MMT and Social Movements

By Tadit Anderson*

The probability of demonstrating the democratic functionality of MMT/ff economic and fiscal policies in an academic or literate fashion to persuade politicians toward a conversion experience is unlikely. Even with our best communicators speaking in a mass media context or other public forums there are various other factors that need to be examined, such as learning styles and self-interest. Even if the analysis is right and validated by history the politicians will act upon the net amount of political influence supporting one set of policy priorities over another set of interests. When it comes to the influence of campaign contributions, thanks to the delusional decision that money is a form of free speech, the many will be usually outweighed by the few who have the money to buy political influence. While that is the unfortunate law of the land, the advocacy for democratic functionality will usually end up in second place.  However, the actual history of socializing movements suggests that an alternative path is not just possible, but also necessary. Given that the public discourse is also largely occupied by corporate interests, we have to also find different ways to grow a socializing movement other than relying upon public spectacles, such as mass demonstrations of protest and resistance.

Bluntly put, politicians tend to “lead” from the trailing margin, not at the leading edge. The same observation is contrary to the expectation that with enough persuasive rhetoric and criticism from itinerant bloggers and the electronic versions of wooden soap boxes favoring economic and fiscal reform and the public good a socializing movement would rise up. I was also told at one point by one of the early advocates of MMT that the CRX “…would never amount to much.” I was surprised at the blanket nature of the statement and the apparent faith based adhesion to a particularly “conservative” political ideology and its historicist narrative. It would be equally slanted if the importance of MMT was reduced to ” it would never amount to much,” but then I read in multiple areas including philosophy, economics, and social history, not the Gallup polls.

Politicians, as speculators in self-interest, will always lead from the rear most point of a socializing movement to reduce their perceived personal exposure to what seems to be the unknown. I can only explain the dismissive response as a surrender to the capture of the institutions of “democracy” by the Madison and Hamilton legacy of political elites as the “owners” of Wall Street, and thereby the sovereign economy. Truth is that while such public displays of political affection are possible and even productive in certain situations, there are several steps that have to happen prior to this level of demonstration. The common historicist concept of social movements features imagined charismatic figures speaking to the assembled faithful. The celebrity version of the history of social movements is more ideological than historical, though the narrative seems to make the interpretation of historical social movements easier to narrate though it is a fiction. As an ideological narrative it aids in diminishing how non-celebrity people can substantially contribute in the making of socializing movements and of history.

The historicist political narrative serves to oppress the majority of the citizens from participating in the making of history and recruits the same people as oppressors within a supposed “just” society. Where once there was a community we have essentially a variety of class warfare that is accepted as part of the cultural and economic process. Sometimes this is because the victims of this inter-communal warfare are hidden from the video cameras and peripheral vision by being in a whole different country or zip code, or by justifying a whole series of rationalizations, beginning with racism and class. The ideology of a “just society,” also adds to the rationalization of oppression and injustice as if those who are struggling to survive must deserve their position in life because they failed to conform to the uber culture.

The good news is that the social history of social movements tells a different story. Academia in its conventionality tends to be invested in the posited divisions of academic labors, because that is the basis upon which higher degrees are granted and how tenure is ordinarily received. Yet, even so, being in the social world remains multi-disciplinary. In this context the objective is to condition behavior in a viral fashion to expect the management of sovereign fiscal capacities of a fiat sovereign currency in support of a democratic functionality by a growing mass social movement.  This how the innovators can multiply to include the early majority adopters of new technologies.

The well-funded propaganda pressing austerity as the appropriate response is compliant with the false analogy of how household finances are ordinarily expected to be managed under even conditions of massive fraud and fictitious circumstances. The corporate mass media will sustain the oppression of neo-liberalism exactly because it is profitable, even as we are being dragged and bloodied into another dark span of economic collapse based upon economic fictions. Their unearned profits and positions of pretense require this level of loyalty and self-interest. The biggest problem about our ideological blindness is our blindness to the political ideology, which sustains it. This is not “ideology” as in an overt political doctrine as such, but closer to the basic notion of a world view and how our social realities are constructed by individuals and by groups, including institutions as a basis of cultural capture.

The Nature of Social Movements

Since relying upon the historicist political ideology is a core source of oppression, pausing to examine the actual dynamics of progressive social movements is worth their description. When I researched this process, for historical examples, for theoretical statements which seem to satisfy adequacy, applicability, validity, and reliability relative to my direct experience doing community organizing, the best summation I found was in “Beyond Revolution,” by Daniel A. Foss and Ralph Larkin (1986). The core statement they made was in a somewhat dense paragraph, found on page 143:

“The difference between a social movement and episodic dissidence is that it builds upon itself in a process of intensification, wherein the hegemonic (dominating) ideology (world view) is rendered problematic (challenged) by dissidents. This “reinterpretation of reality” provides the subjective basis for further- and more drastic- action. As social reality is reinterpreted in the struggle, movement participants attempt to reclaim those aspects of human subjectivity that have been alienated from themselves as part of their socialization to positions of social subordination. So long as these three aspects of a social movement are a mutually reinforcing totality – intensification of a conflict, reinterpretation of social reality, and the redefinition of the self and its capacities – a social movement is ongoing. Their fragmentation signals the point of the incipient decline has been reached, Such phenomena must be viewed as a whole, since there are often temporary defeats and retreats within the process of intensification of a social movement, as well as phases of overt conflict alternating with cultural (or subjective) intensification” from Foss and Larkin, Beyond Revolution (1986).

