Warren Mosler : “Either we believe in democracy or not“
Jatorrizko testua:
Itzulpena ingelesesera:
The fear of inflation and debt paralyzes politics, says economist Warren Mosler. We could afford much more. Higher public debt is no problem.
Interview: Mark Schieritz
(In 2018, Warren Mosler applied for the governorship of the US Virgin Islands. The photo was taken there during a campaign on a ferry. © Scott McIntyre / Bloomberg / Getty Images)
Warren Mosler is an American economist and former hedge fund manager. He is considered a co-founder of Modern Monetary Theory (MMT). The supporters of this controversial theory argue that sovereign debt plays no role and governments can spend much more money than commonly thought. This view provides the theoretical foundation for spending programs as demanded by Democratic Congressman Alexandria Ocasio-Cortez .
(i) Nola lortzen du estatuak dirua?
ZEIT ONLINE: Mr. Mosler, we want to talk to you about money. How does a state get money if, for example, it wants to build a bridge?
Warren Mosler: He can just build the bridge. He then pays her in the usual way – just as he pays all his other expenses.
ZEIT ONLINE: Most politicians would say: To spend money, it must first be taken.
Mosler: I know that’s what the politicians say. It is wrong.
(ii) Diru Teoria Modernoa (DTM)
ZEIT ONLINE: They are co-founders of the so-called Modern Monetary Theory (MMT) – an economic school of thought, which makes in the United States just furore. How would you describe the central message of this theory?
Mosler: The conventional economic theory says: first come the taxes, then the expenses. We say: The order is not correct. First, the money is spent by the state or the central bank, then taxes can be paid or issued government bonds. For the money to pay taxes or buy government bonds can only come from the state or its representatives.
ZEIT ONLINE: You have to explain that.
Mosler: I’ll try an example. Some time ago I visited the ruins of Pompeii with my wife. Our tour guide told us about the life of the people in the city before the eruption of Mount Vesuvius. They had a good life for the time. The taxes were high but also the quality of the public infrastructure. Then he showed us some antique coins that were dug up. I said: The government first paid people with these coins, only then could people pay the taxes they owed.
ZEIT ONLINE: And the tour guide?
Mosler: He said: It’s the other way around. First she raised the taxes and then paid the workers. Then I asked: Who originally coined the coins? So he said: The government. So I asked, how did the people get the coins to pay the tax?
ZEIT ONLINE: How did he react?
Mosler: He asked: So people were paid first and then they paid their taxes with the coins? I said, yes, how else would it work? Then he shook his head and ran away. My point is that if the money to pay taxes comes exclusively from the state, then the government can not first raise taxes to make payments.
(iii) Zor publikoa
ZEIT ONLINE: She makes debts instead.
Mosler: That’s the way to phrase it, but I do not like to use the term because it’s negative. Public debt is nothing other than the money that the government has spent and that has not yet been used to pay the tax. I read recently that in Pompeii in a street 20,000 antique coins were found. How did the 20,000 coins get there? The Pompeii government has perhaps minted and spent 100,000 coins, of which about 80,000 coins were used to pay the tax. The remaining 20,000 coins that have been dug up on the street are the national debt. At the same time they are the money of Pompeii. Is this a problem? No.
ZEIT ONLINE: Unless the debt rises and the interest burden takes the government all room for maneuver.
Mosler: Pompeii has not paid any interest on the coins on the street, and with today’s zero interest rate policy and negative interest rates, interest payments for our governments are falling to zero. You do not have to pay interest. Interest is a non-cash income or an unconditional basic income for the owners of government bonds, ie those who already have money. I would make the zero interest rate policy permanent and eliminate such state interest payments.
(iv) inflazioa
Money, a state monopoly
ZEIT ONLINE: Threaten then sometime inflation ?
Mosler: Let’s stay with the example of Pompeii. The government has an aqueduct built. The coins are a state monopoly. Suppose the government decides to pay the workers one coin a day. The value of the coin then becomes the value of the work of that one day. Then there may be another worker who does not feel like building an aqueduct and prefers to grow tomatoes. Let’s assume that he is ready to sell the ten tomatoes for a coin. The ten tomatoes are now worth a day’s work.
TIME ONLINE: Understood.
Mosler: Now suppose the government decides to pay two coins for a day’s work. So ten tomatoes now cost two coins. And with a coin you can now buy only five tomatoes. If this continues, the money is worth less and less. It creates inflation. It is caused by the government deciding to pay more and more for the same thing – in this case a day’s work.
