We speak with John T. Harvey about a new article he co-wrote with Billy Saas titled, “A Rhetorical History of Modern Money Theory,” out this month in the September 2026 issue of the Journal of Economic Issues. Harvey is Hal Wright Professor of Economics at Texas Christian University. We discuss his recent publication in the context of his broader career in heterodox economics.
Modern Money Theory (MMT) (otherwise known as Modern Monetary Theory) is a heterodox macroeconomic school of thought that recognizes currency-issuing governments cannot run out of the money they create. Because the state issues the currency and requires taxes to be paid in that unit of account, it is never revenue-constrained. Instead, public spending is bound only by real productive capacity and available resources (labor, technology, materials), with inflation—not solvency—serving as the true economic limit.
In “A Rhetorical History of Modern Money Theory,” Saas and Harvey trace how MMT emerged not merely as a set of first principles, balance-sheet descriptions, and policy prescriptions, but also as a deliberate discursive and rhetorical intervention against dominant neoclassical paradigms and institutions. Orthodox economics relies heavily on moralizing metaphors of household frugality, naturalized market scarcity, and the false specter of government insolvency to enforce fiscal austerity. In response, MMT theorists developed new vocabularies, pedagogies, and public-facing rhetorical strategies to demystify money as a creature of law and public governance, demonstrating how public finance can be reclaimed for democratic purpose.
Throughout our conversation, Harvey reflects on the communicative struggles of heterodox economists, the pedagogical challenges of unseating entrenched neoclassical assumptions, the relationship between Post-Keynesian and Institutionalist traditions, and what a rhetorical history reveals about the future of political economy and public provisioning.
Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure
Music by Nahneen Kula: www.nahneenkula.com
Transcript
This transcript has been edited for readability.
Billy Saas
John Harvey, welcome to Money on the Left.
John Harvey
Thank you very much. Thank you for inviting me. I’ve been looking forward to it.
Billy Saas
We’re going to talk a bit about some work that we collaborated on over some span of time. An article that just came out in the Journal of Economic Issues called “A Rhetorical History of Modern Monetary Theory,” but before we do that, tell us a little bit about your research background, how you came to do the work that you do at TCU (Texas Christian University) and otherwise.
John Harvey
Well, if I go all the way back to the University of Tennessee, where I went to undergrad, just because my dad got transferred to Knoxville halfway through my sophomore year of high school. But oh my gosh, what luck it was for me. So, I went to Tennessee initially as a physics major. It turns out physics is god awful boring. Then I went to political science, and I kind of missed the modeling stuff, you know? And I took an econ class, and at Tennessee, it was full of institutionalist, Texas institutional. I say, full, you know, there were 4 or 5, which even in the big department, that was a big concentration and the very first class I took was History of Economic Thought at the intro level.
And I was like, “wow, this is what I’ve been looking for all my life. I love this class. I’ll bet everybody else loved this class too.” Apparently, no, a lot of people don’t like economics. So that was Hans Jensen. Really nice man. Danish. Got his PhD at the University of Texas and fought in the resistance in World War Two. So, a really cool guy and absolutely hilarious. I ended up taking three more classes with him as an undergrad, and then I met some girl, who’s in the other room right now, in my senior year. So she still had a couple more years to go and I thought, “I’ll go here for my PhD. I love economics. I’m gonna do the PhD.”
I took the institutional list again for “Economic History” and “History of Economics,” but then I started taking the upper level macro and, god, it was awful. It was all mainstream stuff. One of the things I remember learning was that the Great Depression was because the money supply fell, which drove down prices, which caused firms to lower wages, which caused people to quit their jobs.
So apparently we had 25% unemployment because people quit their jobs. This, strangely enough, made no sense to me. So one day I found a book on my desk, Introduction to Post-Keynesian Economics, and I started reading. Then I was like, “this is what I want to do with my life.”
Scott Ferguson
Can we pause here? I have a couple of questions. One is, you know, it’s pretty special to have a department in the United States that has a handful of institutional economists. So I’m kind of curious about, do you have a sense of the politics of the formation of that department?
The second question is, at what point did you realize you were in a relatively exceptional place? That this isn’t the econ degree that everyone gets in run of the mill departments across the country.
Then the third question is, I want a little more detail on, “Oh, a post Keynesian book came across my desk.” So how does that even happen?
John Harvey
I can do all three of those. The first one is easy because I don’t know. I don’t know how they ended up with a group of institutionalists there. Presumably somebody got there. Maybe it was Terry Neal or Anne Mayhew, who was the editor of the JEI back then. Not immediately when I started there, but she did eventually become that.
She was department chair and then Hans Jensen ended up there. I think [Christoph] Boehm went to Texas as well. Bill Cole, I don’t know how they all ended up there. But it’s kind of like, why is Chicago the largest Polish population in the world outside of Warsaw? Well, a couple of Poles got there and said, “this place is pretty nice, you ought to come over.”
I assume it was kind of the same way. As far as when I discovered it was something different, I guess it was in the middle of those, and it wasn’t even totally clear in the middle of those graduate level macro classes when we’re learning Barro-Grossman disequilibrium models and money illusion and stuff and it was so boring. It wasn’t like the undergrad macro that I had taken from institutionalists. These were all neoclassicals. I really had no backup plan. I wasn’t sure what I was going to do because this is really boring. I don’t want to spend the rest of my life doing this.
Okay, so the backstory I do know about the book. I know why the book was on my desk. Right? So apparently Paul Kubik, one of the guys in my cohort, had left his book on my desk at some point and wandered off. I see this book on my desk, A Guide to Post Keynesian Economics, edited by Alfred Eichner.
I said, “hey, who owns this book?” And nobody answered and said, “well, let’s have a look at it.” I like to think it was the hand of God working through Paul Kubik that gave me this out. It kept going on about, “sure, we want to use math and structure, but we are kind of worried about the real world, about how realistic the model is, that unlike what [Milton] Friedman says, it does matter how unrealistic the assumptions are, because you’re not going to get a good model otherwise.”
To jump ahead to my first job, the department chair at Tennessee at the time was Bill Cole, his office mate in grad school at University of Texas was Dick Wates. Dick Wates was the chair at TCU and Dick Wates calls – we had no email back then – and said “have you got anybody decent coming out?” He said, “Well, not really, but I guess you can have a look at Harvey.” I haven’t even applied toTCU because they wanted the writing sample and I didn’t want to have to bother putting one together. I thought, “Okay, I’ll apply to TCU.” Well, it was full of institutionalists. I mean, Texas and Oklahoma were back then. So little did I realize, this is when it kind of slowly sinks in that you’re doing something different. I didn’t realize I couldn’t just do the research I thought made sense anywhere, and still get tenure and promotion.
At TCU, I was fine. Publishing in the Journal of Post Keynesian Economics (JPKE) and Journal of Economic Issues (JEI) was perfectly fine. But man, if I went almost anywhere else, I wouldn’t have gotten tenure, let alone full professor. So anyway, I went to TCU. Today was the beginning of my 40th year at TCU, by the way.
Scott Ferguson
Congratulations.