The most effective social movement of the 20th century at least in the US was the US Civil Rights movement. It is also offered as a historical model worth emulating, though its interpretation most often focuses upon the oratory of Martin Luther King Jr. The actual back-story closely fits Foss and Larkin’s description in “Beyond Revolution” of a social movement. Martin Luther King Jr. was himself a participant in training for community organizers that was offered by the Highlander Folk School, later known as the Highlander Research Center. The training offered there was led by Myles Horton and Septima Clark. Prior to the establishing of the national significance of the US Civil Rights movement the Highlander Folk school “trained” some 40,000 people who were distributed mostly across the southern states.

What made the training at the Highlander Folk School particularly different is that Horton and Clark served as resources and by example, not by lectures. The people who attended these training sessions learned how to organize themselves as groups by operating as groups. In essence they learned by organizing.  Martin Luther King Jr. also attended one of these multiple week training seminars before he went to Birmingham, Alabama. This is the context that Martin Luther King stepped into as an orator and organizer. The fragmentation of the US Civil Right movement also occurred through the participation of people who did not use the Highlander model of community organization. The strength of MLK’s oratory and the concentration of the media upon him as a personality also became a weakness of that movement. Others also sought to serve in similar positions as orators though they lacked the Highlander training and a regard for that model. In Foss and Larkin’s model of social movements this is described as fragmentation. It can also be described as the confluence of functional socializing effects and anti-social dynamics.

The most important point from Foss and Larkin is “… As social reality is reinterpreted in the struggle, movement participants attempt to reclaim those aspects of human subjectivity that have been alienated from themselves as part of their socialization to positions of social subordination.” When social reality is in support of democratic economic functionality, how do participants reclaim their social capacities? Here Hannah Arendt’s concept of “conditioning” supports Foss and Larkin in revealing the basis for reclaiming social capacities. She described this process in two of her books, On Revolution and in The Human Condition. The capacity to re-interpret social reality is also gained through conditioning. People of even an academic investment require more than a re-interpretation of a slim slice of social reality. What is necessary beyond narrow band of dissidence and innovators is the reversal of social subordination.

Put another way, ordinary people can and do participate in the making of history. Possibly a majority of people in most modern societies learn some thing new most easily by doing, rather than by reading.  To limit advocacy of the MMT economic and fiscal capacities to persuasion by reading, listening or writing makes its advocacy limited to a certain narrowed influence. The capacity to co-produce socializing movements under the historicist narrative is usually assigned to the white knights galloping past. This reproduces the subordination process in favor of the exploitation of social and public relationships for self-interest and the extraction of wealth from the community. People need to re-imagine themselves and their capacities by participating in the redefinition of their communities. Until this happens the capacity to co-produce history generally remains captured. A piece of wisdom from Myles Horton and Paulo Freire is in the title of a book they jointly wrote from a series of conversations, “You Make The Road By Walking.”

Neo-liberal Demolition of the Commons and Commoning

The vile nature of the neo-liberal banking, trade “reforms,” and environmental degradation are only out done by its welfare reforms. It shares its genetic code with the dismantling of the Glass Steagal Acts and the deregulation of the finance sector based upon the declaration of preposterous economic theory dressed in ivy and pomp. The Clinton era Welfare Act of 1996 is still being phased in, with its full contempt for the public, and particularly those currently devastated by the implosion by banking fraud and by the effects of NAFTA also signed by Clinton in 1994. There are a number of stipulations in the Welfare Reform Act which are only now being applied, some due to a change in the party ideology controlling the various state legislatures and governorships, and some by the phasing in process presuming to reform the institutions of public assistance exactly as the need for public assistance is at its highest level in 75 years. The Clintonian, aka the Democratic Leadership Council version, of the Democratic Party is still in power, by both in the repudiation of the social legacy of the US Democratic Party and by the DLC occupation of the corporate neo-liberal agenda.

Under the 1996 Welfare Reform Act applicants for public assistance including SNAP food stamps are required to be part time employed or commit to volunteering 20 hours per week through a community service organization. The neo-liberal ideology is delusional and arrogant beyond measure. The premise is that applicants serve as conscripted volunteers for what will amount to $2.50 per hour of “volunteered” servitude. This also lacks any sense of reality in terms of the capacity of local community service organizations to accommodate the inevitable expectation that they have the staffing to administer such an onslaught of people in need of public assistance. Either masses of people will be denied public assistance, or there will be for a time massive fraud to circumvent this requirement. The problems will be particularly massive in states where tea-party Republican Governors are in office. Very obviously no one thought this reform process through, leaving the population experiencing hardship due to the also engineered economic collapse also due to the sociopathic level of self-righteous political ideology.

Yes, it is also true that the fiscal capacities recognized by MMT, which are a historical economic fact are is being utterly ignored largely in favor of a one sided form of class warfare. One possible result from these reforms at this particular time will be mass protests and probable looting. Currently when I visit the local grocery chain store, half of the time I am incidentally witness someone being arrested for shop-lifting food items. It is rather clear that the politicians and most of the present millionaires and billionaires are exploiting the situation for political or economic profits. There are also estimates as well that from a third to half of the people currently incarcerated are there due to issues related to poverty or undiagnosed mental illness. It is time for a new strategy, perhaps congruent with the development of socializing social movements. At the minimum the possibility that the political leadership to certify their humanity seems steadfastly remote, issues of fiscal and historical literacy seem to have been dropped into a bottomless pit.

Community Currencies and Kindred Examples

The Buckaroos system at the Univ. of Missouri at Kansas City is at one level is an interesting simulation of economic principles in an academic context. It serves both to educate economics students about the principles favored by the faculty, and put them in contact with various community organizations for a larger view of the world. Thanks to Dr. F. Kaboub the Denison University economics department has reproduced the Buckaroos as the Denison Volunteer Dollars (DVD) process serving both an educational and a worldview objective as well. The DVD people have hopes that their system can be expanded to also serve the local community.