ZEIT ONLINE: So a government can spend money, as long as there is no inflation?
Mosler: Something like that. Put somewhat more technically, as long as there is free capacity in the economy, for example, there are people who are looking for a job and can not find what they are looking for in the private sector.
(v) Langabezia, demokrazia eta jendeari diruak nola funtzionatzen duen erakustea
ZEIT ONLINE: Are there any in Europe?
Mosler: Certainly. Take a look at the unemployment rates , labor participation rates and the low utilization rate of the economy. The EU could repair the decaying monuments in Italy, it could rehabilitate the schools and roads in Germany , it could ensure that coal-fired power plants are switched off faster and the conversion to renewable energies is financed. She could make a Green New Deal. That would not be a problem at all.
ZEIT ONLINE: How do you explain yourself that politicians say: We can not afford this, we have no money.
Mosler: If someone says that, then he either has no idea how money works, or he is lying. I do not know, which is worse.
ZEIT ONLINE: There is a third possibility: Perhaps politicians consider it important that there are certain institutional arrangements that limit the access of politics to the central bank. Power always invites abuse of power.
Mosler: My answer is either we believe in democracy or not. If we believe in democracy, I do not see why we do not educate voters about how the money system actually works, instead of fooling it. For the moment we are doing exactly that.
ZEIT ONLINE: One could also say: It is not a deception, but a self-limitation of the state in the interests of long-term stability.
Mosler: If voters are informed and consciously opt for such a model, then I have no problem with that. But I have the impression that people are deliberately leaving people in the dark about the economic context in order to distract themselves from their own failure.
(vi) Inflazioaren zergatiak
The reasons of inflation
ZEIT ONLINE: Do not you worry that people then choose politicians who want to bring more people into employment at any cost with higher government spending, even if it increases the inflation rate?
Mosler: Many economists argue this. I do not believe that. Inflation affects everyone, unemployment usually only a small part of the population. A minority will therefore be in favor of such a policy, but not the majority. People would quickly veto a government that drives up inflation. I’ve been in business since the mid-1970s, and generally high inflation rates are not due to high government spending, but to other factors.
ZEIT ONLINE: Which for example?
Mosler: The hyperinflation during the Weimar Republic, for example, was decisively caused by the high demands for reparations that the German Reich had to pay, while at the same time the industrial center of the country in the Ruhr area was occupied. Corruption plays an important role in Venezuela .
ZEIT ONLINE: Why do so many economists see it differently than you?
Mosler: I think that’s partly a legacy of the gold standard. At that time, the money was linked to gold reserves. As a state, you did not have to get gold unless you wanted to get money into circulation. The governments have themselves shackled. But this system collapsed in the 1970s. But the institutions are still there, and many states still hoard gold. It’s a bit like watching the TV channel change to watch a new game show, but still apply the rules of the show you’ve seen before.
(vii) Zergak
ZEIT ONLINE: If all this is so easy: why does the state have to raise taxes at all?
Mosler: To get people to work for the government. The state needs soldiers, police officers, civil servants. Otherwise there is no army, no police, no legal system. How does it work? The state levies taxes and only accepts as money the money that the government issues. This causes people to seek work to get the money to pay taxes, directly or indirectly.
ZEIT ONLINE: So euro, dollar, yen.
Mosler: Exactly. People need to work for the state in order for the government’s money to go into circulation and pay the tax bill. They have to offer goods and services. This allows the government to hire people, get access to resources and be able to implement their projects. The state does not levy taxes because it needs money, but because it wants to ensure that its citizens need money. Today’s money is a tax credit – it’s what it takes to pay taxes.
(viii) Banku zentralak eta interes-tasa politika
ZEIT ONLINE: Many economists also say: the government should leave the control of the economy to central banks and their interest rate policy. They do not have to have their actions confirmed by parliaments and can therefore act faster.
Mosler: I understand that, but unfortunately interest rate policy does not work. She has never worked. I know many central bankers. If you look at their economic models, then it may come out that the economy will grow by 0.1 percentage point if interest rates are lowered by one percentage point. That’s a joke. But if the state spends more money or taxes less, then growth increases immediately, and so do almost all economists.
ZEIT ONLINE: The central banks are powerless?
Mosler: You are like a child sitting in the passenger seat with his childrens steering wheel. They pretend to drive the car, and we like to think that they do that because they look so serious. But it controls the driver.
