58 min
Ep 45[2/3]: John Harvey on inflation: mainstream versus Post Keynesian (and the MMT job guarantee) People Conversations by Citizens' Media TV
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Welcome to episode 45 of Activist #MMT. Today is part two of my three-part conversation with Texas Christian University economics professor, author, and , John Harvey. In part one we talked about John himself, institutionalism, and discrimination. In the final two parts, John and I talk about inflation as seen through the lenses of both mainstream and Post-Keynesian economics. As people who challenge the overwhelmingly dominant school of economic thought, we must learn both schools. Another reason is because we want to efficiently communicate with and convince the masses who have been influenced by the dominant school – and the nearly infinite power that backs it. I was inspired to talk with John after having an unpleasant debate with a local lawyer and history-buff. He was perfectly pleasant and respectful, but his views I found to be highly cynical and disappointing. (With his permission, the entire dialogue can be found in the show notes.) As I understand it, his view is that it is essentially impossible for the central government, the one and only issuer of the currency, to safely do anything bold, without offsetting that spending one-to-one with taxation or bond sales, in advance. In his own words: I simply believe the government has to pay for those programs through taxes or serious consequences will result. Often, the tradeoff is worth it - I'd gladly pay more taxes for universal healthcare for example. This is because, regardless how desperate the program may be needed, creating the money to do it would increase the money supply, which would cause inflation, which would cause the people to rise up and literally bring down the entire government. In other words, the quantity theory of money is so volatile that even the state’s monopoly on violence is no match for the unbridled rage that would result from the inflation caused by the new money necessary to implement that bold policy. So, for example, take the Green New Deal, which is required to prevent organized human civilization from devolving into literal worldwide chaos. Daring to create the money necessary to implement this program would cause revolution and bring down the government anyway. As Randy Wray and Yeva Nersisian say in , "it is irrational to fear deficits more than we fear the annihilation of human civilization." The objection reminds me of the resistance I have received regarding the job guarantee: for example, if the job guarantee jobs are not "valuable," it would potentially demoralize workers, lead to corruption, and undermine the entire program. Another is that corruption in general would make it essentially impossible for the job guarantee to be properly managed. [I’ve included some screenshots of this criticism in the show notes] (See screenshots at the bottom for examples from a recent conversation.) The idea that these micro concerns would somehow so-dramatically undermine the entire macro purpose of these programs is, of course, absurd. For example: how valuable are the jobs we have today? Right now? Even if a job guarantee job weren’t as valuable as the jobs we currently have, would they be so bad that it would completely outweigh the horrors of involuntary unemployment? What kind of corruption do we have right now in the for-profit private sector? Even if there was some corruption in the administration of the job guarantee, again, would it be so detrimental that it would outweigh the horrors of involuntary unemployment? How much has corruption undermined other federal program such as the police, libraries, and public schools? (And of course, those who vehemently express these concerns are almost always not desperate for a job, or a better job.) As John says, the job guarantee is "elegant in its simplicity" and "just so obviously simple and straightforward." The job guarantee is as beneficial to society as seatbelts are in cars. While padded dashboards and more flexible and stronger windshields may be a good idea, it is no...
Welcome to episode 45 of Activist #MMT. Today is part two of my three-part conversation with Texas Christian University economics professor, author, and , John Harvey. In part one we talked about John himself, institutionalism, and discrimination. In the final two parts, John and I talk about inflation as seen through the lenses of both mainstream and Post-Keynesian economics. As people who challenge the overwhelmingly dominant school of economic thought, we must learn both schools. Another reason is because we want to efficiently communicate with and convince the masses who have been influenced by the dominant school – and the nearly infinite power that backs it. I was inspired to talk with John after having an unpleasant debate with a local lawyer and history-buff. He was perfectly pleasant and respectful, but his views I found to be highly cynical and disappointing. (With his permission, the entire dialogue can be found in the show notes.) As I understand it, his view is that it is essentially impossible for the central government, the one and only issuer of the currency, to safely do anything bold, without offsetting that spending one-to-one with taxation or bond sales, in advance. In his own words: I simply believe the government has to pay for those programs through taxes or serious consequences will result. Often, the tradeoff is worth it - I'd gladly pay more taxes for universal healthcare for example. This is because, regardless how desperate the program may be needed, creating the money to do it would increase the money supply, which would cause inflation, which would cause the people to rise up and literally bring down the entire government. In other words, the quantity theory of money is so volatile that even the state’s monopoly on violence is no match for the unbridled rage that would result from the inflation caused by the new money necessary to implement that bold policy. So, for example, take the Green New Deal, which is required to prevent organized human civilization from devolving into literal worldwide chaos. Daring to create the money necessary to implement this program would cause revolution and bring down the government anyway. As Randy Wray and Yeva Nersisian say in , "it is irrational to fear deficits more than we fear the annihilation of human civilization." The objection reminds me of the resistance I have received regarding the job guarantee: for example, if the job guarantee jobs are not "valuable," it would potentially demoralize workers, lead to corruption, and undermine the entire program. Another is that corruption in general would make it essentially impossible for the job guarantee to be properly managed. [I’ve included some screenshots of this criticism in the show notes] (See screenshots at the bottom for examples from a recent conversation.) The idea that these micro concerns would somehow so-dramatically undermine the entire macro purpose of these programs is, of course, absurd. For example: how valuable are the jobs we have today? Right now? Even if a job guarantee job weren’t as valuable as the jobs we currently have, would they be so bad that it would completely outweigh the horrors of involuntary unemployment? What kind of corruption do we have right now in the for-profit private sector? Even if there was some corruption in the administration of the job guarantee, again, would it be so detrimental that it would outweigh the horrors of involuntary unemployment? How much has corruption undermined other federal program such as the police, libraries, and public schools? (And of course, those who vehemently express these concerns are almost always not desperate for a job, or a better job.) As John says, the job guarantee is "elegant in its simplicity" and "just so obviously simple and straightforward." The job guarantee is as beneficial to society as seatbelts are in cars. While padded dashboards and more flexible and stronger windshields may be a good idea, it is no...
58 min