The Twin Oaks Intentional Community has used a very similar cooperative labor credit system for about thirty years where residents and visitors allocate themselves to both productive activities, such as building, office administration, maintenance, farming, tofu making and more, and to activities that sustain the community internally, including child care, meal preparation, and similar activities. Yes, they also have a history of small-scale industry and services to bring in US dollars. Josiah Warren, one of the leaders of the New Harmony community, established an “Equity Store” also known as “The Hours Store” as a proof of concept demonstration and which was also similar to the CRX/MMT model.

The Community Reserve Exchange (CRX) was formulated as an educational utility based upon MMT principles and borrowed a piece from the Buck-a-roos concept. Under the current public assistance related demand for community service hours the CRX would be one way to satisfy that requirement, and the value of the Community Reserve Notes/CRN units in trade would increase the value of the community service hours to public assistance applicants. Along the way people of different income brackets would gain an education about how a sovereign fiat currency works and how it could serve both their local communities and the national economy. Relative to the 1996 Welfare “Reform” requirements economic and fiscal literacy would be an unintended out come, and it would reshape people’s understanding of economic and fiscal capacities. This is an additional way in which a movement for socializing change can be cultivated.

Currently in my state alone there are 10 Time Bank associations in operation and there are about 400 locations in the US with 17,895 members recorded, 86.5% of the membership is concentrated in 74 locations. The Time Bank and the LETS 1.0 models are debt-based systems, which are crude and empty of much economic or fiscal educational value, beyond the repetition of various slogans, such as “building community” and “buying local.” The primary barrier to establishing the CRX as a functional local exchange system is the software programming necessary to operate such a package of utilities. If the cost of the expertise and labor could be funded by a crowd sourcing process, this utility would then be made available as open source software with appropriate encryption. After that there are more ordinary needs that can be established locally.

This utility could be offered to the Time Bank groups interested in converting to the CRX model and any other group interested in commons centered economics such as the Transition Town network. Sure the concept won’t support large capital loans, but it could support revolving micro-loan funds. The advocacy for publicly owned state banks is self limiting in that it reproduces the key monetary practices which makes capitalism, Capital-ism. Thrift cooperatives (aka “credit unions”) are similarly positive as far as they go in reducing the possibility of fraud and in favoring local investment, and they are also limited by the scale and liquidity of the “equity” nature of the national deficit (note well, it is NOT a “national debt”).

Framing the CRX/MMT as a demonstration of the economics and fiscal objectives of the New Deal era will add to political pressure upon politicians to produce a New “New Deal” including a jobs guarantee program, in place of the current self righteous scamming and abuse by maximizing profits by the suppression of wages, which then is transferred into corporate management compensation in service to control fraud. The requirement of community service to validate public assistance can be turned into a form of a Jobs Guarantee program.  People across the class spectrum also need to understand the conceptual and economic fraud that is being perpetrated, including the posited “necessity” of austerity. Yes, I would prefer a mass contagion of informed progressive political will, but there’s no reason to wait for the corporatist elites and their wholly owned politicians to receive brain and heart transplants or decide that their political careers would be better served by serving the actual public.

I was told at one point by one of the early advocates of MMT that the CRX “…would never amount to much.” I was surprised at the blanket nature of the statement and the apparent faith based adhesion to a particularly conservative political ideology and its historicist narrative. It would be equally slanted if the importance of MMT was reduced to ” it would never amount to much,” but then I read in multiple areas including philosophy, economics, and social history, not the Gallup polls. Politicians, as usually speculators in self-interest, will always lead from the rear most point of a socializing movement to reduce their perceived personal exposure to what seems to be the unknown. I can only explain the dismissive response as a surrender to the capture of the institutions of “democracy” by the Madison and Hamilton legacy of the “owners” of Wall Street, and thereby the sovereign economy.

So really, how is the current campaign for economic and fiscal literacy going?  The small gains in visibility in the media might never galvanize a social movement and may never be enough alone to establish a thoroughly socializing movement. Is it even reasonable to not use every form of advocacy and public education possible? What is at risk is another age of darkness, sustained by the blindness to the present political ideology, which itself sustains a certain hierarchy of greed and the diminishing illusion of class participation by any except the .1 %.

There is a dark irony here in recalling Freire’s Pedagogy of the Oppressed, where the point becomes how to confront the related issues of financial literacy of those who both oppress and who are also oppressed by their own blindness. A primary means would be the immersion within a framework that demonstrates the implications of the proposed reformation of social and economic reality, when well-informed words and opinion are not enough. To paraphrase Foss and Larkin, ‘We must re-interpret economic reality in the development of this social movement such that participants can reclaim those aspects of human subjectivity and community that they have been alienated from as part of their conformity to positions of social and economic subordination.’ One of the next steps in this process is a crowd sourced funding process.

*Tadit Anderson is a long time economic literacy advocate and community activist. He holds an MSc in Sociology from the University of Pittsburgh.  His forthcoming book is Being in the Economic World. 

 

39 Responses to MMT and Social Movements

  1. Marvin Sussman

    It is not a good sign that I read all the MMT literature I can find and have never heard of CRX.

    Amounting to “much” may seem remote but that is no reason not to give it all the aid we can muster. I know little about organizing or advertising but I know something about computers and would like to help.

    Is there somewhere a description of the software utilities required: input, output, data base, etc.? Surely, the university community, including retirees, has all the programming skills that can be volunteered. Something should be done with those resources.

