There is an Alternative to Neoliberal Monetary Austerity

Published on Global, by Prof. Michael Hudson, March 4, 2012.

… I have just returned from Rimini, Italy, where I experienced one of the most amazing spectacles of my academic life. Four of us associated with the University of Missouri at Kansas City (UMKC) were invited to lecture for three days on Modern Monetary Theory (MMT) and explain why Europe is in such monetary trouble today – and to show that there is an alternative, that the enforced austerity for the 99% and vast wealth grab by the 1% is not a force of nature … //

… This is the MMT message that the five of us were invited to explain to the audience in Rimini. Some attendees came up and explained that they had come all the way from Spain, others from France and cities across Italy. And although we gave many press, radio and TV interviews, we were told that the major media were directed to ignore us as not politically correct.

Such is the censorial spirit of neoliberal monetary austerity. Its motto is TINA: There Is No Alternative, and it wants to keep matters this way. As long as it can suppress discussion of how many better alternatives there are, the hope is that the public will remain quiescent as their living standards shrink and wealth is sucked up to the top of the economic pyramid to the 1%.

The audience was vocally against remaining in the eurozone – to the extent that continued adherence to it meant submission to neoliberal pro-financial policies. (The proceedings were videotaped and will be transcribed and placed on the web. Pacifica KPFA broadcaster Bonnie Faulkner attended and is compiling a series of programs and will re-interview the speakers for her “Guns and Butter” program.) They had no naivety that withdrawal by itself would cure the problems that they originally hoped EU membership would solve: Italian political corruption, tax evasion by the rich, insider dealings, and most of all, the power of banks to siphon off the surplus and control the government, the mass media and even the universities in an attempt to brainwash the population to believe that financial control of resource allocation, tax policy and wealth distribution was all for the best to make the economy more efficient.

The audience requested above all more monetary and fiscal theory from Stephanie Kelton, who gave the clearest lecture on economics I have ever heard – a Euclidean presentation of MMT logic.

The size of the audience filling the sports stadium to hear our economic explanation of how a real central bank should operate to avoid austerity and promote rather than discourage employment showed that the government’s attempt to brainwash the population was not working. (For a visual of the magnitude, see the video on YouTube: The Italian MMT Summit, Rimini, 2.49 min) … //

… Epilogue:

  • Now that summary videos have begun to be placed on the web, a Norwegian economist wrote to me
  • I do not understand what is new about this:
  • governments can create money … to promote long-term growth …
  • What IS new is that somebody finally listens.
  • There seems to a hunger out there for somebody (with the “right background”) to tell people plain simple common sense.

What MMT teaches today is indeed long-established knowledge and practice. The degree to which its logic and message have been excluded from the academic curriculum is testament to the neoliberal version of free markets: their policy only appears to work if they can excluded discussion of any alternatives – and indeed, exclude economic history itself.
(full text).

(Global Research Articles by Michael Hudson).


What Ails Europe? by PAUL KRUGMAN, February 26, 2012;

Yes Virginia, there really is Modern Monetary Theory, by Izabella Kaminska, February 22, 2012;

Modern Monetary Theory, an unconventional take on economic strategy, by Dylan Matthews, February 19, 2012;

Is Adam Smith’s Invisible Hand a Pickpocket? on Global, by Prof. John Kozy, March 3, 2012;

La puce géante et le dinosaure à plumes, dans, par Adrien, le 2 mars 2012: … dans les provinces chinoises de Mongolie Intérieure et du Liaoning de nouveaux insectes fossiles (puces) datant du Jurassique moyen et du Crétacé inférieur (environ – 165 millions d’années) … // … La découverte en Chine de ces nouveaux insectes fossiles a révélé l’existence de “puces” de grande taille (jusqu’à 2 cm, alors que les puces modernes ne font que 5 mm au plus) …

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