Jan 5, 2023
Welcome to episode 137 of activist #MMT. Today I talk with Steve Kelsey, about what money and money issuance, and our entire money system, should and could be, if we could start over and design it from scratch. You'll find two of his papers linked below (in the Resources section). Before that, we discuss Steve's Twitter thread, which is one of the most viral MMT tweet threads of all time more than 3000 retweets and nearly 7000 likes.
The topic of his thread is the big lies told by former UK Prime Minister Margaret Thatcher. The first big lie is "TINA" which stands for "there is no alternative." This is how those already on top tell the rest to sit down, shut up, and take what you can get. The second big lie is "there is no government money, there is only taxpayer money." This is a statement by those who have taken control of government that they will do whatever it takes to prevent its powers from being used for regular people. This is true even for things desperately needed and obviously within its capabilities. The third big lie is that the government is nothing more than a gigantic household or company, and so must balance its spending with revenue. This is basically the justification used by those in power to deceive the rest into thinking that deliberate mass neglect is "unfortunate, but necessary."
The fourth big lie, despite not being included in Steve's Twitter thread, is most closely related to today's conversation. That is, "there's no such thing as society, there's only household individuals and families." This is just another version of, "you're on your own. We could help you (and we're the only institution that can help you!) but we're not gonna do that. So, good luck!"
If healthcare had no cost, then rising healthcare costs, obscene pharmaceutical prices, and medical debt, would become an impossibility. If education had no cost, then student debt – and the faux concern that canceling it is regressive and will cause terrible inflation – would also be impossible. Finally, if everyone who wanted a job, could have a job, then "the sack" could no longer be used as a tool to discipline workers.
Much of these things boil down to what Michael Kalecki describes in his 1942 paper, The Political Aspects of Full Employment: the rich pay legislators to not legislate. When the government doesn't govern, who's left to control our lives but those who pay legislators the most? Those on top cannot remain on top unless they exploit the rest. They will not stop until they are stopped.
Needless to say, overhauling our current system is a daunting task. But what if we could? Even if unlikely, you can't achieve a goal if you don't first dream and design it. Today's conversation with Steve is a thought experiment to dream about what a new system could be.
Steve's idea is to replace national money issuance with community-based money issuance. Importantly, these communities don't have to be limited to small geographical regions. They could be trans-jurisdictional, meaning they could span multiple national borders, even dispersed across the world, coordinated by tools such as the internet. Something that spans borders cannot be conquered without the cooperation of all the nations in which the community exists. One historical example of mass collective action is the hole in the ozone layer, which took the cooperation of nations from around the world to reduce chlorofluorocarbons (CFCs) and greatly reduce the hole.
We currently have a society where the vast majority are not cared for. This drives us apart and into the arms of precisely those who pay our legislators to not care for us. Let's replace that with caring for each other, which would drive us together, making it possible to ignore those who personally benefit from mass exploitation and neglect.
There's much more to Steve's idea but I'll leave it there. As a reminder, you'll find two of his papers linked in the show notes.
Sadly, Steve's mother passed away a week before this episode was released. Here is Steve's tribute to her on Twitter.
And now, onto my conversation with Steve Kelsey. Enjoy.
Resources
- Steve Kelsey's Physical Money Propositions v1.5
- Steve Kelsey's Transactional Logic v3.0
- Milton Friedman on inflation
Audio chapters
- 6:28 - Viral Twitter thread on Thatcher's Great lies
- 10:48 - New era of my podcast because of Torrens
- 12:53 - Introducing himself and his ideas
- 24:05 - My one big question: Once we get there, how do we stay there?
- 44:47 - Follow ups by me
- 50:54 - His responses
- 1:09:02 - Final comments by me
- 1:13:28 - Goodbyes
- 1:17:12 - Duplicate of introduction with no background music (for listeners with sensitive ears)