Episode 68 – Reframing Marx Through Modern Monetary Theory with Nathan Tankus

Macro N Cheese – Episode 68
Reframing Marx Through Modern Monetary Theory with Nathan Tankus
May 16, 2020

Steve Grumbine (00:00:00):

Nathan Tankus, welcome to Real Progressives, sir. How are you doing tonight?

Nathan Tankus (00:00:04):

I’m doing good. Thanks for having me.

Grumbine (00:00:06):

Awesome.

Tankus (00:00:08):

Yeah. I mean, you can encounter this, all the stuff all the time. And of course, you know, as being a New York leftist, you can imagine that however much you get it, I get it 20 times more than you. I mean, I go to events at, you know, places like Verso, which is a famous, you know, left publisher. I go to events of Dissent. So, you know, I, I, have been at Jacobin events. So, you know, I’m regularly encountering people, you know, I should say some people who are sympathetic and knowledgeable and, you know, and agree.

And frankly, some people who are more knowledgeable about Marx and who Marx was citing, then, then your average person on the street. But you will, of course encounter the person who is very dismissive of MMT, of chartalism. They think because of, you know, their Marxist background, you know, and then of course, and of course, you know, the Marxist tradition is a huge, very heterogeneous tradition.

You know, went into all sorts of different directions over now, 150 years now, if not more. And so you, of course, you’re going to get things that are completely inconsistent with, uh, with MMT, but you’re also going to get things that aren’t, and, you know, there is a stranded tradition going straight from Marx that definitely influence post-Keysians and then MMTers down the line. And so we’ll be getting into a little bit of that tonight.

Grumbine (00:01:36):

Okay. So, you know, in talking with, uh, I want to tee up a couple of subjects that I’m sure you’ll touch on as we get through this, but I want to tee you up. Ajamu spoke specifically to me about labor theory of value. He spoke specifically about capital flight and they didn’t quite understand the fact that, you know, Hey, if the state’s able to create money out of thin air, how does that impact labor theory of value and how does that impact labor and so forth? And I want to make sure that we address these very important things.

Tankus (00:02:13):

Yeah. So first things to say about, you know, whatever your position about labor theory of value, it’s important to be clear what that, what it’s talking about. The labor theory of value is about is that first, you know, before you even get to labor specifically that value, what . . . the things that we need in society, the biophysical resources, the produced goods and services that all that emerge in production.

And that’s an important distinction because, you know, there are a lot of other theories of value where value emerges in places other than production. And that things that we, that, that we need are created, you know, for example, in mainstream economics value is created by peoples’ subjectivity — people subjectively saying, you know, Oh, I value that a lot. You know, they, they, they, their utility is what, uh, uh, ascribes value to things.

And so, first of all, it’s important to note that, you know, MMT is focusing on how the monetary system works, but it’s not denying that, you know, that a surplus, you know, goods and services that we can use, uh, for other purposes, besides our basic subsistence are produced. And, you know, no one is saying that, you know, money is alchemy, that you can print a bunch of money or, you know, create a bunch of bank deposits and that, you know, can, you know, create goods and services out of nothing.

No, they use goods and services still have to be produced. So there’s nothing about, you know, MMT or post-Keynesianism that denies that the central, that central idea. But it is true that in order for, you know, in, in Marxian terms, in order for goods and services, to have their value realized in order for them to be sold, they need to be purchased. In order to be purchased the people who are doing the purchasing need to be able to buy it.

And that goes back to Keynes, effective demand, you know, post- Keynesianism, chartalism. And, you know, there are plenty of people, you know, not only in the Marxist tradition, but also in the post-Keynesian tradition, that chain, that trace the idea of effective demand, the idea that it’s the demand that determines, you know, how much debt, how much goods and services that are out that are out there, you know, given that you have that there’s the ability to produce them and that, you know, supply doesn’t create its own demand.

Trace that idea to Marx and Marx has really, you know, famous, very virulant criticisms of Say, and of this economist, John Baptiste Say, and Say’s Law, and, you know, some of the most strongest criticisms of Say’s Law, which Keynes followed along and post- Keynesians followed along and chartalists followed along and MMT came, it can be traced to Marx’s original rights. Now that doesn’t, that isn’t to say that everything that Marx ever wrote is consistent, uh, with, with what we would say now.

You know, Marx, you know, if you look at, uh, how the collected works of Marx and Engels, it goes volumes and volumes and volumes, and there’s even more stuff, especially later stuff on finance, which apparently still hasn’t been published in English. And it’s just, just started to get published in German the last decade or so, but, you know, there there’s certainly a tradition that follows there, you know, someone like a Michal Kalecki, Oh, was who, who was, you know, a famous Polish economist went to Cambridge in the thirties.

And he was seen as sort of a forerunner or developing the same ideas at the same times as Keynes, you know, John Robinson famously preferred, uh, his version of his, the way he stated, uh, the theory of effective demand over Keynes’s version. You know, traced his vision of accounting, his famous profits equation, which is sort of a forerunner to stock flows consistent economics, which is united stock flow consistency, which is a big, huge thing in chartalism.

Trace that back all the way to volume two, volume two of capital, which is, you know, widely seen, um, especially among post Keynesians and Marxists and all these other, uh, non-mainstream economists as sort of the origin of stock flow consistent modeling, or at least have a large precursor to it.

Grumbine (00:06:44):

Very, very cool. And so when you say, can you explain to our viewers what, in fact that means stock flow consistent model? Folks, take note. This is important.

Tankus (00:06:57):

Sure. Um, so the basic idea with stock flow consistent models is the idea that if you want to understand something, that how something is working in an entire economy is you need to trace everything that’s going on in it. You need to be able to say that the flows to define flow real quick flow is just, you know, the amount of something that of that is either produced or purchased over a period of time.

You know, an analogy that people like is, uh, the bathtub metaphor, where a flow is the rate at which water is coming out of the faucet and going out the drain and a stock is, is the level of the water of the bathtub at a point in time. And so . . . the idea is that you have to make sure that, you know, flows are always going somewhere. They’re always increasing a stock and flows are always leaving somewhere, you know, decreasing a stock.

