, the process must also gracefully handle multiple simultaneous attempts to update the blockchain, as well as deal with potential failures without corrupting existing items. Here’s a crucial and related topic you’ll hear Brian and I discuss: Modern society is only possible because of credit. Credit is the ability to obtain goods or services before payment is made. In other words, a loan or an IOU. Your boss obtains your labor before you get your paycheck. You pull out a credit card to buy a candy bar and soda, but you don’t actually pay for it until the bill comes due at the end of the month. I commit to purchasing a house, but don’t actually pay for it until months later when seated at the closing table. And I don’t really pay for it until my final mortgage payment thirty years later. Were Bitcoin to replace a government or bank’s money, it would only be possible by eliminating the very concept of credit. Were this to happen, it would bring us back to the days when lords had vaults filled with gold and gave their customers certificates to obtain it on demand. As long as these forerunners to banks properly calculated the number of people who actually wanted to redeem their gold, they should be fine. If they estimate incorrectly, then there could be a run, and the lord will have to literally defend their stock of gold, potentially running out if everyone wanted it back. In addition, gold certificates are also desirable because gold is heavy and inconvenient. It’s also easier for regular people to hide and secure a certificate than an actual piece of gold. Critically, however, banking based on Bitcoin would be just that scenario but without the certificates. Banks would literally only have gold. Customers could only deposit and withdraw and borrow actual gold. So the population and its needs continue to grow, but the amount of gold remains unchanged (see the below graph, with thanks to Brian). It means that society is forced to become a 100 percent pure barter economy. In other words modern banking, and therefore modern society, is made impossible. Finally, note that Bitcoin certificates (or Bitcoin credit, or what Brian calls virtual Bitcoin) are impossible not because it’s technically infeasible, but rather because the concept is simply anathema to the supporters of Bitcoin, resulting from a very libertarian, anti-government point of view. To close, I’d like to share a quote from Nathan Tankus: The very fact that Bitcoin’s 'price' gets quoted in fiat shows that crypto-currency is an adjunct to state money. I’ll take the idea that pure cryptocurrencies are a threat to state money not when Bitcoin’s dollar price gets very high, but when its dollar price is irrelevant. And now, onto my conversation with Brian Hanley. Resources The MMT view of Bitcoin: 2013 post by Eric Tymoigne, The Fair Price of a Bitcoin is Zero (Quote from this post: "By the way, just for full disclosure, those who organized the hunt collected a bunch of eggs before the forest opened to the public.") L Randall Wray: Bitcoin is not money. From Pocket Change Warren Mosler about Bitcoin in 2012 2015 paper by Brian P Hanley, A zero-sum monetary system, interest rates, and implications. The definition of "hodler" Stamp Act Regarding anonymity: 2016 paper Sarah Meiklejohn, Marjori Pomarole, Grant Jordan, Kirill Levchenko, Damon McCoy, Geoffrey M. Voelker, Stefan Sa, A fistful of Bitcoins: characterizing payments among men with no names The VC article about Bitcoin that Brian finds crazy 1852 book (1932 reproduction) by Charles Mackey, Extraordinary Popular Delusions And The Madness Of Crowds Nassim Nicholas Taleb Shellacks Bitcoin and Cryptocurrencies (his 2021 paper for New York University: Bitcoin, Currencies, and Bubbles) Brian’s 2013 book, Radiation - Exposure and its treatment A modern handbook 5he story and capture of Dred Pirate Roberts 

Ep89[1/2]: Brian Hanley: The False Premises and Promises of Bitcoin.

Welcome to episode 88 of Activist #MMT. Today’s part two of my two-part conversation with all three co-authors of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies, or GIMMS. The three authors are Richard Tye, Andy Berkeley, and Neil Wilson. Today’s episode is part two of a two-part conversation, but it’s also the final part in a larger seven-part series on the paper and its authors. (A link to all seven parts can be found here.) The first five are personal interviews with each individual author. In __PART_SIX__, last week, and seven, today, I talk with all three together about their paper in depth. (It should also be noted that David Merrill played an important role in the paper, and was the primary influence of this seven-part series.) In order to strengthen my understanding of the paper and the Exchequer, today I ask several very specific questions. Some of the topics we discuss include the so-called independence of the Bank of England, intraday credit versus exchequer credits versus actual money; the sui generis balancing item of the Consolidated Fund and other funds, and the daily sweeping process and how it relates to Play-Doh. Obviously. But for now, let’s get right back to my conversation with Richard Tye, Andy Berkeley, and Neil Wilson.

