The theory that dares not speak its name

A Martian scholar of Modern Monetary Theory, monitoring the UK media from afar, would be tempted to think that economic enlightenment had yet to reach these shores.¹ But they would be wrong, for not only has MMT most definitely arrived in the UK, it has been here for quite a while. Our imaginary extraterrestrial should be forgiven, however, for thinking otherwise. That’s because, despite the increasing frequency with which the components of MMT are being discussed, the theory itself is rarely named.

Nowhere is this more apparent than in the Guardian and the most inexplicable example of omission was an editorial, published earlier this year, entitled The Guardian view on a job guarantee: a policy whose time has come.² The piece was in response to a talk about the Job Guarantee given in London by Fadhel Kaboub, a US academic and MMT proponent.³ The editorial describes how the government should be the ’employer of last resort to absorb economic shocks’ and how the UK, by virtue of having a sovereign currency, ‘has no real constraint on spending’. It goes on to cite Bill Mitchell and the Levy Institute, but there is no mention of MMT.

The Guardian has previous form when it comes to omissions like this. Phil McDuff is a freelance writer and has written eight articles for the paper which are either wholly about MMT and its policy prescriptions or look at wider issues from an MMT perspective. Most of these articles cite one or more of Bill Mitchell, Stephanie Kelton, Pavlina Tcherneva, Scott Fullwiler and Abba Lerner.⁴ None of McDuff’s articles mentions MMT.

Then there’s Larry Elliott, the economics editor and arguably the staff writer most sympathetic to MMT. Elliott’s hat-tip to Reclaiming the State by Bill Mitchell and Thomas Fazi probably got a lot of MMT supporters excited.⁵ But there is no mention of MMT in the article.⁶

The only reference to Modern Monetary Theory in the Guardian that I can find (bar a couple of letters and thousands of comments on CiF) is from 2013 when David Graeber named the theory in an article focusing on Irish debt.⁷ But two years later, when Graeber wrote an article about sectoral balances (and accompanied it with a short video), there was no mention of MMT.⁸

Now, it’s difficult for outsiders to divine what is going on inside the Guardian or in the minds of freelance writers.⁹ It’s possible that there’s a long game being played; it’s possible that MMT is not being named because that would highlight the obvious conflicts with other policies ‘whose time has come’. Whatever the reason, the paper is doing a disservice to its readers because they are being denied the opportunity for joined-up thinking. The readers won’t be able to make connections between the ideas, their originators and the wider context. The readers won’t know that MMT brings together all the ideas into a coherent and workable whole. The readers won’t know that the Job Guarantee is a creature born out of Modern Monetary Theory.

I am hopeful, however, that things are going to change quite soon. On Friday (5 October 2018) we will see the launch in London of the Gower Initiative for Modern Money Studies (keynote speaker: Bill Mitchell). GIMMS will act as a national hub, a central organising point for all things MMT in the UK. Their aim is to encourage the development of a flavour of MMT which is uniquely suited to the social, economic and cultural conditions here in the UK.

Which brings me neatly to the stamp at the top of this piece. It was issued to commemorate the 10th G7 Summit in 1984, attended by Thatcher, Reagan and a few other notables. Do you remember what came out of that meeting? No, neither do I.¹⁰ The trouble with international jamborees like this is that, despite all their promises to sort the world’s problems, they rarely achieve anything. As Larry Elliott, clearly influenced by Reclaiming the State, said last week:

While the nation state is far from perfect, it is where an alternative to the current failed [globalist] model will inevitably begin…The plan is to build a different sort of economy from the bottom up – locally and nationally. That’s not going to be easy but beats the current, failed, top-down approach.¹¹

If we are going to build Elliott’s new economy we first need to make sure that everyone knows what money is and that will require a catalytic organisation like GIMMS. They, and movements like them, have greater potential for effecting real change than any get together of globalists. I wish GIMMS well in what will be a difficult endeavour.

And Larry Elliott can help too: by getting Modern Monetary Theory out of the closet and onto the pages of the Guardian.