And that you need to understand that, you know, the economy, especially, you know, the monetary system is, is, you know, a closed system in the sense that everything has to go from somewhere, come from somewhere and go somewhere else. And so the idea is you need to be able to trace where everything’s going, and it’s only when you’re able to kind of have that full established view that, uh, you’re able to really see what’s going on in the economy.

If you just try to, you know, make sure you can see that the flow follow the flows, but you’re not following the stocks you’re or like, you know, things, uh, you know, private debt accumulating relative to GDP, you know, or, uh, you know, how much public debt is out there relative to GDP, you’re not really knowing what’s going on in the economy. So an example would be someone like Steve’s Keen’s work.

So if you just follow the flows, you might know how much private debt is being created each year, but you won’t, if you don’t follow the stocks, you won’t know that, you know, in thousand six, there’s, you know, 150% of private debt relative to GDP, which is huge. And that this might not, this might cause a crisis. So stock flow consistent modeling is crucial in order to be able to, you know, see something build up and see a crisis happening. And, you know, it’s widely seen that you can trace that to Marx’s volume two.

Grumbine (00:09:21):

So let me ask you, Nate, um, given that most Marxists tend to not, and this is just my experience in terms of dealing with my people here. They tend to not want to hear anything about the monetary system. They tend to bypass the creation of money and they jumped straight to things like fairness and workplace ownership and, and on and on and on. And there was like very clear balkanization balkanization or demarcation or whatever you want to say between money creation, which is agnostic. It’s not political.

It doesn’t really have a, uh an ideology behind it. It’s kind of like a science. It’s a system. It shows how things go from ABC. On the other side, though, without understanding the underlying monetary system, I have frequently called Marxists, you know, they’re like religious priests in their own right. They’re talking about beliefs as opposed to talking about the underlying, what you’re talking about with the stock flow, consistent modeling and so forth, which is the underlying factors that go within. This chasm creates a, an unnecessary speed bump in people understanding Modern Monetary Theory. They’re not in conflict with one another.

Tankus (00:10:45):

I would say, I would say that that’s certainly true. Although I would say it’s not universal among Marxists. There’s a lot of Marxists who have, you know, major dialogue with both with post-Keynesians and with chartalists. There’s people like Ricardo Bellafiore from Italy who you know is, I would say, you know, is a consistent economist someone who, you know, gets his work reviewed by Wray and, you know, cites people like Wray and all this. And you know, of course, Wray himself . . . Randall Wray of course, and people like Mathew Forstater has written about Marx and, you know, talked about, you know, relationship with their views and Marx.

I would say that there is something to what you’re saying though. I don’t know if you’ve ever seen this before, but there’s this famous essay by Joan Robinson called ‘Open Letter from a Keynesian to a Marxist.’ And it’s famous for this exact point that like, you know, I read Marx and I find it fascinating, and there’s so much, you know, in here that’s important, but like I talked to you guys and you guys are just like, you know, telling me how he’s a genius without really, you know, telling me, telling me anything else.

You know, her famous line about this is: “You know, what I mean is that I have Marx in my bones and you have him in your mouth.” Uh, uh, and, uh, and, and, and that, that’s like a key point that like the idea that, you know, Marx . . . There’s a lot of really interesting stuff in Marx, but you have to work it out for yourself. He was like, does this make sense to me? And there is an instinct among a certain strand of Marxist who just know it’s the truth, and they just have to figure out how it’s the truth, rather than, you know, picking and choosing and seeing like, does this make sense to me?

Does this not make sense? And that doesn’t mean you shouldn’t. I mean, Marx is, you know, a foundational person in the history of economic thought. So if you can see if there’s a way your views are consistent with him, that’s important to do. And, you know, if there’s some, you know, trace back there, but ultimately if you confront something that you think is just completely wrong, you have to push against it and say, no, I, I think differently about this. I also say that, you know, a lot of the most religious people about Marx in my experience are people who haven’t read a ton of Marx.

It’s like I’ve talked to people who I won’t name who consider themselves convinced Marxists. And you tried to talk to them about volume one or volume two, even volume one, but something more likely volumes two or three, or the theories of surplus value, which is, you know, this manuscript from the 1861 to 1863 that’s really interesting. And, you know, they, their eyes glaze over and they, they they’re like, you know, as, as Joan Robinson says, you know, they say, uh, Marx is a genius.

And you just go like, well, all right. I got the quote original quote is: “How could he make a mistake? Don’t you know, that he was genius?” And he gives me a little lecture on Marx’s genius. And I think to myself, this man may be a Marxist, but he doesn’t know much about geniuses. You’re plodding on . . . step-by-step and has time to be careful and avoid slips.

Your genius wears [inaudible] boots and goes strolling along, leaving a paper trace of little mistakes behind him. And who cares? I say, never mind about Marx’s genius. Is this a stock, or is it a flow? Or is it the flow? Then the Marxist gets rather huffy and changes the subject. And I think to myself, this man may be a Marxist, but he doesn’t know much about riding a bicycle. So they actually just mean he doesn’t know much about doing it himself and figuring it out for yourself.

Grumbine (00:14:36):

What do you think is the attraction, if you will, to people that place . . . the is it an identity that people cling to that prevent them from seeing beyond it?

Tankus (00:14:49):

Yeah. So I would say that, you know, that the caution there is that a lot of the more people who are believing rather than thinking about Marx are, you know, the kind of people who are more vigorously promoting their thought on the internet and attacking other things. You know, you encounter certainly plenty of people who consider themselves some type of Marxists who are very open and having, and having these kinds of discussions. And of course, you know, people who are scholars, people who are, who are academics, who are academics in this . . . in this area, you know.

There are certainly people who have committed a lot of time to this and want to see a consistency in Marx; but they’re also open and in talking about it and in tracing the intellectual roots. So, you know, there are people like people, like I mentioned, like Bellafiore, people like Fred Mosley, they’re there, there is no a Marxian tradition there that, you know, and of course there are plenty of people who were influenced by Marx who went on to develop post-Keynesian . . .