Ep88 [2/2, 7/7]: An Accounting Model of the U.K. Exchequer

Welcome to episode 87 of Activist #MMT. Today I talk with all three co-authors of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies, or GIMMS. The three authors are Richard Tye, Andy Berkeley, and Neil Wilson. (Here’s a link to __PART_TWO__. A link to all seven parts can be found here.) Today’s episode is part one of a two-part conversation, but it’s also part six of a larger seven-part series on the paper and its authors. (A link to all seven parts can be found here.) The first five are personal interviews with each individual author. In part six, today, and seven, next week, I talk with all three together about their paper in depth. (It should also be noted that David Merrill played an important role in the paper, and was the primary influence of this seven-part series.) Today in part one, we talk largely about the meta of the experience writing the paper: their workflow, the software tools they used, their unique experiences with public records requests, and how they took the large amount of work and finally put it all together into a coherent whole. Aside from its length, I found the paper to be quite difficult. Not because of their writing, but simply because what they’re writing about is really, really complicated. Before attempting to read the paper, I strongly recommend first listening to their MMT Podcast interview [parts one and two], and also watching co-author Andy Berkeley's forty-minute presentation (as organized by my previous guest, Asker Voldsgaard [parts one and two]). Links to all these things can be found in the show notes. Speaking of difficulty, the paper was deliberately written to be an unabridged and undistilled reference manual. Someone must understand and document everything, and that’s the role this paper serves. Now it’s time to start translating and distilling these details for the general public. Towards the end of today’s episode, I start asking specific questions on the paper. One of the first is a question by an Activist #MMT patron named Advait. If you’d like to ask a question of my future academic guests, please consider becoming a monthly patron. But now, let’s get onto my conversation with Richard Tye, Andy Berkeley, and Neil Wilson.

Ep87 [1/2, 6/7]: An Accounting Model of the U.K. Exchequer

Welcome to episode 86 of Activist #MMT. Today’s part two of my two-part conversation with systems consultant and GIMMS associate, Neil Wilson. Neil is also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). Today’s episode is also part five of a larger seven-part series with all three co-authors; first individually and personally, and ending with a joint interview with all three, where we discuss the paper in depth. (A link to all seven parts can be found here.) In part one, Neil and I talked about how he came to MMT, how he led a lawsuit against the U.K. government in the name of 10,000 people, and MMT on the social media platform, Reddit. Today in part two, I learn a whole lot from Neil. I read several of his blog posts and I ask several questions about them. You’ll notice me experience more than one lightbulb. (Neil’s blog is called the New Wayland blog, and links to each of the posts we discuss can be found in the show notes of part one. To share one example, I knew that the neoclassical assumption of full employment also requires the assumption of balanced trade. What I learned today is that although I’m correct, it’s bigger than that. The assumption of full employment requires no leakages of any kind. In other words, if even one dollar of income is not spent, or it is spent but not in the United States, then demand in the United States will, of course, less-than maximized. This means that firms will respond by lowering production, which puts workers in danger of being let go. This means that full employment is no longer possible. So if a dollar of income is saved or invested, that’s a dollar not spent at an American firm – this is called a leakage. If ten dollars is spent to buy something from a company in Italy, but only five dollars are spent at American firms, then that’s another five dollar leakage. So, neoclassical economics requires every dollar of income to be spent, and for those dollars to be spent in the United States. There’s some more to this, but I’ll leave it there. You’ll find a link to a post where I discuss this topic (written before talking with Neil) in the show notes: The neoclassical assumption of full employment requires balanced trade. We end today’s episode by discussing Neil‘s role in the U.K. Exchequer paper, including how he discovered it and came on board. He also gives a brief summary of the paper and its concepts, which serves as a nice preview for next week’s episode, where I talk with all three co-authors and ask them a bunch of questions on the paper itself. But for now, let’s get right back to my conversation with Neil Wilson.

Ep86 [2/2, 5/7]-Neil Wilson: Real-world economics requires understanding dynamics.

