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On 4/21/2020 3:42 PM, Louis Proyect via Marxism wrote:
On 4/21/20 9:26 AM, MM wrote:
That’s why I recommended the interview with Fadhel — the application
of MMT to the global South is *exactly* what he is focused on...
Yes, he addresses the question of how developing countries can gain
monetary sovereignty in a podcast.
How about a video? Last November in Tunis, we had a conference on
"Monetary Sovereignty in Africa" sponsored by the Rosa Luxemburg
Foundation, with unusual comradeliness between strands of heterodoxy
that are typically in internecine competition.
(If competition is what you want, I would recommend the Michael Roberts
and Doug Henwood critiques of MMT, which are offered with great
attention to politics:
https://thenextrecession.wordpress.com/2019/01/28/modern-monetary-theory-part-1-chartalism-and-marx/
and
https://www.jacobinmag.com/2019/02/modern-monetary-theory-isnt-helping .)
If you want to see the talks and slides from Tunis, they've just
uploaded them:
https://www.youtube.com/results?search_query=%23MonetarySovereigntyAfrica
A leading marxist political economist, Prabhat Patnaik, offered a great
keynote: https://www.youtube.com/watch?v=d017id91fWk
And Fadhel's talk is here: https://www.youtube.com/watch?v=xD6mUDRwZ7k
(My report from the South African front is here:
https://www.youtube.com/watch?v=kakjZF-kyb0&t=1496s )
Six months later, there's an excellent debate about MMT's relevance
brewing here in SA because of the (hopefully-waning) ultra-neoliberalism
in the Treasury and SA Reserve Bank, egged on by credit rating agencies.
An emergency SARB purchase of $60 mn in Treasury securities on March 25
- when no one else came to the auction and interest rates shot up from 9
to 12% - may have opened up the possibility of up to $1 bn a month in
future QE-style purchases.
The balance of forces will determine whether such MMT-lite fiscal
stimulus can be pushed into healthcare financing (estimates from the
government are $250 mn in new spending is required through September),
food relief and income support, plus Green New Deal infrastructure - as
the precariat starves and social dissent rises. The state is currently
offering a fiscal stimulus of just 0.1% of GDP - which last year was
$260 bn - compared to Britain's 15%. So the second largest union
movement wants to see $40 bn in new emergency funding whereas a
centre-left institute just called for $16 bn, and the 5th largest bank
also asked for at least $5 bn more.
Now, unless a prescribed-assets requirement is put on the $50 bn in
institutional investment funds within SA, or new foreign loans are
announced, some major MMT-type central bank interventions to pay for the
fiscal expansion (and also cover the new $10 bn hole in tax revenues)
are probably on the cards, even though the SARB leader remains verbally
opposed.
(He is also the head of the IMF's main policy committee - and studied in
London at SOAS where marxist economists are thick on the ground - but
along with the IMF Managing Director, Europeans and some emerging
economy elites, he failed to get a global-Keynesian boost pushed through
Special Drawing Rights issuance last Friday, thanks to Trump's
stinginess and financial-geopolitical agenda; I think that's ok, it's
far better to have more international financial delinking now, than IMF
relegitimation, but others would disagree.)
I've just listened to Matias and Greg on RealNews -
https://therealnews.com/stories/modern-monetary-theory-developing-countries
- and the very detailed attention they give to hard currency and local
currency is absolutely essential. SA's foreign debt is at least $185 bn
(prior to the Feb-April 2020 melt - likely now its $200 bn). Repayment
of not just interest but transnational corporate profits and dividends
will be mighty hard in coming weeks, as the $55 bn in (Feb 2020) foreign
reserves rapidly shrink.
There are repeated fears expressed that the IMF, World Bank or BRICS New
Development Bank will come in and make even more of a mess than they
have to date (prolific!). So exchange control tightening is of the
essence, but global and local financiers - and yes, rich white folk
aiming to get their wealth out of SA pronto - are profoundly opposed to
this vital task, one Keynes advised was absolutely critical to gaining
monetary, fiscal and credit-system sovereignty.
In our circumstances, here, it strikes me that MMT is a potential
non-reformist reform, a stepping stone to survival, first to limit
social misery, but also to debunk neoliberal dogmas. This is one of
those areas where the Keynesian, post-Keynesian and marxist agendas have
a sufficient overlap as to warrant an exploration.
The balance of forces is not favourable, but the debates are very hot,
and patriotic-bourgeois logic is moving quickly to the centre, embracing
aspects of MMT. Email me if you'd like examples.
Keep safe, comrades,
Patrick
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