Minsky of course, you know, is a famous example who sort of didn’t cite Marx all that much because, you know, he opened up his career, uh, during the McCarthy era. But, you know, certainly was very influenced by Marx. And there are stories from his son about, you know, you know, when he asks, you know, what to read on economics being handed capital, uh, before anything else. Uh, but that, so, so there is, you know, a heterogeneous thing.

I think the thing to emphasize is that, Hey, there’s nothing in, uh, inherently in understanding how the monetary system works that goes against, you know, seeing, uh, that, that goes against seeing surplus value as being sourced in production. Uh, B there’s nothing in, uh, MMT that says that owning, owning the means of production is a productive act in itself. I mean, you you’ll have certain people argued people like Steve Keen, most famously that you can get a surplus that this source of surplus isn’t just workers, but is also a means of production.

But, you know, as you know, first said by Joan Robinson and then, you know, later by Keen and other people, just because, you know, means of production might be productive of surplus doesn’t mean owning that is inherently productive. And so there’s nothing . . . no inconsistency. We’ll see, we’re seeing, you know, the ownership as giving the ability of capitalists to, you know, extract a surplus out of our biophysical resources and out of, uh, human beings, uh, while also saying that, you know, that the owning of the things isn’t there isn’t necessarily productive.

There’s nothing about MMT that says the government is good or going to necessarily act in your interest. There’s nothing, there’s nothing even in, you know, MMT that says, you know, that the state isn’t in often, you know, the kind of, you know, managers of, uh, the, the, the ruling committee of, uh, the bourgeois of the ruling class of the bourgeoisie.

There’s nothing inherently inconsistent with, you know, you know, even, you know, non-Marxists, you know, seeing that, you know, how money driven American politics is and seeing how you can use money to have an outsized voice in American politics, and even, you know, potentially, you know, control political parties. You know, there’s, there’s nothing in MMT that, uh, says that, uh, that, that stuff isn’t true. On the other hand, you know, MMT might make it easier to make the case of having public finance for elections, which would at least have some effect in terms of making the country more democratic.

That there is no, there is no inherent, you know, the fundamentals of, you know, of what people get out of Marx about seeing the, you know, the class antagonism, you know, essentially dictatorship by capitalists and, you know, in, you know, an overwhelmingly dominant control of our lives. And being able to, you know, tell us what to do from nine to five or even longer.

There’s, there is no inherent conflict. You, but you may be you not, you, you won’t be able to swear by every single word, uh, in capital or, or, you know, earlier writings, uh, that you could before, but maybe it wasn’t a great idea to swear by every word in the first place.

Grumbine (00:19:42):

You know, I think, I guess my concern Nathan, is, is that, you know, as we approach trying to, I’m going to use the term unfuck our world, unfuck our country, unscrew it up, right. Let’s just say, hypothetically, we all had this goal of going to a totally Marxist compliant society tomorrow. It wouldn’t happen. It couldn’t happen that quickly. There’s going to have to be some sort of transition regardless.

And, and so what we ended up doing, and, and I’m watching this happen in our movement over and over again, the minute we moved the football ever so slightly, people are jumping far down the road. Oh, we want a resource-based economy. Oh, we want this. Oh, we want that. And the reality is, is that no matter what, there’s going to happen in phases. There’s no way to just rip and replace, unless there’s some sort of a cataclysmic event, at least in my mind, I can’t see it.

What are some expectations that people that you know are born again Marxists, that are trying to learn Modern Monetary Theory and are politically active? What are some things they can expect, or some, some wins that they can expect in a meaningful sense along this trajectory to their, to their final destination, if there is ever such a thing? What would you say is that, you know, some things that they can expect along the way. How does MMT facilitate that?

Tankus (00:21:19):

Well, I think firstly, it’s important to say that, you know, whatever else you want to say about Marx, Marx was a theory . . . theorist of capitalism. He wanted to understand how capitalism worked, you know, the, you know, of course he wrote, you know, the Communist Manifesto, but that’s not really, you know, laying out a roadmap. And then of course is also an early piece of writing, well before he kind of, you know, really, you know, fully, you know, to the extent he ever did fully develop his theoretical apparatus.

So it’s important to understand the, you know, whatever your views on socialism or communism or any of that stuff, that doesn’t really touch like 95%, even more of what Marx wrote. Marx fundamentally was just always trying to figure out how capitalism worked. And so that, you know, nothing, nothing about Marx stands or falls about your view about the next society.

You know, in terms of being, you know, a radical in terms of, you know, having, you know, maybe some of the same, you know, broader political convictions of Marx or other people, I would say that, I would say that, you know, you know, plenty of Marxists, I know, you know, Jackman is probably the most famous, you know, standard bearer of this right now, don’t really, you know, have any fundamental belief that, you know, we’re going to have, you know, some southern revolutionary struggle and, you know, create the new world, you know, instantly.

I mean, nearly every Marxists, radical leftist I know, you know, doesn’t, doesn’t have that sort of vision right now. You know, maybe that is a lack of vision, but, you know, universally, it seems to think that there, that there’s some non-reformist reform, you know, there’s, there’s a whole debate among, among in the Marxist tradition about reform versus revolution. And one of the ideas that has sort of been developed and, you know, to, to try to deal with this historical argument and adjust it to present conditions is that, is that, you know, we have ways that we reform society, but they don’t just stagnate us into not getting past capitalism.

They’re things that help propel us and develop and develop society in a direction that we might, that we might eventually move beyond capitalism. And, and I know plenty of leftists who see the job guarantee as a non-reformist reform, as something that reforms, that genuinely makes life under capitalism better, but also that, you know, creates the . . . creates the seeds about developing alternative ways of living your life, alternative ways of producing.

Of course, job entry sets . . . sets up, you know, sort of laboratory for developing other sorts of . . . other sorts of ways of producing that aren’t, you know, attempting to, you know, get us get at a surplus of money. And, you know, in “Why Minsky Matters,” Wray . . . in his biography of Minsky or intellectual biography of Minsky, explicitly suggests that a job guarantee could be used to fund cooperatives; that a job guarantee could essentially pay the wages of, of cooperatives.