Welcome to episode 85 of Activist #MMT. Today I talk with systems consultant and GIMMS associate, Neil Wilson. Neil is also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is part one of a two-part episode, but it's also part four of a larger seven-part series with all three co-authors, first individually and personally, and ending with a joint interview with all three, where we discuss the paper in depth. (Here’s a link to __PART_TWO__ with Neil. A link to all seven parts can be found here.) Like my previous guests Patricia Pino [parts one and two], Andrew Chirgwin [parts one and two], and others, Neil discovered Modern Money Theory, or MMT, by stumbling onto Bill Mitchell’s blog. A precursor to discovering and understanding MMT was a lawsuit Neil led against the U.K. government in 1999, in the defense of tens of thousands. At the time, U.K. law allowed (and unfortunately still allows) for workers to be treated such that they can be taxed as if they’re an official employee, but treated in other ways as if they’re not. In the era before Brexit, the lawsuit was an attempt to override British law with EU law. Although unsuccessful, it led him to question more deeply the government and how it really works. Neil also talks about his job as a systems consultant. Companies and the government choose to bring him in, they pay him to come in, to evaluate and improve their computer systems. Only sometimes, however, do they give him the power to actually make his recommended changes. So it seems to me that some of these organizations want the appearance of doing their best, without actually having to do their best. Rather than eliminating what’s bad and replacing it with good, the very idea of eliminating anything at all becomes simply and seemingly an impossibility. It results in the system becoming overly complex – paint on top of paint on top of paint – and for new pieces to now have to overcompensate for the ones that really shouldn’t be there at all. This is a parallel for the final three episodes in this seven-part series, which is all about the over-complexity of the UK economy, or Exchequer, and its 800 years of redundant paint jobs. Neil and I end with a conversation of MMT on the only social media platform Neil is active on: Reddit. We also talk about the questionable practices of the decidedly mainstream group, r/AskEconomics. (I am happy to announce that both Neil and I are now moderators of r/mmt_economics/.) Finally, I have some thoughts about the very first thing Neil and I talk about, which is unrelated to MMT, Neil, and his paper. To avoid distracting from the heart of our conversation, you will find these thoughts after the closing music, at the very end of today’s episode. But for now, onto my conversation with Neil Wilson. At the very beginning of today’s episode, I tell Neil that my wife and I are under contract to purchase our first home. As I write these words, it was inspected two days ago. Yesterday, we submitted our rather modest list of repair requests, and are now waiting for the sellers’ response. This is the final major hurdle before the likeliness of the home becoming our own gets pretty close to 100%. I tell Neil that the home is enormous. At least, to me it is. The backyard is about the size of half a football field. The house itself is 700 ft.² larger than our current rental – 1900 versus 1200 ft.². There are a whole lot of critical small to moderate things it needs, but structurally, the home and all its major systems are in great shape. So although the first several years will be a very expensive struggle, overall, we now have a mortgage that’s $400 cheaper a month than our current rent, and a really world asset that will become even more valuable after everything’s done. Especially in this crazy market, we hit the jackpot. It’s basically been a fairytale so far. We are so lucky. We are so privileged. (If you’d like to see it, you can find some pictures in the show notes.) After part two of my interview with Jane Ball, however (episode 71), I’m feeling very conflicted about the whole thing. There is so much suffering all around us, and it’s soon to increase by orders of magnitude as the climate crisis starts to changes all our lives dramatically, whether we like it or not, whether we do a lot or a little. Something very big is going to be happening in the not-so-distant future. It’s either going to be controlled or it’s not going to be controlled. Given how perfectly and elegantly the grip on every lever of power the elite now have, I am really not seeing how it’s going to be controlled. And yet here I am, suddenly having achieved the so-called American Dream. I now have a sense of security and, at least for a time, a real-world asset with a worth that’s very likely to get a lot higher. Who am I to have this? The color of my skin is obviously a very big factor. So I continue to care about the powerless (like those with skin color different than my own), but now I get to do it from a perch of privilege. A perch that how many black and brown people have been kept away from and knocked off of? My accepting this home makes the world a worse place, and yet at the same time, I’m doing exactly what’s best for my family. Resources Neil's conversation with Phil Armstrong, as hosted by GIMMS and recorded by MMT Podcast. "Our intellectual powers are rather geared towards static relations. Our power to visualize processes evolving over time are relatively poorly developed." We struggle with dynamics. We’re very good at static. Because we understand it statically, we understand it dynamically, and it’s not the case. Activist #MMT interview with Bill Peeples, called Accounting, and the story you want to tell [episodes 76 and 77 2020 paper by Edward Lane and L. Randall Wray, Why President Biden Should Eliminate Corporate Taxes to Build Back Better. From the abstract: The authors "explain how federal taxes on corporate profits are not well suited to either containing inflationary pressures or reducing inequality. [They are also] inefficient and ineffective taxes more broadly" Information on ”The Spine” of the National Health Service’s (NHS) computer network in the U.K.: Overview by the NHS, From the company contracted to manage it Neil’s blog posts: May 2021: The 'Too Much Money Chasing Too Few Goods' Myth 2021: UK Government Spending - The Gory Details November 2020: IT'S THE EXPORTERS STUPID, quoted by Randall Wray in his book, Modern Money Theory (pp289) 

Ep85 [1/2, 4/7]: How Neil Wilson came to MMT (and Reddit).

