Marianna Mazzucato’s Rethinking the State Video Project

The 2 videos below are from Marianna’s project. The first features Pavlina Tcherneva discussing employment and labor market issues. The second features L. Randal Wray discussing money and reforming the monetary and financial system.

Pavlina Tcherneva (Levy Economics Institute of Bard College), co-editor (with Mathew Forstater) of Full Employment and Price Stability: The Macroeconomic Vision of William S. Vickrey, discusses the implications of the Great Financial Crisis of 2007 for employment outcomes and fiscal policy. She argues that the current view of Keynesian ‘fiscal policies’ is based on a misreading of Keynes. Only boosting demand – through trickle-down fiscal policy – is not sufficient to promote inclusive growth: Keynes originally called for a targeted approach (‘directed investments’ that result in a trickle-up effect) – including ‘on the spot employment’ – as the means to achieve full employment and sustainable growth.


Randall Wray (Levy Economics Institute of Bard College), prominent Post-Keynesian economist and author of Modern Money Theory, argues that rethinking the State requires rethinking the relationship between the State and currency. His analysis starts with the observation that money is based on State power (‘currency sovereignty’): it is an ‘IOU’ (‘I owe you’) from the State – a liability – implying that fiscal constraints are in fact artificially created. In this sense, the State cannot run out of money, as it creates and enforces its own IOUs. Governments could – and should – afford to invest more in innovation and technology development to promote the capital development of the economy, as long as the monetary and financial system are reformed to remove those artificial constraints.

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