And that, that could be, you know, one way in which job guarantee could contribute to being a laboratory. So, you know, for, for, I would definitely, you know, there is a long tradition of, and of course, you know, there’s also a long radical tradition of supporting a job guarantee. There’s, you know, the . . . the review of Black political economy was in especially in the early seventies, a strong supporter of the job guarantee, of course, you know.

Martin Luther King and Coretta Scott King were supporters of the job guarantee. And there’s a, there’s a whole civil rights tradition around, you know, the written . . . The original civil rights, you know, the original March on Washington in 1963 was called the March for Jobs and Freedom. So there certainly is a left tradition about our main policy program, which is the job guarantee and seeing it as a non-reformist reform. And so, you know, I, I don’t think, I don’t think if there’s anything particularly troubling for that for, you know, for a lot of leftist, I know.

Of course, you know, even, you know, Jacobin and Bhaskar Sunkara, those people are explicit at least at times about supporting a job guarantee. So I don’t think that the, that, you know, any of that is particularly troublesome from a left point of view. Now, of course there are people who disagree, who don’t think there’s any such thing as a non-reformist reform. And for those people, you know, they. . . might not find an MMT particularly useful in terms of fighting for something practical that they’re interested in.

But, hey, you’re going to have to understand how money works if you’re going to build a post-capitalism system and also to debate whether you want to get rid of money. And there’s a long debate about that in Revolutionary Times that I think would have certainly benefited from MMT ideas; but I don’t, but from, for most leftists I know I don’t actually think that this is a much of a conflict.

Grumbine (00:26:50):

So Scott Ferguson raises the question, what about dispelling specific allegedly Marxist arguments against MMT that prevent us from acting on what MMT — and I missed that last part there — make possible. There you go.

Tankus (00:27:10):

Yeah. So I’d say the one big thing is the one thing you mentioned earlier, which is, uh, when I would sort of call it quasi-Marxist argument, which is a capital flight. What about capital flight? This is, this is a really popular one. I mean, you can almost, I mean, I, it’s a running joke among friends of mine that, you know, you know, what about capital flight is the answer to almost every question that, you know, on Marxists’ ask.

You know, if someone asks them, what do they want for breakfast? They go, what about capital flight? Uh, I think, yeah, it’s, it’s, it can get ridiculous at times. Um, I, so what I would say in the capital flight point is, first of all, what do you mean? This, this, you know, I find often puts Marxists on their heels. That, you know, Marx is all about, you know, not buying into essentially mystifying BS an buy into things that mystify what’s actually going on.

And for all the discussion among Marx where he’s trying to distinguish between, you know, different forms of capital, whether it’s capital in the inventory form, that he calls cap a commodity capital, whether it’s means of production, whether it’s a variable capital and constant capital, which is just sums of money that are going to be used to pay wages or some of the money that is going to be able to use to buy intermediate inputs and, you know, things that you use in the production process that aren’t labor and by machines.

That when you talk to, when people say capital flight, they’re never clear on what they mean. Do they mean that, you know, fit, literally capitalists are going to be physically picking up machines and, you know, transporting them out of the country. Now, of course, that happens sometimes, you know, famously during NAFTA, there was apparently, you know, machines that were packed up in factories and driven across the border into Mexico, and set up a new factories; but that’s very rare.

You know, most things are, you know, for all of this view of, you know, the sort of, what I would say a misdefined view of this, you know, capital flowing around the globe, jumping from here and there at a moments instant, you know, the physical stuff stays there. No matter what, even if you have the countries where you can allegedly say that there was capital flight, all the, most of the physical stuff is still there. So you have to be clear about what you mean.

Now, of course, you know, money can a pin in, in some or clean or ownership claims can trans, uh, can go across borders. But then, then we then suddenly we’re in a conversation about the payment system and about the monitoring system, something that, you know, these supposed Marxists are not supposed to be the don’t want to talk about, and it is irrelevant. Well, you know, let’s take, you know, if you want to, uh, get, uh, you know, a quote, you know, if you own a bunch of stock, you know, 10% of a stock in a US company, and you want to, you know, transport that into a form that’s usable to you in Beijing.

Well, you’re not, it’s not, there’s no way for you that, uh, capital to flow on. And for you to have that happen for that suppose a capital flight to happen, unless you sell your shares. And if for you to sell your shares, someone with dollars has to buy shares. So, you know, what’s, so you still have to have a buyer on the other side. And then the, and then it’s still not good enough because you still have these US dollars in a bank account in the US.

Well, you’re going to have to sell them for some Yuan and someone is going to have to buy those dollars from you. So it looks from my point of view that, you know, no, no dollar has left the US. The physical machines in that company haven’t left the US. You know, the stock ownership is still, you know, all those stocks still exist. All that’s happened is the owners have changed. Okay. So capital flight has happened, but what, what does, what does that matter?

Now that the big thing where this could be important is it can affect the exchange rate. So if, you know, you’ll have a whole bunch of people who sell their stocks or sell their bonds, or so, sell they’re government bonds, and then sell them for your Yuan or for Euros, well, then you can depreciate the exchange rate and, you know, the exchange rate can go down even large amounts, 10, 20%, and that might be painful for people. The prices of imports go up, you know, of course, you know, export industries, quote, unquote “benefit.” And you know, it might, it might or might not trade, change our trade balance.

But, you know, the, the fundamentals are still there. All the means of production are still there, all the land, the buildings, all that stuff is still there. It might have a negative effect, but that does, you know, just because the exchange rate has depreciated 10% doesn’t mean that you can’t, you know, still hire people with a job guarantee or still buy things that are, that are sold in dollars. There’s nothing inherently changed. Now, there are southern countries where this can be a self-fulfilling process that can be devastating.

You know, big example would be the East Asian crisis in 1997. What was the big thing there? The big thing was that, you know, you had people in South Korea and in Malaysia who owed dollars. They owed foreign currencies, and the depreciation of the exchange rate increased the burden of their debts. And that, that that’s what crushed them. You know, and then, and MMT has never denied that if you have a whole bunch of foreign denominated debt, then your exchange rate can go down and that can really, you know, harm or harm your financial system, harm your economy, harm, harm, domestic residents. You know, no MMTer has ever denied that.

