The Human Action Podcast Randall Wray's MMT Lecture Distorts History
Apr 19, 2025
Randall Wray, a Professor of Economics at Bard College and a key figure in the Modern Monetary Theory (MMT) movement, faces criticism over his historical analysis. The discussion delves into the misconceptions around government debt and economic growth, exploring how size and intervention impact performance. Wray's interpretations are contrasted with real historical examples, like colonial currency dynamics and Yap Island's unique stone money, which is depicted as a social construct beyond mere currency.
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Governments' Central Economic Role
- Randall Wray argues governments should be central in economics education since they are the largest economic entity.
- MMT claims bigger governments correlate with more successful capitalist economies, citing U.S. and France examples.
MMT's Sectoral Balance Critiqued
- MMT sectoral balance suggests private sector net saving requires a government budget deficit or a trade surplus.
- Bob Murphy argues this accounting tautology aligns with traditional crowding out concerns, contrary to MMT dismissal.
Money Is Not Always Debt
- Randall Wray says money is always a debt backed by the state's promise to redeem it.
- Bob Murphy counters that historically commodity monies like gold and silver are not debts and thus contradict this view.