Unpacking Government Debt and Bonds

Our western (Trauma Culture) economies run on two falsehoods - we might go so far as to call them lies.

The first is that economies have to grow to be 'successful'.  The second is that government spending is limited by the tax take.  That is, they need to take money in as taxes in order to spend it out into the economy.  Both of these are untrue, and understanding that they are untrue, and the political forces of ignorance and mendacity that keep them in place, is essential to our moving forward into a future that works. We cannot continue to maintain the death cult of predatory capitalism. We cannot continue with a Zombie economy that extracts, consumes, destroys and pollutes as if there were no consequences. 
So what do we do? Both ecological economics and Modern Monetary Theory have been around for a while.  Degrowth theory is more recent, but it's being taken more seriously. What I haven't seen up till now is a fusion of these: a set of policy ideas worked out in which we acknowledge how money actually works, and look at how a national -or global - economy could be structured to lead us forward into a world where people and planet flourish together. I don't think this is the final destination, but it's definitely a step on the way.

Our guest this week is someone particularly well positioned to answer these questions.  Colleen Schneider is a Doctoral student in Social-Ecological Economics & Policy in Vienna. Her key research areas: Ecological Economics, Environmental Justice, Monetary and Financial Systems in a Post-Growth Economy, Climate Policy.  She says, "I take a sociological and anthropological approach to understanding money as fundamentally a social relation. Money, and the monetary system (as with our economic system) are things we've created, and can create otherwise. I draw on historical examples to help understand how the institutional structure of the monetary system and our ideas about money came to be what they are, and to challenge those. [I seek to] de-naturalize money and point to ways to structure the monetary system as democratized, and (at least somewhat) localized -to realize money as a public good. I focus more specifically on how monetary and fiscal policy can be directed toward meeting human needs within environmental limits, while maintaining macroeconomic stability."

So this is the focus of today's conversation.  This is a field about which I am passionate - I absolutely believe that if everyone understood how money actually works in our current world, a lot of the power inequities that we currently experience would end.  We have endeavoured to minimise the use of jargon, though we did talk about monetary and fiscal policy and I wanted to make it clear that Monetary Policy is about keeping prices stable - about using interest rates to influence inflation, that kind of thing . Fiscal policy is about the spending decisions - do we have austerity or don't we, do we fund social goods or don't we, do we decide to pour money into the military, or don't we… and the nature of taxation - what rates do we levy, what are the bands and what loopholes do we leave wide open so our friends can escape paying taxes altogether - while everyone continues to pretend that government spending is limited by the tax take. Which is nonsense. Taxation is about levelling the playing field. It's not about paying for the NHS.

So there we go. Colleen spends her entire life working in this field, producing fascinating papers and a chapter in a forthcoming book that completely blew me away. So she speaks to these things far more eloquently and intelligently than I can.  Enjoy!

Colleen on LinkedIn

Colleen's papers:
How to Pay for Saving the World - https://www.sciencedirect.com/science/article/pii/S0921800923002318

Democratizing the Monetary Provisioning System - https://www.tandfonline.com/doi/full/10.1080/15487733.2024.2344305

On universal public services to end the cost of living crisis - https://www.newstatesman.com/spotlight/economic-growth/cost-of-living-crisis/2023/01/state-end-cost-of-living-crisis-climate-change

Papers by others:

The political response to Inflation: https://www.foreignaffairs.com/mexico/governments-survived-inflation

Workshops:

Public Money for Public Good: Why MMT Matters | Vienna
September 27th and 28th 
Gleis 21, Bloch-Bauer-Promenade 22, 1100 Wien, Austria

https://events.humanitix.com/public-money-mmt-vienna

Public Money for Public Good: Why MMT Matters | Sheffield

(Colleen is not a part of this one, but says that wonderful people are running it!)

September 20th and 21st 

https://events.humanitix.com/public-money-mmt-sheffield

Regenerative Economy Lab - Money and Finance Workshop

Vienna, October 23rd and 24th

https://www.regenecon.eu/

Online masters program on which Colleen teaches - grounded jointly in ecological economics and modern monetary theory: https://www.torrens.edu.au/studying-with-us/employability/industry-led-learning/co-delivery-partners/modern-money-lab

Documentary 'Finding the Money'. https://findingmoneyfilm.com/

MMT group based in the UK : https://modernmoneylab.org.uk/

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