In fact has explicitly comments about. And part of the whole point is warning about the dangers of foreign denominated debt. But the big thing is to be clear about what the process is we’re talking about and what the causal mechanisms are. And, you know, a lot of times when you talk to, when you talk to people who are invoking this capital flight argument, they are doing that without really regard to what’s going on, what’s going on? What is the underlying biophysical relationships?

What are the underlying ownership relationship? What’s going on with the payment system? And once you do that, you see the, you know, things look very differently when you’re in a country like the US that isn’t, that doesn’t have a bunch of foreign denominated debt and, you know, has its own currency than those other countries and other situations. You know, and a lot of people, you know, invoke the Greek example or other examples from the Eurozone, which of course, you know, MMTers were very early into talking about the potential dangers in the Eurozone.

You know, Professor Kelton’s book in 2003, I think it’s called “The State, the Market and the Euro,” about, you know, you know, how about how, you know, potentially dangerous the Euro situation was and how unsustainable the Euro was extremely early call, uh, about the possibility of a crisis in the Eurozone.

And so I think that that gets into the other side of this is that a lot of people say, well, this isn’t relevant. This only applies to the United States or a few countries. Well, part of the point is that, you know, we’re highlighting exactly what the dangers of not being monitarily sovereign is and how you need and what you need to do to, you know, get on the right side of that.

Grumbine (00:35:11):

So I, you know, I want to bring up something that’s important here. The, the, we get into a lot of fights here, quite frankly, about the idea of eating the rich and the idea of taxing the rich and taxing wealth and going after this, that, and the other. And there’s an assumption now, mind you, I know Marx uh, started getting into some stuff for our conversation earlier tonight, um, where you had said that he started getting into some understanding about how state money work.

Um, I’ll let you touch on that. But the idea here is, is that most people in our modern society are not six feet under, from a hundred years ago. They’re here now, and we’ve only read, selected pieces. So when you try and explain to them that taxation is deleted, that the federal taxes come in and they purge reserves, whatever you want to say, how well, however technical you want to get about it. Bottom line is they aren’t reused, they’re gone, they don’t do anything.

So the real emphasis, in my opinion, needs to be on rectifying the lack of income for the 99%. And when I try to explain that since taxes don’t fund anything, they don’t actually pay for stuff. They drive currency, but they don’t actually pay for things. They don’t actually get redistributed at the federal level. When I try and say that to them, they still harken to Oh, he’s saying that we shouldn’t tax the rich or whatever.

And the point is, is that in my understanding of the thrust of Modern Monetary Theory, the key, the key to getting us to, uh, both income inequality, solving that problem and solving many others is indeed through full employment through the federal job guarantee, which takes the most vulnerable of us out of the business of borrowing to pay for bread, out of the business of borrowing to pay for electric, out of the business of borrowing to pay for basic necessities and allows them instead to survive without going to the 22% interest rate private debt that is driven as a scarcity of dollars, uh, by, by Friedmanesk, kind of, uh, you know, economic policies.

It seems to me that these Marxists don’t understand that since taxes are deleted, that in order to help the bottom out, the primary help is giving them access to options and financial instruments, if you will, whereas the top, we can tax the hell out of them after we solved the suffering. I don’t quite understand why they don’t get that. And that’s a key issue to me in them not understanding the money system. They only understand this one idea and they’ve eradicated any kind of logic beyond that. Can you talk about that for a minute?

Tankus (00:38:09):

Well, I think one of the parts that I think is really ironic about that is, well, you know, the, the household wealth of the rich, the rich as households as, as Marx would say a capitalist as man about town, that, that part, you know, element isn’t where the control is. That isn’t where they, you know, in, in, in Marx language control the means of production.

So you can tax the crap out of, uh, the, the rich and you can, and, you know, we might even think that’s a positive thing, but that doesn’t do anything to affect their control of the means of production. You know, they might, you know, them as, you know, man about town might make less political contributions. They might, you know, consume less luxury goods, less capitalist consumption, and then we might think that that’s a good thing.

And you redistributing resources away from, you know, being burnt on, you know, making sure, you know, all the yachts look nice and they can go, uh, go around on yachts. That, you know, the control isn’t really on the household side. So part of the importance, you know, part of something that, you know, chartalists would agree with is that, you know, taxing the rich doesn’t actually do anything to get rid of their control. They they’re still setting prices.

They’re still doing all the, all this stuff. So, I think that’s one important point to make. The other point important point to make that, I think that I think where Marxists miss is that, you know, and some, you know, that might be perpetuated by, you know, the way some MMTers approach, you know, approach that dialogue is that separating taxing the rich from spending on social programs.

The point isn’t to defend the rich and to, you know, making sure that they have all the good things in life. The point is to the point is a political point that, you know, when you connect taxing the rich to doing the social programs, you A, limit your social programs to whatever you can tax out of them and whatever, you know, overseas accounts you can find, but B you’re giving them a false control.

So for example, you know, you know, uh, a per a professor of mine, uh, Joshua Mason, who’s, you know, uh, Marxists, but also, uh, I wouldn’t say an MMTer, but pretty sympathetic to MMT, you know, rightly points out that when you say that, you know, you know, capitalists fund the government, either as a people paying taxes or buying bonds, you’re saying that they have control over the government in their, in their capacity of, you know, being money owners.

And that’s not true. Now they might have political control through, uh, you know, campaign contributions, but A, that’s something that politicians are actively conceding. They’re choosing to, you know, see to their wishes. They can make a different decision when in office even, even as difficult as that, as that is. And . . . but you’re exaggerating that their importance to the system. You’re also, frankly, you’re also making it more difficult to move beyond capital.

Thus in your own certain limited way, you’re implying that, you know, we need them. You know, if you want to say that, you know, the means of production are the true source of wealth, well, part of that is saying that, you know, you know, capitalist money that the money that capitalists own is just, you know, some claim and we don’t need it in order to, you know, do what we want with the means of production.

And I think that that’s an essential point too. Uh, that you, you you’re, you know, even though, you know, when you talk to a lot of these people and they talk about taxing the rich, they presented it as this radical thing, but really what you’re saying is capitalists are too important and that, you know, and that we, A- can’t get rid of them, you know, in some deep sense.