Welcome to episode 84 of Activist #MMT. Today’s part two of my two-part conversation with 10th-year MMT activist, Andy Berkeley. Andy has a PhD in marine sedimentology, and is a marine scientist and oceanographer by trade. He's also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This episode is also part three of a larger seven-part series on the paper and it's three co-authors. The first five are with each individual author, in the final two with all three, jointly, where we discuss the paper in depth. (A link to all seven parts can be found __HERE__.) Last week, in __PART_ONE__ of my conversation with Andy, we spoke about two very non-economic topics: the first half dedicated to the fifty-year-long Israeli-Palestinian conflict, and the second half, to the drastically different and lighter subject of music. Today in part two, Andy describes his life and thinking before knowing about MMT. He tells the story about how he discovered it from an actual stranger on a train, who he now knows as Chris Cook. While talking with a friend, the person sitting across from him, Chris, interrupted and interjected the fateful words: "Banks don't lend deposits, and governments don't spend taxes." Confirming the former came rather quickly for Andy. The latter, however, that governments don't spend taxes, took years to fully grasp. After learning more about the concept, it made the entire puzzle appear to make sense. However, only after completing his 2020 paper many years later, did he finally confirm that what was mere economic theory – to him, toning more than a thought experiment – actually applies to the world in which we live. Two important events that Andy believes prepared him to accept MMT years later, were, first, the 2003 invasion of Kuwait by Iraq, and the subsequent invasion of Iraq by the US and its allies. The second was a brief and largely out-of-place montage in the Michael Moore documentary, Bowling for Columbine. The montage shows how the United States’s invasion of Iraq was merely the tip of an iceberg demonstrating its decades-long imperialism, and the U.K.’s support of it. These two things called into question the idea of the US and UK as being 100% forces for good and made him realize that what we are told may in fact be contrary with reality, with the goal of keeping the powerful powerful and everyone else in the dark. (As an aside, It’s both shocking and not shocking that YouTube will not allow you to share that montage at all. It won’t even allow you to copy the link.) Finally, a minor correction: the UK is 800 years old. And now, let's get right back to my conversation with Andy Berkeley. Resources Books by John Kenneth Galbraith 2007 book by Eric D. Beinhocker, The Origin of Wealth: The Radical Remaking of Economics and What it Means for Business and Society 

Ep84 [2/2, 3/7]: Andy Berkeley: Confirming the theory applies to the real world.

Welcome to episode 83 of Activist #MMT. Today I talk with 10th-year MMT activist, Andy Berkeley. Andy has a PhD in marine sedimentology, and is a marine scientist and oceanographer by trade. He's also the co-author of the 2020 paper, An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is part one of a two-part episode, but it's also part two of a larger seven-part series with all three co-authors, first individually and on a personal level, and then ending with a joint interview with all three, where we discuss the paper in depth. In today's episode, Andy and I discuss some decidedly non-economic topics. For the first half of part one, we talk about the now half-century long Israeli-Palestinian conflict. (Here’s a link to __PART_TWO__ with Andy. A link to all seven parts can be found __HERE__.) Since the 1970s, the UN General Assembly has regularly and overwhelmingly voted to affirm the fact that Israel is illegally occupying Palestine. This, in addition to the fact that Israel is clearly the stronger party by orders of magnitude, calls into question the popular notion and official narrative, that Israel is nothing more than a passive and long-suffering, dainty-little-flower of a victim. On the other side of this narrative is Palestine, serving the role of the melodramatic supervillain, seemingly doing nothing but perpetually alternating between launching missiles at Israel and twirling their overly-long mustache. I’m a Jew but not religious. I grew up in a family, however, that subscribed strongly to exactly these ideas – that Israel is 100% the victim and Palestine 100% the bad guy. Questioning Israel and its leaders in any way is essentially treated by some as an act of betrayal. My speculation is that Israel is seen by many Jews as the only home on earth for the Jewish people. This is such a powerful thing that it justifies excusing the behavior of the Israeli leadership and ignoring the suffering caused in service of preserving that home. In any relationship, the idea that that one party is 100% in the right, and the other 100% in the wrong, is the stuff of cartoons, not reality. Further, the assertion that the by-far stronger party is the victim, when that so-called victim has been occupying the territory of its so-called aggressor for 50 years, is a highly suspect one in my view. In the second half of part one, Andy and I greatly lighten the mood with another non-economic topic, this time, music. I'm a classically trained singer, and for the past six months, I've been learning guitar. Andy has played piano and bass guitar for most of his life, and we have a fun and kind-of-exciting conversation about lots of varied topics: how to sight read and learning about music theory, how we were trained, the styles in which we were trained versus those we choose to listen to, the many YouTube teachers who have influenced us, and more. You'll find a few samples of our playing in today's episode, and we both thank you for your forgiving and understanding while listening. At the very beginning of today's episode, you heard a brief sample of Andy's piano and bass playing. You'll find the entire piece, along with another, after today's closing music. You'll also find links to the several musicians and songs we mention, in the show notes. Although this episode has little-to-nothing to do with MMT, it provides important context for learning and better understanding MMT. The academic concepts cannot be separated from those who promote them. Today is about those who promote them, and what interests them. Next week in part two, Andy describes his life before knowing about MMT and how he discovered it from an actual stranger on a train. Someone he now knows well, Chris Cook, overheard Andy's conversation and interrupted and interjected the fateful words: "Banks don't lend deposits and governments don't spend taxes.” But that's next week. For now, here's part one of my conversation with Andy Berkeley. Enjoy. Link to image Resources Solsbury Hill by Peter Gabriel, tutorial by YouTube/Shutup and Play The version of Blackbird that Jeff learned, from Marty Music. The more accurate version of Blackbird, by Shutup and Play, that Jeff has not yet learned. Classical Gas, guitar lesson by guitarlessons365.com (the name of a YouTube channel), where Jeff learned the piece [parts one and two]. (He didn't learn parts three and four!) Luther Vandross’ Never Too Much, guitar lesson by YouTube/Eric Blackman music Jacob Collier adds elaborate harmony to his fans' performances Rick Beato: top 20 acoustic guitar intros of all time. Where I re-discovered Solesbury Hill. (Here's Jeff playing Solesbury Hill after one month of practice.) 