John Harvey
Thank you. Class started today. I’ve been lucky, that it was a place where you could do research in a different school of thought and be rewarded. Now, I don’t know how long that will still be true after I leave, because the department is becoming increasingly neoclassical. Some of them are self-consciously wanting to keep it that way. Others don’t really care either way, but don’t really know of other schools of thought. Well, I will say we do have one really unique thing in our department. We have a class on Contending Perspectives and Economics. Not only do we have a class in that, which is incredibly unique, but it’s required of every major. You must take that class to get an econ degree.
I assume that will go away at some point after I’m gone, but at least right now. Oh, and by the way, in our annual or semester leave senior survey, when we ask what is our greatest strength, Number one reason is they say, “faculty,” which is a nice thing to hear. We do have a lot of faculty, regardless of school thought, who really care about teaching.
But number two is that class, “really glad you taught us different schools of thought.” That was really interesting. So, it’s something that they’re missing out on in other places. So, my research initially was that I’ve always been fascinated by business cycles, but it’s hard to compete in post Keynesian and institutional economics to get publications in something that is so well researched in both of those areas.
So I ended up doing exchange rates for a quarter of a century. I did nothing but exchange rate research. Nobody had done it in and from our school of thought. So, I was like, “okay, well, I’ll try to carve out a niche here.” So I did that. As I said, it’s my 40th year. So for about the first half of my career, I did exchange rates. I just got done publishing a book on business cycles and now I feel like I’m done with that. I finally felt like I could compete in the journals and in the volume and I’m going to go back to exchange rates now. Oh, in the first ten years of our fantasy football league, from 1989 to 1998, I won five championships. No one else won more than one.
Scott Ferguson
I hope that’s at the top of your CV.
John Harvey
I used to put that on my syllabus for my students, “the owner and general manager of the West Cliff Colts.”
Billy Saas
Oh, yeah. You’ve actually written a book that corresponds with that course that’s so popular with the TCU econ students, Contending Perspectives in Economics. I can say that I’ve found that useful in my teaching with students in communication as well. I appreciate it particularly, and I think readers, if they haven’t looked at it, or listeners, if they haven’t looked at it, would also appreciate that. I think this is part of the reason that our collaboration has worked well, and we ended up in the places that we ended up together, was that you’re very sensitive to the argumentative structure and, the sort of the premises and the warrant of the claims of the different schools and how those function. Less overt in the book, but more overt in your other commentary and scholarship is how ideology sort of factors in and that being a major part of that real world story that you were searching for.
I would include that in the list of accomplishments and achievements. You were also the president of pluralism.
John Harvey
Yeah, the International Confederation of Associations for Pluralism in Economics (ICAPE).
I did that for about six years. It’s funny how the book came about, by the way. We already had created the class and there was no decent book out there, so I went to the Edward Elgar booth at the conference, and Edward Elgar, the guy after whom that thing is named, was still actively managing it at that point. And I said, “hey, have you guys got a book?”
They had one that was like 20 years old.
“Is there a newer one in this?”
And he did like a Jedi mind trick on me, because as I walked away I said, “yes, I need to write that book.”
It was nowhere on my radar that I was going to write that book. It was exhausting to write somebody else’s school of thought. Then one of the things I did with the book is that I sent every chapter except the neoclassical one. I was like, screw them. I sent every chapter to somebody, at least one person, sometimes two, in that school of thought to check it for me.
I was like, “hey, Austria!” I sent it to a couple Austrian friends of mine. “Would you be okay with this chapter and everything?” They suggested the change, and I changed everything. I went right along with it. The Marxist chapter. Oh my God. I can’t think of his name right now… Andrew? I can’t think of his last name.
Anyway, he sent me like six single spaced pages of what I had done wrong. It took me several weeks to work up the courage to actually read what he had said, and he was right. I cited everything and fixed it all up, but, man, I almost quit that book several times because it was a lot of work.
But I’m glad I did that now. It was totally different from anything else. I’m really into exchange rates and business cycles and that was just kind of a side trip that I took that worked out really well. So anyway, I’m glad that it is of some use.
Billy Saas
Yeah. The Austrian perspective on human nature is probably not super germane to your exchange rate research.
John Harvey
Not usually, yeah.
Billy Saas
Part of the charm and usefulness of that book and that project is those moments where you pause and say, “okay, well, what does this tell us about their perspective? Or what do we know, what have we seen, what has been written by advocates of this perspective on human nature?”
John Harvey
By the way, that came from Hans Jensen, the guy that I took the first econ class from when he taught “History of Economic Thought,” he made a big deal out of it. Okay, these people weren’t just these people, they had hopes and dreams and visions and these things fed into what became their theoretical models and so forth.
I took that. In fact, I even cited it in the book, but that came from him from the very first class I ever took in econ.
Billy Saas
Very cool. To talk about how you and I first got to know each other from. I was aware of your work, and, at the time, was a member of a new division of the National Communication Association called the Economics Communication Society. We were going to hold a pre-conference at our 2017 meeting in Dallas and I was part of the organizing effort of that pre-conference.
I knew you were at TCU, I reached out and said, “hey, would you be interested in talking to us comm scholars, most of us in rhetoric about econ and maybe even specifically about Modern Monetary Theory (MMT),” because by that time, I think through your platform on Forbes, you had been pretty outspoken about MMT, and engaged their ideas in a fair and honest way.
You said, “Sure.” We got together in Dallas that year, and you gave a talk that I think went down very well and was introducing much of the crowd to MMT. This is a bit of a snapshot in time. We’re in 2026 now. This was almost ten years ago. You would have been talking about MMT in front of a crowd that, for many of whom, had not even encountered it yet.
For all of MMT’s relative rise in that decade, there are still academics in other fields who would not have heard of it. I don’t know if that’s the case anymore.
Scott Ferguson
Oh, I say that it is. It’s okay. I encounter that all the time. You can never take that for granted. It’s been in every major news publication, but some people still have never heard of it. But I digress.
Billy Saas
So the paper that you presented there, I guess I would invite you to talk about your recollection of that pre-conference, your project in that paper and get us started on how we got to where we got to in RGA.
John Harvey
2017 is right. I was like, “oh, yeah, that’d be really cool to go over to Dallas.” I find that non-economists are much more open to what I have to say than economists or people who are trained in a certain way in economics. So I thought, “well, this would be really fun.”
Everyone was really nice. I remember when we went out to lunch afterwards, and chatted with various people. But I wrote a paper to go along with the presentation to kind of organize my thoughts and I do a lot of general background on economics. I think I showed how often certain search terms showed up in mainstream journals. Did you know, by the way, that if you go to look at their standard economics journal listing of their top ten journals? Seven do not use double blind review. Now, that’s kind of what science is built around, isn’t it? The double blind review.
Seven of the top ten journals supposedly in mainstream economics don’t use double blind review. One of them is by invitation only. Okay. All right. So you’re gonna have journals like that. Then six out of the remaining nine, they know who sent that paper and the referee knows who sent the paper.
