Episode 155 – Duality with Bill Mitchell

Macro N Cheese – Episode 155
Duality with Bill Mitchell
January 15, 2021

 

[00:00:03.350] – Bill Mitchell [intro/music]

Where the elites have really misjudged the situation is in terms of the climate. And so it won’t be so much as a social revolution that is the instigator, I think it’ll be the climate that eventually we are going to realize that this planet is going to become unlivable unless we have radical solutions.

[00:00:25.590] – Bill Mitchell [intro/music]

The schooling system isn’t really about developing skills and awareness and being well-read. It’s about creating compliant inputs into the capitalist system, into firms, into corporations and into government.

[00:01:42.090] – Geoff Ginter [intro/music]

Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43.110] – Steve Grumbine

All right. It is Steve with Macro N Cheese, and I get to talk to my good friend Bill Mitchell. Bill has been writing prolifically now for my entire life, I’m sure, but for a very long time. Actually, if you go back through the list of all of our podcasts, the very first episode of Macro N Cheese was with Bill Mitchell. And we talked about putting the T and MMT and what that T stood for.

And 150 plus episodes later, 150 plus weeks of putting out a podcast every Saturday, we’re bringing Bill back again. We’ve had him a number of times because he’s a wealth of information. He’s one of the original developers of Modern Monetary Theory. He is also leading an MMT Ed for people that can learn Modern Monetary Theory the correct way.

And for guys like me who are evangelists, there’s nothing like the OG’s. When they tell the story, they tell it correctly. And so having Bill on is an absolute pleasure. Bill Mitchell is probably the most underappreciated genius that I know. Very few people have written more, have done more, have made themselves more available. And Bill does because he believes in the work and because he wants to see change.

And so this podcast interview today is more than just an MMT discussion, although we’re going to have an MMT discussion. It is really a broader understanding of power, of what we want and what we’re up against and the balkanization of reality. The duality of the haves and the have nots in the two different worlds that they inhabit.

The power dynamic between the people at the bottom and the people at the top. And we’re going to look at some global issues as well. It’s going to be an expansive podcast. So with that, let me bring all my friend, Bill Mitchell. Welcome to the show, sir.

[00:03:58.250] – Mitchell

Well, thank you for that introduction, Steve. Hello to everybody from the east coast of Australia. It’s a summer day, it’s quite warm and we’ve got COVID everywhere at the moment. So there you go.

[00:04:14.910] – Grumbine

Well, we got COVID all over the place here as well. It doesn’t seem like changing presidents fixed the COVID crisis. It doesn’t seem like any of the electoral solutions in the United States have netted us a single win in the legislative area. It doesn’t seem life has changed for the better, for the people that I’m around. It doesn’t seem like we’re being heard. And if we are being heard, it doesn’t seem like anybody’s listening.

[00:04:45.990] – Mitchell

Yeah, well, we didn’t have COVID here, like the rest of the world. We had as a society, made a decision to suppress it until medical science had made such advances that we could open up safely. And then our federal government is approaching an election. But our governments were under intense pressure from the rabid freedom lobby who somehow thought that restrictions on our mobility on a health basis was a restriction on our so called freedom, freedom to get sick.

But also the governments were under intense pressure from various sections of the capital-owning class who wanted to open up and particularly to open up the border, the external border or the internal borders, and all the rest of it. And so now we’re allegedly living with COVID for the first time in two years. And just today, numbers in New South Wales, where I am today, doubled from 6000 cases a day to 12,000 cases a day.

To an American, that might not seem very much but to us that starts to overwhelm our health system. And this so-called living with COVID is just one of a series of falsehoods that the elites have been running now, the Conservatives and the elites, to restore their own profit-making machine and continue to endanger the workers, particularly the low paid workers that are in essential areas like transport and health. And what have you. It’s an appalling state now.

[00:06:33.810] – Grumbine

You had made mention, when we were offline, that the ruling elite don’t have much use for us, really, other than to build the machines and harvest the food. But otherwise, they pretty much leave us alone and give us the false impression that we’re free until, someone like Julian Assange or Chelsea Manning or Snowden, speaks up.

Regular people that don’t even share our same political angle see this clearly and are taken aback by it. But this is the power dynamic that we live in. And you framed it beautifully. You said that there were two worlds, basically two realities. Can you take me through that?

[00:07:22.410] – Mitchell

Well, it’s just this idea that I came to quite a long time ago, really. As a young academic, I’ve never toed the line in my work, even as a high school student, I got thrown out of high school because of a refusal to accept basic arbitrary authority. And so I’ve never toed the line. And I’ve always wondered. And particularly as we came into the MMT era, and I met Warren and we started to work together and to build what we now know as MMT.

The question that arose often in my mind as a younger academic was, well, how does change occur? If we’ve got a problem and it’s a simmering, festering problem that really impacts upon humanity generally, how do we fix that? And is the problem functional? And so what I mean by that is, I did a lot of work early on on segmented labor markets.

We’ve got an internal labor market of hierarchy of protected positions. And then you’ve got a secondary labor market of unprotected, high turnover, low paid positions. And what I learnt from that work was that the segmentation into good paying, secure jobs and low paying, insecure jobs was functional. And because in the late 60s, for example, I was a young boy at that stage.