    • thank you Marvin, I have mentioned. More likely the Buck-a-Roos system at the UMKC has been mentioned, though perhaps not. The current wave of neo-liberal welfare “reforms” have pushed the situation toward new levels of troll politics. I have been advocating for the CRX for a number of years, though I also stitched the concept together in part out frustration with the debt based pseudo community currencies whose “major” value has been good “intentions.” Unfortunately it has been amply demonstrated for me that “good intentions” in the absence of solid practice and transparency almost always produces fraud, in much of the same way that the boasting and blarney of the neo-liberal fairy tales provided the perfect environment for control fraud. The CRX is as close to the MMT principles and ff objectives, imo, as is possible without it being adopted at the federal level to benefit the nation, beyond a form of MMT for the banks and a pseudo gold standard for the 99.9 %.

  2. Mr. Anderson makes a lot of sense. His article reminds me of the co-op movements in Canada during the early 20th century which were based on the needs of local industries such as farming and fishing. We no longer have the same urgency today to assist one another because of globalization that allows us to eat cheap food and use inexpensive products from the countries that trade with us. It will be hard to convince any local population of the need for cooperation when they can go to the nearest Costco and buy huge quantities of the items they need without worrying about how they are grown and what others are paid for their labour. Finance (and how money is used) is probably not on any of their minds either, even though that is what is ruining our democracy at the present time.

    Right now we are fighting a rear-guard action against our own PM who is trying to hasten the democratization of our election process as well as trying to privatize everything in sight and trying to get rid of our “entitlements” such as unemployment insurance. He started with bunging up the collection of our statistics and getting rid of civil servants that did not toe the line and ended with robo-calls and the [un]Fair Elections Act. ( http://www.theglobeandmail.com/globe-debate/editorials/the-fair-elections-act-kill-this-bill/article17629981/ )

    I look forward to more ideas on how to create a social movement against our own government!

    • Obviously wedding the MMT discourse to local practice in the manner of how cooperatives are supposed to operate, as in a well funded member education program. Bill Black’s contribution to the context is also important. I imagine that perhaps the Canadian cooperatives might be friendly to such an addition to their more traditional version of member education. Perhaps the Mondragon cooperative would include this level of member education in that they expanded the traditional “Rochdale” Principles from seven to ten, and particularly since they were burned to the level of 100 million US $ in the Lehman crash. Cooperatives in the US have been a major disappointment for me in that they tend to become sing-a-longs as a means of reproducing subordination to “management,” and a open door to fraud in part due to people’s desire for a legitimate alternative.

  3. You make some valid points Tadit, but it would be valuable to know exactly what you mean by “a crowd sourced funding process”. What is it, how would it work, who would be interested and/or involved, and who would be the beneficiaries? Obviously, any “process” would require organisation so, how would this be initiated?

    • A crowd sourcing funding process is represented by several several different websites where proposals are presented within a compact space, and then others are either referred to the particular proposal on a particular host site Indieagogo is one, and there are several others. The basic notion is that pledges are made, and then depending upon the rules on a particular site, the site takes a certain percentage if the goal is met and a different percentage when it is not met. It is somewhat akin to open source software, You can use a search engine to find more examples. The main premise is that the CRX could have numerous application sites as a means of defining an exchange commons.

  4. Excellent post, which touches well upon what is needed to dispel public apathy and lack of knowledge, over the issues we face and available alternatives – this is a very good framing, for what is needed in building a wider social movement.

    However – the nuts and bolts of that wider social movement, how it will be constructed (i.e. the CRX type projects aimed at demonstrating MMT), and such – all of that needs to be expanded upon in detail, as it’s just at an early formative stage here – an excellent base to start with though, which I think is a very important ‘bridge’ for tying MMT into alternative currency projects.

    It’s my own opinion though, that such community projects are going to be difficult to set up and administer, as well as difficult to get people involved with – I may be wrong (hope so), but this is the kind of stuff the ‘nuts and bolts’ analysis/description, of such a social movement, would need to address.

    I haven’t read much of his work, but Bernard Lietaer has studied many alternative currency projects, which seem like they would be similar to this – that would be a good base for research on it.

    I definitely agree that actually demonstrating MMT to people, first hand, is the best way to get them to learn about it, but there must be thorough descriptions of the programs/projects, that would achieve this – that’s something I’d be very interested in hearing more about – especially the problems inherent in them (as that is far more important, than the positives – I go about learning economics, and most things in general, by looking at the faults/problems first; hence how I came to support MMT ;)).

    • Bernard Lietaer advocates for community currencies though he also accepts lock stock and pork barrel the neo-classical/neo-liberal fictions as well. So, if nothing else he becomes a good, bad example of their possibilities. The general reputation among folks serious about monetary reform, is, imo, actually deserved, mostly because they have rarely shown a serious interest in the related economic history or in the economics, MMT/ff that needs to under-gird that process. This is downstream, imo, of economic history being absent from neo-classical academic departments as well their devotion to the neo-classical faith based economism. When there is such a empty space cranks, the adamantly ill informed, and fools tend to rush in. It can get real ugly and wrong. I suppose this is why, rightfully, community currencies have been regarded as a waste of space, by people more serious about teir economics. However, the Buckaroos concept should have already proved its merit, and can be the basis for a less academic context. The main source of obstacles and problems will come in the transparency and education functions. Having an accounting utility that makes auditing easier will be a positive. Having a set of certification standards on an annual basis would fore-stay some of the deviance. Licensing the program package based on these standards would not be an open source process, but it may be a better way forward, as in starting out with a structure that assumes certain standards, as a credit union would have in it a national association accreditation process.

