0:05

[inaudible] . You

0:13

are listening to money on the left, the official podcast

0:16

of the modern money network humanities division or

0:18

mmn h d. Today

0:21

we're talking with Nathan tankers research

0:23

director of the modern money network and

0:26

research fellow at the

0:28

Clark Business Law Institute at Cornell Law School. Nathan

0:31

recently coauthored and opinion piece in the

0:34

Financial Times with Scott FAU Weiler and former money on

0:36

the left guest in gray about

0:38

mts position on the causes of inflation. It's

0:42

an excellent read and we highly recommend you check

0:44

it out if you haven't and

0:46

this episode we asked Nathan to expand upon

0:48

and deepen his engagement with the inflation

0:50

question in all its historical,

0:53

political and rhetorical complexity.

0:56

More specifically, we discussed the different historical

0:58

approaches to inflation by the

1:00

poster Keynesian MMT perspective. Divergence

1:02

from those approaches, the vital contributions

1:05

of economists , Fred Lee, to the foundations of

1:07

modern monetary theory as well

1:09

as how we ought to be thinking about issues of inflation

1:12

and growth as they pertain. Conversation

1:16

is as compelling as it is. Thrilled

1:19

to share it with you. Thanks

1:22

to Nathan for joining us and as

1:24

always to Alex Williams.

1:32

Thank you . Welcome to money on the left. Happy

1:35

to be here. So we've

1:37

asked you to come talk

1:39

to us , um, about

1:42

the question of inflation

1:44

, uh, and also some

1:47

of the micro economic thinking

1:49

surrounding MMT that

1:52

um, isn't always , uh, as

1:55

a let's say, well advertised as the,

1:57

as the macro economics , uh, in

1:59

MMT and what occasions this discussion

2:02

is not only uh, let's

2:05

say some concern

2:07

, uh, in the, in the discourse and the debate

2:09

about I am empty regarding inflation.

2:12

Uh, but then specifically an

2:14

article that you cowrote

2:17

and published along with

2:19

, um, Scott

2:21

full Weiler and rowing gray , uh , for the

2:24

Financial Times titled and MMT response

2:27

on what causes inflation.

2:29

And I guess just to kind

2:31

of set this up and start,

2:34

I'll say that , um, in

2:36

my own learning

2:39

about MMT, I think the very

2:42

last thing, the last kind of obstacle

2:45

for me to really get on

2:47

board and, and for MMT to really make

2:49

sense to me was

2:51

overcoming what is essentially

2:54

a kind of sublime terror

2:57

of , of the threat of inflation. That

2:59

I can tell you that , um , very

3:01

thoughtful, reasonable people who , who

3:03

I know who are, you know, academics

3:06

or leftists or both , um, you

3:08

know, there'll be sort of onboard , uh,

3:10

when I'm talking to them about MMT, but

3:13

at the end of the day they kind of , uh,

3:16

they , they won't fully commit because,

3:19

because they're terrified by

3:21

, um , what happens when we start

3:23

talking about using fiscal policy

3:26

, uh, in suppose in excess

3:28

of what , uh, what we normally

3:31

so called normally use it for. So

3:33

maybe to get us going, I think

3:35

it could be helpful to paint

3:38

a picture for our audience about

3:40

what it is that, what it is

3:43

that the Orthodox

3:45

discourse assumes when

3:47

they're talking about this thing,

3:49

this process that we call inflation.

3:53

I think for me, the key

3:56

to understanding the Orthodox position

3:58

and really getting inside that

4:00

mindset is actually

4:03

to connect it right back up

4:05

to their conversation

4:08

and discussion of money. Because

4:11

if you go back to

4:13

the beginning, the beginning

4:15

of those writings in the 19th century, the essential

4:17

you know , component that makes everything fit together

4:20

is that there's these other processes

4:23

that are determining this aspect

4:25

of prices called relative prices,

4:27

which isn't the actual monetary

4:30

amount that you will pay for

4:32

a good or service, but is that

4:35

price in ratio with

4:37

another price or even all

4:40

other monetary prices. And

4:42

it's that the , and that

4:44

ratio is equivalent to

4:46

the ratios that you would get in barker

4:49

in that, in that natural relationship.

4:52

And that there's fundamental forces of

4:54

supply and demand that are the same as bordering

4:57

that determine these relative prices. So

4:59

if money can't determine relative

5:02

prices , um, and , and,

5:05

and we , we, and you know, we've put on quote , establish

5:07

that. Then there's a question

5:09

of what does money do? Well

5:12

then where you get to very quickly

5:14

is that there's a price level and it's not

5:16

just, you know, produced by some

5:18

government statistical agency. It's really

5:21

just this fundamental force in the world that

5:23

agents inherently understand.

5:26

And that money determines that

5:28

price level. You know, this is where money

5:31

printing causes inflation, you know, m

5:33

rises and p rises. It

5:36

has to be that way in this system,

5:39

barring, you know, how, you

5:41

know, frictions and imperfections might

5:43

, um , get some other mechanisms

5:46

going. It the fun of this

5:49

fundamental basic framework

5:51

must hold for

5:55

a to , to keep underlying

5:57

apparatus. The , the , the barter

6:00

or real

6:02

or real money, the nonmonetary

6:05

production economy framework. Okay

6:07

, it's in March . And all these people talk about

6:10

that, that that has to be the fundamental

6:12

backup . And so I think that is the essential way

6:15

to understand is that money printing

6:17

has to inherently

6:19

, um, lead to inflation. We're

6:22

in the short run and the long run inflation is

6:24

just, you know, this, this, you know,

6:26

inherent, you know, price

6:28

level , um, that is, is,

6:31

you know, a social, you know, a political,

6:33

it just what is out there in the world. It's,

6:36

you know, when you ignore all that other human

6:38

cramps that , you know, this is the fundamental of what

6:40

the fundamental forces of supply and demand are

6:43

determinate . Um, that's the, that's

6:45

the key to the framework and why it's so easy to bring

6:47

up the inflation boogie man , um,

6:50

because the processes, because

6:53

you have this whole framework that they've built

6:55

up deductively that

6:57

, uh, abstracts from all the other

6:59

different processes that are going on and

7:02

especially if the processes that are going on in

7:04

their modern monetary production economy.

7:07

So just to , uh , paraphrase

7:10

and clarify, it's starting

7:13

with money as a , a natural

7:15

barter exchange relationship that has

7:17

little relationship to government

7:20

, uh , that then essentially

7:24

, uh, renders

7:26

any government spending

7:29

, uh, in excess of,

7:33

of the natural supposedly natural

7:35

forces of that relationship.

7:38

Uh, a threat, right? Or a , an a

7:40

fundamental imbalance.

7:42

Well , it's even more fundamental. It doesn't even have to be

7:44

government spending, like any sort of curation

7:47

of money at all that, you know,

7:49

goes through the system that has a velocity

7:52

as it work, you know, back to the gravitational

7:54

metaphors , um, that

7:57

it's any sort of money that starts

7:59

flowing through the system. The only

8:02

thing it can do is increase

8:04

prices because there's no other room

8:06

for , uh, for it to accomplish

8:09

anything else. Um, that

8:11

matters now in

8:13

the perf, in the kind of quote a perfect

8:16

system. The, this of course, you know,

8:18

and of , you know , uh , Orthodox economists

8:20

will be very quick to bring up all the

8:23

exhilarating assumptions to this basic framework. These

8:25

like in perfect information

8:28

and perfect competition, sticky

8:31

wages, blah, blah, blah, blah, blah,

8:34

sticky prices. This most famously, they

8:37

may have all these other frictions that you

8:39

know, that, you know, put

8:42

seen in the wheels that allow money

8:44

to do something for, you know, the, to the , the term

8:46

of art is , um , allow money

8:48

not to be neutral, but fundamentally

8:50

in the long run, you know, over the

8:53

long course of, or not

8:55

even history. Um, what

8:58

all that money can do is, is

9:01

create info , is creating inflation. Maybe

9:03

it has, you know, create some other

9:05

inefficiencies in the system, but

9:07

it has no productive

9:10

capacity outside of these

9:13

edge cases.

9:15

Well, given your understanding and reading of the

9:17

, the kind of fundamental misconception

9:20

of money at the, at the center of this fundamental

9:23

miss understanding of inflation , um,

9:26

could you kind of take us up to narrow

9:29

or a Nehru the non accelerating

9:31

inflation rate of unemployment and

9:34

then maybe kind of say, well, what heterodox

9:37

economics and specifically MMT does

9:39

to critique that.

9:41

Okay ,

9:42

well, from this point of view, from what I'm

9:44

saying, the narrow

9:46

, um , the not accelerating inflation rate

9:48

of unemployment is kind of

9:51

in index of the frictions in

9:53

the system. Because, you know, of course,

9:55

you know, if, if the system was running perfectly,

9:58

there would just be truthful employment, quote

10:00

unquote. But there

10:03

is all these, you know, factors,

10:05

whether it's search frictions

10:07

, um, you know, if you're Milton Freeman, whether

10:10

there's unions or minimum wage laws

10:12

or any sort of protections for workers

10:14

whatsoever, but none of that , whatever

10:16

it is there , they're all these reasons that, that

10:20

you don't have, that the quote unquote

10:22

price mechanism isn't perfectly

10:24

allocating resources. And thus at

10:26

any given time, you have a certain , uh

10:28

, rate of unemployment among

10:31

the population that is quote unquote

10:33

consistent with inflation

10:35

, uh, with, with inflation not accelerating.

10:38

And then if you get, you know, a per

10:40

, if you get down to a percentage

10:42

, uh , too , too low unemployment,

10:44

say 4%, say

10:46

3.8, 3.5,

10:49

whatever unemployment rate it is next

10:52

year, who , you know, what the, what

10:54

it has been so far that at some

10:56

point it's the , the inflation

10:58

process is supposed to start taking

11:00

off and accelerating into the stratosphere.

11:03

And so in an interest of fully

11:05

sketching out this sort of orthodox view,

11:08

you seem to mention that , um , neoclassicals

11:10

viewed sort of any money creation

11:13

in tandem with a price

11:15

level increases. I was wondering if you

11:17

could outline how then

11:19

they consider a bank lending. Um,

11:22

obviously I think we'll get into more detail

11:24

about indogenous money later,

11:26

but , um, just to

11:28

sort of tell our listeners how

11:31

they conceive of the relationship between

11:33

bank monetary creation and

11:35

the economy.

11:39

Well, one thing is I would say is I think

11:41

there's always been two different views.

11:44

Uh , broadly speaking here, there is

11:46

one view that sees that

11:48

since the system and all of the fundamentally

11:50

important things are determined without money, sees

11:53

the intrusion of money on

11:56

to capitalism. As weird as that is

11:59

as , um , a kite , a fault,

12:01

a a screw up.