But in the late 60s, when this literature started to emerge, the good guys, guys being generic, neither male nor female, the good guys, what we might call progressives, thought that the solution to low pay and working poor was just to create better jobs. And what they found was that there was quite a lot of resistance among those who worked in better jobs.

And particularly there were suggestions in those days that the public sector should create a whole lot more public service jobs. This was particularly an American debate. And of course, the public sector workers resisted that because they didn’t want the riffraff coming into their workplaces. But moreover, they understood that the reason that they were able to secure nice conditions for themselves.

In other words, good pay, secure work, training letters, job hierarchies for career development, and all the rest of it that occur in those primary labor markets was because there was this other labor market that took up the slack of capitalism when spending fluctuations occurred. So while the primary labor markets were protected, all of the flux and uncertainty of capitalism was pushed into the secondary labor markets into the precarious part of the world.

And so the precarity served a function. So there were cozy agreements between the primary workers and capital to really push the secondary labor market workers into working poverty. And so it wasn’t a simple solution. So these are functional things that I was thinking about. And I came to this view that in a more general sense, there are two realities that define human existence, and one reality is the one that you and I and all of our listeners, I assume, live in.

And this is a reality where we grow up, we go to school, we get educated, more or less. We get jobs more or less. Some of us get better paid jobs than others. We strive for even more. We have holidays. We have children, sometimes, sometimes we don’t. We have marriage breakups, sometimes, sometimes we don’t. We buy houses, we get old, we have holidays, we have fun, we have despair, we have anxiety, we have happiness.

And that’s one level of reality. And in a sense, the elites drip-feed us material well being, sharing the national income out to us that’s produced so that over the course of our lives, most of us, but not all obviously, can build up a bit of material wealth, typically in our home to mean that we can retire at some age in our 60s and kick our feet up and wait to die.

And as long as we don’t rock the boat too much, they leave us alone. And we construct that as freedom that we’ve got all these choices. We are free, and we’re making choices and isn’t the system grand? And sometimes it isn’t so grand. But, generally, it is because we’re free. And then occasionally someone will rock the boat.

And this other level of reality where all the really major decisions are made, the lobbying, the dirty deals, the corporate deals, the suppressed information, the secret reports that the public never find out about, the military industrial complex, the government private sector revolving door where ministers, in other words, cabinet members in governments do a bit of time making legislative decisions and go back into corporate world and top end of town.

They have relatively discreet gatherings where a lot of deals are done. That happens at golf clubs, that happens at Davos, that happens at elite lounges, at airports and all of this sort of stuff. And that’s another reality. We don’t ever see that. But that rules our lives. They rely on us in a functional way because we’ve got to keep spending.

And in the postwar period from up till about the 1980s post second world war period, their willingness to drip feed us was much more generous than it is now because they worked out that with financial market deregulation, they didn’t have to pay us as much through real wages growth anymore. The financial engineers could trap us in increasing debt, which allowed us to maintain our consumption, which allowed the participants in this other reality to realize profits through surplus value creation.

And that’s my worldview. And that’s how I see the struggle of MMT. It’s a transverse between the first reality and the elite reality, and it threatens the propositions because the elite reality reinforces itself and secures itself by miseducation. And it controls media, it pumps out lies, it has names and nomenclature, taxpayers’ money and all of the other stuff, and it keeps us under control in a state of ignorance.

And as long as we’re consuming and we shut up, we’re okay. But what MMT does is, for the first time in economic history, in my view, directly challenges the miseducation program that the elites use to suppress us into ignorance. And what we’re now seeing is it becomes much more transparent in the public eye through various endeavors of various people, including yourself, is that we’re getting the kick back now.

Now, it’s not as bad as Julian Assange, for example, who challenged the military industrial complex. But we’re getting kickback from that second reality. And it’s making it very difficult for us to make progress. So that’s sort of a summary.

[00:15:48.630] – Grumbine

And that’s a spot on summary because the frustration of activists that are not informed of MMT even, that just want health care and want to see the climate maintained for human life and not create resource wars like water wars. And Interestingly enough, a new movie just came out called Don’t Look Up, and it’s fantastic.

It’s like a caricature of what we’re seeing today and the absurdity of the stories that the elite tell us and that we believe. And other movies like Elysium, where they have shown that they could give a shit about this planet, that Bezos, Elon Musk, these wealthy profiteers creating spaceships to go into outer space to leave this rock behind as they destroy it.

And this is the reality that many people secretly worry about. People are obviously thinking about it because these movies keep coming out and it isn’t too far from what feels like reality, especially the way you just laid that out. And as somebody who spends all their time talking about economics, this is where these folks find their power is holding us down with these false scarcity narratives. While they plan for us to be exterminated or irrelevant, we’re just nothing to them.

[00:17:23.130] – Mitchell

They can’t exterminate us because as I said, they need our spending power.

[00:17:28.110] – Grumbine

But what about the robots?

[00:17:31.290] – Mitchell

They still need to sell goods and services. They haven’t invented a replacement for aggregate demand yet. They certainly know that they can always call on government whenever they like, when we’re not spending as much as they want us to spend. But ultimately they need us to keep spending. So that’s one thing.