You’re not going to tell me that there’s not a reason for that. So anyway, it’s terrible. So I went through things like that, sort of a general background in economics. But, I didn’t want to leave it there. I thought, “well, I’ve done all this work.” If I can jump into a little bit of background, I’ve coauthored papers before. Not very often. I’m usually on my own schedule, my own time, and I don’t do it much. But never, ever have I coauthored with somebody where there’s no way I could have written their part of the paper, and there’s no way I could have understood the things that you understood about the “A Rhetorical History of Modern Monetary Theory” piece that just came out in an issue with one of Scott’s papers.
For example, when you talked about Milton Friedman, and his “free to choose” and how you can see some parallels with the success of MMT. I would never have thought of that. Papers I’ve coauthored with economists, I probably could have written their part, and they probably could’ve written my part, but it was a lot easier to do it together.
Now, as you pointed out, it took us about ten years from the beginning of the idea to it actually being published. It went through a lot of changes over those years. This was the last round of sending it out, which took place about this time last year.
Then we got these massive comments from the referee that, oh my God, how will we ever address all this? But we did. And to me, it is one of the most unique papers I’ve ever written for the reason that there’s no way I could have done your part. I could not have had those insights. In the academy, we talk all the time about interdisciplinary research.
Wouldn’t that be great if we did it? This actually worked, we actually did it. We were more than the sum of the parts, and it worked out really well. I’m sorry that I’m talking about the creation of it without the content.
Billy Saas
No, no, I think that is interesting. For me, a huge part of the content is this meta content of its production and publication. Thank you for the kind words. I was deeply flattered in 2017 when you asked me after the pre-conference if I’d be interested in tuning it up for publication in a communication journal.
I guess the meta content that I would fill in is that those ten years and the many submissions to many different journals included submissions to communication and rhetorics focused journals with varying results, and varying contexts. So we had to pull it from one for disciplinary reasons. And then another one was a split review where the editor went the way of the second reviewer.
We ended up not giving up on that, but trying our luck and turning to a respected, long running, more squarely economics journal. We look at the other articles, it’s definitely an economics-ass economics journal in very straight ways. So we’ve ended up here now, and I’m super excited. I hope you would consider after those ten years, writing and coauthoring again, although I wouldn’t blame you if it didn’t ever again.
John Harvey
Well, let’s see some time in 2036.
Scott Ferguson
Yeah.
Billy Saas
So, a tremendous amount of fun. Very frustrating. Glad it’s out. And in fact, the day we’re recording this – we didn’t plan it this way, but – it came out today.
John Harvey
It came out today. It’s really neat, very exciting.
Billy Saas
So I’m going to step aside here. As one of the authors, I guess I’ll open up for some questions.
Scott Ferguson
I’ll step into the breach, because I want to know what this article is about. I mean, obviously I know because I read it, but we’ve been talking about the kind of meta history of how it came to be, which is interesting for all kinds of interpersonal, institutional reasons. But okay, so the title, just to say it again, “A Rhetorical History of Modern Money Theory.”
So why is it titled that? Maybe that’s one place to start. And why does that matter? Why isn’t it called, “A History of Modern Money Theory?”
John Harvey
Well, let me toss in first, real quick. Over those ten years, there were a couple times where we both just kind of gave up on it.
“Well, it was interesting, but, well…no, let’s give it another shot.”
“Ah, it didn’t work again, but let’s give it another shot.”
Another reason why I’m really proud of this piece is that we really worked really hard on this. Okay, so I had a piece come out in the JPKE last year and I wrote it in two weeks. It was pretty good. It was a survey article, and I had done a lot of the background research already, and I was on sabbatical. I like the article, but it took me like two weeks. I mean, maybe six months, if you count all the time I spent collecting the articles. I made a spreadsheet of the articles because it was going to be a survey piece.
So I wanted to say, “Okay, these articles fell into this category, these into this category.” This one, man, was hard, hard work. And I think it turned out great, but, I’m going to let Billy answer the question of why it’s title is that, because that’s his title.
Billy Saas
Yeah. Yeah. Well, I mean, I’m first of all a big fan of “no colon” in the title. This accomplishes that. It’s pretty straightforward. I think it does what it says on the tin and what it promises on the tin is connected with a kind of area of scholarship in rhetorical studies, in the kind of communication tradition where the discursive outputs and habits of a specific community are tracked over time in order to derive some kind of lesson or other.
As somebody who had been variously involved with on-the-ground arguments, but then from initial like early dissertation times, just very compelled by the arguments themselves made by Randall Wray, Stephanie Kelton and other MMTers. So this would have been the early 2010s when I came into contact with their scholarship. This is a history that I’ve outlined in the Liminalities piece that was published a couple of years after John would have given his keynote.
But we published a special issue of Liminalities from Money on the Left, where I describe some of this background. Anyway, a lot of research over time, a lot of reading of the blogs and kind of coming through my continuous contact with not only the blogs, the podcasts, the posts, the editorials, the comments in the comments section of the New York Times of MMTers.
Following that stuff very closely as sort of an interested party, but then also as a student of communication and someone interested in rhetoric, noticing that this seems to be a, if not entirely novel, certainly a deviation from the norm of how economics is done. I got interested in MMT from that perspective and started to try to bring to bear some of the tools and concepts that I got throughout my graduate studies on studying and trying to learn something from all of this reading and participating through conferences and otherwise, and this kind of
broad discourse community. I think John brought the perspective in his keynote that was, I think, very much from a member of that sort of discourse community, from a more central perspective. I would actually like to put the question to you, John, how did you first come into contact with MMT?
How did it meld with your institutional background? My entry into this was naive, and then educated and then, eventually, I guess not cynical, but tired encounters with all of this rhetoric over the years, and trying to make sense of it, also coming into contact with John, who was just a great person to offer additional perspective on how this stuff works and basically why MMT became so notable as a school of economic thought in the 2010s when it seemed like it had been a very long time since any school of economic thought had made such a splash on the national stage and international stage.
John Harvey
As Saas and Harvey say right here, “…progressed from a state of total obscurity to widespread notoriety, including mainstream economic discourse.” When I was in grad school and I realized I wanted to do non-mainstream stuff, Tennessee hired Paul Davidson, who was a huge name in post Keynesian economics.
I’d already finished my classes, so I talked to him by the copier and that was about it. But, we were all invited out to lunch – I say all, it’s just the two of us — with Chris Brown, who later became the editor of the JEI. We were there with Anne Mayhew and Terry Neal, two giants in institutional economics, and Paul Davidson and his wife, Louis and Alfred Eichner, who was another giant. I loved his stuff.
We’re sitting there and we’re not saying anything because we’re scared. The famous economists are all chatting and they said, “remember back when we thought we could make a change and we didn’t,” and I thought, “oh my God, that is not what I wanted to hear when I’m just about to finish my PhD and go out in the world.”
And so, these MMT people made a change. That’s what you’re pointing out. What makes it so unique is “wow, they were able to make inroads in a way nobody else did. I wonder how they did it?” That’s your rhetorical history of modern money theory. I wonder how they did it?
What remains to be done? What were the successes? What were the defeats? And I think we really do a good job. Having reread it last night, having not looked at it for at least a year, we do a good job pointing out what it was that was unique. That happened.