      • The Buckaroo is not a community currency, Tadit. It is a currency issued by a centralized monetary authority, the demand for which is supported by that authority’s ability to impose tax obligations on those over whom it has authority. The point of the Buckaroo was to provide a lab experiment in a smaller setting that illustrates how state currencies work.

        P2P community currencies, on the other hand, are just informal “buy local” compacts, with a limited purpose inconvertible exchange medium, only one step away from a barter economy. Frankly, I can’t see any major problem that is solved by them, although they might have some marginal value in promoting a little bit of civic pride. The Buckaroo model is not applicable to a P2P currency.

        The current obsession with localism is, in my view, a symptom of pervasive fear and escapism. Progressive political forces concerned about their nations’ futures and the global future should be fighting to gain control of the global economy and govern it on more just, progressive and egalitarian principles. If people instead retreat and flee back into their local communities in search of a totally illusory and romantic self-sufficiency, then that means they are accepting domination and decreased prosperity, and that the forces of neo-feudal global capitalism are winning.

        A system of manorial feudalism isn’t threatened by the serfs and yeomen using tickets to exchange their ribbons, jellies and gourds in village stalls.

        • Dan, it is as much a community currency as most other community currencies, and I can name several. There are minor differences such as the Ithaca Hours example which functions on a substitution strategy for FRNs. On their value relative to economic and fiscal literacy for the most part I agree. Ithaca Hours by its substitution process has a higher educational value as did Warren’s Equity Store relative to the equity embodied in different products/goods and services. The CRX serves the same functions as the Buckaroos only in a wider population. In the Buckaroos model the issuer is the central authority, though that process is initiated by the individual student signing up the econ course work. Relative to solving “major” problems, the primary problem that the CRX and the Buckaroos addresses is economic and fiscal illiteracy. I would rather take a lot of small wins, than wait for a major win, which may not happen at all until general level of economic literacy is much higher. The attack upon academic economics departments began in the late 19th century culminating in the mass occupation of academic economics and of the political discourse about economic and fiscal literacy and the implanted fictions. You are entitled to you priorities, and based upon the saturation of a relatively small niche and some minor exposure there are very, very few white knights advocating for higher economic and fiscal literacy, or fiscal policies that are actually serving the commons as a public discourse. I understand by direct experience and by my research how actual social movements happen, and I will proceed on that knowledge What you are insisting upon seems to be a one tool box perspective in my opinion. For me this embodies a form of historicism at least.

          • I didn’t propose any tools at all in my comment Tadit. I just commented on the community currency issue.

      • A I didn’t know that about Bernard Lietaer, that’s a pity – I agree fully, on neoclassicism in any case.

        I’ve not been very knowledgeable of community currencies, but I have suspected they were quite problematic, since it is not difficult to think of a plethora of potential problems.
        I agree with Dan there, on the problems with community currencies – inevitably, one of the main problems I see with them is what was mentioned earlier as well, of fraud.

        I have to admit, I’m a bit confused about CRX – would be good to learn more about it; are there any good sources/links, describing it in more detail?

        • Lietaer literally means “currencies” that are complementary to the neo-classical paradigm. Yes, I agree that for the most part they are problematic and oversold. The Ithaca Hours example actually relies on a substitution strategy, in effect you pay in one US Federal Reserve Note (FRN) and you get back 2 Ithaca Hours credits. The FRNS collected are used to operate the admin part of the process. The Ithaca Federal Credit Union acted as a central bank/clearing function, as well as an advocate for the program. The Ithaca Hours credits stayed in the Ithaca area. This provides at least an additional level of economic and fiscal literacy. The Schumacher Fdn has sponsored a Berk-Shares model which is similar. Yes they are limited, but the FRNs would be more limited than what they are if not for the Bretton Woods accord and Nixon’s “shock” in 1971. This is a way of sustaining a conversation and awareness of these issues. It would provide a context to also discuss the Free Banking period and Pres. Jackson’s limited economic and fiscal literacy. Ie the solution to a corrupt “national” bank was not multiple corrupt state banks, but a regulated central national bank. There is potential for fraud no matter where you go, and that requires acknowledging that a communal critique and regulation are important. As to sources, I am the primary source at this point, though putting the CRX and the Buckaroos in a wider discussion has some merit. Dr. Kaboub at Denison has promoted the Denison Volunteer Dollars, which is very similar to both the Community Reserve Exchange and the Buckaroos model at UMKC. You can apply a search engine to any of the names. Dr. Kaboub has a good video that he has put together here: https://www.youtube.com/watch?v=vSQ6POEV86U

          • Thanks – I’ll take time to check all of that out, appreciate info on these additional projects.

            I’m not optimistic about being able to inform the public about ‘functional finance’ and the like, based on my experience debating economics with people thus far, but certainly – teaching by direct-experience/example does seem potentially much more fruitful.

    • Bernard Lietaer, is an engineer dabbling in monetary possibilities, and really does not seem to have much knowledge of archeo-economics or of alternative. He accepts neo-classical economics as the default without actually understanding its origins or development. I realize that he is popular, and for recognizing additional capacities you have to be able to understand a wider variety of cultural and historical narratives. It is bit like looking at the economic world by only looking through a specific window, without actually understanding the limitations of that framing or history, or without even leaving the confines of that implicit world view. The “fault” and “problems” are still from within a specific set of assumptions. The next level is changing the assumptions. On Lietaer go to page 214 of his “Complementary Currencies” book where he admits his defaulting to neo-classical economics. Conservative Christians for instance tend to be bewildered by vedic philosophy and zen Buddhism.