I think the other thing a lot of people think and I go back to high school and people said economics are so boring. And you go to University and economics students are considered to be dull and boring. And to some extent the subject matter is pretty dry and technical, and I much more enjoyed studying philosophy, science and those sort of subjects and history and languages than I did studying economics.

But the main game in all of this resistance is economics. And that’s the fact, because if you think about the way in which global politics has moved in what we call this neoliberal period, if you go back and study, say, British politics in the 1970s, you will see that the British Labor Party was a socialist party, and in modern terms, in 2021 terms, that party would have been talking about radical solutions to the climate and radical solutions through nationalized health for pandemic protection, and so translate it over history.

In the 70s, we did have distinguishable differences between our major political parties in all of our countries, and something happened, and I’ve written about it a lot in the 70s and 80s where monetarism, Milton Friedman’s monetarism, came along in the late 60s and early 70s, and it infested both sides of politics, the Social Democrats and the Conservatives.

And, progressively, the Social Democratic parties, whether they’re labor parties like in Australia or Britain or Socialist parties like in France, for example, or the Democrats, as in the US, they’re all in a social Democrat tradition, but effectively, what neoliberalism did and what monetarism did was force those Social Democratic parties. They call it moving to the center.

But effectively macroeconomics ceased to be a context at our national political level. And that’s because both political sides of the politics accepted all of the nonsense that my profession pumps out. And then the political argument was around the edges. Whether you support gay marriage or not or whatever. Not unimportant issues don’t get me wrong, but the main game was basically neutralized.

And so my feeling is, this is what I’ve been devoting my attention to for many years now, is that unless we educate ourselves in economics so that we can see through all of the smokescreen that the elites use to suppress our understanding of what’s going on in which they’ve penetrated to social democratic political parties to render them like Biden’s Democrats, for God’s sake, who basically is no contest anymore between the Republicans and the Democrats in the US at the macroeconomic level.

And that’s why I think it’s really significant that even if economics is boring, that lots of people like you learn it and become familiar and be able to defend your arguments against those who are better trained, better formally trained in economics. And in a way, that’s what my venture in MMT Ed is about.

It’s sort of like a socialist public education venture for those who can’t go to formal programs and enroll in University or whatever. They can become very erudite and breach their ignorance. Get over it. And whether that changes anything, I’m not sure, but it increases the possibilities of change.

[00:22:32.970] – Grumbine

I’ve been learning and talking MMT for over ten years now, and that’s probably more than I’ve done just about any other thing in my life, short of being a parent. And I know that we should never take a political stance to explain an economic problem. Randy Wray has been militant in the idea that we should never use a political excuse to give a poor macroeconomic answer.

And, unfortunately, where we’re at today, at least in the United States, we have capitalism baked into the electoral process and every aspect of governance in this country, which our primary export is this mindset. And we go to every other country and trying to destroy their public works, and we allow suffering in the name of some few people gaining profit.

And this is all kind of cliché after a little while. And if you’re really seeking solutions with a macroeconomic, solutions are probably the easiest ones to come to because somebody’s already come up with them and that’s you guys in the MMT development world. So, it’s not due to a lack of solutions. It really is the power dynamic and at Real Progressives our goal is to teach as many people as possible with two goals in mind.

That if an electoral solution is possible, that we can take it by having an informed populace, and if electoral solutions are not possible, that whatever is the remainder from any form of people-driven revolution or direct action, whatever we try to replace the existing cancer with will be informed by MMT literate people, because you either can do it electorally or you do nothing.

And the idea of little people taking on global capital feels absurd on its face because it’s so massive. It’s almost too massive. And you realize this is so much more than, quote, unquote taxes don’t fund spending. You’ve written prolifically about reclaiming the state. I think it was December 21st paper you wrote, before we can reclaim the state, we’ve got to reclaim ourselves. What are your thoughts on this part of it? Reclaiming ourselves before we can reclaim the state.

[00:25:06.630] – Mitchell

Ultimately, capitalism requires social stability to continue. And if you go back to the late 19th century, however many years of industrial capitalism after really supplanting the feudal system, production and distribution and even a bit earlier than the late 18th century. But let’s say the last quarter of the 19th century. There was a reason why trade unions began to form.

There was a reason why citizens’ lobby groups formed to oppose children working in cotton mills and dying under the spinning jenny, scraping out the fluff. There was a reason why there was the formation of pressure groups to empower the state to create what then became known as welfare states. So income support structures for the unemployed, public education, public health, public transport, aged pensions.

So these were all things that impacted upon that first reality that we mostly live in. And they enhanced that reality. But they did it by demonstrating to the second reality where the elites hang out and make all the decisions that unless they were willing to share the booty a little bit more and to improve the way in which we worked. And what happens to us when we are unable to work because of unemployment or age or infirmity that the game was up, that unless they were willing to share a bit more, there would be radical overflow.

And so you had revolutions in 1848 and Paris Commune in 1871 and the 1890s strike, which really started the formation of trade unions. And workers understood that individually they were powerless but together in solidarity they could do damage to the profit making process. So there was a reason for all of that. And that reason was that capital went too far and the pestilence and conditions of life just became totally unacceptable.

In other words, the level one reality that I talked about, the drip feed wasn’t sufficient. Then the neoliberal period really has been defined in my way of thinking as a sort of steady retrenchment of all of those gains that the working class made in the first half or first three quarters of the 20th century. And for the last 25 or 30 years, the elites are trying to work out how they can keep us spending.

