Why Nobody Talks Class Anymore - Dr. William F. Mitchell, University of Newcastle, #309
Jan 6, 2025
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William F. Mitchell, a renowned economist at the University of Newcastle and a key figure in Modern Monetary Theory, unpacks the decline of class consciousness over the past fifty years. He discusses how identity politics emerged in place of traditional leftist ideologies, fueled by shadowy think tanks. The conversation delves into the shift from Keynesianism to monetarism and critiques modern monetary policies. Additionally, Mitchell explores the impact of corporate power on political structures and the urgent need to refocus on socioeconomic disparities.
Modern Monetary Theory argues that governments can create currency to meet public needs without running out of money, challenging traditional fiscal policy views.
The left's shift towards identity politics since the 1970s has weakened its ability to address broader economic issues like wealth inequality, favoring conservative narratives.
The rise of neoliberalism, catalyzed by the 1970s oil crisis and monetarist policies, has shaped global economic discourse to prioritize corporate interests over public welfare.
Deep dives
Understanding Modern Monetary Theory (MMT)
Modern Monetary Theory highlights the role of government in the economy, emphasizing that governments that issue their own currency can never "run out of money" in the same way households or businesses can. MMT argues that such governments can create currency to meet public needs, intending to achieve full employment and economic stability. This perspective challenges traditional views of fiscal policy, asserting that taxes primarily serve to regulate inflation and not to fund government spending. In essence, MMT suggests that a government’s financial capabilities are significantly broader than typically understood within conventional economic frameworks.
The Fragmentation of the Political Left
The left has become increasingly divided, with a tendency to focus on identity politics rather than broader economic issues such as wealth inequality. This fragmentation has weakened the left’s ability to challenge the growing power of the right, as internal disputes often overshadow critical discussions about economic policy and the plight of the working class. The historical shift began notably in the 1970s when a postmodern critique emerged, altering the focus from class struggles to individual identities. This shift, while important, diluted the left's message and strengthened the appeal of conservative economic narratives, contributing to the dominance of neoliberalism.
The Impact of the 1970s Oil Crisis
The 1970s marked a significant turning point in economic theory with the oil crisis acting as a catalyst for abandoning Keynesian economic strategies in favor of monetarist policies. Increased oil prices led to inflation that was not accounted for by traditional Keynesian models, which largely viewed inflation as a result of excessive demand. This created fertile ground for Milton Friedman and others to shift the narrative towards blaming government deficits and public spending. As a result, the ideological foundation of neoliberalism gained traction, promoting austerity measures that have since influenced governmental economic policies worldwide.
The Role of Capital in Economic Narrative
Capital interests played a crucial role in reshaping economic narratives to favor free-market ideologies and discourage state intervention. The rise of think tanks and media outlets that support these views has effectively dominated public discourse, making alternative perspectives seem fringe or impractical. The result has been a shift in public perception towards viewing government spending as inherently irresponsible or wasteful, contributing to a culture of austerity. This narrative has been especially powerful in shaping policies that serve corporate interests rather than the wider population, particularly in the context of education and public services.
The Challenges of Bureaucracy and Efficiency
Modern institutions often face the challenge of becoming burdened with bureaucracy, which can impede efficiency and transparency. As governmental bodies and educational institutions increasingly hire administrative personnel, the focus shifts from service provision to a complex web of internal governance. This bureaucratic structure can lead to inefficiencies, as resources are diverted away from essential services towards managing and sustaining administrative functions. The growth of bureaucracy exacerbates public frustration, as citizens perceive inefficiency and corruption while the true operational capabilities of these institutions remain obscured.
The Future of Capitalism and Civilizational Collapse
There is a concern that current economic systems, particularly capitalism, may be reaching a breaking point that could lead to civilizational collapse. Factors contributing to this potential decline include increasing income inequality, environmental challenges, and the disintegration of social support structures. As crises mount, whether economic or ecological, societies may either adapt to new paradigms or face chaotic disruptions. This scenario poses profound questions about the sustainability of modern institutions and the potential for emerging social movements that could reshape future governance and economic practices.
Professor Bill Mitchell is an economist at the University of Newcastle. In addition to being one of the founding figures of Modern Monetary Theory, Mitchell has also been preoccupied by the interplay of culture and economics that led to the death of the left over the course of the last fifty years. We sit down with him to trace the economic transformations that gradually eroded class consciousness and replaced it with divisive identity politics, the role of shadowy thinktank money in the transformation, and to understand qui bono from the complete absence of a salient leftist critique of the modern day.
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(00:00 Intro
(00:07:08) Postmodernism & the 1960s
(00:10:15) Economic and Intellectual Divide
(00:14:16) Global Economic Turbulence
(00:21:24) Transformations in Economic Systems
(00:25:29) Left vs. Right Economic Ideologies
(00:28:06) The Role of Government During Economic Downturns
(00:35:04) The Shift from Keynesianism to Monetarism
(00:44:28) The Influence of Corporate Power and Think Tanks
(00:52:21) Neoliberalism and the Spread of American Economic Ideals
(00:58:27) Value of Work and Leisure in Economic Thought
(01:05:00) Middle-Class Seduction
(01:08:59) Impact of Austerity on Society
(01:15:26) State's Role in Economic Inequality
(01:21:02) Monetarist Influence on Public Perception
(01:25:49) Economic Misconceptions
(01:27:10) Modern Monetary Theory Explained
(01:33:11) Government Spending & Corruption
(01:51:18) Broken, Hollow Political Systems
(01:59:01) Narrative Construction
#WealthInequality, #EconomicHistory, #PoliticalEconomy, #ModernMonetaryTheory, #KeynesianEconomics, #MonetaryPolicy, #Neoliberalism, #EconomicInequality, #FiscalPolicy, #EconomicTheories, #BrettonWoods, #GlobalEconomy, #Austerity, #EconomicSystems, #PublicSpending, , #DebtEconomy, #philosophypodcast, #sciencepodcast, #longformpodcast
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