Billy Saas and guest-host Will Beaman speak with Money on the Left’s own Scott Ferguson about his essay, “Endogeneity Without Exception: Modern Monetary Theory and the Promise of Heterodoxy,” published recently in the Journal of Economic Issues.
Across the episode, Ferguson re-examines the longstanding debate between endogenous and exogenous money theorists to rethink the foundations of heterodox economic analysis and politics. While orthodox economists understand money to be largely “exogenous,” rendering it external, scarce, and uncontestable, heterodox traditions celebrate money’s “endogeneity,” insisting that monetary forms are fundamentally social, institutional, and generative. Still, Ferguson argues, heterodox economists in Post-Keynesian and related traditions consistently slip into exogenous assumptions that distort political economic analysis and undercut money’s capacities to provide for all. Identifying endogeneity primarily with volatile private markets and treating revenue and debt service constraints as external, fatalistic limits, heterodoxy often naturalizes the very capitalist narratives of scarcity it seeks to overcome.
The conversation turns next to Modern Monetary Theory (MMT). By extending endogeneity to public finance, MMT recasts money as a fundamentally generative and contestable public utility, which remains irreducible to private markets. This school arguably goes furthest to correct the exogenous assumptions in heterodox theory, Ferguson claims, only to introduce new exogeneities into its approach. Such exogeneities come to the fore principally in MMT’s opposition between “monetary sovereigns” that issue money and “currency users” that merely recycle funds that sovereigns issue. In contrast, Ferguson recommends replacing the zero-sum language of monetary sovereignty with more fruitful terms like “agency,” “capacity,” “power,” “authority,” “capability,” “care,” “sustainability” and “resilience.”
Ultimately, Ferguson contends that, despite powerful political, legal, and ideological constraints, all institutions and actors play meaningful roles in monetary generation, rather than functioning as mere recyclers of scarce funds. By embracing endogeneity without exception, he concludes, we open up vital, yet formerly repressed horizons for public provisioning, social experimentation, and anti-imperialist reparation.
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Music by Nahneen Kula: www.nahneenkula.com
Transcript forthcoming …
* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript.
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