12:03

And so this is where you get things like the Chicago plan,

12:06

you know, a hundred percent reserve money. The idea

12:08

that if you just require there

12:10

to be a dollar of reserves for every

12:13

dollar of bank liability, that there is

12:15

outstanding, that you can neutralize

12:18

the , the powerful forces of

12:20

, uh , of money in the economy.

12:23

But that also because reserves

12:26

determine , uh, the supply

12:28

of money that um,

12:30

the government is ultimately

12:32

responsible for anything

12:35

that that goes awry

12:37

in terms of the private agents in the financial

12:40

system. Um, and,

12:42

and if you take a natural rate of interest point of view,

12:44

they're also responsible for

12:47

everything going on with non bank financial

12:49

entities because of keeping interest rates too

12:51

low. So that's

12:54

one view. The , the , the kind of money as

12:56

intrusion on their, on their

12:58

perfectly operating system view. And

13:01

then I would say the second view is

13:04

, um, a view

13:06

that basically , um,

13:09

money is, this is this passive

13:11

thing that's necessary but is

13:13

not a productive in

13:16

itself. And thus, you know, as

13:18

long as you don't mess with the banking system,

13:20

the banking system isn't gonna mess with everything

13:23

else. So you , you,

13:25

you have this framework where either money

13:27

is this passive accommodating

13:29

thing that is merely not

13:31

disrupting the kind of nonmonetary

13:34

forces as it were that were going on. Or

13:37

it is money is

13:39

forcing itself money and especially,

13:41

you know, particular actors , um , and

13:43

their money creation, power of process powers

13:46

are forcing himself on the economy and causing

13:49

disruptions to it's perfect

13:51

functioning. And obviously that reads is

13:53

, it's an extreme , um, you know , a

13:55

lot of Austrian , uh, of

13:58

views about the banking system. But you

14:00

have this struggle between these, these

14:02

two polls . Um,

14:05

that I, that I don't think he is really

14:07

a resolvable one because

14:09

of , um , the,

14:12

because of, of, of the fundamentally

14:15

nonmonetary vision that they have, especially, you know, quote unquote

14:17

over the long run. Um, th

14:20

that's, that's how I would, I

14:22

would put that together.

14:26

All right. And maybe just one

14:28

more question about fleshing out

14:30

the orthodoxy turning toward

14:32

critique. Um , let's

14:36

just spell out , um, what

14:39

are the consequences, right? What, what

14:41

are the, the social, political

14:43

, um, historical consequences

14:46

of this, this Orthodox

14:49

viewpoint that most people adopt?

14:52

Um , uncritically

14:55

I think , um , it leads

14:57

to a sort of

15:00

fragmented worldview where

15:02

when you're talking about budgeting

15:04

and about a fiscal

15:07

policy, that the

15:09

banking system disappears from view. And

15:11

it's not part of how you think about this

15:14

, um, this whole system and how you think

15:16

about, you know, quote unquote government money creation

15:18

, uh, or you think about deficit

15:21

spending. It just becomes this, you know,

15:23

we were extracted from that. Um,

15:25

so we don't, we don't need to think about that because we're

15:28

thinking about budgeting. And then

15:30

on the flip side, when you bring up the financial

15:32

stability or the financial crisis

15:34

or the banking system, the banking

15:37

system is isolated from all

15:39

these broader questions of fiscal policy.

15:41

So often you get, you know, the

15:44

big critique of the

15:47

of the banking system is that they didn't get

15:49

out there and lend money after

15:51

, uh, after the financial

15:53

crisis when they should have . And that's what they were quote

15:56

unquote supposed to do with

15:58

the equity purchases

16:00

that the government made into

16:02

the too big to fail bags. Um,

16:05

but because we don't connect

16:07

these two conversations, it,

16:10

it doesn't dawn on anyone

16:13

that the financial crisis

16:15

and the collapse in lending by the

16:17

making system is actually a

16:19

huge opportunity that that essentially, quote

16:22

unquote pays for what

16:25

could have been a huge program of government

16:27

spending because you don't have the

16:29

output that is being appropriated

16:31

by , uh , whoever the

16:33

making system lends to. You don't have that

16:36

output be being devoted

16:38

to these , uh , finding to the

16:40

purposes that , uh, that

16:42

the people who receive bank lending

16:44

come up with or receive finance come up with

16:47

private finance come up with , um,

16:49

you instead can to devote

16:51

those resources to public purpose. But

16:55

the way that this , um , this conversation

16:57

about inflation and money from

16:59

the main stream perspective has

17:01

managed to segment it. And completely break

17:03

these two conversations where we have

17:06

an impoverished zero sum conversation

17:08

on one or another. Like if

17:10

people could have a connected view

17:12

where they saw money and finance

17:15

throughout, you know, all

17:17

of our economic policy discussions,

17:20

then you could, the banking

17:22

system could in bankers could never threaten

17:25

us with a collapse of lending

17:27

by reason, capital requirements. Because

17:30

if people had a fuller fiscal

17:32

policy view, they would just go,

17:34

oh, what you're saying is we

17:36

get to spend even more money without

17:39

raising taxes or cutting spending elsewhere

17:41

because you know, you'll be lending,

17:44

you won't be lending as much and the

17:47

people that you're, that

17:49

you're not lily to will be denied the

17:51

ability to hire a bunch of people

17:53

and buy up a bunch of, not of

17:56

machines and, you know , use up

17:58

a bunch of oil to go

18:01

on whatever venture that they're interested in going

18:03

on. Um, and I think that one

18:05

of the underestimated,

18:09

you know, parts of out MMT is

18:11

the, is connecting these conversations

18:13

back up with each other. And I, and

18:16

that's one of the motivations behind

18:18

the FTE . Op Ed was

18:20

really connecting these conversations

18:23

and , um , making people realize

18:25

that there are, that even

18:27

from their particular points of views, there

18:30

are more positive sum games

18:32

, uh, than are generally

18:34

real.

18:35

And I think this point is crucial because

18:37

it, it actually informs

18:39

the sort of historical terrain that I think

18:42

this conversation is taking place on

18:44

in that coming out of the financial crisis,

18:47

we see a real paradigm crisis

18:50

of, of, you know, what an

18:52

economy is and how it relates

18:54

to a banking in governing structure.

18:57

And so I don't think it's a surprise

18:59

that we see the rise of

19:01

, um , MMT in popular consciousness

19:04

and, and scholarly discourse

19:06

during this period, which makes

19:09

the FT article that , um

19:11

, you cowrote and you just , uh , cited

19:13

, uh , more, you know, more intensely

19:16

applicable to this question

19:18

of inflation because it's with this

19:20

rise in the popularity

19:23

of MMT that as Scott mentioned,

19:25

we see the rise in the inflation

19:28

bogeyman and yet as you suggest, we,

19:30

the interconnectedness and the interconnected

19:32

argument that you outline seems

19:35

to fit perfectly into

19:37

, um, the model as

19:39

an answer for how to address

19:41

this boogeyman historically

19:44

and , and for the paradigm crisis. So

19:46

I was wondering if you could actually

19:48

outline the arguments

19:50

and sort of what we're calling the MMT

19:52

view of inflation for our listeners.

19:57

Okay .

19:59

So where I would start with this , um

20:01

, is I

20:03

mentioned briefly before that there

20:05

is this view that in the mainstream,

20:07

it's associated with new Keynesian

20:10

economics, which , uh, we

20:12

can broadly speaking is that it is an attempt

20:14

to show that there

20:16

the efficacy of countercyclical

20:19

fiscal policy, but within the

20:21

constraints of if

20:24

he's these highly mathematize.

20:27

Um, general equilibrium models

20:29

that without inserting

20:32

a bunch of frictions, don't have any room for

20:34

countercyclical fiscal policy. So it's a little bit

20:36

of a, you know, maybe even

20:38

schizophrenia view in the sense that you're

20:41

starting with a model that has no room for

20:43

countercyclical fiscal policy and that you're building

20:45

in the frictions and they

20:47

give , um , kind

20:50

of countercyclical fiscal palsy, some room

20:52

to breathe. But because the model

20:54

is still must converge to end

20:56

equilibrium, you

20:58

can't , uh, have these forces

21:01

go, go through the quote unquote

21:03

long run. So , um,

21:05

it's a very, it's a view that that

21:08

isn't very easy to keep all

21:10

the different , uh, opposing

21:12

viewpoints in your head all at once because it's

21:15

really serving more of a tractable,

21:18

tractable mathematical purpose

21:21

then a practical purpose.

21:23

Yeah . But the, the key kernel , uh,

21:25

in that, in that idea is really

21:28

is it starts bringing up the question of the

21:30

price setting process itself. How

21:33

do businesses set prices

21:35

in, in the new Keynesian view? They're

21:37

supposed to be these adjustments as

21:40

there are in the perfect model. But

21:42

because firms have some power,

21:44

they are able to, to wait

21:47

and slowly adjust

21:49

to quote unquote demand shots , uh

21:52

, or cost shocks rather than

21:54

, um, having to

21:56

respond immediately. But from

21:59

a post Keynesian from a

22:01

head troche from an but especially from an

22:03

MMT point of view of the,

22:07

there are concrete price

22:09

setting processes that uh

22:12

, businesses have institutionalized

22:15

over many decades over

22:17

and centuries based in

22:19

accounting frameworks which are socially constructed.

22:23

And these frameworks are designed

22:25

for reproducing

22:27

those business enterprises. They're , they're designs

22:30

to make sure those businesses exist

22:33

in the future. And when

22:36

you think from that point of view, from the point

22:38

of view of what is the best

22:40

way to reproduce

22:42

a business , um, this,

22:45

this system, this a concept of

22:47

these constantly oscillating prices

22:50

, uh, responding to , uh

22:52

, supply demand doesn't just

22:54

not fit the facts of how

22:56

businesses set prices, but it doesn't

22:58

make sense for them. You know, businesses

23:01

don't want to be in a position where

23:04

they are facing prices

23:06

that don't cover their costs

23:08

and they might be forced to you because

23:10

of , um, you know, because

23:12

of a competitor who you know,

23:14

has, is, has better from access

23:17

to finance or uh, has

23:19

lower costs to set a price

23:22

that threatens their reproduction,

23:24

but they're not gonna do it on their own. And

23:26

so when you very quickly get to

23:28

from the MMT

23:31

heterodox view of the pricing

23:33

process is that , um,

23:36

the, the non-responsiveness

23:38

of prices two shifts

23:41

in demand and the

23:44

the or

23:48

structured process to changes in

23:50

costs and only two changes

23:52

in costs that are persistent , um,

23:54

isn't some flaw in the,

23:56

in the business enterprise

23:59

that, you know, we can quote unquote

24:02

fix with better policy. It

24:04

is some, if

24:06

it is a strategy that makes sense

24:08

for their reproduction , um,

24:11

and once he gets that point of view , um,

24:13

what that very quickly opens up is

24:15

the idea that business

24:18

is that if businesses,

24:20

you know, are in general

24:22

not responding to demand

24:25

when they're setting prices and

24:27

that they are responding to, to uh,

24:29

to cost, but only persistent costs,

24:32

then you, than prices can't

24:34

do this job of allocating resources

24:37

of clearing markets. They can

24:39

, in other words, they can't do the job. They

24:41

can't do the job that has been assigned

24:43

to them by this border role of

24:46

establishing ratios between prices.

