Bill Mitchell-en Klasea, Kapitalismoa eta MTM


Episode 270 – Class, Capitalism, and MMT with Bill Mitchell


A hundred years ago, John Maynard Keynes predicted we would see a massive expansion of growth and productivity under capitalism. Bingo. He got that right. He said this amazing efficiency would result in a shorter work week with far more leisure time for everyone. Oops. Not so much. The structure of capital ownership will never permit it. 

Bill Mitchell’s blog post, Keynes Was Wrong Because He Failed to Consider Class Conflict, was the inspiration for this episode. Bill talks with Steve about many of the truths about capitalism economists and historians get wrong, beginning with the idea that capitalism freed workers from the bonds of feudalism. 

Bill covers the social democratic politics of the postwar era and how the ruling elites then ensured that government would only serve as their agent. He and Steve take a critical look at the dangerous power of institutions like the World Bank and IMF. Bill explains why he supports degrowth instead of “green growth.”  

Bill believes progressives shouldn’t be working to reform the system; they must work to change it.

Coming from the Marxian tradition, he says MMT is only part of the story.  

Yes, it provides a first class lens into monetary operations but it doesn’t have a theory of power. And you have to add that ideological layer for it to be, in my view, a purposeful framework for advancing systemic change. Just to have an MMT understanding provides you with no additional tools to work out systemic change.” 

Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. He is also a professional musician and plays guitar with the Melbourne Reggae-Dub band – Pressure Drop.  Follow his work on  

@billy_blog on Twitter 




Macro N Cheese – Episode 270
Class, Capitalism, and MMT with Bill Mitchell
March 30, 2024

[00:00:00] Geoff Ginter [Intro/Music]: Here’s another episode of Macro N Cheese, with your host Steve Grumbine.

[00:00:45] Grumbine: All right, this is Steve with Macro N Cheese. I have not talked to my friend Bill Mitchell in a few months, and I’m really grateful to have him back. For those of you who do not know Bill Mitchell- and you should if you follow our podcast- Bill Mitchell is a professor of economics and director of the Center of Full Employment and Equity, COFEE, at the University of Newcastle in Australia. He is also the docent professor of global political economy at the University of Helsinki, Finland, and a guest international professor at Kyoto university in Japan. Bill has been on the show many times. In fact, episode number one gives it all the meaning in the world.

Bill Mitchell was our first guest, and it was Putting the T in MMT, and I recommend strongly going back and listening to it. In fact, go back and listen to all the episodes with Bill, they’re fantastic. Today is going to be no different, because Bill put out a great, timely and important post. Bill writes prolifically on his Billy Blog- you can find that at, under blog. But he writes some fantastic articles that stay current, and when things come up, he writes, and it’s all worth your time. In particular, what he wrote about- that caused me to reach out to him and ask him to please join me- was an article from March 14th, titled Keynes Was Wrong Because He Failed to Consider Class Conflict.

And that’s what we’ve been talking a lot about around here. We talk about modern monetary theory, because the truth of the way the system works, is vital to understanding how to move forward- with anything. But it’s also important to understand class. Because if you’re not understanding class, you’re likely to support Joe Biden and pretend that it’s the best economy ever.

You might even think after the state of the union address that he “stuck the landing.” But if you have class on your side and you’re considering the way the world is, and you start understanding that people with means see the world vastly differently, then you begin to understand how important Keynes missing on class conflict, was. And even modern heterodox economists that fail to take class into consideration, when they pronounce how great the economy is.

It’s important to analyze everything through the lens of class, because you never know who’s winning and who’s losing. And today we’re going to talk about that. Bill, thank you so much for joining me today, sir.

[00:03:25] Mitchell: Yeah, you’re welcome, Steve. Thanks very much.

[00:03:28] Grumbine: The economics training I had, everything I learned, was from a very different class perspective. And I had to unlearn a lot of that, once I ran into your work. But the reality is, here we are today with an economy that- on paper- looks really good, if you look at the GDP, the growth, the job growth, etc. But for the people of my class, the working class, they’re complaining about how life is nearly unbearable. That they don’t feel this ‘greatest economy ever.’

And I’m wondering, how would you tell someone to interpret economic numbers, when they’re working class? The vast majority of economists- who tend to be well off- they’re talking in terms of basis points. Main Street’s talking about, ‘I can’t pay my bills.’ Where does this conflict come from? Is this a visionary issue of class?

What’s creating this chasm, where some see the economy is spectacular and others are trying to make it week to week.

