We all know the usual approach to money, that begins with a fantasized story about barter, the search for an efficient medium of exchange, the role of the goldsmith, and then on to the gold standard, the deposit multiplier, fiat money, and monetary neutrality—at least in the long run. It provides a perspective on the nature of money, on the primary functions of money, and on rules for proper monetary management. It frames all mainstream discussions of money—whether by economists, by policymakers and by the population at large. That framing is also largely consistent with the conventional view of the economy and of society more generally. To put it the way that economists usually do, money “lubricates” the market mechanism—a good thing because the conventional view of the market, itself, is overwhelmingly positive. The market “meme” frames our view of the economy and society, too—the market is the place we go to exercise choice, to assert our individuality, to catch and bring home prey to the adoring family. The king of the market, of course is the highly vaunted, entrepreneurial small businessman (gender specific) who provisions society with useful work as well as consumption goods and services. Each productive member of society is appropriately rewarded with money which preserves the freedom to choose how to apportion his claim on output in a manner consistent with preferences. The biggest potential threat to efficient allocation of scarce resources among competing unlimited wants comes from government’s exercise of control over money—first by replacing natural, intrinsically valuable, commodity money with fiat money, second by taking away people’s hard-earned money through taxes, and third by profligate government’s uncontrollable urge to inflate away money’s value.
It is a beautiful meme, entirely consistent with the individualistic sentiment that has dominated public discussion since Margaret Thatcher asserted that there is no such thing as society. Government’s destructive impulses must be constrained by strict rules—balanced budgets, debt limits, and especially an independent father-figure central banker who keeps tight control over the purse strings. Voters must insist on frugality, and can enforce it through tax cuts to “starve the beast”. Wasteful spending—which includes almost all government spending—must be reigned-in to allow the market to allocate scarce resources to more productive, private, use.
We need an alternative meme, one that provides a frame that is consistent with a progressive social view.
To be sure, in my view the conventional story is wrong—it is inconsistent with the findings of historians, anthropologists, legal scholars, sociologists, and political scientists. I’d prefer a meme that is more consistent with these findings.
However, I also know from experience that “truth” doesn’t automatically trump myth. George Lakoff has brilliantly explained how our minds work, using metaphors—memes—to understand the world. This is especially true the more abstract the concept under examination. Economics uses highly abstract concepts and reasoning: “economy”, “market”, “equilibrium”, “productivity”, “supply and demand”, and, especially, “money”. Simple stories—Crusoe and Friday agreeing to use seashells as a medium of exchange—simplify difficult concepts and also draw attention to the lesson the speaker wishes to teach. The “story of money” outlined above provides the proper framing for the conservative’s lesson. Money simplifies life for Crusoe and Friday. More importantly, the story diverts attention away from inconvenient topics: Crusoe and Friday come together as equals, of their own free will to engage in mutually beneficial exchanges, in a “free” market only lubricated by money—not as conqueror and subject. While the simplistic story adopted by economists is inconsistent with historical “facts”, it is not difficult to adapt the story to bring it in line with many of the findings of historians (who, after all, generally do adopt the conservative framing).
As Jack Balin argues, memes serve as the basis of stories, networks of cultural associations, metaphoric and metonymic models, and other mental structures. Memes are self-replicating, sort of like a virus. Since we think through metaphors, according to Lakoff, as the virus spreads through the population, the meme controls the way we think about a topic.
Conservative memes dominate all discussion about the economic sphere. The market is “free”; the government “intervenes”. Consumers “choose”; government “regulates”. Through judicious framing, the conservatives have won all the important economic debates of our times. Deficits crowd out, cause inflation, and bankrupt our nation. We’ve run out of money. Government is the problem. Taxes and regulations destroy initiative. Small business creates jobs and government destroys them. Yet, in every case the conservative claims are demonstrably false. But it does not matter. They’ve got the better framing, the better money memes.