Uh, but you’re also saying that, you know, that, that the way we can reorganize our society is limited. You know, part of, you know, looking past the veil of money and looking at what’s really going on. And, you know, what’s really going on with means of production and production is, you know, seeing the monetary system for what it is, and, you know, seeing the importance of taxation and tax receivability behind it.

And so, you know, that’s, you know, we’re, there’s no, you know, MMT no argument explicitly against taxing the rich. The point is to make our policy program of taxing the rich, you know, separate from our policy program of say, full employment, or, you know, more public services. And that, and that it’s crucial for these to be separate things.

Grumbine (00:43:11):

I want you to correct me on something, if I’m wrong, if I’m right, I want you to back me up. Okay. My thoughts are in Ellis Winningham and I have, I, you know, I have really, really just locked into this and if I’m wrong, I need to change it ASAP. Okay. Since the act of taxing and the act of spending are different functions and serve very different needs, why in the world, when you’re trying, if you’re trying to get to the other side from A to Z, why would you put unnecessary boundaries in there to save lives?

Single payer healthcare immediately saves lives. Green New Deal today, immediately start saving the planet, which saves lives and stops wars, ironically. And then you get into college, free college for all, or eliminating student debt. My God private debt in and of itself in this country is the financial situations that most people find themselves in, as non-monetarily sovereign entities, causes people to commit suicide, leaves them destitute, leave some desperate, et cetera.

So in my mind, the idea of putting a barrier of, well, we’ve got to find tax dollars before we can help anybody is, is quite frankly murder by proxy. It is an ideological religious argument in the face of a modern money system that is inexcusable in my book. And those people that advocate for it have said it’s more important for me to get my feels taken care of with soaking and eating the rich than saving lives, which to me, once again, makes them literally a murderer by proxy. I’m sure I’m harsher than you are on that . . . but . . .

Tankus (00:44:54):

You’re harsher than me, but I definitely, I’m definitely with you in the general point that, you know, part of the problem is if you make it that much harder and, you know, it’s hard enough to get single payer through to get these things through, but tying it to, you know, well, we need to tax X, Y, and Z, and we want it to specifically come from the rich. It hobbles the program even more, and it makes your arguments more convoluted.

Like, Oh, I want single payer, but only if we can, you know, project it, have it you know, quote, unquote, “fully funded,” yada yada, yada. It just weakens the argument where you just say, single-payer. I don’t talk about any of that crap. Just, you know, just argue for single payer. And that I think that the argument for taxing the rich is straightforwardly an argument about, you know, reducing their consumption, which we see is not a very useful use of our collective resources and to reduce their political power.

But, you know, if we have the political power, if we can get, if we have our one shot, you know, where we can have a movement pushing something, well, we shouldn’t be spending that shot on taxing the rich. That shot should be absolutely be about single payer and climate change. I mean, these, these are the central things that you, if we get to the point where we have to make some big argument, you know, that has to be the thing.

You know, if the argument we win is taxing the rich well, I mean, the most basic point is if the argument we win is taxing the rich and no one’s lives get better, well, then you lose the election and then they come in, what do they do? They said, look how terrible things are, you know, and the riches and the taxes on the rich are so hot. We got to cut them. I mean, it does it not only, not only is it like in a certain level and immoral, because you’re not taking the highest priority thing, but on the second level, it’s self-defeating.

But it’s not the thing that, you know, the things that you should learn from, uh, last year’s election is that you need to be giving real material things to people’s lives. You know, we’re talking about materialism, that’s the, that’s the thing that, you know, we have on the table and, you know. But the there’s an important reason why the Democrats in the early two thousands, you know, the things they focused on the most were Bush tax cuts, which of course, you know, were, you know, redistributive upwards and bad and all that, but they also kept effective demand going.

And, you know, kept people employed. That kind of argument is, is easy to make, is consistent with, you know, at least a certain faction of capitalist interests because they still control the society. It’s just, their taxes are a little higher and you know, it doesn’t fundamentally change anything. And fundamentally also doesn’t improve people’s lives. That’s the flip side is, you know, is, is how terrible the Bush tax cuts didn’t win them any damn elections. It didn’t help at all.

So, you know, there’s, there’s a reason this stuff falls apart and even know as much as we, we want people to, you know, as leftists as metaphysically connected to the idea, well the rich are doing wars cause we raised their marginal tax rates, you know, 12% or whatever, you know, people aren’t moved, they’re still living their lives. Their lives are what matters. You know, high taxes on the rich are not, you know, if their lives don’t change, you know, what’s the point?

And you know, no matter how high, how high you raise their marginal tax rate, you know, capitalists are still gonna control the means of production. That means controlling people’s working lives. If your boss is still shitty, if your boss is still, you know, is still sexually harassing you and, you know, giving you crappy hours. Uh, but you know, Oh, his tax rate is, you know, 10% higher or 20% higher or whatever. What does that matter to me? He’s still harassing me.

So you have to give people material things. You have to give them a public option and jobs, and, you know, a basic level of working conditions that compete with that private option. You need to be able to give them healthcare so they’re less tied and less desperate in central part. You know, and I may have support, you know, raising taxes on the rich, you know, if we want to get more polemical, expropriating the wealthy or whatever, or crap like that, but that’s not the essential thing that people care about.

And frankly, also, if you read Marx, I’d be surprised that’s the central things that you care about. If you read volume one of his horrific discussions of, you know, people, people suffocating in factories because there’s literally not enough air given the amount of people that they shove in there. You know, it’s not like Marx finishes those paragraphs and goes, Oh, and we need to raise the tax rate on, you know, the top 1%, you know, eight and a half percent.

No he’s talking about working conditions. You know, then, you know, no matter how, you know, it’s sort of weird where you get the sort of posture of radicalism. And then, you know, at the end, I’ll tax the rich to fund these social programs. So that’s not the central point.