How they can keep us realizing their profit ambitions through our spending without paying us as much by increasingly immiserating us in material terms, not all of us, but an increasing number of us such that their project is attempting to hollow out the so-called middle class that they created to make sure that there be plenty of spending going on.

And so I think our mainstream political parties have become, as I said, neutralized. And so an electoral solution is difficult to conceive with the current state of knowledge and awareness among the voters. So they’re still letting us vote. But we really vote for parties that are indistinguishable, and the radical parties are too marginalized and small in most of our countries to have any impact at all.

And so before we can get to an electoral solution, we have to go through that process that society went through in the late 19th century, where we just get so annoyed and anxious that we realize that the reality we’re living in isn’t freedom and luxury, it’s poverty and suppression. And at that point we start to become a force again.

Now, in Australia, for example, we’ve got increasing poverty and major social problems. But the middle class is still relatively secure. And until the middle class becomes threatened with a lack of security, we’re not going to get significant change through an electoral process because the mainstream parties, the so-called Labor Party, the voice of the trade union movement – what a joke that is – they sound as much mainstream macroeconomics as the Conservatives do.

And in actual fact, the Conservatives have opened the public purse in the pandemic, and we’ve got very large deficits and very high public debt at the moment, in historical terms. And it’s the Labor Party, the so-called Progressive Party that’s saying, what about all this debt as we go into a federal election campaign? So the hope that we have an immediate solution through the electoral process is relatively dismal.

Now, what might occur, and I think this is going to occur, is that in the late 19th century, it was the citizens uprisings from misery and poverty that challenged that elite level of reality. And it was going to be a violent challenge through street revolution. And it happened in some countries, of course, into the 20th century. But I think where the elites have really misjudged the situation is in terms of the climate.

And so it won’t be so much as a social revolution that is the instigator. I think it’ll be the climate. That eventually we are going to realize that this planet is going to become unlivable unless we have radical solutions. And at that point, I think you start to get the two levels of reality really coming up against each other really quickly.

[00:32:05.610] – Grumbine

I want to jump back to Vladimir Lenin to his book Imperialism, The Highest Stage of Capitalism, and he talks about global finance capital. And I felt like I was reading about today. This is written late 19th, early 20th century. And picked up Jason Hickel’s book, The Divide, and he speaks quite specifically about the role of the WTO, the IMF, the World Bank, and the structural adjustments imposed on the global south, basically turning them into the slaves of the north.

And they’re fighting back. They may not be doing it correctly, but they’re not just taking it. And you’ve seen a socialist elected in South America recently. But overall, the role of finance capital and the neoliberal experiment of the IMF, the World Trade Organization that is largely led by the United States interests and representatives of the United States imposing these horrific structural adjustments.

But wherever there’s public space, it must be attacked and privatized and owned privately by these power elite. A few weeks back, I interviewed a wonderful man from the New England area. His name is Davarian Baldwin, and he wrote about the Ivory tower of the university system and how the universities are representatives of these elite, and they take over entire cities and, as nonprofits, suck the GDP out of the local community and pay no taxes.

At every level, we are being conditioned either by the university system to be good supporters of capital or by the military system to be protectors of private property.

[00:34:09.390] – Mitchell

It’s worse than that, though, Steve. And there’s some literature in the early 70’s and there’s one book by Samuel Bowles and Herbert Ginters called Schooling in Capitalist America and the hypothesis that they and that whole literature then explored, and it starts in primary school and secondary school and then into higher education.

That these institutions in college towns, for example, in the United States, those institutions, as you say, are important parts of the profit generating machine because of their size and their employment and their spending. That’s true. But what they do in the classroom is significant. And schooling in Capitalist America was about the way in which the schooling system isn’t really about developing skills and awareness and being well-read.

It’s about creating compliant inputs into the capitalist system, into firms, into corporations, into government that will take instructions that will be prepared to jump through hoops to get little promotions like first year exams. You jump through a hoop, you answer some stupid questions and you pump out what the lecturers told you, whether you believe in it or not, so that you pass your exam and that goes on and on until you get a degree, and then you go into the workplace and you’re already set up to obey that authority.

That triviality, that suppression of your own instinct and your own intuition to accept what you’re told to get promotion. And the role of the education system in a capitalist system has been that, so that’s a really important thing. And the other thing I’d say is that, yes, we just got a so-called left wing government in Chile.

Well, if you examine exactly what their policies are, they’re pretty centrist in my way of thinking about the spectrum. They’re left if you think the extreme right is center. But yeah, they opposed the right corporation candidate. That’s true. But we’ve been there before in Chile, haven’t we? And I think back to after September 11, 2001. Occasionally I would tease an audience of so-called progressives, and I remember I was speaking on September the 11th.

It might have been about 2006 or 2007 or something like that. And I said, yeah, today is September the 11th. And that was a day where a terrible terrorist organization inflicted major damage on society and murdered people. And the audience were nodding. This is a left wing audience. They’re all nodding and I said, that was such a reprehensible act, and they’re all nodding. And I said, yes Tuesday because it was on a Tuesday as well, by the way, Tuesday, September 11, 1973.