In most cases, the progressives adopt the conservative framing and so have no chance. For example, take the current debate about government budget deficits which progressives propose to reduce by raising taxes on the rich to “pay for” government spending. Without knowing anything about government or budgeting, the listener knows a) deficits are bad—somehow government is “deficient”; and b) the progressive solution relies on more taxes—and no one likes taxes. The conservative framing—government spends too much–has a much more appealing solution: reduce government waste. It addresses the problem more directly, and in a morally superior manner. Lakoff explains why conservatives always win:
They understand the importance of morally-based framing, the importance of language, the importance of repeating language, the importance of not using the opposition’s language, and the importance of an extensive communication system that operates daily everywhere… Everything you understand is a matter of framing. And what counts as a fact depends on the frame used in understanding.
Hence, it is not so much the accuracy of the conventional view of money that we need to question, but rather the framing. We need a new meme for money.
That meme would emphasize the social, not the individual. It would focus on the positive role played by the state not only in the creation and evolution of money, but also in ensuring social control over money. It would explain how money helps to promote a positive relation between citizens and the state, simultaneously promoting shared values such as liberty, democracy, and responsibility. It would explain why social control over money can promote nurturing (“parental bent” as Veblen called it) activities over the destructive impulses of our “undertakers” (Smith’s evocative term for capitalists).
According to Lakoff, there are two competing views of the parent: the strict father figure who constrains and punishes versus the nurturing parents; most individuals simultaneously hold both views—but the conservative views about the dominant father who needs to discipline the kids is most prominent in political discussion. Adults, of course, want to escape the strict father represented by government, and so want to limit its power. Conservatives emphasize that we need to “get government off our backs”. In Lakoff’s terminology, progressives need to emphasize the nurturing characteristics of the state—the mother and father working together in the interest of the “family”, rather than the stern, punishing, “strict father model” with rules and constraints.
With respect to money, the conservatives emphasize “fiscal discipline” and “inflation targets” enforced by our Father Chairman who art at the controls of the Central Bank. Progressives can win this debate only by taking a higher moral stance, emphasizing the nurturing role that can be played by our government working with our monetary system to support us, to help us to achieve more, and to make us better people.
Part 3 will be posted next.
 See L. Randall Wray, Modern Money Theory: A primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan, Basingstoke, 2012 for a discussion of the orthodox approach and for the alternative presented here.
 The best place to start for a sociological approach to money is with Geoffrey Ingham, The Nature of Money, Cambridge: Polity Press, Ltd, 2004. See also Wray (editor), Credit and State Theories of Money: the contributions of A. Mitchell Innes, Cheltenham, Edward Elgar, 2004 for a number of contributions that counter the story told by economists.
 George Lakoff, Don’t Think of an Elephant: Know Your Values and Frame the Debate, Chelsea Green Publishing, 2004.
 See http://en.wikipedia.org/wiki/Meme, and Jack Balin, Cultural Software: A Theory of Ideology, Yale University Press, 1998.
I’ve found that using the Cheetahs chasing down, catching and killing Gazelles is a very useful analogy for capitalist businesses.
You can’t expect Cheetahs to stop wanting to chase down Gazelles and kill them. It’s in their makeup. Trying to make a Cheetah vegetarian is a non-starter.
You want Cheetahs to chase down Gazelles. It keeps them fit. Lardy Cheetahs sitting their getting their lumps of Gazelle handed out to them on a plate is not good for their health.
And it is always best for Cheetahs to operate in a large managed nature reserve. That way there is enough room for them to run, but they don’t wander into the towns and start killing the chickens.
But most of all the homonym is priceless.
Lately it appears the Cheetahs have been seen in the Village Square chasing after the chickens. Maybe time to cull the herd a bit.
It is a beautiful meme, entirely consistent with the individualistic sentiment … L.R. Wray
Not really. What’s individualistic, for example, about a government enforced gold standard? Why should government favor anyone’s favorite shiny metal by recognizing it as money? Thus government money must ONLY be inexpensive fiat to avoid favoring private interests.
In many cases you are not dealing with true believers in individual liberty but with fascist poseurs who desire to crucify mankind on a “Cross of Gold.”
I really like the framing from this post: http://neweconomicperspectives.org/2012/11/modern-money-and-the-altruistic-gene.html#more-3645.
Specifically: ” In (extremely) simplified form, the guidance system described by Wilson is this: Human societies are composed of individuals who are dominated (at any given moment) by one or the other of two genetic traits—the “selfish gene” or the “altruistic gene”. The selfish gene leads individuals to take actions benefitting their personal selves. The altruistic gene leads individuals to take actions benefitting the social group to which they belong.
