The Times they Are a Changing: The MMT Wave Begins
Take a look at the picture below. Take it in. Now scan your eyes to the far right…there, in faded blue you’ll see the initials MMT. Now zoom out. Take it in again. Notice: a few hundred people. Spending their time learning about an economic theory called Modern Monetary Theory or MMT and its application to the European debacle. Now where does that happen? In this case, Italy. Normally, never.
But something is changing out there. Economic necessity is opening people to new ideas, just like it did in the 1930s, just like it always has. First, it was the Economist. Last week, the Washington Post.  Then the Financial Times. Even Jared Bernstein, economic adviser to U.S. vice-president Joe Biden, jumped in.
Never mind that they all get it mostly wrong. Never mind that they invite derision from those who take the journalist’s word as gospel. Focus instead on the people, the power of a new idea that is not defending the status quo but advocating for something new and exciting based on sound reasoning and deep institutional understanding, and then remember: First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you.
Now ask yourself: the times they are a changing but are we?
This is what a good idea looks like: Italian audience for MMT presentation by Stephanie Bell and Marshall Auerback
Great stuff Arun! I think the challenge to MMT/post-keynesian thought lies less in the unwillingness of the public to undergo a paradigm shift in its thinking, per se, as in the need of so many people to anchor their misery and misfortune (in times of austerity) in some grand theoretical shibboleth. It is always astonishing to see how often progressives — in particular — seek to substitute some exogenous force, usually something hard to define like globalization, for domestic policy failures. Accepting and coping with austerity is one thing, but trying to cope with it when there is NO GOOD REASON for it is actually psychologically unbearable for many. Far easier to retreat into a kind of fixation on by-worn political and economic ideas. Which is perhaps why, in part, revolutionary change often tends to occur in the upturn AFTER a crisis, rather than at the nadyr of a downturn. MMTers are doing an excellent job of making their arguments known, but I wonder if there are ways to make the absurdity of austerity less forbidding. Incidentally, did you see that Steve Keen’s circuit model actually is perfectly consistent with MMT? (Really it just required translation into more standard language):
http://www.debtdeflation.com/blogs/2012/01/11/guest-post-a-double-entry-view-on-the-keen-circuit-model/
Very excellent!
I first learned about MMT through a series of podcasts of the Fiscal Sustainability teach-in that Stephanie Bell, Marshall Auerback and others put on in 2010. The podcasts are available here, http://reformthemoney.blogspot.com/2011/04/01-what-is-fiscal-sustainability-bill.html.
I heard attendance was 1500+
looks like a rock concert. Hopefully it won’t be a one hit wonder. Lets get lots of tracks and make it genre!
I was there. I live in Rimini, Italy, where the summit was organized. MMT is very interesting and could be one of the solution to the actual systemic crisis. I think also another good way is the Social Credit Monetary Reform, please have a look at the following article “Monetary Reform and How a National Monetary System Should Work” :
http://michaeljournal.org/monetaryreform.asp
Arun: It is always nice to see a new post from you. I have been reading MMT for a little over a year. It has been exciting and frustrating to be in such an interesting discussion, yet watch the world crumble around us. Money is our creation (literally). Our real limiting factor is resources (Land and People) and I would argue we are well positioned to provide a better future for all Canadians.
Mike, is that you? How is the great white north treating you?