Ep83 [1/2, 2/7]: Andy Berkeley: Palestine and piano [NOT MMT]

Welcome to episode 82 of Activist #MMT. Today I talk with 10th-year MMT activist, Richard Tye (Twitter/@widespreadhaze). Richard is the co-author of – and historian for – the 2020 paper called An Accounting Model of the U.K. Exchequer, which is published by The Gower Initiative for Modern Money Studies (or GIMMS). This is the first of a seven-part series on the paper and its three authors. It starts with an individual and personal interview with each of the authors and ends with a two-part episode with all three jointly, where we discuss the paper in depth. Here are links to all other episodes in this larger series, in order: Part 2: Andy Berkeley, part one: Palestine and piano [NOT MMT] Part 3: Andy Berkeley, __PART_TWO__: Confirming the theory applies to the real world. Part 4: How Neil Wilson discovered MMT (and Reddit) Part 5: Neil Wilson: Real-world economics requires understanding dynamics. Parts 6 and 7: An Accounting Model of the U.K. Exchequer [parts __ONE__ and __TWO__] For the past 20 years, Richard has flown a helicopter for Search and Rescue, under perilous conditions on both land and sea, serving millions of U.K. citizens. For the U.K. Exchequer paper, he became a historian, placing today's economic and political systems into proper historical context. Using only the internet, he and his co-authors discovered original government documents from all the way back to the 11th century. Because of the COVID health crisis, writing the paper would have been an impossible task without the internet. Richard describes several historical concepts and events related to the U.K. economy, including the use of wood tally sticks as a primitive form of money, and the so-called "stop of the exchequer". We also discuss how history moves at a pace that's impossible to directly observe in a human lifetime. We consider this final concept especially in the context of the MMT project. (Before attempting to read the paper, I strongly recommend first listening to their @MMTpodcast interview, and watching co-author Andy Berkeley's forty-minute presentation [as organized by my previous guest, Asker Voldsgaard].) Before we begin, I have several observations to make about history. First, in part one of my previous episode with Andrew Chirgwin, and as inspired by Steven Hail, we discussed how neoclassical economists don't "stay in their lane". Those in power and the economists who advise them, have declared that "finding the money" (and preventing the boogeyman of inflation) is the primary prerequisite for doing anything and everything. If one can't find the money in a way that satisfies these economists, then they get to veto the entire project – sight unseen, and very likely, without understanding its intricacies or consequences at even a basic level. In other words, those in power and their economists have made themselves gatekeepers over every aspect of our lives, pretending that without money – their money – it's impossible to accomplish anything. (Note that this also implies that everything in life must have a precise financial cost applied to it.) In reality, the only reason it's impossible to accomplish anything without money is because we choose for it to be impossible. Knowing this, the resistance to the idea of making education and healthcare free at point-of-service (and therefore free of debt!), now becomes clear: without a price tag, it takes away the ability of those in power to gate-keep and veto. (Not to mention the cherry on top, of profit baby!) Providing education and healthcare for all is not just about making people smarter and healthier, it's about power. (Another related example is the reserve currency or "petrodollar". Nations must transact for oil in the US dollar, simply because the US has muscled its way into the OPEC cartel in order to make that the case. Without the reserve currency, the United States would lose a valuable barometer with which to monitor the behavior of most other nations. It would not change all that much in a financial sense.) Along with many other fields, such as science, sociology, and politics, history also illuminates connections that would otherwise remain hidden. As Richard says in today's episode, knowing something new and unknown happened to occur at around the era of another important event, provides valuable context and reveals a new avenue to pursue. History also provides a convenient method of organization, allowing one to confidently place a puzzle piece down in the correct