You asked about my introduction to MMT. It’s kind of funny, actually. Randall Wray and I got our PhD’s about the same time, so I’ve known him since way back then through institutionalist organizations. I’ve known Stephanie Kelton, I think, since she was Stephanie Bell and maybe before she got her PhD.
Pavlina Tcherneva, I can remember visiting her in her graduate school office when she was there. So I’ve known these people for years. I had never heard of MMT until I was having some discussion on, like an old person or a boomer, on Facebook and somebody said to me, “how long have you been into MMT?” I was like, “what does that stand for?” And then they told me I was like, “well, I just thought that was the right way to do macro.” I didn’t know that we had a name for it. I say this when Randall Wray’s book, Understanding Modern Money came out, whatever year that was.
I was one of the first reviewers of it for the Review of Social Economy. So I knew what the ideas were. I just didn’t know we had a name for it. So anyway, that’s how I just thought it made sense from a macro perspective. Now, I used to teach that the government had to eventually balance its budget.
Yes, I did, I used to teach that. Yeah. So did Randall Wray and so did Stephanie Kelton. We all did, because that’s what you heard. So it takes a while to figure these things out. Actually, one of the articles that made a big difference to me was one Randall Wray wrote. It was a Leading Institute piece on Social Security of all things.
He was talking about, “what if we were to hand out tokens to ride the subway to elderly people right now, or, they’d save up some tokens for later, but the main difference is, if there’s not a subway, there’s not a subway. Having the tokens is irrelevant.” That really hit me.
It took me a while to think through. In fact, in my review of Understanding Modern Money, I said, “it’s one of those books where you’ll read a paragraph and you just want to sit the book down for a while and think, ‘I don’t know what you just said, but wow, I’m going to have to think about that.’”
Scott Ferguson
How resistant were you? I’m always fascinated by people’s — I mean, this isn’t always the best way of putting it because it’s a religious term — conversion stories, right? Like how were you persuaded? Was it like, “oh, this seems to make sense, but I’m still a little confused. I have to figure it out.” Or did you have violent rejections of it and then have to kind of come back around?
John Harvey
I was excited to hear another viewpoint. I don’t think it’s just that because, you know, I could read an Austrian viewpoint that’s different and exciting and say, “I just didn’t sit with me.” But, I am always excited. Let’s see, today’s the 25th. In two weeks, I’m going to see the Sex Pistols in Dallas. Then I’m going to see The Damned in Dallas and then the Buzzcocks in Dallas. So I was always into different stuff. Everyone else was going to see Journey and Rush when I was in college and I was like, “Blaah,” and was gonna throw up, but, I’m going to go see the Dead Kennedys.
Scott Ferguson
This is the best way to answer this question. Yes, yes. How did you take to MMT? “Well, let me tell you about my Sex Pistols.”
John Harvey
That’s right, that’s right. I was always open to it and don’t forget the first people that taught me were institutionalists. So that was my first introduction to economics. It was Adam Smith and Marx and Ricardo. So that’s what got me excited. I was always far more excited about the subject matter than I was about the tools.
I didn’t want the tools of analysis because, like I said, I started in physics, went to political science, and I enjoyed it. I majored in political science, but I like model building. So I like the structure and the math. I enjoy that, it’s the way my brain works. But I was always really interested in understanding the actual problems, regardless of whether the math can work it out or not with regard to how complicated it is. There’s some stuff in MMT that I don’t think makes any sense. So I will say that right there. Now, I have had people press me in interviews before, “what is it?” And I refused to answer it because as long as we’re under siege, there’s no point in picking on each other.
When we’re on top, then I’ll say, “by the way, I don’t think that makes sense. That was a silly idea.” So there are things I don’t think make sense. Just because it’s new and different, I don’t jump onto it. But it’s an interesting point, Scott. I never thought about that before.
I was excited to read something like that. The build up to the main point all made sense to me. And then the main point blew me away. I was like, now if the build up had made sense, like, for example, the thing I told you about what I learned in grad school that the money supply fell during the Great Depression, which caused prices to fall, which caused wages to fall, which caused people to quit their jobs. So 25% of unemployment was volunteer unemployment. That was unique and different. It was also stupid and so that one I didn’t jump on to. But the Randall Wray book, every time I would come across one of these ideas, “Oh, yeah. That’s good, that’s good, that’s good, that’s good. What? Okay, I got to think about that for a while, but that’s really interesting. I never thought of it that way before.” It sank in after that. So maybe it’s not just the Sex Pistols. Maybe it’s also that I thought that it made sense.
Scott Ferguson
That’s a great answer. The MMTers will often say, in the early days you could count on, maybe two hands the number of people who even knew about what they were up to, let alone agree with what they were up to.
Then we’ve seen this exponential growth over the years and you guys do a really great job at charting not only that growth, but the rhetorical strategies that are taken up and then the kind of rhetorical situations that crop up that help expand this discourse. So I’m wondering if you could take us back to the beginning and maybe we can just walk through this rhetorical history a bit, and we can pause at some emblematic moments.
John Harvey
Right. Well, Sass and Harvey say that it really came out of the post Keynesian thought listserv. This was back in the days of the early-ish internet. I was really excited about it. I was one of the first ones to present a paper that was very exciting on the Post Keynesian thought listserv.
It was on heuristic judgment theory. It was actually very helpful. It’s one of my most cited articles. I’m not sure why. I thought it was okay, but anyway, this was back in the 1990s, right Billy?
Billy Saas
1993-ish.
John Harvey
Warren Mosler, who I finally met by the way, I’d never met him before. I was in Edinburgh.
Scott Ferguson
You met him in 93?
John Harvey
This March. I never met him before. We exchanged things, but he came up to the Scottish Economic Festival that was in Edinburgh in March. I was speaking there. So he came up and we met. It was really nice. So anyway, he was a fund manager, and he was bringing up all these ideas that we associate with MMT.
Now, basically, a government that’s on a flexible exchange rate with a sovereign currency faces no budget constraint. They face many, many, many other constraints, but they don’t face a budget constraint. That’s where you get the straw man, “They say you can print money and there’s no consequences.” No, they don’t say that.
Nobody says that. Anyway, he’s pushing that and Randy and some of the others are like, “yeah, I don’t know…maybe,” and then it finally sort of congeals into this. There’s a bit of a history behind it. I just saw that last night, Billy, as I was reading through this, all the folks that Randall Wray cites as folks that had blazed this trail earlier.
Well, Abba Lerner, I guess, and others talked about this before, and then, Sass and Harvey say that this eventually evolved into a literature. We have Randall Wray’s Understanding Modern Money. Then we have Louis-Philippe Rochon write some stuff, all coming out of this conversation.
Then I think initially on the post Keynesian thought listserv, they were missing each other, at first. Then it kind of came around to, “Oh, wait, I see what you’re saying, and that all makes sense. But, yeah, I guess you’re right.” That’s the 1990s. I happen to have here on page 850 of Sass and Harvey, the Google hits for Modern Monetary Theory from 2000 to 2004, there were 191. And I won’t read every line here, but from 2020 to 2024, say, another five year period, there were 21,700. So 191, to 20 years later, 21,700. It outnumbered the hits of things like Austrian Business cycle theory, stuff like this. I’m sorry, I’ve skipped a couple of stages here.