24:48

Um , and you know, making some

24:51

hunter gatherer choose to , uh

24:53

, produce, you know, one item

24:55

over another. But instead, if it

24:57

does this whole, this whole other role

25:00

of reproduction and that in the context

25:02

of all of that , uh, it

25:04

means that fiscal policy

25:07

is much more,

25:09

has, you know, much more positive

25:12

benefits and the, the capacity

25:14

for Resource Corporation , um

25:16

, and the capacity to , um,

25:20

to fundamentally transform the system

25:23

, uh, than it does

25:25

in that other framework. Because now

25:27

a fiscal policy can change . Can

25:30

increase the resource

25:32

utilization over the long run, it

25:35

can , uh, it can

25:38

drive the creation of new resources

25:41

over a number of years. Um,

25:43

and, and it can, it

25:45

can do all these things

25:47

while accomplishing social goals

25:50

as long as we, you know, are

25:52

organized and can organize around

25:55

, uh , making sure such

25:57

processes of curation happen.

26:00

Um, and that is a, is a big , and that

26:03

is a very different view in a view that now

26:05

more than ever is vital in the , uh,

26:08

in the context of climate change.

26:10

And in the context of recruiting new deal.

26:13

Um, because I think you, while you can

26:15

make a case for the green new deal from

26:17

in Orthodox with frictions perspective,

26:20

I think from the fundamental

26:23

methodological and

26:26

, uh , theoretical premises

26:28

of an empty heterodox view, the

26:30

possibilities of agreeing to deal

26:33

are much more obvious and natural.

26:37

So I want to get to the

26:39

green, new deal and the larger consequences.

26:42

Um, but a couple things before we get there.

26:45

One is , uh , to have

26:47

you reflect

26:49

a little bit more explicitly what

26:51

I think you're implying here. Uh, it's

26:53

the converse of what we were talking about with the Orthodox

26:56

point of view, which is that money has

26:59

an active, productive mediating

27:01

role , uh , in the economy and

27:04

that changes everything. And then maybe

27:06

from there you can walk us

27:08

through some of the more

27:11

detailed arguments

27:13

that , uh, you and your coauthors are making

27:15

in the FTE piece , uh, in

27:17

response to very specific kinds

27:20

of critiques.

27:22

Um , so to , to try out

27:25

the money as having this treaty

27:28

of , um , mediating function.

27:32

Well , I would say is that because

27:35

in the , in the Orthodox view, these

27:38

prices, and they're not really monetary prices,

27:40

but they're really just ratios between goods

27:43

and goods , um, that,

27:46

that are, are determining how

27:48

the production system works. As

27:50

a, as you know, got to, in the beginning there isn't

27:52

a role for money in , uh , to

27:55

allocate resources. Once you break out

27:57

of that worldview, that money

27:59

suddenly does have a role for allocating

28:01

resources. That money decides,

28:04

you know, what , uh , what

28:06

quantity of what goods and services are

28:08

being produced. And

28:11

now you can have shortages

28:13

, uh, of particular

28:15

goods and services. Um, but

28:18

that those shortages are,

28:21

rather than being, you know, some big

28:23

system failure, there are actually things

28:26

that , um , can drive

28:28

the system forward. Obviously not if there's

28:30

systemic shortages of everything that can cause problems,

28:32

but say, you know, you have a particular

28:35

good service where there are, where there

28:37

are shortages and

28:40

the, the business, the

28:42

business enterprise suddenly has an

28:45

incentive or

28:47

even other business enterprises have an incentive

28:49

to figure out a way

28:52

to make sure that a much

28:54

more gets produced with the resources that they

28:56

already have. And if they don't have

28:59

the capacity to do that, they have the incentive

29:01

to install more

29:03

capacity to expand

29:05

their , uh , productive ability

29:08

to produce more. And this doesn't

29:10

necessarily mean I'm , it

29:12

doesn't even often mean that less

29:14

resources go into other places, but

29:17

it's actually pulling in resources. You know,

29:19

one obvious way is unemployment. Um

29:21

, but other thing is just literally, you know what

29:24

Joan Robinson called disguise unemployment.

29:26

People who were in low

29:28

ph in activities that weren't very

29:30

socially useful. But , uh,

29:33

it was easy for some business to

29:35

hire them to do that because they

29:37

had no other opportunities. And so they were

29:40

sort of just picked off literal

29:42

Ilo idleness and put into what

29:44

you might say it's like figurative idleness,

29:47

but it still forced I on this the

29:49

whole time. So there all of

29:52

these ways big and small in terms of

29:54

um, this the point people

29:57

from different activities to

29:59

coming up with new ways,

30:02

new technologies in the sense that like,

30:04

you know, a technology is just a , a different

30:07

recipe for producing a similar

30:09

kind of output to get

30:12

more out of out of our system.

30:14

And then when , when you look at

30:16

the Times where you've, we've, you know, the only

30:19

times where we, where we unleashed

30:21

the productive, the creative

30:23

power of money , uh, wars.

30:26

You, I think you see this very

30:28

clearly that these, that

30:31

this power of production is

30:33

, uh , unleashed and,

30:37

but, but, but you know, that must be put

30:39

in the box of for finance.

30:41

You must emphasize all the, the

30:44

social disruptions that really come

30:46

by the speed by which the economy has

30:48

to adjust for up to war rather than,

30:50

you know, high demand in and of itself.

30:54

Um, but what MMT

30:56

is essentially saying is that, that,

30:59

that socially productive, that creative

31:02

power of money is something

31:04

that we can also have

31:06

in a peace time economy. Um , because

31:09

it's just fun. It's fundamental to

31:11

the nature of our system and

31:14

, um , social production

31:16

itself. The last thing I would say on that is

31:18

that another

31:20

important empathy to emphasize about money

31:22

is it has the power to overcome

31:26

, uh, capitalism,

31:30

capitalists , um,

31:33

desire to not

31:35

engage in those kinds of socially trans transformative

31:37

processes. You know, the capitalist

31:40

ideal position is to consistently

31:42

make profit in the future. Um,

31:45

never implement a new technology. And

31:47

if they implemented new technology , um

31:49

, be out in front in implementing

31:51

that new technology and have control

31:53

over the process of its introduction.

31:56

Whereas a , US , a high pressure

31:58

economy generated by a

32:01

fiscal policy , um, no

32:04

longer puts businesses in the driver's

32:06

seat and also pushes

32:08

them to unleash the,

32:10

the transformative, the creative power

32:13

, um, of, you

32:15

know, of our Social

32:18

Libor because it is, you

32:20

know, quote unquote in their interest

32:22

. But more generally the, the

32:25

incentives of a

32:27

high pressure economy change

32:30

and also the political

32:32

ramifications , uh,

32:35

of, you know , sabotage

32:37

in the, in the Linnaean sense

32:40

of , uh, of, of disrupt,

32:43

disrupt these things. [inaudible] and disruptive

32:46

PR , uh, productive power

32:48

simply because you have the property

32:50

, uh , rights and the authority to do

32:52

it , um, becomes

32:55

more challenged than it is in normal

32:58

times.

33:12

[inaudible] Ooh, yeah

33:15

. Ooh.

33:20

Tappings you get [inaudible]

33:37

put it together and look at it . [inaudible]

33:44

I mean, all that's really helpful. I

33:46

guess I'll say , um, more

33:49

explicitly, you know, the framework

33:51

of the article seems to be a

33:54

response to

33:56

, uh , critiques of MMT

33:59

on inflation, which seemed

34:01

to start from the presumption that what we're

34:03

arguing would MMT is arguing

34:05

is that ex post

34:08

taxation , uh, legislated

34:11

by the federal government will

34:14

do all the work of

34:17

uh, so-called soaking up , uh

34:20

, excess in

34:22

the economy. And it

34:25

seems like that's what the FT article

34:27

is taking on and really problematizing

34:29

and then offering alternatives

34:31

to in terms of very specific kinds

34:33

of approaches, institutions

34:36

and mechanisms, agencies, etc

34:38

. I was wondering if you can just kind of spell

34:40

out, you know, in a kind of bare bones way

34:42

, uh, that,

34:44

yeah, where I would start with that

34:46

question. I think, I think it's important to

34:50

motivate. What is the thinking behind

34:54

these kinds of claims about MMT

34:57

and what I think the motivation or the, or

34:59

the thought process behind it is

35:01

still this view of thinking about

35:03

fiscal policy in terms of quantities

35:05

, um, and we , and where you climbed

35:07

to think about this way. Because if fiscal policy

35:10

seemed like the Obama stimulus is talked in terms of $900

35:14

billion, this is that , you know, discrete

35:17

or mounts . And so

35:19

this, this, what

35:22

this thinking comes from is this

35:24

idea of , of thinking of taxing in

35:26

quantities. Meaning that like if

35:28

you have a sort of MMT view

35:30

of money , uh , refluxing

35:32

throughout the economy, you know, money gets sent

35:35

in, has all these processes in which

35:37

it is , um , sucked

35:39

out or siphoned off in

35:41

, uh, in seeming that

35:44

the basically, you know, any

35:47

sort of attempt

35:49

to have a sort of reflux

35:53

of using fiscal policy , um,

35:55

doesn't really work because you, as he said,

35:57

you have to like post you're , you're seeing

36:00

that the economy is overheating and you're trying

36:02

to impose more taxes , um, after

36:04

the fact. Um, there's

36:06

a number of ways where, where you can

36:08

approach that. One of them, one of the more basic

36:10

ways is that saying we're at

36:12

a fundamental level. We're approaching , uh,

36:15

we're, we're approaching this by challenging

36:18

the current CBO process. The current CBO

36:20

process already has a process

36:23

for, you know, offsetting

36:25

a whatever spending initiative

36:27

that you want to do or tax cuts you want to do

36:30

with , uh , a quote unquote pay

36:32

for it . Just that, that system isn't very

36:34

good. It's thinking in dollar

36:36

terms where $1 of taxes pays

36:38

for $1 spending rather than

36:40

in demand terms where you

36:43

might need a pay for.

