At the beginning there, you heard our guest this week, author and Forbes contributor, Professor John T Harvey and this part two of our two-part interview with professor Harvey on contending perspectives in economics - if you haven’t already, please listen to part one, because nobody delivers insights in quite such an entertaining way as John.
We left off the conversation last week with a paraphrase of British economist Ely Devons, which goes like this: “If economists were asked to study horses, they wouldn’t go out and look at horses, they would sit in their offices and say to themselves ‘what would I do if I was a horse?’”
And this underlines the difference between MMT and the dysfunctional mainstream economic framework that it’s replacing - which is that MMT economists prefer to understand how the money system works by looking at how the money system works, rather than using models that don't represent reality, and blaming the shortcomings of the models on everything except their own lack of intellectual rigour in their column every week in the New York Times.
In fact, last week, the Financial Times felt the need to describe MMT as both right and wrong: “It is right, because there is no simple budget constraint. It is wrong, because it will prove impossible to manage an economy sensibly once politicians believe there is no budget constraint”.
And this is why we send our most important economists to Imagining Money School rather than Understanding Money School - because telling the truth is wrong and we need protecting from reality, or we could end up pissing money away on a Space Force, or something stupid like that!
Fortunately, we do send undertakers to actual Understanding Dead People School, because it’s important that corpses get treated properly and the place doesn’t get too untidy and rancid as people suffer and die from poverty while well-paid clever people are trying to think straight in order to write their next think-piece for the quality press.
If there are any orthodox economists listening, hot tip for you: poverty seems to be connected to a lack of money, and I read somewhere that money is issued by some issuing authority, a sovereign government in a lot of cases, anyway you guys should look into that - because it seems irrational and possibly criminal that people are dying because of a lack of something that can be issued by typing numbers onto a spreadsheet at a central bank. I’ll leave that with you, see how you get on.
To the non-economists: If you think an informed electorate choosing political representatives on the basis of whether or not those representatives can grasp reality is wrong, then you need listen no further and by all means buy a subscription to the Financial Times.
But if you are interested in reality, and this is your first time hearing that monetarily sovereign governments issue currency, and they can’t run out of that currency, and that austerity, unemployment and poverty are all political choices and not necessities, and maybe you want to understand more, you can listen to our first three episodes, where me and Patricia talk through these things slowly - and of course we hope you’ll check out all of our episodes when you get time, because we’ve interviewed the best economists in the world, the ones who want you to understand things, the ones the Financial Times are warning you about.
In the show notes for this episode there are links to where you can find Professor Harvey’s book, Contending Perspectives In Economics, and to where you can watch his alter ego, The Cowboy Economist - believe me, you’ll thank me for it - and we also have other episodes with John, they are episodes 18, 19 and 42.
Also, in the show notes there’s a link to where you can support our work through Patreon by going to patreon.com/MMTpodcast, support starts at a dollar a month (that’s 81 British pence at the time of recording) and you get early access to all our episodes and other patron-only content, including episodes where you can ask me and Patricia questions. We really appreciate the support you give us, it’s really keeping us going right now.
And finally, thanks for the time you put into understanding and getting the word out about these really crucial things. Politicians have to work with the framework we’re working with, and at the moment, the general public are working with the economic equivalent of flat earth theory, so politicians have to talk like the world’s flat, whether they believe it or not. Their job is to win votes, not to change culture.
Here in the UK we’ve just spent the last ten years proving to politicians that they don’t need to be scared of losing their jobs if they kill tens of thousands of people and that, in fact, what they do need to be wary of is offering us lavish things like healthcare and dignity. So let’s get some self-esteem and make politicians scared again. Let’s dive in!