[00:04:34] Mitchell: If you want to understand the dynamics of the capitalist system, and when I refer to a ‘capitalist system’, I’m referring to a very specific way in which productive capital is owned and allocated, and the motivation for making economic decisions, so that the majority of us have choices. But we don’t have a choice not to work. And if you go back to Karl Marx, he wrote that ‘capitalism looks as if the working class were free’, and he was relating that- of course- to the organization of production and distribution under feudalism. Where the workers were tied to a Baron or a feudal Lord, and were dependent upon that tie. And as capitalism evolved, it looked as though workers were freed from those feudal constraints, and could choose to work for whoever they wanted.

But the important point Marx made, was that while the owners of capital don’t have to work to survive- and survive very well because of their wealth- the workers are not free not to work. You and I both have to go to work- effectively- to survive. And so, it was like capitalism created an illusion of freedom, rather than an actual freedom.

And the difference between those who own capital and those who don’t, is a very telling one, in terms of understanding the trajectory and the behavior of the system that we live in. Now, if you think about our work in modern monetary theory- and I introduced this concept of a lens many years ago to help people understand what MMT was, and now that’s common usage among people- but I said that the lens was a way of helping us better understand the operations of a fiat monetary system, and the capacities of the currency issuer- the government- within that system, and the consequences of using those capacities. Now you might then think that, ‘oh, well, that means you then can understand the dynamics of capitalism.’

And the problem is that you have to add another layer to that MMT understanding before you can understand the current situation, and how we’ve got there and what the likelihood of where we’re going is. And that extra layer- to go back to what I’ve said, initially- that extra layer is to understand what the differences in ownership of capital, and the pressures or the urgency that ownership of capital, provides the owners.

You have to understand what that means and how that evolves, and intrinsically- even though we don’t talk about it anymore- the essence of capitalism is that workers want to get as much out of the system- via distribution- as they can, and do as little as possible. Because work is onerous for most of us, and we’d prefer to be out surfing, or playing golf, or lying around reading classic fiction. And the owners of capital want to pay workers as little as possible, and make them work as hard as they can, to extract as much out of them as possible. Now, those two dimensions- or aspirations- are fundamentally in conflict.

And if you don’t start from there, in your analysis of the system, and don’t understand that conflict then drives behavior, you’ll say things like, ‘the State of the Union was a great speech.’ And you won’t understand world events, and you won’t understand why people are doing what they’re doing. So for me, I didn’t start my journey as an academic by liking John Maynard Keynes and his general theory and related writings, because for me, he was bourgeois.

The actual blog post you referred to, really reflected on his work in- nearly a hundred years ago- his essay to the grandchildren, where he made all these predictions about where we’d be in a hundred years, which is coming up in four years time. And he said that there’d be dramatic growth in productivity and GDP per capita, GDP and all of these things that Biden- the other day in his State of the Union speech- would have extolled as virtuous outcomes for the American economy and his administration. And Keynes also said- back then- that because of these massive advances over the course of the century, that- by now- we would all be working a couple of hours a day, and enjoying our leisure, and being freed from the constraints of work, effectively.

Now, what he got right, was that capitalism would be highly productive- in the narrow sense of measured GDP, and productivity growth and technology change. That’s happened. But why aren’t we all working a couple of hours a week? Well, because of class conflict. Because of the expropriation of that largesse by one class- the owners of capital- and using the other class- us, the workers- and having power over us, because we have to work.

So, that’s the reason we still work long hours, if we’re lucky enough to have a job. And many of us are marginalized in the casual work, because it’s in the capitalist’s interests. That’s a better way for them to extract our surplus production and create profit for themselves. And to understand why we’ve got all these developments, why are we tolerating the American government spending billions through its military industrial estate, to effectively slaughter women and children and the innocent people in Gaza.

Well, that’s all to do with the profit urgency, and that’s all to do with the fact that our moral compass has been abandoned under capitalism, in the interests of profit. And profit goes to one class. It doesn’t go to all of us, it goes to one class. And so Keynes got it spectacularly wrong, in that sense because he didn’t consider those class dynamics.

My economics background comes not out of Keynes, which a lot of the MMT academics was their initial inspiration, John Maynard Keynes. Well for me, he was a liability, because he failed to understand class.

[00:12:18] Grumbine: Talking about Biden, he said the quiet part out loud. That the majority of the Ukraine aid package would be spent in the US, that it was built for US jobs. The same thing for Israel, the money is really staying at home, as we’re creating these military weapons that we’re sending to them. His concept of growth and jobs, is very similar to that of Ronald Reagan during the cold war.

[00:12:47] Mitchell: Yeah.