36:46

Um, that has a much larger dollar

36:48

size of it's tax is if it's taxes

36:50

or no dollar

36:52

size in terms of revenue, if it's

36:54

, uh , some, some form of regulation,

36:57

whether financial or otherwise. Fundamentally

36:59

from this point of view, this , uh, this,

37:02

this quantities view of thinking about

37:04

what MMT is trying to say. Um,

37:07

what did , what it's missing is

37:09

that taxes

37:12

in the modern era are

37:16

always in all of these ways. Bigger , small

37:18

, um, based on these other

37:21

forces growing and tricky and the economy,

37:24

you know, most obviously, you know, at

37:26

property taxes are based on the,

37:29

the, the , the valuation, the appraisal

37:31

of the monetary value of the property. But also,

37:34

you know, most fundamentally, you know, our income

37:36

and our payroll taxes are based

37:38

on the income

37:40

that we are actually receiving in, in

37:43

money terms and um,

37:45

you know, to a certain extent corporate taxes

37:47

as well as sales

37:49

taxes most obviously, you know, based on the value

37:52

of the , the monetary

37:55

value of the PR of the products themselves. Then

37:57

when you take that, you know, when you look

37:59

at the system from that way, we've

38:01

fundamentally transformed our

38:04

fiscal apparatus to

38:06

be able to reflux money

38:10

based on the state of the economy.

38:12

You know, there is , you know , there

38:14

is a literature on this including mainstream

38:16

economics called, you know , automatic stabilizers.

38:20

Um , but automatic stabilizers,

38:22

he's sort of this technical topic. It's not part

38:24

of the public's fundamental thinking

38:26

about fiscal policy. And you can tell that because

38:29

you know, when 2009 at tax revenues

38:31

dropped off and spending increased,

38:34

people were talking about, oh, the deficit is

38:36

exploding. Rather than talking

38:38

about like, well, these are the guard rails

38:41

on our system that makes sure that

38:43

the system functions. Um,

38:46

so what

38:49

you, what you, what

38:51

you, where, what comes from that

38:53

is we don't necessarily

38:55

need any discretionary , um

38:58

, policy at all to

39:01

have a , uh, fiscal

39:03

policy that adjusts to

39:06

whatever our new spending programs , uh

39:08

, are. But even on top of that,

39:10

nonetheless, that that is

39:12

much less necessary than is that

39:14

commonly conceived, certainly politically

39:16

conceived. Um , because of a underemphasis

39:19

or , uh , forgetting

39:21

of automatic stabilizers. What

39:25

you get from our point of view is

39:28

we're still, you know, suggesting to have

39:30

this CBO processed this congressional

39:32

budget office process, but just

39:35

fundamentally reform it so

39:37

that you are x anti before

39:39

the fact deciding on what spending

39:41

programs you have estimating, you know,

39:44

you know, how much resources are

39:46

under your lies , how many, how

39:48

much new resources can be generated

39:51

over the next decade and

39:53

deciding on your pay

39:55

fours, your tax increases,

39:58

but also , uh , financial

40:00

regulation and environmental regulation

40:03

than other , uh , regulations to

40:05

, uh, you know , reduce

40:07

resource use and elsewhere does employee resources

40:10

so that they can be , uh , reemployed , um,

40:13

the [inaudible] no part of that. Are we

40:15

suggesting tax increases

40:17

after the fact that this is sort of just been this sort

40:19

of a narrative invented while MMT

40:22

is fundamentally talking about a

40:24

fiscal policy take , uh , be in

40:26

the driver's seat. So it must mean,

40:29

you know , tax increases that happen

40:31

, like a interest rate

40:33

increases. And that isn't the

40:36

case from our, from our point of view. I'm

40:39

not saying that it will never ever be necessary

40:41

to have a tax increase

40:43

after, after the fact, but we

40:46

want to design a system that avoids

40:49

that as much as possible, as much as everyone

40:51

else does. It's just that we see

40:53

much more possibility in

40:56

having a, a

40:58

much better budgeting process,

41:01

a budgeting process that we also think is more

41:04

attuned to the

41:06

kind of economy in society that

41:08

people want. Um , and also

41:10

how, you know, design , uh,

41:13

and strengthen , uh, the,

41:15

the reflux mechanisms we currently have,

41:17

the, our automatic stabilizers we currently currently

41:20

have so that we're

41:22

, uh, we , we are less

41:25

in need of, of that CBO

41:27

process. Uh, getting

41:30

things right. Um, yeah .

41:35

Great. To , to backtrack just a little

41:37

bit and talking about firms and price mechanisms,

41:39

could you talk a bit about the importance of

41:42

the work of Fred Lee , um,

41:44

and the NMT micro perspective

41:46

in those regards?

41:50

Yeah, I think Fred

41:52

Lee really doesn't get the attention

41:55

he deserves. Um, I would say

41:57

especially from critics because of course, you

42:00

know, all the NMT economists know his

42:02

work, but Fred Lee was,

42:06

you know , there's this big hiring period , um , in

42:08

the late nineties at UKC

42:10

where Matt for statter , Stephanie

42:13

Kelton and Randy Ray all get hired

42:15

at the same time and you know , Transform

42:18

, um , the

42:20

Human Casey Department overnight. Well, around

42:23

the same time Fred Lee was actually also

42:25

hired and I don't think

42:27

it is, you know, is

42:32

saying anything about the others

42:34

to save that Fred Lee was in many

42:36

ways the most fundamental transformation

42:38

of that department. Because if you think about

42:41

in economics education where there

42:43

is macro and there is micro,

42:46

you know , Matt , where macro is treated as basically,

42:48

you know, like half the subject area.

42:51

Having a perspective that

42:53

is MMT consistent

42:56

and has something to say about micro

42:59

economics and doesn't rely on

43:02

neoclassical microeconomics in any fashion

43:05

, uh , is first

43:07

of all rare, but also crucial

43:10

to having a holistic perspective. Um,

43:12

and I, and

43:14

the many people who came for MMT

43:17

, um, got deeper

43:20

into the project of NMT

43:22

and heterodox economics as a whole through

43:26

engagement with friendlies

43:28

project. And he taught , um

43:30

, at UKC from that time

43:32

for 15 years from that time to his

43:35

untimely death in 2014

43:38

, uh, from cancer and

43:42

for , and so I think he's a real critical

43:44

part of the, of, of

43:46

this literature, which deserves more

43:48

attention. Um , and towards

43:50

the last decade of his life,

43:52

he worked hard to

43:55

more and more integrate MMT

43:57

, uh, into his framework

43:59

formally , um, and certainly

44:01

saw himself as contributing to

44:04

the [inaudible] project. And I think he

44:06

does have something very fundamental to

44:08

contribute to it. Um, and,

44:10

you know, the whole, the whole discussion I had

44:13

around from setting prices

44:15

around it being, you know, these

44:18

prices are about their reproduction

44:20

and that they have these administrative apparatuses

44:23

that are designed to determine

44:25

prices and precisely designed to

44:28

not to respond to short

44:30

term. Um,

44:33

that is what I learned from

44:35

Fred Lee. Um , that's what I learned

44:37

from reading first . His Book Post Keynesian price theory.

44:40

That's what I learned. Talking to him, reading

44:42

his other papers , um,

44:45

listening. And in fact, I was lucky,

44:48

fortunate to listen to you lectures

44:50

, uh, that, that he did

44:52

graduate lectures on

44:54

Heterodox microeconomics and then he's textbook

44:57

, uh, uh, microeconomic

44:59

theory, a heterodox approach. Um,

45:02

so this, this for me. Um,

45:04

and of course, you know, the m

45:07

and t economists are grounded in this too and you

45:09

know, had many, I'm sure fiery conversations

45:11

with a lead themselves.

45:14

Um, but for me, this is a fundamental piece

45:17

of, of the MMT project

45:19

and , uh , wive

45:22

writing that op Ed , uh, with

45:24

, uh, Scott and Rowan came

45:27

so naturally to me, I think because

45:29

, uh, having that sort

45:31

of understanding of, of

45:34

the, the micro

45:36

structure , uh, the , the

45:38

institutional structure that

45:40

, uh, leads

45:43

to individual price

45:45

setting, which, you know, bubbles up to

45:48

fees, price indexes , um,

45:50

and the price system as a whole

45:52

, um, is, is fundamental

45:55

for designing these kinds of , these kinds

45:57

of , uh, policies and

45:59

for , uh, you know , taking

46:02

a shot at reforming budgeting

46:04

processes like the, like

46:06

the CBL . So to me, friendly

46:09

is absolutely fundamental. And

46:11

, um, when you start

46:13

attacking the barter

46:16

theory of money and , uh,

46:19

and making claims

46:21

about , uh , monetary production

46:23

economy , um, when you create

46:25

a quickly get to, is that more fundamental

46:28

than uh, attacking

46:30

the ignoring

46:32

of money , uh, is attacking

46:36

the price mechanism. The idea that there's

46:38

this law, like functional

46:40

relationship between price and quantity,

46:42

that there's these price ratios, these

46:45

relative prices that determine

46:47

how the production system works. Then if

46:49

you don't take a fundamental swing and attacking

46:52

Matt , you might, you know, initially

46:55

, uh, when some blows

46:57

on the macroeconomics

47:00

and the Orthodox monetary

47:02

theory , uh, that's around, but

47:05

it will ultimately survive you if

47:07

you don't attack the price back in aneurysm . And I actually see,

47:09

think we see this very clearly in

47:11

inflation discussion , um, that MMT

47:14

makes these basic claims about how monetary

47:17

sovereigns work about , uh, the government

47:19

, uh , of government finances.

47:22

Um, and you know, there are some, there

47:24

are many orthodox economists who of

47:26

course, you know, struggle

47:29

these claims and tried to deny them as much as,

47:31

as much as possible. But once

47:33

you break through all of that, what

47:36

you get back to is this

47:38

idea of, of

47:40

you know, deficits of deficits, spending

47:43

of um, access,

47:45

demand , uh, and

47:48

aggregate demand driving

47:50

, uh , prices, the price

47:52

level and inflation. And

47:55

it's that fundamental last barrier

47:57

of talking about , um,

48:00

well, once you reach

48:02

a certain point, you're back into the

48:04

world that is

48:06

, um, that the, that the monetarist

48:08

pointed out so many years ago. And maybe

48:10

the question of em , of , of what variables

48:13

are in, is a little different, but you're

48:15

still fundamentally in that world. Um,

48:18

still limits the possibility

48:21

and imagination and the capacity

48:23

to see curration

48:25

, um, in,

48:28

in, in , uh , you know , in our economy and

48:30

in, in our society. So to me,

48:33

a friendly is absolutely fundamental

48:35

to the project of building

48:38

, uh , in alternative economics and alternative

48:40

political economy to

48:43

a mainstream orthodoxy

48:45

and the liberal orthodoxy.

48:48

And , and, yeah. So it seems like,

48:50

you know, what you're calling into question

48:52

through , um, through

48:54

his work is really a fundamental

48:58

cat , the category of causality

49:00

and agency and in economy. And

49:03

I was wondering if we can concretize

49:06

, um, these, these

49:08

theoretical questions in , um,

49:11

in the sphere of antitrust policy

49:14

and perhaps talk about the ways in which

49:16

, um, the relationship

49:18

between governance and law

49:21

and firms takes

49:23

on a different , um, orientation

49:26

when we consider Fred

49:29

Lee's , um , understanding of

49:31

pricing and, and

49:33

how we can integrate those

49:35

things together to really get at , uh , antitrust

49:38

policy that isn't a panacea

49:41

for, for really an, a whole economy,

49:43

but a compliment to

49:45

a broader , um, suite

49:48

of price management policies.