spot and orientation, despite not yet knowing the location of any surrounding piece. In other words, it provides an anchor of sorts, making it clear in some contexts if we are being led astray. The fact that Modern Money Theory or MMT, and Post Keynesianism in general, are explicitly interdisciplinary, is a reflection of their attempts to ensure their theories apply to the real world. By imposing its money onto all other disciplines, neoclassical economics resists the idea of interdisciplinarity, which is yet a reflection of their decision to grasp onto assumptions that benefit an ideology, at the expense of empirical truth and caring for others. It is little more than further entrenching their power at all costs. Finally, being interdisciplinary is essentially a decision to have balance and to be aware of the world around you. It's not possible to care about the world if you refuse to recognize its existence. What this means to me personally, as out there as it may seem, is how our emotions and thoughts are considered separate from our physical existence. It's not unlike how "the economy" is considered separate from people. We're essentially told we can't help people if the economy is unstable. The news tells us that because the stock market is at an all-time high, "the economy is doing great!" And yet at the same time, millions of actual human beings are suffering in the real world, homeless and hungry, not to mention we're on the brink of global societal collapse. The truth is that the economy is us. It's all of us. We are the economy. So if the economy’s doing well while millions are suffering, it can only be true by taking those who suffer, and defining them out of the economy. It's just as true that our mental and emotional existence cannot be separated from our physical existence. Our emotions and thoughts are greatly influenced by our physical condition and vice versa. If we are in physical pain, it can be minimized as much as is possible by managing our emotions. If we are an anguish, it can be minimized by taking care of our body, such as through nutrition, activity, and exercise (and by being lucky enough to have a home whose water supply isn't poisoned!). We're also not alone. We can't separate ourselves from our family, community, and society. By caring for ourselves, we help others. By caring for others, we help ourselves. It's up to us to find the proper balance between all these things, and to resist those who try and stop us. And yet, we as MMTers know more than most, that we exist in a world in which many believe wholeheartedly in these false dichotomies and ideas. We must rage against the system and be kind to individuals. My next interview is with co-author Andrew Berkeley and then after that, Neil Wilson, and then the joint interview. Now, onto my conversation with Richard Tye. Resources Naked Capitalism financial blog. General news through an MMT lens. Twice daily list of links. 

Ep82 [1/1, 1/7]: Richard Tye: The history of the U.K. Exchequer (and interdisciplinarity)

Welcome to episode 81 of Activist #MMT. Today is the end of the world. Wait. Let me try that again. Today is part two of my conversation with sixth-year MMT activist Andrew Chirgwin. It's a dark episode. Just letting you know. Today Andrew and I continue our conversation about how neoclassical economists don't "stay in their lane", and have essentially given themselves, and those who advise them, veto power over every facet of our lives. Most relevant to today's episode is mitigating, or more precisely, not mitigating the climate crisis. Andrew and I hit the issue head on, and it's not pretty. The depth of what we face as a species is stark, it's coming in the not-so-distant future, and is becoming more likely by the day. Andrew and I come to terms with this reality, and also wrestle what it means to choose to bring up young children in this context. Mine 11- and 14-year-old boys, his 6- and 8-year old little girls. I want to mention that the first hint of this severity was made aware to me by Australian economics professor Steven Hail, whose 2020 Facebook post was also the inspiration for our conversation in part one. I spoke with Steven at length at the 2018 MMT conference in New York City. Before talking with him, I was certain that climate change was a very serious issue. After speaking with him, I started understanding that it may actually be a climate crisis. A much fuller introduction can be found before part one, but for now, let's get right back to my conversation with Andrew Chirgwin.

