Category Archives: Uncategorized

By Marshall Auerback

George Soros probably understands the nature of the immediate problem facing the Eurozone (namely, the accelerating bank run which, amongst other things, potentially exposes Germany to trillions of contingent euro liabilities).  But even Soros reflects the prevailing – and mistaken – view that Greece might need to become the sacrificial lamb required to save the euro.  He said as much in a recent interview in Der Spiegel. Questioned about his proposal to rescue the European Monetary Union via a Debt Reduction Fund, Soros was asked whether this measure could also save Greece.

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By L. Randall Wray

The Primer has run its course. I did not get to cover quite all of the topics I had planned. However, for those of you who want the whole Primer can read The Book: Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. Pre-order your copy here.

As the marketers say, if you liked the Blog, you’ll love the Book. As we went along with the blogs, I tweaked the manuscript. I incorporated a Q&A section following many of the chapters, taking account of your responses. I added topics that seemed to interest you, but that I did not have time to address in the blog. It also has an index and bibliography. And I changed the order substantially in order to make the argument more coherent. The book is in printing now so I expect you can get it by August.

This week we will wrap up with a discussion of the “nature of money”. Really that is what we’ve been getting at for approximately 52 weeks. I think this is what distinguishes what we do here at NEP from other bloggers who understand much of the basics. It is not just that a sovereign government faces no financing constraint, other than constraints it self-imposes. It is not just that bond sales are a reserve drain. It is not just that a JG provides a wage anchor. In my view, MMT is an approach that allows us to understand the nature of money in the sort of economy we find ourselves. And since money is the most important economic institution in our economy, we really cannot understand what our economic system is all about if we get money wrong.

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By Michael Hoexter

Neo-Social Darwinism and Neoliberalism

An ideological support to the rise of the neoliberal consensus in economics and politics has been an undercurrent of neo-social Darwinism in the social sciences and in social discourse more generally, which has gained a stronger role in political discourse since the beginning of the most recent economic crisis. Published in the mid-19^th Century, a critical time in the genesis of the social sciences, Charles Darwin’s work proposed that biological reality was fundamentally based on differential advantages of individuals within a species, which in turn led to evolution of that species and differentiation of new species from pre-existing species.  When applied to social species (social insects and human beings) that have come to be critical players in the world’s ecosystems, the exclusivity of focus on differentiation between individuals of a species over evolutionary time has been questioned by evolutionary biologist Edward Wilson.  Wilson observes that social species’ commitment to survival of the group is an important in co-determinant in their individual evolutionary success.

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By Michael Hoexter, Ph.D.

A spectre is haunting Europe, the United States, and the world, the spectre of social science unmoored from reality.   Economics, under the influence of an alliance of otherworldly academics and short-sighted businesspeople has lost touch with the reality of a functioning economy, the reality of ordinary people, and the on-rushing challenge of overburdened planetary systems, in particular human-caused changes in the chemical composition of the atmosphere and oceans.

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By Marshall Auerback

Hans-Werner Sinn, President of Germany’s Ifo Institute and the Director of the Center for Economic Studies at the University of Munich, has taken to the pages of the NY Times to explain why Berlin is balking on a further bailout for Europe. Amongst the points that Sinn makes against German sharing in the debt of the euro zone’s southern nations is a legal one: “For one thing, such a bailout is illegal under the Maastricht Treaty, which governs the euro zone. Because the treaty is law in each member state, a bailout would be rejected by Germany’s Constitutional Court.”

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By Tracy Marvin

This is the last (most certainly not least) of the videos produced by Eric Tymoigne’s students in his modern money course at Lewis & Clark College.

By J.D. Alt

Today I cut out of the Wall Street Journal an article and photo that, in combination, illustrate the absurd plight we have placed ourselves in as a society by insisting that we are too poor to create the things we really need. The article is about the Pittsburgh metro area and how it is drastically reducing its public transit routes (as well as increasing fares) in order to cope with a $64 million deficit in its operating funds. The accompanying photo was of a young, bright-looking mother of two day-care aged children (the article explained) sitting at a bus stop that will soon be removed, waiting not for a ride to her job, but for a ride to a job placement agency where she spends four hours a day looking for work. When her bus route is eliminated, she won’t even be able to get to the placement agency. And this is America, the great achievement of modern civilization. I hang my head in shame.

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