49:53

I mean, w I think the first thing to say , uh

49:55

, towards your question is that there is

49:58

a , in Orthodox

50:00

conception that the,

50:04

that you know, the problem

50:07

with whatever , um,

50:09

imperfections that exist with large

50:11

corporations such as they are,

50:13

is the disruption of that fundamental

50:15

price mechanisms. So in the same way that,

50:18

you know, the , the money cracks

50:20

look at the

50:22

, um, the money system and

50:24

see that as a disruption of this.

50:28

Um, the, you know what I , what

50:30

I've termed it in other places, the antitrust

50:33

can't cracks see the same

50:35

thing with corporations.

50:37

That it's just sort of this unnatural.

50:40

You know, interference of law

50:42

into the functioning of the price mechanism

50:45

and you know, antitrust

50:47

policy through breaking up companies

50:50

can get us closer to that

50:53

framework. Um, you

50:56

know , obviously Lee would

50:58

reject that kind of perspective, but

51:01

that doesn't mean he would reject antitrust

51:03

policy or more generally, you know,

51:05

challenges to corporate

51:08

power because from,

51:12

you know, a , a legal and analytical perspective.

51:14

And I would mentioned , uh, people

51:16

like St to Paul and Sandy,

51:19

he said, who are carrying these projects

51:21

forward , um , in a tremendous

51:23

way. Um, but

51:26

this is also a leap,

51:29

fundamentally elite perspective. Um

51:31

, is that the question of

51:33

corporate power is a question of

51:36

the agency and the decision

51:38

making processes of corporations.

51:41

And it's not that , uh,

51:44

you know, Cha , you know, challenging

51:46

restructuring corporation or corporations

51:49

democratizing them or

51:52

um, granting prices

51:54

, uh , pricing power to , uh

51:56

, and price coordination rights

51:59

to , uh, associations

52:01

of people would get us closer to

52:04

a price mechanism, but that

52:06

it would change and challenge

52:08

the , uh, the governing

52:11

processes that lead to the

52:13

reproduction of our current,

52:16

you know, inequities and

52:18

, uh, and democratic structures.

52:21

So to, to, to, to bring that more concretely

52:24

one way is just go

52:26

around breaking up companies and , uh,

52:29

washing our hands, but still

52:32

denying , uh,

52:34

pricing power to loose

52:36

associations, you know, notably , uh,

52:39

Uber drivers who are classified

52:41

as independent contractors. Um,

52:45

and another way is to strengthen

52:49

those forms of democratic

52:51

coordination and

52:54

restrict , uh , and

52:57

regulate , uh, undemocratic

53:00

coordination really, you know, most fundamentally , uh,

53:03

uh, corporate consolidated

53:06

decision making , uh, that is

53:10

hierarchal and , uh, and

53:12

makes decisions that are , uh,

53:16

completely against what any sort of

53:18

conception of the public purpose, which

53:20

is kind of, it reaches its most extreme

53:22

forms with say, you know,

53:25

insulin prices that go

53:27

up a couple of hundred percent . Um,

53:30

that, that, that re

53:32

that restructuring process is about creating

53:34

a new governance order , um,

53:37

and giving different actors

53:39

, um, perhaps less Plath,

53:41

illogical actors, more agency than, but

53:43

the actors that, that currently have

53:46

agency rather than trying to

53:48

, um, squeeze agency

53:50

out of the system. So you get,

53:53

you get back to some imagined,

53:55

ideal ideal type that uh,

53:58

that makes , uh,

54:02

in some sense a perfect

54:04

or ideal decisions or even,

54:06

you know, most ideally no decisions at

54:08

all.

54:11

So we've talked a lot about the MMT

54:14

lesion , uh, perspective

54:17

on inflation , uh,

54:19

and how it breaks with the

54:21

, um, various breeds

54:24

of, of Orthodoxy. But

54:27

now can we step back a

54:29

little bit and , uh, compare

54:32

this NMT lesion , uh,

54:35

approach to agency price

54:37

coordination, inflation

54:40

with the way that Carl

54:43

Marx and some Marxists , uh,

54:45

have historically treated,

54:48

treated some of these same questions

54:50

and where, where is their influence

54:52

in convergence? Where are there

54:54

places where perhaps we need to

54:57

make a distinctions?

55:00

This is a really good question. Um,

55:04

where , where , where I would point

55:06

to , uh, is

55:08

, um , first of all, if you have a grounding

55:11

in , um , volume three

55:13

if of capital , a big

55:15

part of that is talking about these

55:18

prices of production. Um, and

55:20

they're not very different from the,

55:23

you know, what would, when earlier periods,

55:25

you know, by saying by Smith are called natural

55:28

prices. And when way you can see that

55:30

as not very different is that there's this whole tradition of

55:32

quote unquote classical Marxian

55:34

economics that carries

55:37

forward the study of , uh,

55:39

all of these, all , all these

55:41

ideas and fundamentally

55:44

talks about as a, as a,

55:46

as we've talked about a lot, Scott

55:48

, uh , the,

55:50

the idea that, you know, prices gravitate

55:53

towards these fundamental

55:55

positions and there's this

55:57

gravitation process that leads

55:59

prices to reach their natural prices or the prices

56:02

and production. Now in some ways, this

56:04

framework is , uh , it's

56:06

still a lot better than the neoclassical

56:08

economics that Paul's at because

56:11

those prices of production are fundamentally

56:13

grounded in costs. Um,

56:17

although sometimes it's unclear whether they're

56:19

monetary costs or some sort of

56:22

other conception price,

56:24

a denture adjustment that existed at the

56:26

time. Um, but

56:29

still, even though that

56:32

their quote unquote costs determine prices,

56:35

the fact that a,

56:38

this thing there isn't really described the description

56:41

of the actual price setting

56:43

processes , um, involved.

56:46

Um, but also that, that

56:49

there is no room in these

56:52

arguments , uh, for each

56:54

agency in the markup.

56:57

I, you know, despite this decision

56:59

making by , uh,

57:01

by businessmen, by managers,

57:03

by capitalists over the markup

57:06

, uh, makes

57:08

it different from Aaliyah

57:10

. And I would , I would say , uh , or Leah

57:13

or him , empty frame , uh , framework.

57:15

All right . MMT emergent , heterodox framework.

57:18

Um, and I think that is , uh , one

57:21

big place that , uh, that

57:23

there's divergence. The others. The

57:25

other place that I would point to

57:28

is despite a lot of the discussion around

57:31

, uh, the social construction

57:34

of economic categories, which, you

57:36

know, run throughout many Marxists

57:38

, uh, traditions, both , uh, in

57:40

economics and outside of economics. Um,

57:43

because the discussion

57:46

of cost accounting is so

57:48

fundamental to their

57:50

understanding of the Labor theory of value

57:52

, um , for example, or, or the

57:54

, the socially necessary labor time

57:56

theory of value. For example,

57:59

the idea that , uh, the

58:02

only value that

58:04

machinery , uh, contributes

58:06

to production is the value

58:09

that is, you know, embodied

58:12

it's purchase price. And thus it's

58:14

depreciation is exactly

58:17

equivalent to its east value production,

58:20

which is exactly what marks denies

58:22

about Lieber . Um,

58:25

that , that building

58:27

this, this system with these fundamental

58:30

, uh, ideas in them

58:32

, um, makes

58:36

the , the concept of the social construction

58:38

of, of accounting

58:41

and of the account of the, of the specifically

58:43

the managerial managerial accounting

58:45

processes that firms use

58:48

in their decision making in the price setting,

58:50

in their , you know, evaluation of

58:52

other economic opportunities, I

58:55

e investment decision making. Um,

58:58

that this also

59:00

, uh, is challenging too

59:02

. A lot of Marx's perspective , although I wouldn't

59:05

necessarily say all.

59:08

Um, and you know, in the one way of

59:10

putting this is that Lee really,

59:13

you know , built a framework from the

59:15

ground up that has

59:18

social construction all the way down.

59:20

And there are, you know, specific

59:22

arguments that people

59:24

are attracted to in Marx and

59:27

Marxism that aren't necessarily

59:30

necessary for what I would say is

59:32

the most fundamental points of marks

59:34

. Um, but nonetheless, they're

59:36

, they're attracted them because the

59:39

, the, the process of theory

59:41

creation you'd have to go into to reject these

59:43

certain parts , um, is uncomfortable.

59:46

And you know, he's a staffer of uncertainty

59:50

that I think people struggle

59:52

with when they grasp onto

59:55

Marx , Marx and Marxism as a way to

59:57

understand faith , to understand a world

59:59

that they fund , that they otherwise feel

1:00:02

like they don't have. Uh, a grounding

1:00:04

to understand, especially, you know,

1:00:07

in the place of, of,

1:00:09

of processes

1:00:11

of, of capitalists decision

1:00:13

making

1:00:15

and to sort of , um,

1:00:17

elaborate on this point. You

1:00:19

know, I think how it's so crucial

1:00:21

to consider inflation

1:00:24

along with all the other pricing

1:00:26

mechanisms that you talk about as

1:00:28

socially constructed. And I

1:00:31

think also what, what's really

1:00:33

helpful about your answer to

1:00:35

the, to the question is

1:00:37

that it really highlights the

1:00:40

ways in which there is

1:00:42

domination at

1:00:44

the center of this social glee constructed

1:00:47

system, specifically the way

1:00:49

we consider the relationship between

1:00:51

inflation and um , and

1:00:54

the racialization of unemployment.

1:00:57

And I was wondering if you could take

1:00:59

apart , um, inflation

1:01:02

as a, as a category perhaps even

1:01:04

deconstruct it in order to get

1:01:06

at that question in to how

1:01:09

we as a society have constructed this

1:01:11

racial domination at the heart

1:01:13

of the way we consider pricing.

1:01:17

I think this is really fundamental. Um,

1:01:19

and I think the

1:01:21

question of, of

1:01:24

prices and pricing in the price

1:01:26

level is again, a place where

1:01:29

there's a naturalization process

1:01:31

that goes on with mainstream economics that you

1:01:33

have to relook , look really, really hard

1:01:36

to see. Um , because in

1:01:38

their framework, price levels are

1:01:41

a theoretical variable. Um,

1:01:44

that is understood apart

1:01:46

from the,

1:01:49

the, the, the philanthropic

1:01:51

or the government measurement of

1:01:54

prices and, and construction

1:01:56

of price indices, price levels

1:01:59

exists , exists. And then we

1:02:01

approximate them with

1:02:04

our you index construction

1:02:06

processes, which are imperfect,

1:02:08

but the, you know, they get close enough

1:02:11

to where basically we can treat these

1:02:14

pricing disease as approximating

1:02:18

just prices out there and

1:02:21

not having a fundamental

1:02:24

socially constructed purpose

1:02:26

themselves and not being fundamentally

1:02:28

socially constructed themselves.

