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Conversation with William Mitchell and Noel Pearson, Newcastle, December 15, 2019

Today’s blog post is shorter than usual but you do get to access a hour-long video where I talk with Indigenous leader and activist Noel Pearson about Modern Monetary Theory (MMT), how it impacts on his perceptions of options to improve indigenous well-being in Australia, and how it informs a new collaborative venture we are in the process of putting together – JUST2030 – as a response to the socio-ecological crisis that three decades of neoliberalism and the fiscal obsession with surpluses has created.

Conversation with William Mitchell and Noel Pearson, Newcastle, December 15, 2019

For non-Australian readers – Noel Pearson – is the Founder and Director of the – Cape York Institute for Policy and Leadership.

You can learn about his work as a lawyer, activist, indigenous leader, writer from the Wikipedia page, which provides extensive links to his work.

The Institute’s home page is at – Cape York Partnership.

Noel and I have been having regular meetings over the last several months to develop our collaboration on a major project that we hope will influence the direction of policy in Australia and beyond.

Our project – JUST2030 – will be launched in the coming months – coronavirus allowing – to the general public.

It will outline what we think is a realistic but ambitious agenda to meet the challenges of the social and environmental damage left after three or more decades of neoliberalism and its related policy misuse.

We are partnering with global climate activists and other academics and community activists.

We are also forming partnerships with activists in Timor-Leste, West Africa, Europe, and the UK (and hopefully Japan) to create a global movement that allows the insights of an MMT understanding to inform a green agenda designed to (among other things):

1. Improve the quality and availability of employment for all, including the design of a viable Job Guarantee framework.

2. Restore the integrity of public infrastructure and public services.

3. Provide coherent opportunities for workers and their families in regions affected by carbon-reducing strategies to retain material prosperity and employment in equitable ways via a Just Transition.

4. Address the excesses of the financial markets.

5. Reduce income and wealth inequality through wage justice and other measures.

6. Outline a viable path to achieve zero carbon emissions by 2030 through regulative action and public investment.

While this video doesn’t articulate the JUST2030 agenda (that will come in due course), it does provide essential background to how Noel and I came together to begin this work together.

The video starts off talking about his – Light on the Hill – speech delivered in Bathurst, NSW on August 12, 2000.

It goes on to discuss how Noel came to understand MMT and how it has changed, to some extent, how he thinks about unemployment and the opportunities for disadvantaged people in Australia and beyond.

Our conversation also allowed me to understand the background to Noel’s ideas surrounding ‘passive welfare’ and ‘radical centrism’.

It was a most enjoyable and rewarding hour spent in conversation with a good friend.

The video goes for 59:27 minutes.

I was going to cut it into shorter segments but I decided that it would then lack continuity.

I am thankful to David Thompson, from the Cape York Partnership for his excellent filming and video editing services.

When I did the last conversation with my co-author Thomas Fazi – released in this blog post – Our sequel to Reclaiming the State in now in progress (February 27, 2020) – we used my iPhone as the movie camera mounted on a little tripod structure that we bought in a Trastevere street market in Rome for a few euros.

This video, thanks to David, was recorded using professional audio and video equipment and the quality is excellent.

The music is my addition (obviously, 1960s rock steady)!

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

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    This Post Has 4 Comments
    1. Hi Bill,
      an interesting discussion.
      In regard to the pre-welfare period it should always be remembered that while Aboriginal workers in Qld were technically entitled to wages from 1919 (set at a racially discriminatory rate of between 75% of the award wage in 1919 declining to 40% in 1933 and to 61% in 1966 ) , very few of those workers ever got to see that money as the “trust funds” their wages were paid into were continually fleeced by Qld Govt and individual govt bureaucrats (see Kidd, R. 2006. Trustees on Trial: Recovering the stolen wages. Canberra. AIATSIS). This led to huge losses in any intergenerational wealth transfers.
      There is still a tendency in some quarters to morally valorise the pre-universal access to welfare period but the cruelling conditions under which this labour was extracted and wealth stolen in the 1897-1972 period absolutely set the scene for the later severe social dislocations associated with the welfare period.
      The work regimes on Aboriginal missions and reserves were derived from the 1865 Industrial and Reformatory Schools Act, which established and regulated schools for children under 15 years of age who were ‘neglected’ or convicted of an offence. The legislative definition of a ‘neglected child’ was widened to include ‘Any child born of an Aboriginal or half-caste mother.’ Aboriginal reserves and missions were originally registered as industrial and reformatory schools.

