On Tuesday Truthout published an OpEd co-authored by Sean Keith and Alexander Kolokotronis about Modern Monetary Theory that people worried about how we’ll pay for everything when Bernie replaces Trumpanzee is the White House will need to start learning about. You’ll need to understand this stuff when you argue with your brother-in-law next Thanksgiving. By then, even he may be admitting he likes, for example, Medicare For All, but is worried how we’ll pay for it. Unless he’s already a student of Stephanie Kelton’s economic work, he probably has no idea. He’ll be hearing a lot of, as Keith and Kolokotronis put it, "Single-payer health care sounds great, but how can we pay for it? How can we pay for any universalistic program without going bankrupt?… MMT is debunking popular narratives about the harsh necessity of austerity and belt-tightening. It is showing that money is not a finite abstraction, but a limitless public utility that can be used to meet human needs. More than this, however, MMT and its heterodox economic cousins offer a framework to build directly democratic, egalitarian political structures, and thus reimagine and recalibrate the viability of democratic socialism."
[M]oney does not emerge from barter-based economic activities, but rather from the sovereign's desire to organize economic activity. The state issues currency and then imposes taxes. Because citizens are forced to use the state's currency to pay their taxes, they can trust that the currency will carry value in day-to-day economic activities. Governments with their own currency and a floating exchange rate (sovereign currency issuers like the United States) do not have to borrow from "bond vigilantes" to spend. They themselves first spend the money into existence and then collect it through taxation to enforce its usage. The state can spend unlimited amounts of money. It is only constrained by biophysical resources, and if the state spends beyond the availability of resources, the result is inflation, which can be mitigated by taxation.These simple facts carry radical policy implications. Taxes are not being used to fund spending, but rather to control inflation and redistribute income (and Trump's tax plan is certainly continuing the redistribution of income upward). Thus, we can make the case for progressive taxation from a moral standpoint concerned with social justice: We should tax rich people because their wealth is the product of exploitation and an affront to any truly democratic society, not because our transitional political program depends upon it. Congress can simply authorize the Treasury and the Federal Reserve to spend the money necessary for single-payer health care.If we apply MMT to Medicare for All, the aforementioned "viability" debate and ungrounded fears about "printing money" fades into the background. Rather, our concerns shift toward examining our available resources and thinking about how to best provision them in such a way to as to advance social justice. This means training doctors, nurses and other medical practitioners. And it also means medical facilities being supplied with the necessary instruments, tools and technologies to provide care and treatment to patients and their communities.This carries implications for policymaking beyond Medicare for All. If money belongs to the public, then questions about who and what the public is will arise. By extension, money, financing and investment should be subject to popular control through directly democratic participatory processes. To operationalize policies, however, requires further insights from heterodox thinkers close to MMT like lawyer Adolph Berle and economists Gardiner Means and Alfred Eichner.…When coupled with democratic socialism, Berle, Means and Eichner all inspire a praxis of worker self-management and participatory democracy. Grasping nuanced divisions between ownership, management and control allows democratic socialists to better understand that solely changing ownership structures will not necessarily create a democratic, egalitarian society.After all, minority ownership blocs represented by proxy managers or pyramided individuals can often exert almost complete control over the firm. The US has numerous firms with Employee Stock Ownership Plan status that are 100 percent employee-owned, but have board of directors that are not elected by workers themselves. In a global context, such worker alienation has also occurred in purportedly socialist countries, too. In his seminal book Labor and Monopoly Capital, Harry Braverman quotes an American sociologist visiting the Soviet Union who noted that the "Soviet economists and social scientists [he] met in Moscow ... insisted that job satisfaction studies are irrelevant in a society in which the workers own the means of production." This view suggests that things like worker participation in management decisions and day-to-day affairs are simply unimportant-- equal distribution of ownership certificates alone guarantees the promises of socialism.To counter this distressing vision, we as individual members of Democratic Socialists of America call forth a vision of maximal democracy that can be operationalized through a heterodox economics framework. We envision a democratic socialism with four policies at its core that each appeal to distinct constituencies:•Medicare for All: All would have universal access to health care, with a structure that also allows for effective input by patients, medical practitioners and other stakeholders.•Multi-Stakeholder and Workers' Self-Managed Job Guarantee: The state creates unemployment by imposing a monetary survival-constraint through various financial obligations (such as taxes, duties, fees, fines, etc.). One partial but significant solution to unemployment issues is that a job be offered to anyone who wants one. Yet, for democratic socialists, this job must approximate from and towards socialist relations of production-- rather than hierarchical exploitative relations of production, as was common under many prior experiments in state-socialism.•Financing Enterprise Conversions to Democratic Employee-Ownership: Due to a wave of 2.34 million retiring Baby Boomer small business owners, nearly 25 million workers could lose their jobs over the next 10 years. What would otherwise amount to a crisis could amount to an opportunity to save jobs and create millions of enterprises that operate according to "one worker, one vote." Furthermore, soon-to-be retirees would have be given financial exit options that preserves their legacy and can only amount to an extension of community.• Free Public University: Degrees and certifications are increasingly structuring employment. As MMT demonstrates, the issue is not one of fiscal means, but technical. The casualization of academic labor shows there rapidly growing pool of educators available to meet the growing desire for university instruction.Unlike the claims of Soviet economists and social scientists, job satisfaction surely is important if one wants to create a truly democratic socialist society. And such a society will only exist if workers not only own the means of production, but also have control in and through the management of their workplaces and lives at large. MMT and heterodox economics paves the path forward for us to get there.