Grumbine (00:50:09):

So I want to touch one thing because we’re running out of time here. When I look at the idea of income and wealth inequality, obviously these terms are bandied around a lot sometimes appropriately, sometimes very inappropriately, but I want to just state for the record that when you provide people medical health coverage, and not just insurance, but medical health care as a right, you immediately eliminate the capital flight from their wallet, if you will, or whatever you want to say.

You immediately change income inequality right there immediately. And then when you look at a federal job guarantee, you immediately change income and wealth inequality instantly. And then when you look at things like providing a student debt relief, immediately you change income inequality, because so much of this inequality comes from private debt-driven economic policy. And that entire neoliberal monetarist nonsense has really caused a chasm of understanding in our movement.

People just assume it’s this . . . they have this boogeyman that doesn’t exist. It’s our government policies. And if we want to have better our Congress has to do better, but then the reality is you want to say solve for income inequality. It’s less the taxation. And far more, in my opinion, on providing the goods and services needed by the regular man and woman, and providing them with living wages, living benefits, and then they don’t have to go into private debt to sustain their basic living.

And that right there would eradicate huge amount of upward drift of capital of your, of money or whatever of wealth in general. Can you talk a little bit about pain on them to address income inequality versus taxing from them to, you know, lowering the top versus raising the bottom?

Tankus (00:52:18):

Well, I think the first thing to say there, and really hammer home that point is that the meaning the fundamental meaning of inequality is different. When the difference between inequality, when the difference between having wealth and having income and not having wealth and not having income, when that difference is your family starves.

When that difference is that you don’t have a place, you or your children doesn’t have, don’t have a place to sleep that night; when that means that your kid died of cancer because you couldn’t, you didn’t have the wealth to pay for your kid’s medical care that . . . the fundamental meaning of inequality is different with these, with these different social types of social programs. That doesn’t mean inequality is . . . doesn’t matter.

But, you know, if you talk to someone, when you talk to someone in America today, them not having wealth means potentially very potentially that their kid dies or they die, or their spouse dies. Uh, that it means that they’re not able to, you know, go to school and, you know, and have and have a better life. It means that, you know, their kid sleeps on the street. I mean, this that’s fundamentally what it means.

If you’re in a society where, you know, there’s housing security, you know, defended by public right, where there’s, where you have a right to a job, shout out to Raul Carrillo’s article, you know, uh, the government owes you a job. When you have these things as fundamental rights, then, you know, the difference between having wealth and not having wealth still matters, but it’s not the same thing.

It’s not necessarily a matter of life and death. And I think that’s the crucial point. You’ve fundamentally qualitatively changed the character of inequality. Now that doesn’t mean that we shouldn’t worry about inequality, even if we get all these things, you know, inequality still matters. And, you know, to the extent that inequality in control and wealth and control over the means of production, the inequality in, uh, wealth inequality, in income, to the extent that they, those broad political differences and can potentially push back against the gains we’ve made, it’s important to be able to hit that conflict head on.

But they’re not fundamentally the same character and that fundamentally, you know, it’s control over our lives and wants; and the level of want that we have for our basic needs and desires. That’s fundamentally why inequality is bad. And when you don’t have the focus on that, what’s the point?

If you can give people some sort of control over the lives, that they have more control about what goes on in their workplace, if they have access to what they need in their lives to housing, to healthcare, to food, then, you know, inequality starts, you know, losing importance with, and, you know, fundamentally when you get to the end point, when money can’t, you know, buy control over someone else’s life, which is fundamentally what, you know, the radical aim, the radical goal is then, you know, inequality of money isn’t that different.

If all I can buy with money is just some extra goods and services and not more of the basic necessities of life or not of, you know, the standard version of it, it starts to really lose its importance. So, I mean, you know, the guy I mentioned, JW Mason, Josh Mason, from John Jay School of School of Criminal Justice, he mentions that, you know, the ultimate goal as a leftist should be getting to the point where, you know, quantitative comparisons of different, different people’s lives, isn’t possible and doesn’t, or doesn’t matter because, you know, because people have access to what they need and money can’t buy control.

Grumbine (00:56:27):

I want to, I want to say something real quickly. This super important to me. Scott, I talked to Scott Ferguson earlier today, and one of the things that came out of this, and I think, you know, if he’s still watching, I hope he gets the shout out, but Dr. Scott and I spoke at length about the idea of the UBI only crowd coming in and talking about robots and stuff like that.

This is a problem that is very, very passionate to me. And I’m, I’m, I, it makes me almost frickin bust into tears over it. Cause I get so angry and enraged. My father died of something called superanuclear palsy, progressive supranuclear palsy. It is something that very few people in the world have. It is very, very minuscule amount of people that actually have progressive supranuclear palsy, which is a destroying of the human being’s brain.

And all of a sudden, you watch them little by little die as parts of their brain shut off, and you see them no longer be able to swallow. And all of a sudden another part happens; they stop being able to breathe. And they stop being able to do other normal things and all kinds of horrible things happen to them. It is such a small amount of people that it will never be profitable for it to ever have research done on it, for it to ever have medication and treatments or cure on it.

Now, my father passed away in September and these robot fetishizes, these automation fetishizes that think that UBI only is the way to go. They don’t realize how much work is left undone because it’s not profitable. It’s not profitable to the capitalist they claim to hate, but here we are, we can redefine work. We can redefine a job. We can redefine the way society looks, but they will still talk about these goddamn robots and automation.

And we could have solved my father’s illness had we invested in tons of jobs digging into these minor things. So many of these illnesses exist. So many of them, and yet we don’t bother actually digging in and realizing how much work is left undone. It’s infuriating. It’s beyond infuriating.

Tankus (00:58:37):

Yeah. I mean, this is something, one of the craziest things, when you get asked like, well, what jobs would people do? It’s like, no, have you looked around in your community? Just even basic things. I mean, that is a tremendous horrible story and something that, you know, absolutely would be something that I’d want a job guaranteed to devote it to. But even basic things, just like, you know, the quality of the New York City subway.

The, you know, the quality of, you know, just, you know, basic communities and what you know, resources you have available in your local community. There’s so many basic things that you walk around. It’s like, well, why, why isn’t someone doing that? Or couldn’t someone do that? And, you know, yes, someone could. There are all sorts of things that you can make a city better and better a suburban area better, a rural area better.