  5. Joe Firestone

    Really interesting, Tadit. If we’re to wed MMT to a social movement, then I think we have to persuade people active in the process of organizing one that MMT is the right approach to economics for them. I follow the work of Margaret Flowers and Kevin Zeese, good writers and energetic activists (who seem to organize the vast majority of DC area protests) on a range of issues covering all manner of civil liberties, economic, medical care, and environmental and climate change concerns, and also members of Jill Stein and Cheri Honkala’s Green Shadow Cabinet, along with Gar Alperovitz, Ellen Brown, David Swanson, Patch Adams, Richard D. Wolff, and many, many more good people. Stephen Zarlenga is also part of the group, as is Philip Harvey who is closer to MMT, I think, in his thinking.

    This group is aware of MMT, but most still give lip service to some of the neoliberal frames about fiscal matters. Nevertheless, if we could move them toward our position then I think MMT could be more closely tied to an emerging social movement.

    Right

    • Joe, I am being a bit more specific, I’d like to see MMT considered in light of what is understood to be a socializing movement, but not in the ordinary sense of what most people seem to think that a social movement is and has been. Let’s use Richard Wolff as an example for instance he seems to be largely a polemicist in favor of a fairly specific political economic agenda though he doesn’t seem to have a clue that he lacks an understanding of the nuts, bolts, and capacities to make those priorities functional apart from his rants and somewhat thin socialism. MMT/FF define social and fiscal capacities that are generally ignored by most nominal socialists and progressives. This alone makes him entirely in appropriate as the Green Shadow Cabinet Sec. of the Treasury. Dr. K would have been a much better choice for several reasons, but Wolff is from the U of Mass Amherst I believe that most progressives/socialists will remain economically and fiscally illiterate until they have a motive to join the discourse, partly they seem to operate within an echo chamber sort of context, and they seem deeply invested in the historicist rendering of the history of social movements. In effect they are accepting neo-classical economics/fiscal capacites and the Micro-phone grabber’s pre-sumptions of how socializing history actually happens. This, for me, has a certain Don Quiote sort character to it, or if you will the Animal House clip where the marching band is led into a cul-de-sac. I’ll settle for now for propagating a broader a deeper level of financial literacy. In time we will need orators for a socializing movement, but not, imo, until they are more economically and fiscally literate themselves. The state of nominal progressive politics is appalling, truly reflecting the oppressed also oppressing as per Friere. Again, We make the road by walking, not so much talking into microphones, yet.

      • Joe Firestone

        I largely agree with this comment Tadit. But don’t write off Ellen Brown, Margaret Flowers and Kevin Zeese. I’ve communicated with all three. Ellen’s been favorable to PCS and the others offered advice to the small team that organized the fiscal sustainability conference. So, I think all three are trying to persuade,

        • Joe, you need to pick up a copy of Ellen Brown’s book Money as Debt. It is tangle of countervailing argumentation, which often contradicts itself within the same chapter. You should talk to

          • Randal Wray about his effort to tutor her, after which he gave up on the possibility. I have known enough people who seem thrive on being the center of attention, and then tend to be empty. She has a habit of seeming to be a lot of things to a lot of people who buy her schtick. I also tried, and had the same summation. Their persuasion tends to be all about them and not the substance of the material. Life is actually short, so I tend to choose where I apply my good faith.

  6. Mr Kervick, we in community would disagree with your assessment of P2P currencies as informal buy local compacts.

    That maybe how they are now, but that isn’t how they will be in the future.

    Going forwards, community organisations everywhere, will issue community credits to individuals that give their time producing community. One hour will earn 50 credits – a standard rate issued in exchange for completing activities that contribute to the health and well being of local communities.

    Those credits will be stored in an online account which will act as of bank but also as a kind of measure of one’s reputation for contribution to the common good.

    That account will also be linked to a market place where commerical organisations can accept credits in part payment for goods and services so only the balance must be paid in cash.

    The credits accepted by the commercial vendor disguise the level of any discount offered as part of the transaction, and represent their own corporate social responsibility efforts which will enable them to compete more effectively for their share of the consumers wallet.

    When seen as a whole, our communities are full of under employed or under used assets. Empty seats at a sports game; empty public buildings; unsold seats at the cinema and so on. Even unemployed people who if valued for the things they can do rather than stigmatised for the things they can’t, would find work since in a real community the only disability is loneliness. (If you drink from the well you should pay for the well).

    We all know the dollar’s value is unsustainable because of the way money is lent into existence. A counter balancing currency that is earned into existence for contribution to the common good, and with standardised issuance protocols, has the potential to act as a long-term hedge to the dollar’s vulnerability.

    We need a currency that makes the world a better place. It’s no more complicated than that.

    • It seems to me that efforts to get people to trade and conduct business in a currency whose use as a medium of exchange is restricted to a single small community is potentially a step backward toward primitivism and social disintegration. But if the currency is essentially just a kind of community service reward in the form of local products, and the scale is small, that’s fine.

      I’m worried, however, that Americans are retreating everywhere from a frontal engagement with entrenched power and economic injustice, and an effort to re-make the world on a major scale, are seeking to escape into illusory pipe dreams of personal and local autonomy.

      • Mike Riddell

        Dan the community would be a virtual community where everyone works together to improve the health and wellbeing of community by producing more of it. Teaching, giving or learning activities would all earn credit from the community.

        This might be regarded as a utopian pipe dream but the reality is that the software that organises and coordinates such activities and which is connected to a web-based trading platform will be ready for testing next month.

        Creating a grass roots social movement, which shows the world what good looks like is really not that far away. Investment in pouring into the project as word of its imminent arrival spreads.