[00:37:29.100] – Grumbine

Yep.

[00:37:29.100] – Mitchell

And the audience realized they’d been had. But it told me that the left has forgotten things. And so it’s happened in Chile before. And will we sequence through it again? Who knows? Hopefully not. But that’s level one. That’s the elite reality getting threatened by our reality through in this case again, because Salvador Allende was elected democratically in the institutions of Chile at the time, and in the same way that the new guy has been elected in the electoral institutions. We’ll just see what happens. But there hasn’t been a good history in the last 30 or 40 years of progressive being elected and getting an easy time.

[00:38:52.560] – Intermission

You are listening to Macro N Cheese, a podcast brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon, like and follow our pages on Facebook and YouTube, and follow us on Periscope, Twitter, and Instagram.

[00:39:18.650] – Grumbine

I think his name is Gabriel Boric or som ething to that effect. Occasionally you see flare ups where they’re trying to fight back. Like I said, I’m not suggesting you have all the right answers. In fact, Socialists in America are peddling Milton Friedman. They are peddling, the very antithesis of what they claim to be.

[00:39:42.490] – Mitchell

That’s the point I made earlier that the contest is over, that our progressive parties, whether they’re Labor parties or Democrat parties or Socialist parties, they are indistinguishable on macroeconomic grounds. And so by falling into that trap that was set for them by the Conservatives, by the elite into just mimicking the same sort of misinformation that holds us in a state of ignorance and stops us asking relevant questions like, Why is there mass unemployment, Prime Minister?

Or in your case, President, why are we tolerating all these people without jobs? Oh, we can’t afford it, or they’re asking too much money for wages. And we just go, oh, yeah, we can’t afford it. Oh taxes will go up or the government will get into financial trouble, or they’ll be held up. And so we’re held in a permanent state of ignorance by not only the forces of capital, but, increasingly, by the progressive political forces as well.

They’ve been captured completely. So they go out of their way because they think they’re progressive, of course, and they’ve got good values. They care about people and they care about the environment and all the rest of it. I’m sure Biden cares about the environment, but they’re so constrained by this macroeconomic straitjacket of lies and myths that the way they then try to express their progressiveness in a political space just becomes either incredible that is not able to be believed by the voters or plain stupid, which has the same effect at the end of the day. Or they just give up like you’ve now got, as I understand it, in the United States, BBB will just vanish, won’t it? So that’s the problem.

[00:41:45.950] – Grumbine

Build Back Better started off with a really bad name that nobody really liked. But then it sounded like maybe this is just a rebranding of what we’re hoping for in a Green New Deal. And so it started out weak. I think Bernie Sanders was pushing for $6.5 trillion in spending, which was still a compromise from $13 trillion he felt we needed, which probably is low as well.

[00:42:11.050] – Mitchell

Yeah, but at the same time, he was saying, we’ve got a tax the rich to pay for it.

[00:42:15.960] – Grumbine

Oh, absolutely. For all the great things that he did do by awakening a lot of people to the possibilities, he didn’t help us any. And he knew the economics. Give him credit for giving MMT a platform. But he fell into the same hole that a lot of them did, like Corbyn. And that is a hole that if we don’t dig out of, there is no future.

In my opinion, real genuine hope is Modern Monetary Theory and the work that you guys are producing. The hope I have is that here is this thing that is universal that allows us to understand that we can, in fact, have nice things. And being a lay person, you don’t know who to listen to. You don’t know what information is real. You don’t have the skills and knowledge to confidently debunk the nonsense you’re being fed.

So in the absence of a source that you really genuinely know and can trust, groups create their own fake reality, and they start pumping out half truths that are just as deceptive as the power elite do. The only difference is down at the bottom, these tales keep us that much further from uniting to take on the power elite.

[00:43:36.900] – Mitchell

Yeah, you see it on social media. You’re on it far too much, Steve.

[00:43:42.140] – Grumbine

Yes, I am.

[00:43:43.390] – Mitchell

I’m on it hardly at all. But I see it. And I see people who should be our allies fighting us because,  for various reasons, often purely ego. And this is the classic divide and conquer. If the elites can get us all fighting among ourselves, then we won’t fight them. And I actually do believe that the changes will come through pestilence.

And I still think education is really important – don’t get me wrong – obviously. And education is important because it’s going to create the knowledge when it’s needed. Now, you might say it’s needed now, but the time is not right now because we’re not right. When Randy Wray and Warren and I used to talk in the mid 90s, they were more enthusiastic about the capacity of this stuff we were doing to make relatively rapid changes in people’s psyches and decision making, whereas I always said to them, this is probably beyond my lifetime.

Now I was a young man then, of course, so I was projecting a long time in the future, and I still believe that. And that’s why I wrote that thing the other day you referred to that we’ve got to go through an internal process of change before the education that the MMT economists are producing will be seen as relevant. Because at the moment, we’re all in denial.

We’re all in a state of ignorance that’s been a manipulated process through our formal and informal education processes, through social media, through formal media, all the rest of it, through sitting around at dinner tables within our families, expressing knowledge that is not knowledge about the economy, telling our children about taxpayers money and all the rest of the nonsense.