We end up with these scholars from the post Keynesian thought list, writing scholarly stuff about what later is called MMT and then — and this is Billy’s idea entirely — Steve Keene, who is sort of associated with the MMT stuff, but more just sort of post Keynesian thought, he writes a book called, Debunking Economics.
He’s sick and tired of trying to argue with the mainstream. This is sort of separate from the whole MMT thing, but it ends up feeding into it. He’s sick and tired of trying to get into their journals. They’re not gonna pay any attention. They’re not going to listen to us. “So screw you,” as he says, “I’m taking the gloves off. We’re going to have a knock down, drag out fight.” One of my favorite things that Billy says in here, not me, he says he talks about some of the reviews of the book when it first came out, and he says they missed the point. They missed the important thing he did.
This is from the rhetorician. The really big thing he did was he took the fight to the street. He changed the level at which we’re going to take this fight. “You know what? Screw you. Do your stupid economics. Go ahead and assume away unemployment. All right, that’s fine. But I’m going to tell people that you’ve been assuming away unemployment. I’m going to tell people that.”
Steve Keen has a fantastic article on the economics of climate change and the horrible job that mainstream economics has done in examining climate change. “I’m going to tell people.”
By the way, we asked Steve Keen and Randall Wray if they would read the article for us and let us know if there were any factual errors or whatever.
Steve Keen apparently was a little nervous to read it. Then when he was done, he was like, “Oh my God. Thank you.” He had been put in such a central place of having shifted the argument.
Scott Ferguson
Something I want to point out just for our listeners. I mean, this is a deep cut, I don’t even think we’ve defined modern money theory. For the people who are listening, anybody who isn’t already a little bit on the inside. What I do want to suggest for people who are groping and trying to find anchors here, is what’s crucial here about what Keene did with Debunking Economics.
Debunking Economics is a popular book. It’s a trade press book. We’re talking about talking to the general public using non jargony, non specialized language in order to debunk economics for and to the general public. That’s the essential move here. So instead of fighting on the terrain of academic conferences and academic journal articles alone, he took this to the people and to the commercial press and put on his boxing gloves in that arena.
So the move was to expand the arena and change the medium.
John Harvey
Because you were never going to beat the neoclassicals in their own journals. I mean, that was just never going to happen and so he shifted over. Then there was the financial crisis, which created a leverage point for those who were arguing that neoclassical economics, especially the macro stuff, was really flawed.
They, initially, had all kinds of mea culpas and, you know, “oh, we didn’t know this could happen.” They eventually got over that and decided, “yeah, we know what was going to happen.” But, Steve Keene jumped in on that and then that’s it. Roughly speaking, I believe this is when all the other blogs started up as well, right? All the MMT…what’s the one at UMKC?
Billy Saas
New Economic Perspectives. But I would say that part of the story, too, is Bill Mitchell.
He had started a blog as well in the early 2000 and Steve Keene also, before New Economic Perspectives, Keene and Mitchell both had their blogs going. Each, in a way, could make a claim to anticipating what happened in the GFC (Global Financial Crisis) and then afterwards would make claims to having seen it coming and cashing that in.
John Harvey
For Steve, there was an academic article on who did predict the financial crisis, and he laid out some really strict considerations and, he said, “well, you know, Keene did. Keene wasn’t always saying the sky is falling. He was saying, ‘the sky is falling for these specific reasons, based on a mathematical computer simulation I built back in 1995.’”
This is now 2007, and fairly accurate. Then, this created the opportunity for people who were critical of the mainstream to come in and talk, but not to talk to the mainstream. They all took off with blogs, and as it says in the article, Stephanie Kelton was the first one for New Economic Perspectives.
Another really important thing that is pointed out in the article is that non scholars, lay people, were welcome to the discussion. They were welcomed in and it created this grassroots support. There’s this one piece by Paul Krugman where he says, “this might be a bit wonkish.”
Scott Ferguson
In parentheses.
John Harvey
I hate that! “I’m sorry, this is going to be a little bit too big for y’all. I’m going to try to dumb it down if I can.” They didn’t do that. They had conversations with people who weren’t professional economists and they spoke with them with respect and bothered to answer them. This created something that probably had never been possible before without the internet.
Scott Ferguson
A lot of that took place on social media and I was part of that. I was part of that project. There were several Facebook groups and many of the key MMT economists like Stephanie Kelton and Matt Forstater, they were there and Warren Moser was there, and they were explaining and they were engaging.
I mean, it was really a rhetorically rich situation. It was pretty amazing. It was interesting for me because I’m a trained scholar, but I’m not a trained economist. I felt it was an interesting position because I knew they were the academics and everybody was sort of looking to them to explain.
I had my own questions, but I was sort of the layperson in the group. It was a weird position for once.
John Harvey
They did a fantastic job. Well, there’s this thing I just went to in Scotland, held by William Thompson, and it is all coming out of the whole MMT movement. They had all these policymakers or people that were interested in climate change and so forth.
It wasn’t for scholars, per se. But it was a fantastic meeting that took place over the course of 3 or 4 days. This wouldn’t have happened without these scholars, primarily from UMKC (University of Missouri-Kansas City). Here’s the other thing that’s great about the MMT stuff. As you said earlier, Scott, we haven’t really explained exactly what that is.
I mean, it’s just basically going to be there. As I said very briefly earlier, right now everyone’s freaking out over — what is it — $40 trillion of debt?
“What are we going to do?”
Oh, the same thing we did when it was $20 trillion, which is absolutely nothing. You can find so many quotes, even in mainstream economics on this. It’s impossible for the United States of America to default on debt in its own currency. It’s impossible. Now, have we wasted resources by using those $40 trillion or whatever he’s contributed by using those to attack Iran rather than address climate change? Yes. I mean, we have places to complain here.
Scott Ferguson
Are there distribution problems? Is this welfare for the rich? Yes.
John Harvey
That’s right. Yeah, absolutely. Are we running out of money? No, we’re not running out of money. When the federal government creates this money, they use it to command resources.
I have a YouTube series, “The Cowboy Economist,” where I try to explain various concepts. The favorite one I ever made was on World War Two, because there is this myth in that fantastic Ken Burn’s World War Two series (The War). He went on and on about how America paid for the war itself, that we had the bond drives, and that’s how they pay for the war.
Scott Ferguson
In the middle of a Great Depression.
John Harvey
So you’re telling me Ken Burns, that in 1941, when U.S unemployment is still almost 10%, that if we had not been able to borrow the money from grandma and granddad, who had just had their farm foreclosed on, if we were able to borrow that money, that regardless of our ability to produce goods and services, Hitler would have been marching down Broadway.
No, the money was irrelevant. We made up the money. It’s one of the good things that Covid did. That first summer of Covid, nobody argues that we just made it up. I mean, who did we borrow it from? China? That’s kind of where the whole thing started. Europe was in worse shape than we were.