      The late 19th century cattle industry in Queensland leveraged Murri starvation from enclosure of their lands to induce them into indentured labour on the stations in exchange for rations.
      “As can be imagined, obtaining suitable labour—or any labour at all—in this far-flung wilderness was no easy task. ‘New chums’ and ‘city slickers’ who were assigned by the various stock and station agents in the city were unable to last long among the dust, the flies, the heat and the loneliness. The problem was solved when the settlers discovered the Aborigines, who in the past were ruthlessly slaughtered and driven from their tribal lands, were not only a hardy breed but were most adaptable to the type of labour which was in such short supply – namely, stockwork. It took little time for the pastoralists to man their properties almost entirely with Aborigines except for a few white stockman – the overseers, managers and cooks”. (Rosser 1985:1)
      The Indigenous population, who only a few years earlier had been considered nothing more than an impediment to pastoral expansion, quickly became indispensable to a pastoral industry that would have been unsustainable had it paid for their labour (see Plevitz 1998; Kidd 2006:66-104).
      Following the passing of the Qld Aborigines Act in 1897, Protector Meston authorised the first forced removals of Aboriginal people across vast distances:
      “Since the passing of the Act I have removed to Frasers Island, Durundur and Deebing Creek over 300 men, women and children brought from all parts of Queensland … I have supplied the police of Queensland with 22 trackers and Victoria with two. Nearly 100 Aboriginals and half-castes have been removed from one locality to another for some special reason. The Durundur Blacks are very dissatisfied with the place and made pathetic appeals to me to take them back. I explained to them that this was beyond my authority. Then they asked that they might not be allowed to walk back to Woodford, but I explained that it would be no use them doing that as all the Woodford Blacks were to go to Barambah”.
      These removals were commonly undertaken simply to deter others from resisting or avoiding the Protector’s authority.
      “No white man can command the fear and respect of the Australian black without an unmistakable manifestation of superior physical and intellectual force”. (ibid)
      “Some also were sent from the districts as an example to others, in some cases after serving a sentence in prison, to remove them from bad influences, and to provide them with healthy occupation under proper control. (Howard 1910:18)

      This arrangement of Aboriginal people trading their labour with Europeans to support a nearby encampment of young and elderly dependents was not in accord with Meston’s vision nor the intention of the Act. The Chief Protector complained that what enabled these town camp residents to survive their impoverished conditions was the support of their kin working on nearby stations. These camp residents ‘rely for their upkeep on the natives at work, from whom they get money when they visit the town’ (Howard 1913). Blake has explained that ‘[d]uring good seasons, when demand for labour was high, fewer removals were ordered. When drought hit the rural industry, the number of removals increased’ (Blake 1991:35).

      Aboriginal people made up fifty-five percent of the northern Queensland pastoral workforce as early as 1886 (May 1983:54). Most of the Aboriginal people who were able to remain on, or near, their traditional countries became more or less incorporated into the workforce on stations and other rural industries. The following description was given of Wandovale Station around 1890:
      “A large number of native blacks live in contentment on the station rearing their families of podgy pickaninnies in comfort and plenty; a good building has been erected and solely for their use, and here, at least, the question of ‘what to do with the blacks’ is satisfactorily solved. Nearly the whole work of the homestead is done by blacks… (Qldr Jan 18 1890) (Babidge 2004:65).
      Although the Government would legislate that Aboriginal labourers on Stations must be paid, housed and fed,
      “The natives received only the ‘roughest . . . and cheapest’ food and clothing for work at which they were ‘competent as any white man’, while to the great majority of their employers, ‘The chief virtue of Aboriginal labour…is its cheapness and servility’. (Meston 1902 in Evans et al 1993:112)

      In the KImberley and Cape York Aboriginal communities where I work , the availability of child endowment from about 1962 allowed stockmen to begin the first walk-offs from the stations in pursuit of wages and to defy their class and racial subjection to the cattle bosses (see also Jebb, M.A. 2002 Blood, Sweat and Welfare: A History of White Bosses and Aboriginal Pastoral Workers). it was in fact this access to small welfare payments in 1962 that allowed workers to eat while on strike, eventually leading to the 1966 Wave Hill walk-off and land rights in the long term.

      I heartily endorse the pursuit of the Jobs Guarantee across all Indigenous communities.

    2. Hello Bill,
      I have been trying to replicated the popular US sectoral balance chart by plotting (S-I)+(T-G)-CAB=0, but the chart would never dance around zero for me, but rather drift into positive or negative territory. I am sure I am missing some data adjustment..
      Could you please share what data series from FOF/NIPA are actually used to construct that chart?
      Thank you.

    3. Dear Arseniy (at 2020/03/13 at 1:03 am)

      You generally will get measurement error using the NIPA data because the categories are not uniquely defined by the data collection.

      The most accurate series are for the fiscal balance and the CAB. You then construct the private domestic balance as a residual of those constrained by the fact they must balance to zero overall.

      best wishes
      bill

    4. Thank you for the reply.

      On another topic, I have been listening to Prof. Wray’s lecture where at some point he summarizes that M1 is essentially the total number of loans that have been created, but not repaid. Hence, it is a “boring” number. So my question then, if you were to measure how much money/liquidity there is in the economy, what measure would be appropriate?

      Arseniy

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