It's Wednesday, and as usual I scout around various issues that I have been thinking…
MMTed Q&A – Episode 7
Here is Episode 7 in our weekly MMTed Q&A series. This is the third- and final part of my discussion on the Job Guarantee with Dr Pavlina Tcherneva and in this episode we discuss the applicability of Job Guarantee to nations that have both fiscal and external deficits and are exposed to international currency markets. While such a nation faces somewhat different pressures from their external sector, the point remains that if they have their own currency, they can always ensure that all the available productive resources at their disposal can be fully employed. The catch is that that level of activity may not deliver a high standard of material prosperity. We discuss examples such as Indonesia, Pakistan, South Africa and Argentina.
MMTed Q&A – Episode 7
This is Episode 7 in the MMTed Q&A series.
This week we continue my Zoom conversation with Dr Pavlina Tcherneva where we answered questions submitted by readers about the Job Guarantee.
Pavlina has just published a book – The Case for a Job Guarantee (published by Wiley) – which provides a really great entree into the world of the Job Guarantee.
In this episode we discuss the intrinsic importance of the Job Guarantee to MMT.
The video goes for 11:44 minutes.
Note the discussion is mostly via Zoom, which means at time the audio and video quality is less than first-class. But we are learning to live with that constraint.
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I decided to go laid back today
I dug out an old album that I have had since my teenage years – yes, old.
It was released on the 1969 album – Cal Tjader Sounds Out Burt Bacharach – on Skye Records and features the American vibes player – Cal Tjader – who I listened to a lot in the 1970s, especially his partnerships with guitarist – Charlie Byrd (for example, Tambu, released 1974) and Puerto Rican pianist – Eddie Palmieri (for example, El Sonido Nuevo, released 1966)
Some classic recordings among that lot and I accumulated them with some zeal.
He was a Cuban or Latin Jazz star but was not born into the music, which made him somewhat unique.
He actually started out playing Dixieland jazz.
He died very young of a heart attack and the world lost a great inspiration.
This Burt Bacharach track includes:
– Jim Keltner (drums)
– Mike Melvoin (piano and organ)
– James Helms (guitar)
– Harvey Newmark (bass)
A very hot lineup.
It is smooth but that is how I was sensing the day would best unfold today.
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.
One of Bill’s hallmark tenets deems that a nation with “their own currency, can always ensure that all the available productive resources at their disposal can be fully employed. The catch is that that level of activity may not deliver a high standard of material prosperity.”
Its the last sentence of that statement that often keeps me from having a full night’s sleep.
You see I cannot dispel from my mind the conviction that what Bill and his adherents have achieved so far with MMT is the easy bit – that is not to say the decades of effort haven’t been highly influential in the way economics is understood and taught.
His conversation with Dr Pavlina Tcherneva is indicative of all that is worthy of MMT principles and beneficial in its adoption. It could be argued for example that any, perhaps temporary, stagnation in GDP statistics in a developing nation is outweighed by the rising trend in societal advantage derived from JG and educational advances.
The problem for MMT is not one therefore for the Eastern World, but its observance in the West.
It is easy just now to lump such concerns under the Covid 19 banner, and it is true that many doubts spin out from this pandemic – the immense employment upheavals that were already lying in wait in the future have been accelerated into a miniscule time-frame.
A Job Guarantee is, on the face of it, a timely remedy for such a cataclysm. It takes no account however of the current resentful mood of the populace (manifest in “popular” political support). Years of austerity on top of an already stagnant middle class economic status, coupled with an expanding and low productive service sector has raised right-wing views, riding on a debt ridden surface, where immigration issues float on a tide of unrest.
To introduce a Job Guarantee into such a volatile environment would take leadership and courage strong enough to carry masses of the hitherto employed electorate towards something that will have to be described as the promised land; free from a techno affluent version of elitism.
That is the start of MMT in its practical form.
Gogs submits that “(t)o introduce a Job Guarantee into such a volatile environment would take leadership and courage strong enough to carry masses of the hitherto employed electorate towards something that will have to be described as the promised land; free from a techno affluent version of elitism.” He’s so right. What it will take to implement a JG and other governmental programs informed by the MMT lens is precisely the kind of inspirational Kennedy-esque leadership able to transcend “the current resentful mood of the populace,” of which inspirational leadership we seem to have NONE, neither in the U.S. nor elsewhere in the Western World. This sobering fact should be keeping all of us up at night. My hope is that necessity will again prove the mother of invention, and that “the immense employment upheavals that were already lying in wait in the future,” now “accelerated into a miniscule time-frame” by the global Covid Crisis, will call forth new leadership equal to the daunting tasks of reaching and uniting “the people” and thereby seizing the reins of government, redirecting it to serve the interests of (as they say) people and planet. That hope may seem forlorn in the light of history, yet as Schweitzer reminded us, history is the story of what has been, not necessarily what will be. Has not humanity reached the point where it must up its game, internally and externally, or lose its civilization, perhaps its life? And if so, should we not, MUST we not, err on the side of belief, even beyond the rational and the historical, in the potential and power of the human spirit?
I think we have much to learn from China regarding managing the economy – and the viral outbreak. Just been reading some of Bill’s posts about the country and its dual currency. No wonder the leaders in the West are shitting themselves.
I guess what MMT has done is provide a better understanding of how governments operate their fiscal policies – and it’s clear they have been exploiting some aspects of the paradigm for many years. It appears China used the money to good effect – investment in the people, infrastructure and industry. Where have the UK and USA invested their spoils? Enriching their elites and lubricating the wheels of the global gravy train.
China is not the problem but may well prove to be an important part of the solution.