On this episode of Wine, Women, and Revolution (The Socialist Podcast) Heather is joined by Professor Mike Merrill for a conversation about capitalism the often-controversial modern monetary theory. Your host, Heather is a supporter of striving for a cashless economy. She presents this topic to expand how we think about money and economies. Could Modern Monetary Theory be a step toward a socialist Utopia? Maybe. Check your feelings about MMT at the door and listen to this discussion. It will challenge everything you think.
L.E.A.R.N.
Mike is the director of the Rutgers L.E.A.R.N. program. LEARN is the extension division of the department of labor studies at Rutgers University. Rutgers has offered this program for 50 years with the goal of teaching how to better organize workplaces and the economy. The focus is not just labor history, but wider social justice impacts. Heather met Mike during the income inequality training. Listen to an in depth discussion of that here
The Early Economy
Professor Merrill has been studying the transition to capitalism for most of his academic career. When he began his career, the popular theory was “capitalism came in on the first ships” and there was no alternative. Capitalism is usually used to mean the market economy. That is not exactly the real definition though, it is a specific type of market economy. Specifically, it means one run entirely by the capitalist class. A market economy does not need to be run by capitalists, it can be run by workers, farmers, or anyone. The early American economy was not one dominated by the monied class but concerned itself more with everyday people.
Anti-Capitalism
Capitalism requires infinite growth which is impossible on a finite planet. When a market economy is dominated by capital, the principle goal is to maximize profits. This is a zero-sum game, and the question is how much share everyone gets. When workers have power to demand good salary, capitalists must fight back to maintain their power and wealth. There are 2 solutions to this conflict. The capitalists can agree to accept less, or they can continue to grow so there is more to spread. In a sense, they bought labor off to allow capitalists to get as filthy rich as they wanted, if there were enough scraps left over for everyone else. “Growth” is used as the solution to all social ills. The planet we live on is not infinite. It is extremely finite, and we have gone far beyond sustainability.
Musical Chairs
The current economy is organized like a game of musical chairs, but the elite have reserved seats. They sit comfortably and watch the rest of us scramble for an insufficient number of chairs. The are deliberately not enough seats. Economists say the healthy rate of unemployment is five percent. That is if things are running perfectly. That results in 1 out of every 20 people being without a job at any point int time. This strips the voice from workers who are always forced to compete for insufficient jobs. The dramatic power disparity results in 40% of American citizens who are unable to meet basic material needs.
Introducing Modern Monetary Theory
Modern Monetary Theory rejects the traditional theory of money completely. The traditional theory of money is that it is a market commodity like gold. This could also be known as the commodity theory of money. Even Marx feel victim to this theory. The paper money like we know today is a relative recent phenomenon. Successful paper money is only a couple hundred years old. Modern Monetary Theory tries to explain how paper money works, since in theory it shouldn’t.
2 Kinds of Money