        A community of communities is an attractive population for many vendors that are seeking to grow their brand and their bottom line. Business has the potential to transform community but community has the power to transform business.

        If you drink from the well you should pay for the well.

  7. Mike, I need to refine your advocacy a bit. It is not so much that it is “lent” into existence, though it is by being attached to a debt, but that the power to spend currency credits into circulation my the theoretically the main agency of the national commons, the Federal government has been entirely captured by corporatists and “conservative” ideologues based upon the neo-classical/neo-liberal fictions. AND as a form of usury this principle has been scrubbed from the public discourse. Making the world a better place for all puts the commons foremost over the usury of the occupation of this part of the commons. The CRX/DVD/et al, the Ithaca Hours design , and Warren’s Equity based exchange,… have something to contribute at the level of practice and thereby praxis. MMT was rebuilt partly based upon archeo-economic excavation of practices forgotten and overwhelmed by the neo-classical choir, as well as the examples of Lincoln’s Greenbacks and of the WPA et al of the US FDR administration, not to forget Minsky’s analysis of the fiscal assumptions and dysfunctions of the US Confederacy. Thanks.

  8. Hi Tadit, please can you explain what you mean in non-technical terms? This is such an important debate that we in community need to understand exactly what you are saying. We think you’re onto something and want to support you if that is the case.

    Great debate.

    • Apart from my one typo, that should have been “by” rather than “my,” give me a clue. I consider the full definition of usury to be the exploitation of public and social relationships for personal gain. Most of what I was referring to is economic history. Give me questions or comments about concepts that you don’t understand, and then I will have something I can respond to. Asking for a “non-technical explanation” doesn’t tell me anything about what you do understand. What Minsky refers to as apparent human behavior, is a different perspective upon Gresham’s dynamic, but then he had a very dry wit. Base world views aka ideologies tend to presuppose appropriate and meaningful responses, as opposed to in appropriate expectations. Praxis is another way of describing what Abba Lerner named “functionality,” and what Adolph Lowe named “instrumentality.” Small “d” democracy is another way.

  9. Hello, I don’t know anything about the theories you are talking about and I am interested in your mention of local currencies, a field I have been active in for 20 years.

    I ran a local exchange system in Wales for 10 years and an Institute for Community Currencies in the University of Newport for 4 years. In 2012, I co-published a book with Bernard Lietaer (whom you mention) and Margrit Kennedy called “People Money – the Promise of Regional Currencies”:
    http://www.triarchypress.net/people-money.html

    I interviewed 40 local currency leaders from around the world and profiled 16 of them in depth. So the book seeks to present both the theory and practice of local currencies right now. What we know from practice is how difficult it is to establish viable systems and for a variety of reasons: poor design, poor attention to goals, poor management, poor marketing, poor governance, lack of critical mass etc.

    The most promising systems are strong partnerships between local government, local banks, local business and local citizens such as the SoNantes system in northern France launching this year: http://sonantes.fr/

    You may also be interested in this Prezi on Local Money I presented at the first conference on the Good Economy in Zagreb, Croatia last week: http://prezi.com/byn39kcf9s2g/local-money/

    And my pamphlet “Local Money – What Difference Does It Make?”:
    http://www.triarchypress.net/local-money.html

    • I have very high regard for Margarit K. As to the future, trying to cross a river while reconstructing the boat you are in can be very hazardous. I really do subscribe to the Horton/Friere aphorism of “we make the Road by walking.” Starting out accepting the inherent limitations of the neo-classical ideology will not get anyone to a better future. As in cooperative where there is success, there will also be a functional cooperative culture with an appreciation of historical efforts. Without those such experiments will be merely an open door to fraudsters exploiting a lot of wishful thinking. On the authentic monetary reform context much the same will apply, a different world view and economic literacy will be essential. Expressing apparently new capacities will in part require going back and re-interpreting. Peter Linebaugh is a great author in this mode, though he deals with mostly social history he also addresses different economic (as in oikos-nomia, management of the community). His book The London Hanged is about the criminalization of various commoning culture customs, for the sake of the rights of property.

      • Regarding “primitive,” it depends what you mean by “primitive.” Such an attribution could be put against close to anything not complying usury for the banks. Much like education or other forms or even social interactions of most varieties tends toward face to face interaction, minus the majority of the w3 zone. “Primitive” can also be used to describe the essentials of life, or essential ideas. The community currency zone tends to also be a major gathering place for trolls who are more interested in promoting conflict and occupying space mostly to promote their own meager literacy just because there’s a keyboard available. In the US currently there is a recent infliction of “”workfare,” which has placed an onerous requirement upon people applying for public assistance and upon community service organizations of a local nature. The CRX/MMT model can address some of this requirement, to prevent being denied. The programming for CRX/MMT could easily include the capacity to accommodate two different currencies the community reserve notes and the federal reserve notes circulating in what would be primarily a local basis. Please, find a copy of one of Randall Wray’s books and read it. The standard we have now is a variety of “primitive” that basically acts as a wealth extraction process and as a privatization of a utility that should be supported as part of the commons.

        • Mike Riddell

          Cheers for the refinement!

          As far as social movements and community currencies are concerned you keep doing the explaining and I will keep doing the doing?

          • Mike, I also do the “doing” parts, and I read a lot. I developed a small library of single sheet tri-fold flyers on a variety of topics, which I distribute at a local community festival and at smaller events. I have worked in a variety of contexts doing program development of different types, micro-enterprise dev., cooperatives of different levels and types, from member education, to interstate traffic mgmt, to neighborhood crime prevention inititatives, and more. Western culture relies upon a number of fictions, including a supposed superiority. The lineage of Adorno (authoritarian Personality, related reseaarch by Milgram, Zimbardo’s related experiements and his Lucifer Effects, and Lerner’s “just society delusion all add up to a cultural sociopathy. All point out the cultural values sustaining subordination. Favoring democratic functionality is a major part of what defines MMT/FF.