1:02:31

Uh , and that once you really,

1:02:34

really get deep into a friendly

1:02:36

framework, and I would say this, this isn't a place

1:02:38

that you also connect up , uh

1:02:40

, with , uh, the

1:02:42

legacy of Charles and cause someone like nap

1:02:44

. Uh, also, you know, didn't

1:02:47

go as deeply as, as Lee , but looked

1:02:49

at the, this price level

1:02:52

literature with skepticism. And

1:02:55

, um, and challenge

1:02:57

the idea that , um,

1:02:59

price levels, you know, we're basically

1:03:01

just the inverse of the value

1:03:04

of money, even if they measured the value

1:03:06

of money in any fundamental sets. Um,

1:03:10

that, that once you, once you get to this, the

1:03:12

socially, this socially constructed

1:03:14

place where it is a

1:03:17

question of, of,

1:03:19

of politics, of economics, of ideology,

1:03:22

then you get to see processes

1:03:25

in history that you aren't

1:03:27

able to see otherwise . So

1:03:30

one way to, one way to

1:03:33

to tackle this problem is , um,

1:03:36

we look back on the seven of these.

1:03:39

And as much as there's this talk of

1:03:41

stagflation of high inflation,

1:03:44

the inflation that we see when we

1:03:46

look at the current measures , um,

1:03:49

is lower than the inflation that they

1:03:51

saw at the time. Uh

1:03:53

, and the reason is because they had a different methodology.

1:03:56

Well, there's a number of places I can

1:03:58

point to. But one fundamental place I would point to

1:04:01

is that in the 1970s

1:04:03

price indices, as contemporaries experienced,

1:04:06

that home prices were

1:04:08

part of those indexes. Interest

1:04:10

rates were part of that index, which

1:04:12

of course matters it extraordinarily.

1:04:15

Because when Volker raised

1:04:17

interest rates, a lot, it fed

1:04:19

through into of

1:04:22

this the CPI,

1:04:24

the pricing index that they experienced

1:04:26

that you know, that, you

1:04:28

know, social security is adjusted

1:04:30

for and so on, that

1:04:33

tax rates are adjusted for now. Um,

1:04:37

so from their point of view, inflation

1:04:40

was much higher and this, that is

1:04:42

a big part of what the discourse of inflation

1:04:45

, uh, at the time was, is

1:04:47

this constructed

1:04:49

process which was more

1:04:52

, uh , vulnerable to,

1:04:55

you know, the fluctuations of,

1:04:57

you know, when you might call like idiosyncratic

1:05:00

variables. And the other thing I would mention,

1:05:02

the other thing I would point out about

1:05:04

this social construction process is

1:05:09

it's not, it would be

1:05:11

if it was a question of distribution, if it was

1:05:13

question of like, Oh, the PR , uh, um,

1:05:16

the inflation rate is high

1:05:18

above us. You know, some people are

1:05:20

really losing out. Um,

1:05:23

it would be a political question, but it would not

1:05:25

be a political question that was bigger than say

1:05:28

, um, what was going

1:05:30

on with our social safety

1:05:32

net? It wouldn't be a bigger question than

1:05:34

the question of what's going on with the minimum

1:05:37

wage. It wouldn't be, it

1:05:39

wouldn't be a bigger question than what's coming

1:05:41

on with working conditions. Otherwise.

1:05:44

In other words, it wouldn't be a bigger question

1:05:46

than the actual social ailments

1:05:49

that people are facing. It's

1:05:51

not merely that prices are changing

1:05:53

and that, you know, some people have

1:05:56

greater access to the social provisioning process

1:05:58

and some people have less. It's

1:06:01

the idea that prices

1:06:04

are a Radek , that there are volatiles

1:06:07

that they're going everywhere at once.

1:06:10

Um, it's, it's, it's the

1:06:12

metaphor of losing control

1:06:15

of a sort of prometheus's fire.

1:06:19

Um, that is what captures

1:06:22

, uh, people's imagination

1:06:24

and their terror. Um , and what

1:06:26

makes inflation such a highly political

1:06:28

issue. Um, because there

1:06:30

are other ways of measuring , uh,

1:06:33

prices of talking about what's

1:06:35

going on in the prices of the economy, which

1:06:38

emphasize stability and MPO

1:06:40

emphasize , uh,

1:06:42

how overwhelmingly

1:06:44

, uh, the system we have

1:06:47

is stable and structured

1:06:49

by these administrator administrative

1:06:52

process , the administrative processes

1:06:55

that , uh, preserve

1:06:57

their stability , uh, even in

1:06:59

an adverse environment. So,

1:07:02

you know, if you, if you instead

1:07:04

look at it from the point of view of

1:07:07

what is the average or

1:07:09

the median frequency of

1:07:11

price change, then prices

1:07:13

are a notch

1:07:16

, are not changing that often. Um,

1:07:19

you still have prices that are, that

1:07:22

change every three months

1:07:24

or so. Even in countries that we think of as these like,

1:07:26

you know, high inflation basket cases

1:07:29

because we are , we're so used to thinking about price

1:07:31

in disease. You know, a country like Brazil

1:07:33

, um, you know, for,

1:07:36

for many, many years there

1:07:38

, um, median price

1:07:40

change was say every two

1:07:42

and a half months, every three.

1:07:45

Um, that's

1:07:47

a, that's a smaller , uh , that , that's,

1:07:50

you know, a more frequent level

1:07:52

of medium price jeans than say the u s

1:07:55

which at a retail level gets stuff

1:07:57

four months. Um, you know,

1:08:00

at a , at a wholesale level, it gets,

1:08:02

you know, up to eight months a year. Um,

1:08:05

these, these sort of measures

1:08:07

of price stability, what

1:08:09

I've called medium priced , uh , stability

1:08:12

after Gardner means , um,

1:08:15

who did a lot of the groundbreaking

1:08:17

work in this area. That

1:08:19

creates a whole different vision of, of

1:08:22

the, of the price system and

1:08:25

what's going on with prices. So

1:08:28

it's a whole different way of conceiving

1:08:30

of what's going on in the economy.

1:08:32

And it also emphasizes , um,

1:08:35

the corporate structure of the economy.

1:08:37

You know, when, when

1:08:39

prices are fluctuating, it's

1:08:42

easy not to see the power

1:08:44

that's behind those

1:08:46

fluctuating prices, meaning the

1:08:49

price indices. But when you

1:08:51

see endemic stability, but

1:08:54

you also see , um,

1:08:56

you know, these periodic sustained sometimes

1:08:58

large price increases, then

1:09:02

the corporate power, the structuring

1:09:04

process behind it , um , becomes

1:09:06

obvious. And I think

1:09:09

this is where the

1:09:11

fun and where the fundamental question of social

1:09:13

construction comes in to get

1:09:15

to that latter point about , um,

1:09:18

the way this becomes a racialized

1:09:20

process , um, is

1:09:22

that I would say that there's a few different

1:09:25

elements here. One is simply that

1:09:28

by constructing price indices

1:09:30

rather than price stability

1:09:33

indicators, oh, we

1:09:35

generate, you know, a quote

1:09:37

unquote crisis and prices that

1:09:40

doesn't necessarily exist there

1:09:42

organically and are thus able

1:09:45

to, you know, motivate

1:09:47

this fundamental conception we have

1:09:50

of, of uncontrolled

1:09:53

, uh , money or uncontrolled

1:09:55

government processes. Uh, disrupting

1:09:58

the functioning of the economy. And

1:10:01

that process always courts the most

1:10:03

marginalized as disproportionately

1:10:06

hit by high unemployment.

1:10:08

And the, and also less able

1:10:10

to , uh, work

1:10:13

through , uh , the

1:10:15

system and work through raises when,

1:10:18

you know, employers have the pick of the litter,

1:10:20

I. E the pick of a

1:10:23

white man. Um, what

1:10:25

you all but, but the, the other

1:10:28

piece of course is that , um,

1:10:30

this process of being uncontrolled

1:10:33

I think, and this, you know,

1:10:36

just this sort of losing control

1:10:38

of, of the, of the price

1:10:40

system is also

1:10:43

, uh , keyed up

1:10:45

and connected to losing

1:10:47

control of the society as a whole, as a whole.

1:10:49

You know, or you know, a riot

1:10:52

and inflation

1:10:54

become these things that are metaphorically

1:10:58

linked together. Um, because

1:11:00

they are both these, you know, uncontrolled

1:11:03

processes led by

1:11:05

liberals gone amok. Um,

1:11:08

and you know, you know, the, the

1:11:11

idea that a liberal, that

1:11:13

a conservative is a liberal who's been

1:11:15

mugged by reality. Well , th

1:11:18

th the mugged by reality is being mugged

1:11:20

by both inflation and

1:11:23

a black man that , that it's both

1:11:25

at once. Um , and I

1:11:27

think if you, if you read aesthetically,

1:11:31

so, so

1:11:34

the, the though media

1:11:36

of the time, both, you know, film

1:11:38

and literature elsewhere , um,

1:11:43

okay . That, that uncontrolled process

1:11:46

of, of inflation of stagflation

1:11:49

is tied up

1:11:51

with this idea of uncontrolled

1:11:53

crime that's going crazy. And,

1:11:56

you know, as an extension , uh,

1:11:59

this uncontrollable underclass.

1:12:01

I mean, when , when one of the most interesting things

1:12:03

to me, and you know, this is

1:12:06

says a lot more about me than it really does about

1:12:08

the movie, although I do think it says something about the movie

1:12:11

is in taxi driver,

1:12:13

when , uh, he goes

1:12:15

to see a politician talk, the

1:12:18

politician is talking about stagflation

1:12:21

and stagflation and it's activation

1:12:23

becomes part of his warped

1:12:26

mindset of the

1:12:28

society out of control. Um,

1:12:31

and it just beats , it becomes another piece of evidence.

1:12:33

I'll, you know, there's, you know, there's all,

1:12:35

there's this, you know, these uncontrolled animals running

1:12:38

a muck. And you know, there's also speculation that's

1:12:40

doing it to , um, uh , stack

1:12:42

Felicia that are in a real fundamental sense

1:12:44

is this like , is

1:12:46

this metaphorical , uh

1:12:48

, mugging , um, black man

1:12:50

wandering the streets of New York City. Uh,

1:12:53

and , and so I think that, that, that racialization

1:12:56

process happens at that

1:12:58

all these levels and of course that, that these

1:13:01

processes of , uh , of,

1:13:03

of crime and social

1:13:06

, uh, collapse are connected with

1:13:08

unemployment and from

1:13:10

another point of view, also the demand

1:13:12

for full employment. Um,

1:13:15

and the challenge to , uh

1:13:17

, macro economic decision makers

1:13:20

in their priorities , um,

1:13:22

between , uh, between inflation

1:13:24

and unemployment and not , uh , focusing

1:13:27

on how to both complicate

1:13:29

, uh , accomplish full employment

1:13:31

, uh, and accomplish

1:13:34

whatever we call all of the goals we have in terms

1:13:36

of prices, in terms of oil , uh , et

1:13:39

cetera . I think it's just, it's just, it's,

1:13:41

it's so rooted together.