The interplay between these two genetic traits creates the following dynamic of social evolution: Within a given social group, the selfish gene will always competitively dominate (and defeat) the altruistic gene. However, when there is competition between two social groups, the group with the most active altruistic genes will always dominate and defeat the group with the most active selfish genes. In terms of reproductive success then, natural selection is continuously choosing the selfish gene of individuals within any group while, at the same time, it is choosing the altruistic gene in groups that out-compete other groups. The tension and interplay between these two competitive dynamics is what guides the course of human history.”
What I like about this framing is that I think it adds a progressive dimension to Social Darwinism, in that collectivism is also innate and equally important competing dynamic.
We know that the strength of memes in populations vary over time. You point out that the conservative economic framing has dominated discourse since Thatcher denied the existence of society. But you don’t say what dominated before, and how it lost ground to the conservative framing and its memes. And how new memes and framings emerge.
I think we invent memes and narratives using frames all the time, and then the environment selects among different memes and determines which ones become dominant and which ones remain weak or fade away. We know that the neo-liberal Thatcher frames weren’t invented by her. They’ve been around for a very long time and were dominant here during the 19th century and part of the early 20th. So, how did they lose power before? And what brought them back to dominance?
I suggest that the latest round of dominance of neo-liberal memes was caused by the perceived failure of alternative narratives in the context of events that people experienced and lived through. When the perceived failure occurred, the neo-liberal memes were there to offer explanations, understandings, and predictions which competed successfully against the weakened frames that had been dominant. Now neo-liberalism has failed, and think that’s obvious to a majority of people in Western nations. Our elites fight back with propaganda to try to reinforce their moral frames. We have to bring those memes and frames into conflict with morally superior memes and frames that have been reinforced by what people are experiencing — their “facts,” and that support the MMT view of money and economics. If we do that, we’ll win.
There’s no need to appeal to a “selfish gene” theory. Both usury and theft are problematic for an economy but our money system is based on both; the banks lend stolen purchasing power for usury. And the banks are able to do so via extensive government priviledges such as a government backed monopoply on risk-free fiat storage.
“[The claim that] government destroys [jobs is] demonstrably false.” – Dr. Wray
It is? Wouldn’t we be near or at full employment were it not for the payroll tax?
The author of “Cultural Software …” is Jack Balkin.
Yes, thnx for spotting the typo
It may prove greater advantage if the new meme is an extrusion of the existing one. Remember,we are talking about linguistic values which are subject to somewhat rigid rules on interchangeability at any given point in time. Take for example this meme: Money is Power, this type of moral assumption might be thought of as secondary (having some relation to either of competing memes) but the moral meme can be evaluated as being derived primarily from observation of only one of the moral stances. If we understand these secondary outcomes as extrusions they have a relational truth which by extension suggest per this example: Money is Political Power. Here is where the existing meme forfeits any direct moral high ground as it imposes a contradiction on a hierarchy of assumptions which by default represent a structural integrity of a higher system of values, in this case democratic equalization of individual parts and functions. Selective use and identification of meme trumping extrusions appears to have a dynamic potential for restructuring hierarchies which competing memes by their very opposition have little capacity to accomplish.
To a person, I am much more interested in what MMT authors have to say about what caused the economic crisis, who was to blame, why the economic response is counterproductive, and what needs to be done. That can all be done with very littel reference to the technical aspects of MMT.
I have written this before and I know I am in the minority. BUT, the MMT-specific framing and language can be very counterproductive. There’s an “I-have-a-hammer-and-everything-looks-like-a-nail” aspect to much of the MMT stuff I read.
FWIW, I see the MMT authors whom I have read as humanists and progressives first — and MMT advocates second. I dare say that their economic advice would be largely the same if MMT never entered the picture — and they relied mostly on John Maynard.
But I could be wrong.
Mostly I agree. But I think MMT does add something to the discussion. For one, we can no longer think the government is about to go broke or that it is the same as a household. I think that is huge. I think it is a good starting place, since it can be extended into things like the safety net.
Lakoff (from above) : “They understand the importance of morally-based framing … the importance of not using the opposition’s language …”
“Going broke” and “same as a household” are the opposition’s language. Using them here on NEP is not a problem. Using them in communications with potential converts might be.