So we’re the perfect machines to perpetuate these myths. So we’re not ready yet. So what the education that I’m involved in is making sure there’s a body of work that’s there. This is what I said to Warren and Randy at the beginning. Our role was to create a body of work that would be there when the time was right. And I still believe that.

That my role is to produce a body of work that’s there, can be drawn on with clarity, when the time is right. Now, what’s going to force the time, right? Well, maybe, as I said at the end of the 19th century, people formed trade unions because they finally worked out that that was power. Well, what I think will cause the change this time is climate threat, as I said.

That will waken us up very quickly and I think it’s already starting to happen. And when it starts to really threaten our material existence in the big countries, the advanced countries, when it starts to really impact, like the bushfires in Australia last year, the flooding around the world that’s been going on, the hillsides collapsing for too much rain.

Those are the things that are going to prompt us to demand the elite level of reality drip feed us a bit more. Not material in this case. But climate change solutions. And at that point, the education, hopefully, will be there to be drawn upon by smart people who are driving the response to climate change.

We have the smart people but they’re not empowered yet. Who’s going to empower them? We will. We’re not ready to empower them yet because we’re too seduced by the economic myths. And so that’s the way I think at the moment.

[00:47:51.230] – Grumbine

And very eloquently said. I want to transition slightly aside from the political space that we so often get pushed back from in the MMT world is that MMT is a uniquely United States thing. And so it’s dismissed out of hand because of empire and world reserve currency. However, recently, Turkey did something that, at least on the surface, was mistaken as MMT. And so instead of a cautionary tale, it’s “MMT failing.” Tell me the story of Turkey and why that’s not the case.

[00:48:36.650] – Mitchell

Well, let’s take a step back.

[00:48:38.890] – Grumbine

Sure.

[00:48:39.800] – Mitchell

Let’s not tread on people’s toes, but we’ll do it anyway. [laughter] Well, that’s the Australian humor, dry. We haven’t helped ourselves to some extent by making the MMT narrative so American centric. I remember when we were writing the textbook with Randy and then Martin came in on the project. I really insisted that we use non-American terminology.

So we talked about central banks, not the Fed, because most of the world doesn’t know what a Fed is, that’s Americanism. Most of the world has an idea that they’ve got a central bank. And so the way in which we’ve framed MMT. And the way in which the framing has been dominated by American terminology and American topics, “the Congress.”

Well we have governments, we don’t have the Congress around the world. We have central banks, we don’t have the Fed. The rest of the world doesn’t have the institutional structure that America has, but it has institutions that do the same things. But they’re called different things. So, in a way, by a torrent of social media activity, tweets about the Fed and all of this, as if that’s all MMT has got to offer, has allowed people to be seduced into the idea that this is an American phenomenon.

So that’s the first point I make. I trod very lightly there on people’s toes. The other thing is that there’s not that many of us who do research work outside of the American political debates. Now, Fadhel Kaboub, for example, does excellent work on other countries in Africa and elsewhere, and so do I. I’m not saying it’s excellent, but I do that work.

[00:50:55.980] – Grumbine

I’ll say it for you. Great work.

[00:50:57.570] – Mitchell

And Pavlina Tcherneva certainly does work in other countries. And in part, that’s because neither of the others I mentioned were born in America. And what that meant is that MMT has been framed very much in an American way. I’ve always resisted that, of course, because I’m an Australian, and I don’t want to be rude, particularly, but the rest of the world hasn’t got a very good opinion of America.

[00:51:27.990] – Grumbine

We don’t have a very good opinion of it ourselves.

[00:51:30.650] – Mitchell

No, I know. But, I mean, you don’t know how bad.

[00:51:33.870] – Grumbine

Oh, boy. [laughs]

[00:51:35.490] – Mitchell

You don’t know how bad the rest of us feel. [laughs] America is seen as being this martial country that talks about freedom but invades countries illegally whenever it wants to, that is a military machine that causes dreadful death around the world, that engages in torture of citizens, that locks people up in Guantanamo Bay and all the rest of it.

So when we blur the idea that MMT making it appear as though it’s an American thing, and then add in all of that hostility that the rest of the world has about America and its bullying behavior in the international scene, then that opens us up to this ongoing torrent of abuse about MMT is just American. See, they just want to bully us all, and it’s not relevant to us.

Now, I come from a small, open economy, not a large, closed economy like the United States. And what I’ve tried to do with my work is demonstrate that the economic institutions that support the fiat monetary system, which MMT is relevant to, are virtually the same wherever they are, in whatever country. They might be called different things.

They might have somewhat different regulative and legislative structures but they, effectively, do the same thing. They, effectively, operate in the same way. That the central banking in Australia is identical effectively to the central banking in an operational sense in America. Yeah, there’s nuances, there’s different legislative structures, all the rest of it, but they effectively all work the same.

And that’s why I say Japan’s my poster child, because it’s demonstrated for longer the principles that define what MMT is. And people say, oh yeah Japan’s different. And you say, why? Oh, it’s culturally different. Well, yeah Japanese culture is quite different to Australian culture and certainly American culture, but their monetary institutions work virtually the same within that different cultural context.

And so MMT is applicable everywhere, not just to the United States, not to Australia, but to Turkey as well. And the principles that we’ve developed are applicable to a country like Turkey as they are to the United States. Now, we’ve spoken about this before. The other problem is that people then say, if there’s a country that’s in trouble and the trouble is identified as high inflation or high bond yields or a currency under threat from global foreign exchange markets, then, Oh see?