1:13:44

Um, and it's, it's, you know,

1:13:46

it's the massive mass incarceration

1:13:49

is because a p piece of , uh

1:13:51

, of austerity, not just that it's

1:13:53

about managing this, you know, now

1:13:56

more and more under, under , uh , unemployed,

1:13:58

underclass. But it's also

1:14:01

the , the, the process

1:14:03

of gaining, of regaining

1:14:05

control over

1:14:08

, um, things that have

1:14:10

fallen in that way. The,

1:14:13

the, the Volcker shock and the rise

1:14:15

of mass mass incarceration, a

1:14:18

specialty , you know, taking off , uh, in the 80s , uh,

1:14:21

under Reagan, but also among the Democrats

1:14:23

who give up , who give up any last

1:14:25

vestiges of social democracy

1:14:27

, um, that, that re

1:14:30

control process is, is

1:14:32

of a piece with each other. Uh

1:14:34

, and thus, you know, unfortunately

1:14:37

the two Tutu , I think really

1:14:39

fundamentally to attacks

1:14:41

the , uh , the

1:14:43

mythical monster , uh

1:14:46

, of race

1:14:48

in America and of , uh

1:14:50

, racialization. You also

1:14:52

, uh, at a fundamental level have to attack

1:14:55

the mythical monster of the population

1:14:57

.

1:14:58

This is America live

1:15:01

in , no , you don't get your flipping

1:15:03

now what? I'm whipping now

1:15:05

. This is America that

1:15:10

come live in now . Only

1:15:12

be tripping now . Yeah. This is America.

1:15:18

I got this draft . Oh, I

1:15:20

got it . Carry on. Yeah. Yeah. I'm gonna

1:15:22

go into this. Yeah, yeah. This is go

1:15:25

real low . Yeah. Yeah. I'm going to go get

1:15:27

the bag . Yeah. Yeah. Or Am I get the

1:15:29

bad [inaudible]

1:15:34

we don't know yet. Oh

1:15:37

, [inaudible]

1:15:54

yeah, absolutely. I really appreciate

1:15:56

this discussion and it, it , um,

1:15:58

it's interdisciplinarity , uh

1:16:00

, is striking where we're, we're bringing

1:16:03

together macro economics, micro economics,

1:16:06

legal studies, governance,

1:16:08

but also alongside

1:16:11

questions of identity, racialization

1:16:14

, um, and, and

1:16:16

art and cultural production. Um,

1:16:19

and , uh, you know,

1:16:22

it, I think the project

1:16:24

that we're interested in

1:16:26

on money and the left and also in our individual

1:16:29

, uh, scholarly pursuits

1:16:31

is, you know, thinking

1:16:34

critically about the history

1:16:36

of culture and the history of aesthetics

1:16:38

from this, from this viewpoint.

1:16:42

And, and, and, and

1:16:44

really making the argument that

1:16:46

it can open up a

1:16:49

questions both present and past

1:16:51

in new ways. Uh, so I

1:16:53

, I , uh , as you were talking, I

1:16:55

was reminded of , um, the

1:16:58

work of a , a historian named Michael

1:17:01

O'Malley, who's written about the greenbacks

1:17:03

, uh, that , uh, the Lincoln administration

1:17:05

produced , uh , in order to eventually

1:17:08

, uh , fund , uh, the

1:17:10

north , um, in its

1:17:12

, um, uh, military

1:17:15

efforts against the south during the

1:17:17

civil war. Uh, and it was

1:17:19

during that moment when

1:17:22

the relationship between

1:17:25

pricing, inflation,

1:17:27

money, its productivity

1:17:30

and race was

1:17:32

actually very, very

1:17:34

vividly on display. Uh

1:17:37

, when I just read , uh , some lines from,

1:17:39

from O'Malley, he says, critics

1:17:42

of Lincoln's decision claimed

1:17:44

that it raised colored soldiers

1:17:47

to a level of equality with

1:17:49

whites. They argued that blacks

1:17:51

lacked the basic qualities of discipline,

1:17:54

courage and intelligence necessary

1:17:57

for battle. They saw the soldiers

1:18:00

as inflated, valueless.

1:18:03

I'm curious if you have any response

1:18:05

to that quotation.

1:18:08

Yeah, I think that

1:18:10

is absolutely really

1:18:12

fundamental and true and something

1:18:14

I definitely see. Um , and

1:18:16

my own work. Um, there's

1:18:18

a, there's a, there's a paper that,

1:18:21

you know, I , uh , I've carried with me and then it's

1:18:23

been part of Saipan , you

1:18:25

know, the teaching road teaching Rowan and I have done

1:18:28

, um, by an author, Shane

1:18:30

Shane White , uh , called freedom's first con

1:18:33

about , uh, changing

1:18:36

bank notes in Antebellum New York City. And

1:18:38

one of the, one of the really interesting ways in which

1:18:40

you think about this process of that

1:18:42

there were, you know, all these different , um,

1:18:46

paper monies , you know , issued by individual

1:18:48

banks and from different regions

1:18:50

is , um, it became

1:18:53

, uh, a very personal

1:18:55

, um, individual relational

1:18:58

process , uh, to

1:19:00

give these banknotes value

1:19:03

in any given transaction. And

1:19:05

that made it a fundamentally gendered and

1:19:07

racialized process. Um

1:19:09

, and talks about these, these very vivid

1:19:11

incidents of , uh,

1:19:14

of , uh , uh,

1:19:17

black owned businesses, oyster bars

1:19:19

or you know, black individuals , um,

1:19:22

dealing with this system , uh,

1:19:25

and you know, getting safe, threatened

1:19:27

by a white patron over

1:19:29

not accepting their crappy

1:19:32

or fraudulent , um , bank

1:19:34

note from a distant land. Um,

1:19:37

and , and , and the negotiation

1:19:39

process on , um,

1:19:42

at sale local store and not just being

1:19:44

over the price of the goods,

1:19:46

but also the price of there

1:19:48

that where the exchange rate of their monies

1:19:51

themselves. And in that sense, the

1:19:53

green Mac not just was

1:19:55

this, this, this vital

1:19:57

source of freedom because it

1:19:59

freed , um, it

1:20:02

was part of the process in which,

1:20:04

you know, slave persons

1:20:06

went on general strike, but

1:20:08

that also it

1:20:11

had the ability to , um,

1:20:13

to break or at least loosen the

1:20:15

constraints of these very personal

1:20:18

relational , uh, forms of

1:20:20

exploitation that they experience through

1:20:22

having, you know, what essentially

1:20:24

a non fungible form of money that

1:20:26

abstractness and abstraction

1:20:28

was a source of freedom , um,

1:20:31

on, in the monetary sphere. Um,

1:20:33

also in, you know, in these,

1:20:36

in these other spheres, you know, abstractions,

1:20:38

freedom as well. Um, and

1:20:40

I think that, that, that, that fundamental

1:20:43

process and that fundamental, you know, struggle,

1:20:46

ideological struggle carry

1:20:48

carries itself , uh,

1:20:50

carries itself forward. And

1:20:52

, uh, and , and

1:20:55

the idea of, of,

1:20:58

of , uh , of a constrained money

1:21:00

being tied to the

1:21:03

psychological characteristics that

1:21:05

supposed to exist than white men that also

1:21:07

existed in their sexual

1:21:10

behavior. Um, that

1:21:12

this, this, I, this, this dichotomy between

1:21:16

the controlled , the constraints,

1:21:18

the inhibited and

1:21:20

, um, and

1:21:24

, uh , and, and powerful a

1:21:27

white guy. You know, because , um,

1:21:31

compared to, especially black,

1:21:33

but also other minorities, I would mention also Jewish

1:21:36

, um, in that earlier period at

1:21:38

least , um, groups

1:21:40

who were uncontrolled were

1:21:43

Venal , um, where , you know

1:21:45

, liable to, to,

1:21:47

you know, attack white women had random

1:21:50

, um, and that

1:21:52

would dirty them. Uh, the

1:21:55

, the social relations through

1:21:57

any entering these fungible processes, most

1:21:59

notably, you know, quote unquote white

1:22:01

slavery or relationship between black

1:22:04

or Jewish or other , uh, other

1:22:06

types of foreign men with

1:22:08

, uh, with white

1:22:10

and white women and , uh

1:22:13

, sex work. That I think

1:22:16

there really is a very, very

1:22:18

deep and longstanding connection

1:22:20

here. Um, which

1:22:22

, uh, W

1:22:25

W which has not been broken

1:22:27

yet and which needs frontal

1:22:29

assault by the left , uh, in

1:22:32

order to reach a , uh , a

1:22:35

place of liberation.

1:22:39

Certainly. So I think one of the

1:22:42

ways I think we would all agree the most

1:22:44

exciting or promising paths

1:22:46

to conduct that frontal assault and

1:22:48

to kind of confront this history you're talking about

1:22:51

and to reclaim , um,

1:22:53

and , and re recognize and

1:22:56

represent the social construction

1:22:58

and the power dynamic that and the creative

1:23:00

dynamic of money behind it is the green

1:23:03

new deal. Um, and you just

1:23:05

recently participated in

1:23:07

a , uh , an event at Harvard with some

1:23:09

others where you were on a panel , uh , about

1:23:11

managing inflation. Um,

1:23:14

could you talk a little bit about the green new deal,

1:23:16

your, your take on it, the inflation question,

1:23:18

and then also a little bit if you'd like

1:23:20

about growth and d growth and the question

1:23:23

of the limits and, and

1:23:25

constraints that we might face moving forward.

1:23:30

Uh , well first of all, I would just say I'm excited

1:23:33

about the green new deal. I think the greener deal opens

1:23:35

up this conversation, this

1:23:37

rhetorical space , um,

1:23:39

that hasn't existed widely

1:23:42

, uh, in the society and

1:23:45

that, so that must be the fun . I'll start

1:23:47

that. The idea of resource creation

1:23:49

, of, of transformation,

1:23:51

of the , the qualitative

1:23:54

changes that we need to have a sustainable

1:23:56

injustice. It be out in the forefront

1:23:59

of American politics is incredibly exciting.