Food for thought.
Good point. You may have a better way of talking about it. And I will use that language. But here’s the thing. In the end you must defeat those ideas. Had I not been “converted” I would have a much different viewpoint on how we should be handling the fiscal cliff today and the safety net. As I said, MMT brought a good deal of light to those ideas and IMO beyond what traditional economics has done. Personally I do not see as much hammer looking for a nail in MMT as you apparently do.
I also agree that most of the MMT writers (Mosler excluded) often seem to feel more strongly about their politics than about their economics. And that turns off people of different political persuasions, who might otherwise be attracted to MMT.
I’ll wait for part 3, but part 2 does not encourage me that Randy will put aside the politics.
It’s not politics. It’s values and priorities — and the policies that flow from them.
With all due respect, if you’re turned off by policies such as pursuit of full employment, achieving greater income equality, ensuring a strong social safety net, and saving the planet — all of which are compatible with, and made more attainable by, acceptance of MMT — then your values and priorities are different. BTW, these are widely shared humanistic and progressive goals, not markers for a “nanny state.”
Political views are informed by values and priorities. One can value diversity and freedom, and support MMT, as well as others can value income equality and support MMT. MMT is economics. Advocacy of a particular economic theory should be based on logic and empirical data, not values and priorities. (Maybe you could say that a healthy economy is a value, but that is irrelevant because it is shared by those who support austerity as well as those who support MMT. The divergence is on how to achieve it, on the economics, not on the goal.)
Management of the deficit is not politics, it is economics. Most liberals and Progressives, who fully support all your values, say that taxes must be increased in order to sustain the safety net. They share your view on the safety net, the political issue, but diverge on the economic issue. Many who are politically conservative or libertarian, like I am, are also economic austerians, like I am not. The political view is separate from the economic view.
To take your issues one at a time,
Pursuit of full employment is an economic issue. I support it.
Greater income equality is a side effect of full employment, but as a goal in itself it is a political issue. I tend to believe that different rewards are appropriate for different achievement, but that achievement is the only valid criterion for differential pay. In one sense, I suppose you could say I support equality of income under equal circumstances, but I doubt that is what you mean.
A strong social safety net is a political issue. My take is that whatever safety net there is should be absolute, and in that sense strong, but that full employment will greatly reduce the need for safety nets other than JG itself (which is how you get full employment). I don’t think we need to spend $60,000 per poor person to fail to eliminate poverty, when half that amount simply given to the poor would do the trick twice over. I imagine the myriad of specialized programs for the poor are what you refer to. I would address the problem more directly, in a more unified manner.
“Saving the planet” is a political issue, or, ultimately, perhaps a scientific or even a metaphysical one. I’m torn between two views of man’s relationship with nature. In one sense man is simply one part of nature, and his influence on other things should be regarded in the same way as we regard the influence of any other species. In another sense, man is the only species which is self-aware, and as such might be held responsible for his influence. But how is one to know the consequences of that influence? More than 99% of all species that have ever existed are extinct. Extinction has clearly been a natural part of the world for millions of years before man came along. Who are we to say that we should end it? If a butterfly flapping its wings can cause a hurricane halfway across the globe, who is to say that the continued existence of some species somewhere is not going to eventually cause great destruction somewhere else? Or that such destruction wasn’t part of nature’s “plan” all along? There is a lot we don’t understand, but I do support the improvements we have made in the US to air and water quality over the past 30 or so years, even though some of the regulations have been counter-productive. The problems in that area have mainly shifted now from developed countries to developing countries. It’s easy to say they should give up their economic advancement for the sake of our pristine air and water, or for the reduction of global carbon emissions, but then it is an issue of survival for some. If MMT were to succeed, then perhaps we could share the wealth even more than we do already, and that would help.
You cannot ever put aside the politics, so rather than trying to hide it from everyone and ourselves we embrace it. Go read some philosophy of science and about pragmatism so you don’t confuse yourself further. For our specific approach, read this:
I may get to it, but not now. Am I being kicked out of MMT for differing on political philosophy?
This isn’t a disagreement on political philosophy. This is a difference in knowledge. We wouldn’t want you thinking the same ignorant sorts of thoughts that caused others to split from MMT.
