Introduction

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Modern Monetary Theory, or MMT for short — if you haven’t heard of it explicitly or read about it in an economics textbook, you’ve certainly come across some of its theories and ideas out in the wild. Essentially, its proponents argue that, when it comes to the way that money and taxes work, most of us have it all wrong. 

MMT is billed by its advocates as a radical new way to understand money and debt. The central idea of modern monetary theory is that governments can and should print—or in today’s world, create with a few keystrokes—as much money as they need to spend. It’s a bit more complicated than that, but that’s essentially it—that the government doesn’t actually have to worry about taxing the rich or borrowing money because it can just create money out of thin air. And this sounds nice, right? We get to bypass that annoying question that we’re often asked on the left, “...but, how will you pay for it?” 

But, maybe it’s not quite that easy to bypass that question. Maybe there’s a lot more to the equation that MMT leaves out. And maybe this theory is just a mirage—or, as our guest in today’s episode has written, “a phantasm, a late-imperial fever dream, [and] not a serious economic policy. 

So, is MMT a sound theory? Or is it snake oil? That’s the question that we’re going to be exploring in today’s Patreon episode with Doug Henwood, a journalist, author, economic analyst, host of the radio show and podcast Behind the News, and author of the article Modern Monetary Theory Isn’t Helping published in Jacobin. 

What does MMT miss? What does it get wrong in its explanations for how taxes, inflation and debt work? And why is it important for Marxists to scrutinize and criticize any monetary theories that say so little about labor, production, exchange, class conflict, and the function of the state? These are just some of the questions we’ll explore in today’s episode.

Further Resources:

• Behind the News with Doug Henwood
• Modern Monetary Theory Isn’t Helping published in Jacobin
• Upstream: Universal Basic Income Pt. 1 – An Idea Whose Time Has Come?
• Upstream: Universal Basic Income Pt. 2 – A Bridge Towards Post-Capitalism?