1:24:01

And the measure of how exciting is,

1:24:04

is how crazed the,

1:24:06

the right place is in talking

1:24:09

about it. Um, because they , they

1:24:11

have an innate sense of its power in

1:24:13

a way that, you know, even most

1:24:15

of the democratic establishment doesn't really

1:24:17

seem to yet. Um, what

1:24:20

I would say is as , as, as good

1:24:23

as it as it is for it to be

1:24:25

had this, you know , wide rhetorical,

1:24:28

open space. I , uh, I

1:24:30

am interested in getting

1:24:32

more to more specifics and getting

1:24:35

more, more other stakeholders

1:24:38

, uh, in this process committed to

1:24:40

specifics, especially

1:24:42

I'm committed to a specifics

1:24:44

, uh , that the Greenlee deal is about

1:24:47

spending and the

1:24:50

edit that to the extent that we rely on other,

1:24:52

other tools. Um,

1:24:54

it's more about discouraging

1:24:58

the Reese , you know , resource use

1:25:00

that is contrary to

1:25:02

the broad goals

1:25:05

of , uh, the green new deal.

1:25:08

Uh, and not so much doing, doing

1:25:10

them through our traditional processes.

1:25:13

Um, you know, there are scattered mentions of saying the

1:25:15

reconstruction finance corporation

1:25:18

, uh, around , uh, in

1:25:20

discussing the social transformations we need.

1:25:23

And I don't think that , uh,

1:25:25

upbeat that president Hoover

1:25:27

created vehicle is a good

1:25:30

way of , uh , running

1:25:32

our public policy through and

1:25:34

I think connects that. I think , um,

1:25:38

and , and this sort of interest , the sort of other

1:25:40

background discussion of, you know, the

1:25:43

Greeley d o m and t being America

1:25:45

first policy , um, which

1:25:47

I think, you know, even just the money

1:25:50

on the left is, is , uh , evidence

1:25:52

against that. But more specifically,

1:25:54

I'd like to see a lot more discussion

1:25:58

of what we're going

1:26:00

to do with the technologies

1:26:03

and , uh , and knowledge

1:26:05

created by , uh , the

1:26:07

green new deal and a clean job guarantee.

1:26:09

I want, you know, to get more

1:26:11

specifics, you know , uh, our

1:26:14

colleague Ron Gray is , uh , kind

1:26:17

of, I think been a visionary

1:26:19

in this respect of having

1:26:21

a longstanding interest in copyleft

1:26:24

and patent left , um, meaning

1:26:26

, uh, having,

1:26:28

you know, structuring whatever

1:26:30

intellectual property event that

1:26:32

come out of these public processes

1:26:35

such that , uh, they

1:26:38

, uh, they're given away

1:26:41

at no monetary costs under

1:26:43

the condition that whatever, any modification

1:26:46

, modified forms of intellectual property

1:26:48

that come out of come out of them

1:26:51

are also given away at no monetary

1:26:53

cost . And I think this, this, this gets a

1:26:55

new , uh, urgency

1:26:58

and importance , um,

1:27:01

in the context of the green new deal where climate change

1:27:03

is a global process and the single

1:27:05

most positive thing that

1:27:08

of the United States can do in the world in terms of

1:27:11

contributing to the broader global

1:27:13

processes. Giving away de-carbonization

1:27:15

technologies for , uh, for

1:27:18

free and especially,

1:27:20

you know, through structured do our on

1:27:23

our quote unquote free trade , uh

1:27:25

, structure as well, ensuring that

1:27:27

, uh, other countries

1:27:30

also have to , uh, let

1:27:32

those technologies propagate for free.

1:27:35

Um, and I , I'd

1:27:39

also liked to see more discussion

1:27:42

of how

1:27:44

are we're going to change our, our

1:27:47

budgetary processes. Um,

1:27:50

and you know, our administrative

1:27:52

agency , uh, system

1:27:55

to manage these,

1:27:57

to manage , uh, the ongoing

1:27:59

transformations of the green new deal and

1:28:02

, and, and make it more

1:28:04

of a dialogue between different

1:28:07

stakeholders in the green, new deal conversation rather than

1:28:10

just sort of , um, uh

1:28:12

, an an important and eh , uh,

1:28:15

but singular voice coming from , uh,

1:28:18

from MMT scholars. Um,

1:28:21

but I'm optimistic, but I'm optimistic that in

1:28:23

a lot of ways we're still early in that conversation

1:28:25

and then we have a lot more to go.

1:28:27

But , uh , and I look forward to those

1:28:30

changes and evolutions in the conversation. But

1:28:32

, um, more

1:28:35

than anything else, I'm just excited about , uh,

1:28:38

resource creation being on the table. Um,

1:28:40

in terms of questions of growth

1:28:42

, um, obviously the green

1:28:44

new deal brings up these questions. Uh

1:28:47

, very fundamentally, I think some

1:28:49

people , um , involved

1:28:51

with the green DTO conversation may kind

1:28:54

of believe in , uh , in a green growth vision.

1:28:57

Um, and that of, you know, there are people who are

1:28:59

taking or who are attacking that

1:29:01

from my point of view , um , the

1:29:04

question of growth , uh,

1:29:06

is a little complicated by

1:29:10

the lack of clarity of what people mean

1:29:12

. I think for the

1:29:15

laymen entering this space

1:29:18

, um, growth

1:29:21

is, this is literally just about throughput.

1:29:24

It's about just literally, you know, the weight

1:29:26

, the mass of output. And

1:29:29

I think a lot of Lee's feet, a lot

1:29:31

of the people who are, who , who are, who are attract

1:29:34

to this conversation, who are and who are attracted

1:29:36

to rhetoric about the insanity

1:29:38

of infinite growth on a finite planet.

1:29:40

Imagine that

1:29:43

, uh , that

1:29:45

these fundamental constructions

1:29:47

of, of economist , you know , the GDP

1:29:50

and , uh , pricing

1:29:52

indices on top of that are

1:29:54

really about, you know,

1:29:57

measuring some fundamental mass

1:29:59

that if they're, if they're conceived

1:30:01

of as contributing delivery standards, that they must

1:30:04

also be concerting to , uh,

1:30:06

environmental devastation by definition.

1:30:09

And thus, you know, we must,

1:30:11

we must attack growth to , um,

1:30:14

get to see sustainability. Um,

1:30:16

but from a Lee Heterodox MMT

1:30:19

point of view , um,

1:30:21

the fundamental , the idea

1:30:24

that we have this fundamentally socially constructed

1:30:26

process that's measured in dollars

1:30:29

and has all these

1:30:31

, um , imputations, which

1:30:34

don't, don't have even a reference

1:30:36

in any underlying transactions at all

1:30:38

in GDP. And that we're

1:30:40

smashing on top of that , um,

1:30:43

uh, price index , um,

1:30:46

choosing , uh,

1:30:48

in , uh, an

1:30:51

unclear base here in

1:30:53

which to crowned our

1:30:55

estimates , um, means

1:30:58

that there is no underlying

1:31:00

physical biophysical reference

1:31:03

for GDP to be measuring. And

1:31:06

that without that GDP

1:31:08

doesn't really tell us anything at all about

1:31:10

what we need to do about , uh , living standards.

1:31:13

And also doesn't tell us anything

1:31:15

at all about what we need to do , uh,

1:31:18

in terms of our economy besides,

1:31:20

you know, maybe some financial considerations

1:31:23

where , uh , negative nominal

1:31:25

GDP growth is associated with

1:31:28

financial crisis. Um, but

1:31:31

that, that , um , that,

1:31:33

that from the sense that this, that

1:31:36

we're talking about these two social

1:31:38

constructions on top of each other with,

1:31:41

with fluctuating and complicated

1:31:44

methodologies means that I'm

1:31:46

unwilling to treat, you know, GDP

1:31:48

as either a measure

1:31:50

of quote unquote growth or

1:31:52

quote unquote [inaudible] growth in that, in

1:31:55

the GDP sense that makes

1:31:57

me attracted to in a growth being

1:31:59

agnostic towards growth. But that doesn't

1:32:01

mean that we need, we don't need to

1:32:04

reduce the throughput of our, of

1:32:06

our economy, that we don't need to, you know, literally

1:32:09

shrink the massive stuff that we

1:32:11

produce and that we don't need to move

1:32:14

towards a carer economy and

1:32:17

an economy that's not just caring in the individual

1:32:19

sense and the child fair and elderly care signs

1:32:21

, but an economy that uses

1:32:24

reusable tools

1:32:26

, um, where you only,

1:32:29

where you only, or primarily meat Libor

1:32:32

to , uh , produce the,

1:32:35

the services that , uh, that

1:32:37

our society fundamentally needs. That,

1:32:40

that, that, that, that transformative

1:32:43

process that we need doesn't

1:32:46

necessarily have any relationship to

1:32:48

any specific path of

1:32:51

nominal GDP or real GDP.

1:32:54

Um, and thus, you know, we

1:32:56

should sort of value that,

1:32:58

that shouldn't be the center of

1:33:01

our decision making, but also that

1:33:03

that doesn't necessarily also doesn't necessarily

1:33:05

see anything about living standards at all.

1:33:08

Um, that I think the, the processes

1:33:11

, uh, that we, that we have now

1:33:14

for economic , for [inaudible] , you know, for ecological

1:33:17

devastation, haven't, you know,

1:33:20

brought , know happiness

1:33:22

or good living to most people.

1:33:25

And even people who live

1:33:28

in suburbs where

1:33:30

they have many rooms and

1:33:33

there's a lot of resource consumption happening

1:33:35

, um, don't necessarily have

1:33:38

socially fulfilled lives

1:33:41

or don't feel

1:33:43

the pressure of , um,

1:33:46

these bills and economic insecurity

1:33:48

bearing down the on them such that

1:33:51

I'm a , I am skeptical

1:33:54

, uh, and unwilling

1:33:57

to join narratives that , uh,

1:34:01

paint our social questions as

1:34:03

one of needing,

1:34:06

you know, resource austerity

1:34:09

, um, so that we can , uh,

1:34:12

deal with climate change. And it's

1:34:14

not necessarily that I don't think

1:34:16

certain processes of,

1:34:19

of suburban sprawl or sustainable,

1:34:22

but it's that I don't think, I

1:34:24

don't think that , uh, densifying

1:34:28

and moving to

1:34:31

a sustainable economic processes

1:34:34

really is going to be some big

1:34:36

burden in a, in

1:34:38

a living standard sense on people.

1:34:41

Although it might be, you know,

1:34:43

psychologically disruptive , uh

1:34:45

, in terms of, you know, having

1:34:48

to rapidly change

1:34:51

but qualitatively change how

1:34:53

they live. Well

1:34:56

, Nathan, this has hugely

1:34:58

illuminating, thanks so much for joining us.

1:35:00

Thank you for having me. Pleasure

1:35:03

to be on money on the left that contribute

1:35:06

to my

1:35:08

own listening and

1:35:11

give me something back to listen to because I'm always

1:35:13

looking for more podcasts

1:35:15

, audio to listen to. And , uh,

1:35:18

you know , Molly on the left is

1:35:21

one of the best, brightest stars

1:35:24

on that , uh , horizon in the

1:35:26

last year.

1:36:55

[inaudible] [inaudible] [inaudible]

1:37:00

.