When someone makes any economic suggestion, it is also a political one. Because it’s what you do say and what you don’t say. It’s what you put into a model, how you measure it, etc etc etc. Politics is in all of that, and most people choose to hide it and both the writer and the reader pretend it isn’t there. Students at UMKC are required to read some philosophy of science as part of their heterodox training, so when we hear fans of MMT saying things like excluding politics we simply shake our heads. The people who split from MMT are out there pretending that you can push something called “economics” disembedded from society. Guess who else does that? Neoclassical economics.
“economics” disembedded from society.”
??? When I studied it, economics was called a social science. How could it be disembedded from society?
Some Progressives favor tax increases while MMT progressives favor tax cuts. If all economic opinions are grounded in politics, how can one political view spawn these opposite economic views and policies?
One other thing I should note: Wray, Mosler and others have said that many of the technical operations that MMT explains is value or politically neutral (or stock flow analysis is neutral, etc). This is true to a large extent. But it doesn’t mean we’re actually separating our economics from our politics, it just so happens that there is no politics involved when we’re describing those operations. Yet the reason we even bother is because we live in a larger society, and we have ideas and viewpoints on how to fix things in that society. Again, this is inherently political.
Naw, you’re views are highly valued by many of us. But I think you’re mistaken about the sharp distinctions you’re trying to make between economics and politics and the idea that MMT can be free of value judgments. Here’s only one thing to read that may dispel the value-free notion.
I’m not saying that either economics or politics are value-free, and “sharp distinction” is an overstatement. There is overlap, and one’s politics can influence one’s economics, and the more one is invested in his political views, the less likely one is to accept any economic theory that challenges them.
However, people who are politically conservative can accept the economics of MMT while rejecting the politics of Progressivism. (In the style of your link, one can simultaneously say that government can spend without limit, and that it should not be the sole provider of health insurance.) There is not a lockstep relationship between MMT and Progressives, nor between Austrians and conservatives.
And that’s important to MMT. If it is to prevail, it must attract support from more than just Progressives. And it must think tactically about how to attract that support.
Im curious Golfer, what would putting aside the politics look like?
I here that a lot, and from people whom I respect like the guys over at MR, but I’ve never been shown that it is possible. You have to take a persons politics with their opinions and analysis. They are part of the picture. If you like their analysis, you probably like their politics whether you know it or not.
Mosler is very strong about his politics I think. He is quite insistent that the govt should ignore deficits and promote full employment if they want price stability. Does this make him a democrat or republican? Ive heard no one from either of those parties make such a claim. But Warrens sense comes from his politics, that focusing on the right macro variables will lead to a better economy. I share that view too. I voted democrat this year because I thought the republicans were further form ever accepting such a view. The democrats arent there currently but they are a few steps closer I think. I could very easily vote for a republican if he had the right (for me) politics>
What it looks like to put aside the politics is when people of different political persuasions agree on the economics. Like when Obama and Boehner agree that the deficit should be reduced. Or like when Randy and I agree that it should be increased.
Mosler ran for office as a Democrat each time, but I know little about his politics, outside of his economic proposals, which seem totally justified on economic grounds without reference to political values, or at least without reference to any that are in dispute between the two main political parties. His economic policies do not look much like Democrat economic policies. He advocates cutting taxes, not raising them. I think he has been quite agnostic in his writings about politics. “Taxes are too high for the size government we have”. Nothing about whether the size government is appropriate or not, or in which direction it should move.
“focusing on the right macro variables will lead to a better economy”
I think that is almost a tautology, and would be agreed to by any sensible person of either party or political persuasion. If it has any meaning at all, the meaning is economic, not political. Differences about which are the “right macro variables” are also economic differences. Everyone wants a better economy, they differ only on how to achieve it.
I voted Republican because I think Obama was right about Romney’s tax plan when he said “the numbers don’t add up”. The 20% rate cut would have saved us, and there is no way enough offsetting spending cuts or decreased deductions would have passed Congress so as to make it deficit-neutral, especially using static analysis. Even if the growth exceeded all expectations, I don’t think automatic stabilizers would have completely offset the reduced tax revenues for at least a few years, surely not immediately.