Just, you know, basic things that improve quality of life that, you know, that could be done. And, you know, absolutely. I think that that is, you know, an essential point. And of course the ironic thing about the the robot thing is that, you know, all this is happening during a time of true drop-off in productivity over the last decade that, you know, there’s a strong argument to be made is because, you know, there hasn’t been enough government spending and maybe even the wages have been too low, you know, if they can give a shout out, maybe want to talk about it some time.

Josh Mason has a, that I mentioned before, has a report coming out next month on, on all this stuff. You know, making, I think what I think is a very convincing argument that it’s, you know, the stagnant economy itself and our, the lack of public spending, which is the ultimate source we’re looking for, that’s been keeping productivity from going up and you’re never going to, you know, have, you know, your productivity revolution, robots or not, if we don’t get, you know, some spending going.

And that spending should be for public purpose and should be about making our lives better and dealing with climate change, and you know, that we can’t . . . There’s no, there’s no robot, there’s no magic fix of the market. Whether it’s, you know, you know, marketers saying that if you leave, free marketers saying that you’ve, you leave everything to the free market, things will supposedly get fixed or the techno free marketers who say that, you know, if you leave it everything to the free market, they’ll fix everything with robots.

It’s just not going to happen. And there’s so many practical things that need to be done that aren’t going to be done by robots; and, NO, nurses aren’t about to replace robots. There isn’t going to be this huge army of robots that are going to provide the technical and effective care that nurses provide. You know, and we, you know, we need a hell, a whole lot more nurses.

Grumbine (01:01:35):

Absolutely. You know, we, we’ve got a few minutes left and I want to close on this. I’ll let you have the last word. But, you know, as I look around my life and I look around my kids’ lives and I look around the things that I took for granted growing up like music class every day, choir every day, gymnastics or, or our physical education every day. Watching kids be able to just say, yeah, I want to play football.

And they get to go play football every day. And, you know, they got to play baseball, they got to play, whatever sport was there for the school, they got to play it. Now, these kids can’t do that because the schools are starving. The state of Pennsylvania is drowning in over $600 million deficit. Right now it’s freaking 6 million shortfall. And that’s just the state of Pennsylvania. You look around. And the other states in the nation, and many of them are absolutely floundering because of a lack of federal spending right now.

And so when we talk about jobs not being there, I assure you, everywhere I look there is work that isn’t being done because the man can’t profit off of it. And so since the man can’t profit off it, and these robots lovers are not realizing how many jobs are undone because the man can’t profit on it and they claim to be revolutionaries, but yet they parrot the man’s comments, instead of realizing that we can in fact fund those kinds of jobs so we can make our world better so we can improve our communities.

So we can, these even should appeal to the tea party and folks like that who want to locally administer things. This is an opportunity to allow them local control so that they can influence what they feel is important in their own communities. It infuriates me that people don’t look at it this way. I mean . . . . . Infuriates me . . .

Tankus (01:03:25):

It’s such a, it’s such a lack of a vision, you know, not being able to see, you know, how things can be improved. And of course there is, you know, of course, you know, concern that you have to be careful about, about, you know, administer, you know, some the theoretical hypothetical administrator, public administrator who tries to use, you know, job guarantee workers as scabs.

And you would want to set up a, you know, some sort of program that, you know, if some local public school teachers on strike that, you know, administrators couldn’t bring in a bunch of job guarantee workers to replace them. And this is certainly an important political point that maybe we can talk about another time, but in the normal, you know, way things are, you know, there’s no contradiction between, you know, having, you know, a well-stocked army of teachers and having some person who, you know, has some specialty, then it has some free time or otherwise, you know, isn’t finding private employment, come in and teach something about this specialty and, you know, teach, like, teach a class on, say, you know, you’re really into the Ancient Near East.

I’ve sort of got a, got, got interested in it in the last couple of years, you know, in to bring it, have a special class or AP class or whatever it is to teach students on that topic, which you know, is perfectly fine, but that your local public school teacher isn’t, you know, an expert in, you know, ancient theories history, you know, co-teaching the class, you know. How many, I have a personal experience with teaching a class and having two teachers in that room and being able to, and it gives you just so much more flexibility to be able to have that, not to say that you can’t run the classroom without it, but, you know.

An extra teacher is always helpful and you can always add something, add something to the quality of, of that education. I mean, there’s nothing, there is something additive and isn’t combative, especially if you structure it right. For, you know, even basic things like, and of course, like you said, also afterschool programs is I think is an essential thing to create afterschool programs that you could pay vacancies with, you know, job guarantee jobs. I mean, the only limit is your imagination.

A lot of people, you know, seem to be stuck in, you know, as they say, neoliberals have their imagination, really, you know, strangled by what seems possible now. And you know, and it may be true that we can’t, that, you know, we’ll lose that political fight over it. But a lot of people in the past have gotten awfully close for over this sort of thing.

And, you know, if we don’t get everyone on the same base in terms of how things work and, you know, making consistent arguments and we don’t try, and we’ll never get anything. You know, conceding before you even try, you know, it doesn’t, you lose either way, you know. Fighting and losing is much different from, you know, assuming you’re going to lose and then lose it.

Grumbine (01:06:37):

Right. So we’re literally out of time, Nathan, it blows my mind how quickly these hours go. Coming up in literally two minutes, we have our very first episode of a new show we’re doing called Vegan Planet with Trisha Roberts and Keith Bergen. It’s a very exciting group. They’re ethical vegans and they are abolitionists. So I recommend very, very, very strongly tuning in. They’re two experts.

And if you watched a few weeks ago, we did a show called Going Vegan, where they were trying to educate me. And I will be honest with you. My progress is slow. So without further ado, I’m going to say, thank you once again, Nathan, for joining us, I really, really appreciate our time together. I appreciate our friendship very much. And I’m going to let you go. Have a great day everybody. We’ll see you later. Thank you.

Tankus (01:07:31):

Yeah. Thank you very much, Steve.

Grumbine (01:07:31):

I’m going to let you go have a great day. Everybody. We’ll see you later. Thank you. Thank you very much.