Nov 26, 2020
Welcome to episode 56 of Activist #MMT. Today I talk with Pakistani PhD economist, Asad Zaman (wiki, personal website). Professor Zaman arrived in the United States in 1971 at the age of sixteen to pursue a masters and then doctorate in economics and econometrics, starting at MIT in Boston. Five years later, in addition to earning his doctorate, he realized his personal life was a mess, poisoned by the individualism promoted by the West that says a primary goal in life is nothing more than to maximize one’s own pleasure. He worked through this crisis, but it would take him another twenty-five years to realize, have, and finally resolve another major crisis in economics.
In 1996, Professor Zaman published a highly-advanced textbook on econometrics, after working on it for ten years. The book received accolades and is still used as a reference in university classrooms around the world.
One of the important things he realized while writing his textbook, however, was the vast gulf between those who get their hands dirty with real-world data, and those who earn prestige and status by developing theory. Because the two sides never communicate, the theory becomes progressively more unrealistic. This is called the theory-practice divide.
In fact, only a few years after being published, he realized that it, and indeed everything his entire academic career was based upon, was fatally flawed. Professor Zaman talks about the many incorrect and insidious concepts underlying mainstream economics, first and foremost being the idea of logical positivism, which he calls one of the most poisonous philosophies ever developed by human beings. Logical positivism says that if something cannot be externally observed and measured, it must be discarded – not just from economics but one’s life in general. It means that our internal realities of thoughts, emotions, and spirituality are not important because they cannot obviously witnessed or measured by others or with instruments.
It was not illiterate savages, but graduates of the finest educational systems of the West who designed the gas chambers used to burn millions of innocent men, women and children in Germany.
The philosophies of logical positivism (combined with the those of individualism and binary logic, the teachings of Kant and Hume, and others), is substantially why man can do the evil that he does: we are taught that we must do what’s best for us alone, we can only trust what can be reduced to maths and models, and we must also ignore our own inner emotions and spirituality. How could this lead to anything but disaster? We have cut ourselves off from the only signals that can truly guide us and know nothing about those we harm, or that they exist at all.
Most unfortunately, the deep flaws of mainstream economics are not accidental, they’re in service of keeping the rich rich and the poor poor. Especially in the US, daring to challenge or question these things results in brutal suppression.
Professor Zaman says he may never have realized these things had he not taken his family to Turkey for six years. Being out of the United States, especially in a less-advanced and -wealthy country, allowed him to study other subjects and schools of thought, and also to take a look at the mainstream economics of the West from the outside. His life is now dedicated to educating others on real world economics, which includes Islamic Economics and MMT.
Finally, in the show notes, you will find links to some of Professor Zaman’s prolific body of work. This includes his 2020 paper on models as we discuss, his full video-course on Modern Money Theory, and his six part series describing the economics of his home country and how MMT can apply to it. The MMT course has an hour-long segment on most of the chapters in the MMT textbook.
This is part one of a two part episode. Enjoy.
For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start:
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