There were no MMT candidates, so I picked the one with the most MMT-like major policy proposal. In my case, my political action was based on economics, not politics. If Obama had proposed a tax cut instead of Romney, I would have voted for him.
this is not because of anything Mosler explicitly does. Each of us have different personalities and different viewpoints. It just so happens Mosler has one that you like. So what?
So what? So I don’t see that he is pushing a politically motivated point of view. He often says that some decisions are political ones, not mandated by MMT or any other economic school of thought.
I don’t see why this putting aside politics. Obama’s thought the deficit should be reduced since the beginning of his presidency. Also, the view itself is very political in my view, and is aligned with particular elites and interest groups in our society. In addition, when you and Randy agree on making the deficit larger that view too is political as well as economic, in my view.
‘Conservative memes dominate all discussion about the economic sphere. The market is “free”; the government “intervenes”. Consumers “choose”; government “regulates”. Through judicious framing, the conservatives have won all the important economic debates of our times. Deficits crowd out, cause inflation, and bankrupt our nation. We’ve run out of money. Government is the problem. Taxes and regulations destroy initiative. Small business creates jobs and government destroys them. Yet, in every case the conservative claims are demonstrably false. But it does not matter. They’ve got the better framing, the better money memes’
Yeah, y’see, Tweeder says “sheee-it, boy, it jus’ makes commun sense.”
BobbyG says there’s no such thing as a “free market.” Human affairs get regulated one way or another. Choose your frustration. Actual governance is tedious and boring.
Why not talk about “balancing” the money supply rather than the budget, and criticize absentee policy makers for a dereliction of duty in failing to ensure “balanced money.”
On a more general level, the progressive social view is supported by ideas far older than the conservative framing. The ideas of “civic virtue” and “public goods” are simple and compelling moral grounds for action; paying taxes–so that government can create public goods and act in favor of the common good–is a fundamental civic duty, rooted in a millennia old conceptions of virtue and community.
A very good development.
You need to address crony capitalism, corruption and “capture”. These things completely undermine people’s faith in government and the idea of it as benevolent or “nurturing”. Plus also “public choice” theory.
That meme would emphasize the social, not the individual. It would focus on the positive role played by the state not only in the creation and evolution of money, but also in ensuring social control over money. It would explain how money helps to promote a positive relation between citizens and the state, simultaneously promoting shared values such as liberty, democracy, and responsibility.
I think it’s really interesting that Randy’s post today and mine both focus on the same thing – the social dimension of the values that need to be promoted.
On the other hand, I am not at all attracted to Lakoff’s paternalistic take on this: the “nurturing characteristics of the state—the mother and father working together.” I don’t think that soft paternalistic model is any better than “strict father” paternalism. I believe it is better to promote the ideals of democratic government and democratic society. There is no such thing as the “state” taking care of us. There is instead a community of self-governing equal adults working together to build and maintain a society based on cooperation, joint effort in pursuit of common purposes, mutual obligation, and mature adult participation in the hard work of governance. Empower people and call on them to take charge of their society and govern it. Don’t promise them either a stern daddy or a nurturing mommy.
After considering this post, I enjoyed this relevant commentary by Moyers and his guest Johnathan Haidt broadcast earlier this year. http://billmoyers.com/episode/how-do-conservatives-and-liberals-see-the-world/
We’re talking about a paradigm shift here, I’m not so sure that the issues lies with how to frame the progressive MMT argument. It has been framed quite well, and presented in a very coherent and irrefutable manner. Yes, conservative language has been very effective in equating fiscal responsibility with positions that are anything but, but do we really want to lower the argument to the level of advertisement, salesmanship, and who can yell the loudest?
There are other reasons that the conservative argument works well – there are boatloads of money behind it, and powerful business interests that benefit from it. How does getting MMT accepted help the Koch Brothers, or Goldman Sachs, or UnitedHealth? This is what makes MMT so pure in my opinion, there is no agenda behind it, no one is trying to push it for selfish ends. It is just logical and leads one quite naturally to an egalitarian, progressive sort of conclusion. We can afford to employ everyone, to provide healthcare for everyone, to educate everyone, to help out the poor. “Money is no object.”