Ep81 [2/2] Andrew Chirgwin: The end of the world (economics that stays in its lane)

Welcome to episode 80 of Activist #MMT. Today I talk with sixth-year MMT activist Andrew Chirgwin. Andrew graduated from the University of Sydney with a Bachelors of Science in Chemistry and Pure Mathematics, and a masters in secondary teaching. Andrew's introduction to Modern Money Theory, or MMT, was in 2015 when he stumbled on the blog of University of Newcastle economics professor and original MMT developer, Bill Mitchell. Andrew spent the next nine months reading five years of Bill's blog posts. Those who are familiar with the blog will understand how this is no small feat. (Here's a link to __PART_TWO__.) The heart of our conversation, however, was influenced by a February 2021 Facebook post by Steven Hail (the text of which can be found below). Steven is an economics professor at the University of Adelaide and the author of the 2018 book Economics for Sustainable Prosperity, which is a good introduction to MMT. In the post, Steven discusses how neoclassical economists don't "stay in their lane". What this means is that economists impose themselves onto and dominate conversations about healthcare, when they should be led by healthcare professionals and their patients. They dominate conversations about education that should be led by educators and their students. And to bring it back to today's episode, neoclassical economists dominate conversations about mitigating the climate crisis that should be led by true experts in the field, such as climate scientists, energy specialists, chemists, and so on. This domination is in the form of forcing all conversation and concepts to be expressed in financial terms, as exemplified by the "how're you gonna pay for it?" question. This essentially gives those in power and their economists veto power over every facet of our lives, subjecting us to their biases, ignorance, and ideology. It prevents the true experts from ever being able to complete their highly-complex and critical conversations, and it also keeps the public unaware of the depths of the problems they face. Finance is a purely-human-created concept. Therefore, purely-financial crises are also purely-human-created concepts. This means we can prevent and mitigate financial crises merely by choosing to do so. It also implies that the Great Depression and the Great Financial Crisis are largely man-made disasters, caused and exacerbated by the actions and inactions of those in power and their economists. And yet this is who we allow to dominate highly complex conversations on topics that are largely outside of human control, such as mitigating the climate crisis. In other words, if neoclassical economists can't get their own house in order, then why do we allow them to be in charge of every house?! And of course, when problems are framed in financial terms, then problems that face the rich are always more profitable to solve than those that face the poor. An analogy I keep coming back to is viewing a child only through their report card. Doing this will do nothing to help the student if she is hungry and homeless, and suffering from abuse. It is very unlikely the problems will even be seen. In the same way, forcing the climate crisis and other real-world problems to be seen through a financial lens basically guarantees that these problems will never be acknowledged, let alone properly and fully dealt with. Part two of our conversation turns decidedly dark, as we consider our fate as a species and our choices as parents of young children, if we continue to leave the climate crisis in the hands of neoclassical economists. There's no solving a problem if you don't understand its depth. So buckle up. But that's next week. For now, let's start part one of my conversation with Andrew Chirgwin. Resources Steven Hail's Facebook post (that inspired much of our conversation) and Andrew's Twitter debate with John Hearn can be found below. The 2006 paper by S. Abu Turab Rizvi, The Sonnenschein-Mantel-Debreu: Results after Thirty Years Steven Hail, February 2nd, 2021, Facebook post: Some people I respect think you should value our ecosystem in financial terms and then manage a portfolio of natural assets the way a fund manager might use portfolio theory to manage a diversified portfolio of financial assets. I could not disagree with them more profoundly. Never mind the fact that this buys into the notion of a simple link between GDP per capita and well-being, which should have been dismissed by now in all high income countries, where there is demonstrably no such link. Never mind that they habitually use a measure of ecological footprint which allows rich countries to 'export' their pollution to poor countries, allowing them to claim that ecological impact does not rise as GDP rises beyond a certain point. My biggest problem with this approach is the idea that the financial economics of portfolio management implies the safe management of anything - let alone the natural environment. Portfolio theory requires measurable risks and known probability distributions, or in other words the absence of complexity, non-linearities, feedbacks and fundamental uncertainties. The complexity and feedbacks and resulting uncertainties of financial systems is the reason we have so many endogenously driven financial crises in our history. The thing about financial crises is you can recover from them. Our natural environment is far more complex, has far more feedbacks and non-linearities and connections, and is as a result far more uncertain than our financial system. So if you can't trust economists to manage the financial system so that it remains healthy and robust, why would you imagine that by financialising ecosystem services, you will be able to trust them to manage that far more complex 'portfolio'? It is a profound mistake to financialise the natural world, in my opinion. Instead, we should identify