That’s what happens when you have MMT policies. And we’ve spoken about this before, and I’ve written about it a lot that MMT doesn’t really have policies. Now it has a macroeconomic stability framework of which a job guarantee is one part. And you might say, oh, well, that’s a policy. Well, it’s really an institutional structure. It’s not like I will set taxes at 25% or 30% marginal tax rate, or we’ll set the interest rate here or there.

The fact that the government does those things isn’t an indicator of the validity of the explanatory framework provided by MMT. What MMT does is give you the knowledge and the understanding that if the government does increase its deficit, then this will probably happen.

Or, if the government and the private banking system borrow heavily in US dollars or in Euros where the country isn’t a Euro or US dollar using country, then MMT tells you that it’s likely to encounter problems if export markets turn down because it won’t be able to generate enough foreign exchange to maintain the servicing of the foreign currency denominated debt.

So MMT gives you the understanding to appraise, in my view, in a much more accurate way, the policy settings of any country. And in the case of Turkey, what the Turkish situation is about is nothing to do with MMT. But MMT tells you a lot about why they’re in the situation that they’re in. They entered a standby arrangement with the IMF in the early two thousands.

They converted their economy into an export-oriented growth strategy. Typical IMF. They deregulated the financial system, privatized the state banks, and of course, then you get the cabal of financial capital in there going for broke. And they worked out that they could bring in hot speculative money from abroad rather than foreign direct investment, which would go into building productive capacity, which would generate the returns that would be able to service the debt.

No, the banks wanted just speculative money. So that’s what happened. The central government borrowed in foreign currencies. And of course, after a while, that type of restructuring becomes so unstable that a small event like in Argentina, the downturn in their export commodity markets in 2001 led to them having to default on all the US dollar debt. And that’s Turkey.

So MMT gives you a clear view of why Turkey is in the situation it’s in. But it’s not an application of MMT because MMT economists didn’t tell them to borrow in foreign currency. MMT economists didn’t advise them to privatize their state banking system and then push up interest rates to such a high level to basically keep attracting speculative foreign currency.

MMT didn’t tell them to peg their currency in any way, shape or form. It’s got nothing to do with it, but MMT insights allow us to understand what the Turkish problem is.

[00:58:30.270] – Grumbine

That is amazing. I really appreciate you saying that because I don’t think people realize the tie-in. Neoliberalism is not just globalism. It’s the radical privatization, taking over all public spaces, destroying public and pushing everything to the hands of the elite. If there is a way for them to take ownership of it, whether it be the healthcare system of countries that have a national health service or energy, they want to take it over.

And it’s interesting because you’ve got a competitive force in Bitcoin, which once again is privatization. Private currency controlled by global Silicon Valley plutocrats. So you’ve got a situation where there’s a technology that is pushing us once again further into private territory, to where there is no more safety nets. And, in my opinion, that’s a direct rebuttal to global capital, even though they’re actually participating in it. It’s a reaction to that.

[00:59:40.650] – Mitchell

Yeah. I wrote about it the other day that I reflected on a book I read when I was a University student, and it was a book by Harry Braverman, who was a trades person in the United States. And then he became a trade Unionist, of course, in smithing, copper smithing. And then he became a publisher and a writer. And he wrote a book, Labor and Monopoly Capital in 1974.

And you talked about Lenin before on globalization. But really, if you go back to the Communist Manifesto, Marks and Engels understood the need for global expansion of capital as each successive market started to present difficulties in surplus creation and profit realization. What Braverman spoke about was more than a spatial spread of capital and capitalism of the type that you just been talking about, but also more and more activities that we typically never thought were part of our working lives, our production lives.

So in the past, we’d go to work for 8 hours a day, longer in the past but 8 hours a day and then we’d come home and we’d have leisure. We’d have non work time. We’d go and play sports or we’d go dancing or whatever. But, increasingly, those non work activities have become surplus producing profit making activities.

So you can’t go to the football match in Australia now, without being completely confronted with surplus creating processes, sport has become a corporate machine. Music has become a corporate machine. And so more and more of our lives become subsumed within this process of surplus production and profit realization.

And we’ve got to start resisting that. We’ve got to get back to nature, as the hippies used to say. We’ve got to get back to building fringes in our lives that are non-part of that process, that are local, that are unique to us and that are outside the prey of the capital machine. And that’s one of the reasons I wrote the other day. It’s got to start with us now.

We’ve got to start resisting at the individual level, well before we get out in the streets and join protest groups and chant meaningless slogans. We’ve got to start with ourselves, and get up tomorrow morning and say, I’m not going to buy that stuff anymore. I’m not going to do that anymore. I’m going to resist that. One of the advantages we’ve got that previous working class movements didn’t have with social media the ability to network relatively costlessly.

And I know there’s all debates about what horrendous places like Facebook and that are suppressing and Twitter banning certain things and not other things and what have you. But, in general, we still got that networking capacity. And one of the things that I’ve often advocated is that we should start developing consumer boycotts because one of the things they still have to do is sell goods and services.