  10. I love the phrase “make the road by walking”.

    That’s what we’re doing over in Manchester, England by introducing our own community currency. We don’t if it will work or not but we’d love for all you guys to get involved and help shape it.

    This great city is famed for its social movements as well as its desire for free markets. The markets are demanding a fairer and more just economic system of redistribution, and what the market wants the market usually gets.

    Manchester: steam power, then computer power now people power. As Benjamin Disraeli argued that “what Manchester does today, the rest of the world does tomorrow”.

    If you care anything about social justice you will look us up.

  11. Or “we build the road and the road builds us” as they said in the US civil rights movement.

    As Mike says, people doing local currencies are learning by doing, it is a global learning community. Most people are not intellectuals or interested in monetary or economic theories. They have needs and they have resources. Local currency is just one mechanism to bring them together. And as with any other initiative, you have to get your design, management and governance right or it does not achieve what it sets out to achieve. Theory and practice. Or as the New York Yankees coach Yogi Berra once said: “In theory, there is no difference between theory and practice; in practice, there is!”

  12. Mike, one of my favorite books is E.P. Thompson’s, The Making of the English Working Class. Peter Linebaugh’s The London Hanged and his Magna Carta Manifesto all follow that historical culture. Much of the Town hall culture of the northern US colonies favored commoning. Christopher Hill is another who preceded Thompson, Linebaugh, and other of the same cant. I fully believe that US history cannot be interpreted in isolation form the history of the working class in England. Its absence withing the fairy tale historicism in the US significantly distorts our own sense of capacities. I am also aware of the Bristol Pound as a local community currency, as well as of the Transition Town movement there generally.

  13. Mike Riddell

    The Bristol pound is a substitute for money and is not what many practioners would regard as a community currency which typically operate on a system of mutual credit I.e. you do us the community a favour and we’ll owe you a favour in return.

    Bristol pound, Brixton pound all part of the same old money system that robs the world of its riches.

    • Even so, it is based upon a substitution strategy very much like the Ithaca Hours model, which is well recognized as a community currency, including the E. F Shumacher Society. It retains the currency within its community rather than it being extracted from the community. As such the “riches” stay within the community. As such it is different from how the US Dollar and the UK Pound are manipulated as wealth suction mechanism. I fail to see where any currency, even under the MMT/FF paradigm would be a means to a different basis for managing communal life, ie oikos-nomia. There seems to be a tautology lurking here.

      • Mike Riddell

        A community that gives and receives “credit” as a means of paying for goods and services isn’t that complicated. Just think of the credits as vouchers, tokens or IOU’s.

  14. @Tadit “Starting out accepting the inherent limitations of the neo-classical ideology will not get anyone to a better future.”
    So you don’t like Bernard Lietaer but you admire Margrit Kennedy. They wrote their original 2004 German book on regional currencies together so they must have agreed on something! Although Bernard comes from a central banking background, he is now a great advocate of money created by communities – ‘complementary’ or local currencies because he sees the necessity of monetary diversity to create monetary resilience paralleling the resilience/efficiency balance we see in nature. Check out his co-written paper with Goerner and Ulanovicz on the theory behind this: http://www.lietaer.com/2010/05/is-our-monetary-structure-a-systemic-cause-for-financial-instability-evidence-and-remedies-from-nature-april-2010/

    @Dan “P2P community currencies, on the other hand, are just informal “buy local” compacts, with a limited purpose inconvertible exchange medium, only one step away from a barter economy. Frankly, I can’t see any major problem that is solved by them, although they might have some marginal value in promoting a little bit of civic pride.”
    The ‘major problem’ solved by well-designed local currencies is the consistent matching of underused resources to unmet needs locally. One of the major flaws of capitalism as we practice it is waste. What the market isn’t interested in, the market doesn’t touch if it can’t spin a profit from it: wasted people with skills and talents; wasted business inventory, restaurant and theatre seats etc.; wasted vehicles and rooms amongst voluntary groups; wasted resources owned by local government agencies. All of these can be got moving again when national money is scarce. That is the secret of local money when it is well designed, managed and governed.

  15. Via MMT/ff there is a major difference between currency being issued in support of commons infra-structure/utilities, and money which is put into circulation based upon private debt by way of the capture of the common currency by essentially usury/usurers, def’n: the exploitation of public and social relationships for private gain. You seem to be lumping all types currency into one black hole as a blanket dismissal just because they serve as currencies. If you don’t see the difference, then you probably also have difficulty understanding the historically positive effects of debt free currency and thereby MMT/ff. Perhaps, you need to rethink a few of your assumptions about economics and and fiscal capacities. There is a popular form of “anti-capitalism” which tends to be a blunt instrument, the majority of nominal socialists seem to share this. It has always seemed to be a reactive sort of posture, which actually accepts the whole neo-classical framework of assumptions, leaving really only taxation as the primary instrument to reduce the dominance of “capital-ism.” This set of assumptions ends up also assuming that central government deficits are actually debts or indebtedness. They really aren’t, though as a set of fictions this serves quite well to snare the less discerning. The Roman Empire began under the use of iron based currency which a non-debt based/fiat variety of currency, and then switched over to using silver and gold and ended in debtor slavery and the bottomless greed of their .1%. It all comes back to the level of public economic and fiscal literacy, again.