where it is safe to be, add a big margin to allow for unavoidable uncertainty (if we can), and then set limits on what we can tolerate. Dollars shouldn't come into the limits. Then we should take a step back and identify what we need to allow people to have the best possible chance of a good, secure, just, engaged life. To an extent, this has been done in the UN Sustainable Development goals, but it is done better in Kate Raworth's doughnut, which can be and is being applied at national, regional and local levels. What is someone who has spent a career training finance professionals doing saying we ought not to be applying the tools of financial management to our natural environment? I am saying it is entirely inappropriate, misleading and liable to bias the narrative, policies and outcomes in potentially dangerous ways. Andrew's conversation with economist John Hearn Many line breaks have been removed. Andrew: What is a stock of income? Hearn: There is no stock of income only a stock of money. Andrew: Flow of incomes become stocks of money. Accounting 101 Hearn: Accounting 101 is wrong. A stock of money is used to measure a flow of income. Economics always teaches accountants not the other way round. Andrew: Accounting is incorrect? So your conjecture here can't even stand up to basic bookkeeping? The net sum of flows is a stock. Hence the net sum of incomes is a stock of incomes, and the stock of incomes is savings or money. Hearn: Accounting is bean counting it does not require any understanding of what it is counting. Flows are not stocks so there is no hence. Andrew: If accounting is just beam counting, how do you measure any of your work? Economic activity is measured using accounting... that's how Taxes are determined, savings calculated, policy assessed into potential outcomes. Your statement here is like saying "physics ignores distance" Hearn: Economists understand simple accounting, accountants rarely understand economics. Andrew: That's a nice hasty generalisation there. You seem to be shaky on elementary accounting Professor, especially about credit creation by balance sheet expansion. Hearn: Test me. Andrew: Credits are created with a matching debts. Currency is is therefore both a credit and a debt. Money, as a credit issued by other entities, are both a credit and debt. Hence currency, and all other money, are debts created by balance sheet expansions. Hearn: Yes it is double entry bookkeeping. A deposit at a bank is double entered as an asset and liability. It is not the currency. Money can be created by a net increase in newly created loans. Fiat money is not a debt, commodity backed currency is. Andrew: Fiat money is a debt, because it is also a credit. It is a balance sheet expansion of a different balance sheet. I thought you said you were good at accounting... Hearn: Think assets and liabilities as these appear on a balance sheet not credit and debit. Andrew: That's another red herring professor. You should be running a cafe at this rate. Red herring for everyone. Currency and other money are accounted for on balance sheets along with other credits as assets of the balance ledger. Stop trying to play coy. Hearn: Explain how the Aussie dollars in your wallet are a debt Andrew: Because the federal government created a credit by balance sheet expansion, hence making them also a debt. Hearn: Think liability not debt, asset not credit. Andrew: See my other response. This is a red herring and we both know it professor. Liabilities, and debts, are accounted for on the balance sheet as much as assets and credits. Your accumulated credits appear as assets. But again, a red herring to avoid the actual topic. Andrew: It's also their liability to me. The Treasurer signed it. Hearn: How will the Treasury fulfil its liability to you? Andrew: When they contract their balance sheet. Until they are willing to do so, they recognise the liability exists because they recognise the asset existing. Hearn: You are wasting your time and your intellect trying to play word games rather than understanding what you are talking about. Spend the rest of the day trying to understand that fiat money is not debt and commodity backed currency is. Come back tomorrow when it is solved. Andrew: Apparently, Professor, balance sheet contractions and expansions bother you. The collection of an national import duty is a balance sheet contraction of the Issuer of Currency. The collection of a fee for operating a company by the national government as above. The issuing of a, now very limited, UK Passport comes with a contraction of the balance sheet of the UK Government. The settling of a debt incurred from a court case at the National Law level comes with a contraction of the balance sheet of the national government. Four concrete examples all generalised as: "The liability to me will be expunged when I do something that the Currency Issuer will contract its balance sheet in response." 

Ep80 [1/2] Andrew Chirgwin: Economics that stays in its lane (and the end of the world)

Welcome to episode 79 of Activist #MMT. Today is part two of my two-part conversation with first-year MMT activist Katrina Pilver. It's about how she discovered the importance of economics and then MMT, and her unusually-intensive and -ambitious journey to learn MMT more deeply. After the end of our interview you will hear a brief follow up where, given that she’s only been at this for around five months, a pretty sophisticated summary of the MMT-designed job guarantee and why she believes it’s important for newbies to understand. A full introduction, including links to lots of resources, can be found before part one, but for now, let’s get right back to our conversation.

Ep79 [2/2]: Katrina Pilver: MMT for Newbies

Welcome to Activist #MMT. A podcast for non-violent direct MMT activism, for spreading Modern Monetary Theory both online and in person.

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