I think we need to be careful in rushing to try and change the framework. Five years ago, how many Ivy-League schools would have sponsored year-long seminars on Modern Money? How often could Professor Kelton get time on C-SPAN or NPR? A lot of progress has been made here, and it catches on more by the day. Be patient.
It’s fairly obvious that altruism achieved a fragile victory because we have the nation state which is a form of “nesting” ( sally forth to get resources for the occupants of the nest and defend the nest at any cost, etc. ) but it is also true that sociopathic or anti-social individualism in the shape of Malignant Capitalism can be dispersive of a nation’s “nest building” efforts and this is the condition where most nation states find themselves today. For a more detailed explanation of the human species as “nesters” see the biologist Edward O. Wilson’s latest 2012 book “The Social Conquest of Earth.”
It’s hard to rehabilitate government in the abstract when our actual government is so obviously – even hopelessly – corrupt. This isn’t just about institutions of government. We are in some sort of class struggle – some sort of class war. But, except at the far margins, it’s hard to work out who’s in which class.
I think James Galbraith is closest to getting this right: the class enemy is the predator-CEO class. These champions of capitalism have betrayed productive capitalism and set up as rentier crap-table gangsters instead. They have rigged the world economy so that they always win and most of the rest of us always lose. They have changed the risk/reward equation from the inside so that it’s now heads-I-win-tails-you-lose, but they have paid their propagandists and media whores to make them out to be genuine entrepreneurs. All other interests in society are now counterposed and opposite to theirs.
More politics. Not less. MMT is inherently Left, inherently pro-government, inherently anti-monopolist and anti-rentier. No one wants to take Warren’s hard-earned millions away from him, or assassinate any Czars or set up a guillotine in Zuccotti park. But economics has political implications. And only political power can make any of this make any real difference.
We need a new meme for money– L.R. Wray
Does Mr Wray want to say that let us have a start again from zero period and write every thing new specially on economics:- market, supply, demand, production and currency relationships etc. etc.
We are undergoing an evolution of capitalism. We have evolved from Protestant Ethic Capitalism based on the Golden Rule, (sometimes considered altruistic, no genes involved), the engine of the economy being labor and sacrifice which were favored by scripture. Unearned income, wealth without labor, was a difficult pathway to justify. This has been replaced with Trader capitalism, the capitalism of the trader and finance. The Austrians best represent the Trader school of self-interested capitalism (no selfish genes involved) where value is based on perception and profits are taken when the perceptions of the buyer and seller differ. The engine of the economy is knowing the value of everything within a free market environment without any global restrictions on capital movement. Labor is considered disagreeable. Financial capitalism is a sophisticated form of Trader capitalism. Packaging defective mortgages as securities and selling to “sophisticated investors” is Trader capitalism. In Trader capitalism, scripture favors the prosperous man regardless how he became prosperous. Trader capitalism irritates the “Ethical” rule based, community capitalist about whom much has been previously written in the form of idealized fruit in juvenile literature. But these two versions of capitalism simply describe how wealth can be accumulated. Both versions merge into a third version of capitalism, where combinations create wealth and where competition is considered inefficient. Imperialistic capitalism uses wealth to control labor, management and government by making all dependent on money. Low wages, high relative taxes and credit at interest are used to force labor to work. Management chases compensation perks. Safety nets are destroyed. Retirement is a vestige of the past. It is a return to the 1900’s with an intent to getting it right this time. The single largest obstacle to Imperialistic capitalism is to have sovereign fiat freely available. The euro is an experiment in global money control with Imperialistic overtones. The big secret is that Ethical capitalism is sustainable whereas Trader capitalism (which gives customers the best price, for awhile) and Imperial capitalism which supports an aristocracy, are not sustainable because they tend toward being destructive with short term goals and without community vision. There are many examples of Ethical capitalists that became very successful and wealthy by working hard and giving their customers a full measure.
Money allowed the division of labor and unleashed the labor multiplying effects of innovation. Ethical capitalism provided a more level playing field, safety-nets, enabled a division of labor to suit the individual and an increasing quality of life through a combination of labor, production and consumption; although not at the best prices nor did it offer the fast-track to wealth expected today using perception manipulation, mal-investment, asset shifting and asset stripping of the unrestrained Trader capitalist.