We just made the money up. Are there consequences to that? Absolutely there are. Is bankruptcy one of them? No. That is a core concept. The federal government is not going to run out of money. What we do need to worry about is where it is placing its priorities in producing goods and services and activating resources and so forth.
Then a big part of that has become part of the whole MMT approach is the job guarantee. This goes a little bit further back into post Keynesian economics and institutionalists as well, the private sector does not automatically create a job for everyone who wants a job. Now that absolutely is the opposite of what mainstream economics believes, mainstream economics believes it does.
We don’t think it does. We believe that to the private sector, labor is a cost to be minimized. So, when they put in a screen in McDonald’s to put your order in, they laid somebody off. Now, I like to think, “Good. Now my Big Mac is cheaper.” That is good, as long as we’ve given something else for that person who got laid off to do.
That’s where the job program comes in. What the government should be doing is maintaining a continuous, “oh, you can’t find a job in the private sector? We’ve got one for you over here.”
“Oh. Am I going to be making hamburgers again?”
“No, because hamburgers are profitable. We leave that to the private sector. Now we’re going to have you help kids after school, or we’re going to help you address climate change. We’re going to have you rebuild the dikes in New Orleans or whatever there are.”
When we run out of social problems that are not profitable, then we can work. But until then, we’ve got all these things we could be using these resources for, and we don’t need the frickin Democrats telling us we need the tax first before we can do it.
We don’t need that, it’s just driving me insane. So anyway, that’s my rant on the MMT stuff that I think makes perfect sense. In fact, Melanie, my wife, is a huge fan. I was telling her in the car one day, “yeah, there’s some post Keynesians that don’t like the job guarantee.”
She’s like, “What? What’s their idea?”
“Well, they don’t really have one.”
“Well, that’s why. They don’t have one!”
By the way, for those listeners who don’t really know what MMT is about, and is going to take a deep dive into it now, Melanie lives with me, it turns out, and had to see me give a talk on it three times before she said, “oh, now I get it,” because it is challenging so many conventional wisdoms all at once. It’s too much.
Scott Ferguson
It takes a while.
John Harvey
It does, it does. It takes a while. Then once it locks in, though, you’re like, “wow, this seems so obvious now.”
Scott Ferguson
You can’t unsee it.
John Harvey
Yeah, that’s right. In fact, we even have a quote in here from Stephanie Kelton where she says that very thing, that once you explain it to people, they’re like, “why didn’t they tell me this before? It makes so much sense.” Anyway, I’m sorry I went off on a little explanation of what MMT is.
Scott Ferguson
No, I love it, we need it. We needed it. We’ve already mentioned our dear friend Paul Krugman, who, I think, is actually getting more interesting in his post-New York Times ventures. But, you all provide a rhetorical analysis of a pretty critical role that he plays in amplifying the microphone for MMTers despite himself. So maybe you want to talk a little bit about that.
Billy Saas
I would say, this was observed at the time by Matt Forstater too. It’s not completely novel but MMT is doing its thing in the blogs and many of the everyday readers of New Economic Perspectives made their way over to Krugman’s editorials and into the comment section and that kind of pissed him off a little.
He started to respond to them, not by responding to them directly, but to respond to the ideas that he understood them to be proposing. Over a series of rejoinders from not just MMT but also Kean. I think the other part of the story that’s important is, Steve Kean was in his sights in these as well.
By responding to their arguments, by talking about them by name, he gives them a high profile that wasn’t available to them until then.
John Harvey
They have nothing to gain by engaging with us other than beginning to validate us.
“You’re worth talking to. You’re idiots, but you’re worth talking to,” but totally ignoring us otherwise.
That’s one of the other things that’s the point of that in the article, is that Keane and others took aim at specific mainstream economists.
They didn’t just say, “well, the idea of the nonlocal fund theory of interest is flawed. And so-and-so said it and so and so was an idiot.”
Okay. Well, not quite like that, but it’s flawed. Well, as a matter of fact, I can point out pieces that Krugman has written where he clearly is buying into the Loanable Funds Theory of interest, which I won’t bore people with, but, my God, that didn’t make sense 200 years ago, let alone now. That’s not the way the financial system works. So anyway, yeah, they were taking specific aim, and most people didn’t take the bait, but Krugman did. Then we end up with, I think, Kenneth Rogoff actually says something about it.
Let me mention one other thing here that I don’t think we ever mentioned here. I don’t think we needed to, what’s his name? Romer. Paul Romer, who eventually won the Nobel Prize in economics. No, we don’t have it here. Paul Romer wrote a piece a few years ago, 2016, I think it was, on “The Trouble with Macroeconomics.”
He’s writing about his own school of thought, macroeconomics, and he literally says it is so bad it no longer qualifies as scientific research. Now, there’s not much more damning thing you can say to another supposed scientist, that it is not even science anymore. He says that modern macroeconomics in their school of thought no longer deals with the way human behavior works. He ends up making up names like fairies, you know, and so forth. They’re the things that are causing business cycles and so forth. Now, I would not agree with Romer’s final conclusion. That is, we should go back to an old style neoclassical Keynesian approach. But, man. I was at a conference with him, thanks to Steve Kean, actually, and I asked Romer about the article he wrote that blasted Milton Friedman and Rober Lucas and all these mainstream economists.
He said, “oh my God, I got so much hell for that. Not for what I said. But, ‘how dare you say something bad about Milton Friedman?’” Well, that’s not the way science is supposed to work. I know that scientists are people too, and that there’s absolutely going to be politics and personality conflicts.
I’m writing a chapter right now for a friend’s book, Louis-Philippe Rochon, on American Post Keynesian economics, and one of my sections in there is about how Joan Robinson at Cambridge simply wasn’t talking to this other economist and they marched out, and I’m like, “oh, God.We’re already under siege. Why are we fighting with each other?”
It’s interesting to me that somebody who later won a Nobel Prize, not for his work in macro, but elsewhere, he was like, “man, our macro is awful.” Many neoclassical economists hate their own macroeconomics. I’m not crazy about the micro either, but, at least it gives us some common ground to talk about these things.
But yeah. So the MMTers and Keane took specific aim at these individuals who were big names in neoclassical economics. Krugman at first, and then a couple of the others actually shot back and this helped. We’re in The New York Times, being made fun of, but nevertheless.
Scott Ferguson
Then people get curious and then the blogs grow. I think another thing to point out here that I don’t think ended up in the final paper, because you can’t put everything in, is in the wake of the global financial crisis you also have students rising up. They want explanations. They’re like, “Why are you teaching us all this? This is BS that can’t deal with the crises that are breaking our world right now.” Several student organizations cropped up.
John Harvey
Paris was one of the first ones, I think. A French University, and then Cambridge.
Billy Saas
Well, I would say so you mentioned anger, Scott. While we don’t talk specifically about the student uprising, and I would say that we don’t get too deep into affect, but I think that that is very much part of the story. One of the earlier iterations of this piece was more about affective dimensions of MTV’s appeal.
Backing up just a little bit, part of what I find so fascinating and have found so fascinating about MMT’s rhetorical history is, so much of the thinking and self-reflection was done in public.
John Harvey
It’s a good point. It’s a good point.