And if we had targeted anonymous boycotts organized where we all finally realized that we can do them damage by not buying their stuff, then we start to infiltrate that other level of reality without them knowing how to attack our reality. Because if we do it all through just our anonymous spending decisions, they can’t really attack us. They don’t know how to do it.

If a trade Union gets up and goes on strike, they can tie them up in legal processes, and the army can take over the workplace. But ultimately, if we screw them over by not buying their stuff, then that’s much harder for them to attack us. And I think that’s one strategy that hasn’t yet been used properly – organized consumer boycotts. Then that’s the way we can empower ourselves without them coming back like they’re taking us over.

[01:04:14.390] – Grumbine

One of my good friends, another alternative media personality, Jordan Chariton, is becoming a huge supporter of MMT, which is incredibly gratifying. He talks about targeted boycotts. So I think there is an appetite for that. I think the people that are awake are getting to the point where they’re not okay with this anymore.

There’s just not enough of us yet, but with the work that you’re doing and the work that the entire MMT project is doing, you and Warren and Randy – heroes of mine that I will never be able to thank enough for opening my eyes. And yet I curse you some days for opening my eyes. But you pulled me from The Matrix. I’m really grateful for the tireless work you do.

[01:05:00.450] – Mitchell

Thanks for that. But here’s my advice, Steve. Gratuitous, though it might be, is one of the things that I said at the beginning that I never really wanted to tow the line. And so that led me into research, questions and topics and learning. And that gave me some intellectual justification for not towing the line because you don’t want to just be a vandal.

That’s mindless behavior just attacking “the man” because you don’t like them, because you’re frustrated. And not towing the line in an academic sense is a very frustrating existence. And for a long time I felt frustrated and powerless. You’d get up in the morning and you’d read something or you hear on the radio or the TV if you watch it. Stuff like that.

People have written to me saying, how do you ever stay sane? And the point I’m making is that at our level of reality, we’re really up against it, and you can’t stay angry all the time. And so I learned over the course of my life to date that at our level of reality, there are some nice things that they’ve let us have and they haven’t locked me up. They haven’t taken them away yet.

There’s personal relationships and just some nice things, the sun shines occasionally. So as an activist and in my role as an educator, trying to butt up against the system, you call it the Matrix, whatever. You’ve got to have some balance and not be angry all the time. Otherwise you get consumed by it, and that’s what they want. That’s my final statement.

[01:06:49.530] – Grumbine

And that’s the challenge that we all have to grapple with. Me in particular.

[01:06:53.550] – Mitchell

Yeah, you have to find some harmony in your personal dimension while you maintain the rage and the relentlessness of the work that you’re doing. I struggle with that every day. But you’ve got to achieve that, otherwise it consumes you and you become just noise and you don’t get anywhere because they’re too powerful.

[01:07:16.410] – Grumbine

Well said. Bill, with that, I want to make sure everyone knows how to find MMT Ed and how they can follow your work.

[01:07:26.790] – Mitchell

Well. MMT Ed just do a search for MMTed:  www.MMTed.org. And we’ve got our next big offering coming up starting on February the 9th, and you can find out how to enroll in that course. It’s a MOOC [Massive Open Online Courses]. It’s a four-week course that’s free. Last time we had 3600 people enrolled when we offered it. I think they all had a great time. I got good feedback.

So it’s coming up again. We’ve got other programs we’re developing as our funding situation improves. That’s our major problem at the moment. Not enough money, but that’s always the problem. And yeah, get with it and get yourself educated and get some life balance and get active and get angry, but also find some happiness. But most of all fight against the ignorance that’s been created for us and get smart.

[01:08:27.330] – Grumbine

Thank you so much, Bill. This was absolutely fantastic. Please tell Louisa that I said Hello and enjoy this New Year as we go into it. I’m going to try my best to take your advice and find some balance.

[01:08:44.590] – Mitchell

Yes, do that.

[01:08:45.880] – Grumbine

But I will never lose that outrage. Don’t ask me. I can’t do it.

[01:08:50.560] – Mitchell

You can’t lose it because it’s real.

[01:08:52.980] – Grumbine

It is.

[01:08:54.010] – Mitchell

And it’s justified, and it’s based upon knowledge. Because that gives you the motivation to be active and to try within your own limited resources to influence others who then snowball and influence others again. But you’ve got to be a bit happy as well, because there are some nice things.

So happy New Year to everybody. And at the moment, it’s not looking like 2022 is going to be much better than 2021, but we’ve got to keep striving to make the changes that we care about.

[01:09:27.930] – Grumbine

Very well said. And with that, folks, I’m Steve Grumbine with Macaro N Cheese. Please find us. Listen to us. We are at Realprogressives.org. Go down to the media section and the drop-down, find Macro N Cheese podcast and you’ll get to hear great people like Bill Mitchell speak all the time. We try to make sure that these podcasts are top-notch. And it’s free of charge.

Everything we do is for you for free. No paywalls. The information is just too important to do that. So by all means, please take the education from Bill. Get as much of it as you can and get ready to take on the powers that be. With that, Bill. Thank you so much for your time. And for all you folks out there, I’m Steve Grumbine with my guest, Bill Mitchell. Macro N Cheese. We’re out of here.

[01:10:46.880] – End Credits

Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Mindy Donham. Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.