Billy Saas
Randall Wray’s blog is out there repeatedly trying to point out and consult readers for their feedback on ideas about how best to counteract the arguments of neoliberalism and so on.
There’s good evidence that that thinking ends up playing out in their public facing, it’s all public facing, but in some of their more high profile talks, papers and otherwise. So I really love that one of the invitations to this project, one of the inviting things about it was so much of it is the thinking behind the strategy is performed in public.
John Harvey
Yeah. I hadn’t thought about that, but that’s absolutely right. Of course, that endeared these people to the folks that were first reading about it. It was like, “Wow, I mean, Paul Krugman isn’t responding to my comments in The New York Times, but Randall Wray is, and that’s really cool.”
Billy Saas
I would say so, too. If I can put you on the spot a little bit here, John, when you gave that keynote talk, I remember what the affect was and the ad hominem and the way that MMT advocates were comporting themselves online was making you quite nervous and a little bit upset. As your collaborator on this for so long, it seems like there’s been some adjustment.
I guess maybe you can reflect on that. In what ways has that changed for you?
John Harvey
Yeah, you’re exactly right, Billy. Back when I was doing that talk, I was a bit worried about some of the grassroots people being more like assassins than ambassadors. They didn’t always have a really good understanding of the economics. They had some information about it, but not enough to really carry on a good argument.
That worried me. In part, I think it’s changed, and in part, I’ve changed my view. I think we need assassins as well as ambassadors, if that’s your personality. I’m not good at that. I’m more, “Well, thank you so much. It turns out I’m not a bastard. My parents were married when I was born, but, you know, on to your question.”
That’s what I used to do on my Forbes blog when I used to answer every comment. “You owe your students their money back!”
“I’m going to get on that right away. I appreciate that, you know, also…”
That’s more my style. Other people, it’s not. Other people are going to attack. This is going to be a crazy analogy here, but I love military history. Part of the Soviet’s strategy for World War Three, had it happened, was, they were just going to attack everywhere at once. They were going to find out, “ooh, we are making some progress over here by Hamburg, let’s reinforce that.” So, alright, let’s attack everywhere at once.
There are going to be some people being assassins, some people being ambassadors, some people doing academic work, some people doing grassroots organizing.
We’ll all do this and go “hey, where are we making some progress? Because you’re making use of your personal strengths and weaknesses in your approach and then, you know, we’ll push forward wherever we seem to be making progress.” I’m really excited about what William Thompson has been doing up in Scotland. But also, I think it’s changed somewhat. I don’t know if maybe I’m just hanging out with different people, but I know that Torrens University in Australia now offers that MMT based — it’s not really MMT based but it’s certainly one of the foundations of it — master’s degree in sustainability.
And a lot of those people who were really fired up about the ideas initially are now getting educated about them and getting a really good, solid foundation in macroeconomics and not just a few of the bumper sticker slogans from MMT, and that’s all they really know.
I think they’re just getting a lot more educated about it. By the way, the book I just came out with on business cycles is really boring. Especially the chapter I wrote the whole thing for, chapter four is why I wrote the book, and it’s a history of the US from 1954, I think, to 2020, which is our last recession.
It goes through, “Nixon did this and Reagan did that,” and so forth. That’s why I wrote the book. I wanted to write that part, which is probably the most boring part to anybody else. But that’s why I wrote the book. The beginning of it, however, is a theory of what causes business cycles.
I kind of wrote that for MMT people, but I didn’t write it for other economists. I have an appendix where I do the math and stuff. I wrote it to make it understandable, so that when they get into an argument with the mainstream economist, they can come back with some stuff. They can understand that.
And then chapter five is my policy chapter. That’s all the MMT job guarantee stuff. I thought they were lacking a deeper knowledge. They were full of enthusiasm, but I think that’s changed. I think that that’s actually changed. So you’re right, that was worrying me. It’s not worrying me now because, A) I think the people have changed and B) because I’m thinking, “well, maybe we need some assistance too, on the other hand.”
Billy Saas
Yeah. One more thing I’d say about the structure and maybe the to wrap up the story, bring us current to where we end off in the article, which is fairly contemporary. It would be to say that, I imagined and worked with throughout the writing process, I imagined Fred Lee’s A History of Heterodox Economics as a launching off point and also a foil for the kind of history that we were doing, because in that book, which is great and tells an amazing story of the sort of institutional history of heterodox economics and its multiple schools throughout the 20th century and into the 21st. It’s very much about sticking to the script and building an infrastructure for journals to be more successful as heterodox economists. Basically sticking with the model that had been tried and tested throughout the 20th century. What we have with MMT is an example, not the only example, but an example of a heterodox school getting off script and going — wildly at times, as Steve Kean put it — into the streets.
John Harvey
Right. Yeah.
Billy Saas
It’s not all about “into the streets” because after the Krugman moment and into the mid 2010’s, we have the first appointment of an MMT person to a significant high profile federal position like Stephanie Kelton, as the budget advisor for Bernie Sanders. Then we have our uptake in the conventional policy circles for, albeit unconventional candidates, like Alexandria Ocasio-Cortez and others who would end up hearing from Stephanie and others. As a result of the work that had been done making noise and the street team that had been developed right through conferences and other means, who would be going to some of the public meetings that these politicians would be participating in and asking them about things like the jobs guarantee or about MMT more specifically. Where I think we end up in the article, and starting in the introduction, the relative ascension of MMT. What’s been interesting about writing this over such a long period is that there were definitely some rises and falls and some rises and falls within that time period. As John said, the early days of the Covid era seem to have validated and elevated the MMT perspective and then subsequent…
Scott Ferguson
Mainstream commentators saying things like, “we’re all MMTers now.”
John Harvey
And blaming MMT for inflation.
Scott Ferguson
That’s right.
Billy Saas
I would say inevitably and somewhat predictably doing that. This piece, big picture, is an opportunity — in its ultimate form here — to reflect on the state of early MMT and MMT 1.0’s project today. What remains to be seen, what remains to be done, and especially in light of the apparent disregard for the fiscal situation for the public that is on display in the current administration.
John Harvey
But, the Democrats are driving me insane because they want to criticize Trump. Okay. Fair enough. But, you know, the $40 trillion debt is being talked about by just about every other person on Facebook. Several times I’ve started to type a comment, “I was like, oh my God, I don’t have the energy.”
There’s a local politician here, a very nice man who is no longer going to be a politician because they redistricted his area. So he’s no longer going to be able to win. But he’s a hard core, “Oh, we have to keep these Bernie Sanders types out, because they’re our MAGA.” I don’t know, I guess I’m in a stage where I just don’t have the energy right now to go in there and fight these fights.
This is where we need our assassins to go in there and say something about this. This has been really distressing to me the last few weeks, all the attention from the left on the debt. I saw somebody else sharing something, “the debt created by all Republican presidents, the debt created by all the Democratic presidents.”
We’ve got to shift that. We’ve got to shift it. Where we ended up in the article was, it seems that the big thing we haven’t been able to overcome is the fact that mainstream economics still holds the high ground. Every time, what would you think if you weren’t knowledgeable about all this?
Let’s use the analogy of cigarette smoking and cancer and if every time we tried to say cigarette smoking causes cancer, if the American Medical Association said, “no, it doesn’t,” well, what would we think?
“I haven’t done any research on lungs in years. So, I have no idea whether that’s true or not.”
As long as the American Medical Association keeps saying “no, it doesn’t cause cancer,” then I’m going to think, “well, I don’t know who these jerks are that are saying it’s causing cancer, but they’re idiots,” so flip that around.
“We can’t go bankrupt.”
Then we have the American Economic Association say, “Yeah, you can.”
Then you’d say, “I mean, yeah, we’ve got to have a balanced budget.”
So who would I listen to if I weren’t an economist? I’d listen to all these other folks. So somehow they have to be discredited that their climate change research is terrible, that they’re macro research is saying, “let’s assume away unemployment.” Let’s hit that over and over and over and over. I don’t know exactly where. Maybe we do like the Soviets in World War Three and push in a lot of places at once and see where we make some progress. But until we can get rid of that last word from these economists who are going to say, “No, that’s not right, and we’re united on that,” I don’t know how we’re going to win this.
One of the things we do in this paper, by the way, and that was one of the last things we added, was, “what do you need to do to make a scholarly idea into policy?” We pulled this from the literature in public health, I think, where they have a lot of that. The scholars have done this research and are trying to actually make a difference in the real world.
There were four things that they talked about:
1) Attract the attention of one or more friendly policy makers.
Okay, we got that. All right.
2) Convention the propriety of the desired policy.
We mostly have that with Bernie Sanders, who was never an MMTer, but close enough.
3) Persuade them to write, propose and promote appropriate legislation.
We haven’t done that yet, but maybe we can get there, but
4) Garner sufficient support from other legislators for this to become policy.
That’s not frickin happening, because the American Economic Association is going to step in and stop us every time. They’re going to say, “no, cigarette smoking doesn’t cause cancer.” Obviously, the American Medical Association had a positive role in that context, but, to me, that’s what’s stopping us.
That’s where our focus needs to be. Okay, so let’s bring up something depressing, as is if this wasn’t already. I was at a conference at University of Texas where Jamie Galbraith was. A fantastic economist. Great person. This is the part of the conference where we’re all just drinking beer.
And so I said to Jamie, “you know, well, what do you think our odds of winning are?”
“Oh, we’re not going to win.” That’s what he said. “But what else are we going to do? What else are we going to do but fight for what we think makes sense? But yeah, we’re not going to win.”
All right, I actually take some strength from that. I don’t have to measure my success by whether or not I got this policy in place. I want to measure it by the fact that I’m still fighting and we’re still pushing back. So I don’t know if listeners now are very sad or very happy. I hope it’s both at the same time. Clear your head of that idea. It’s like in Band of Brothers, and I believe it’s episode three, where they’re trying to talk to that fella Blithe who won’t fire his gun. He’s really scared. I think it’s Winters who’s talking to him. He says, “look, the problem is you already think you’re going to live. You need to think to yourself, ‘I’m not going to make it through this’ and then you’ll be able to do what you need to do.”
So, maybe that’s us. Maybe we’re the Private Blithe of the economics communication discipline. Look, don’t measure your success by whether or not you win, measure your success by whether or not you stay true to what you know academically, scholarly and morally.
Morally. It is immoral to see people as we do all the time here in Fort Worth, I know you do in New Orleans, I assume in Tampa, all the homeless people. That is a policy choice. There is no reason that has to exist. It is a choice. As long as you keep fighting on the right side, I’ll tell you something else too now that I’m on this soapbox. When those economists I mentioned earlier, when Chris Brown and I went to lunch with these four famous economists and they said, “oh, no, remember, we thought we could make a change and we didn’t.”
Yes, you did, four famous economists, because you kept the idea going to where eventually people like Stephanie Kelton could put it into play because she learned from John Henry.
Nice man. Institutionalist. I don’t know if you know her story or not. She was not majoring in econ. She was majoring in, like, accounting. She took an econ class from John Henry, and John was like, “you know, you’re really good at it, and you should minor in it.”
“Oh, okay.” So he got her hooked, right?
He’s like, “you know, you’re doing really well on this minor. You should major in it. Then you should go to grad school in this.”
So she did. Does John Henry have a New York Times bestselling book? No, but he made it happen. He kept those ideas alive. He was a great teacher. He excited her, and she pursued that.
Scott Ferguson
You walked into the point I was going to make, which is, clearly there are rises and falls, and we can talk about the way that in mainstream discourse MMT was having moment after moment after moment. It kind of peaks during early Covid and then falls off and everybody blames it for the inflation, which for the record, is utter BS.
But I think you brought us back to what I think is the most important, which is not just that it is politically and morally righteous to keep fighting, but also to keep building and to keep nurturing. You know what, we do. We keep doing that. That has its own kinds of ups and downs that don’t track when they follow different narratives.
For example, something you guys don’t talk about in the article is MMT adjacent economists are central bank advisors to central banks all around the world. Nobody ever reports on that or freaks out that Scott Fulwiler is talking to the Central Bank of Indonesia. I don’t know if that’s exactly right, but that kind of stuff has gone on throughout.
That’s not as spectacular as Kelton becoming Bernie’s top economist. This work keeps going on, the pedagogy continues, it evolves, the institution is reproducing itself. We have multiple going-concerns. That isn’t such a clear story of success or failure. That’s living.
That’s collective action. That’s reproducing ourselves.
John Harvey
Right. They’re doing such a great job at Torrens with educating people about these things. So yeah, we just have to keep going. New people are finding out about this all the time. Policy activists, who are leaning our way but don’t see an answer because all they’ve ever heard is what the Democrats view or the equivalent in their country of economics, which is just a sort of slightly left mainstream economics version that is still handicapped by the idea that, “oh, but the economy takes care of itself. We have to balance the budget.”
At the end of my book, in the policy section I’m talking about how the Democrats say, “small business, small businesses are the job creators.” The big job creator was the Cold War and the big job creator was World War Two.
Our problems were gone overnight. 1.9% unemployment. Now, granted, there’s a lot of war stuff going on, but otherwise. Think about it, what if we had built all that stuff and just pushed it off into the ocean, which we did at the end of the war. Imagine all the planes and tanks that got destroyed.
What if we had just built them in Detroit and pushed them into Lake Michigan? It still would have created this much employment as we had anyway.
Scott Ferguson
That’s your version of the Keynes line about digging holes and filling them up.
John Harvey
That’s right, that’s right. There’s no need to do that because we have lots of social problems that we could be addressing. It’d be nice if people in Gary, Indiana, had electricity.
Billy Saas
Well, as Coretta Scott King put it, this nation has never dealt, honestly, with the question of a peacetime economy. I think it’s fair to say that aligns with where we land in the piece and where we will move forward — with hope and despair in equal measure. Yeehaw.
Yeah. Thank you so much, John.
John Harvey
Thank you guys.
Billy Saas
Thank you for joining us. Really appreciate you joining us for Money on the Left.
John Harvey
May the force be with you.
* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript.