[00:12:48] Grumbine: And I better not ever hear one of these liberals say that ‘Ronald Reagan was such a bad guy’, he was, but they’re supporting someone that’s doing the exact same thing. And they’re calling it a win because he did some deficit spending on the military. Yes, he’s done this Inflation Reduction Act, but this is not- in any way- helping the people that are really hurting.

It really is, once again, a handout to the wealthy and these military industrial complex contractors. This- to them- represents progress. I don’t understand how we could go from demonizing Ronald Reagan- and rightfully so- to embracing a blue version of Ronald Reagan. Do you see a lack of any kind of foundational beliefs that describe the liberal elite?

It feels like a group of people, that are so disconnected from Main Street, that they could sell just about any lie they need, to make us believe that the pee on our head, is actually rain from God. It doesn’t make sense to me. It’s disingenuous.

[00:14:01] Mitchell: Well look, we’ve always understood, that if you view economic progress through things like GDP, then you could have an economy that produces artists, and good public hospitals, and good public education and transport, growing at 5% per annum- or 2% more realistically- and another economy that’s procuring weapons, and artillery and what have you- from locally sourced factories, which are employing people at good wages- and then sending them to the Middle East to slaughter women and children, growing at 2%. And that benchmark then, is incapable of differentiating those two economies. They’re both growing. They’re both producing higher skilled jobs, well paid jobs.

That’s obvious. We’ve always known that. And so therefore, you’ve got to introduce another element, to assessing whether economic progress is desirable or not. And there’s a lot of work done on genuine progress indicators and all of those things. And recognizing that there are economic bads coming out of production, etc.,, that usually aren’t taken into account, but should be.

But that leaves us still short, because the whole debate is still conducted within the capitalist arena. And a good example of where I’m at- relative to other liberals, for example- is in the climate debate. So, most progressives, and most of the MMT community, are talking always about green growth strategies and making capitalist production green.

Whereas, I’m in the degrowth camp, where I don’t believe that we can continue to have capitalist growth. And what I mean by that is, I think the only way we’re going to have a future under this civilization, is if we start thinking about resource allocation, and about productive decisions and all of that, without a profit metric.

And where capitalism is leading us into oblivion, is because all the decisions- and the way we appraise the economy- is in terms of what makes profit or not. That’s a very poor metric. So, you could have an economy that’s not producing tanks, and military weapons, and all the rest of it, and is producing public goods, etc. But if it’s still obeying a profit metric– where the decisions as to what goods are going to be created, are those that create private profit– well then, we’re not going to get out of the dilemma, and we’re always going to be making wrong decisions.

And the reason for that, of course, goes back to what I said at the beginning, is that the aspirations and motivations of the owners of capital, are very unlikely to ever align with what the rest of us would consider to be ‘uniformly desirable.’ So, the interests of capital are rarely aligned with what we need for the future, and the present. And so, you’ve got all these workers, that are celebrating being employed in casual work and low pay, precarious work, and the employment statistics say they’re employed, sure, but they aren’t ever going to provide a long term sustainable future for the majority of us. And they’re temporary fixes, as another leverage angle to make private profit. And I think that’s my current thinking on all of this, that green growth is just another part of the story to enhance the capacity of capital, and undermine the future of the planet and the majority of us who live on that planet.

[00:18:56] Grumbine: I couldn’t agree with you more. We’ve had a gentleman on, named Hamza Hamouchene, who talked about basically ending green colonialism, as they have Tunisia creating energy for Germany, while having to import energy- that is dirty- from other sources. While they’re creating green hydrogen for Germany, they’re sending all their real resources up to the EU, for them to meet their objectives, while screwing these global South countries right out of every bit of their own wealth.

It’s extremely disturbing. In the article that you wrote, you said the original article that you had cited, ‘massive productivity gains have not freed us up from the desire for work.’ And it goes into Keynes, and what you had said about, how Keynes had basically miscalculated, he didn’t understand class in the sense.

You said Keynes failed to anticipate how the economic problem would evolve. His essay’s underlying normative argument, is often overlooked, indeed. One of the main reasons why he got his prediction wrong, is that he projected his own ethical principles onto others, much like his Bloomsbury group peers, Keynes viewed greed with disdain. In the same essay, he describes the relentless pursuit of wealth- for its own sake- as a disgusting morbidity. But then you go and take the counter to that.

So, talk to me about your counter, Bill.

[00:20:23] Mitchell: Keynes operated in the Bloomsbury Set, which was a highly creative, really smart, intellectual setting in inner North London, around Bloomsbury Square, beautiful area. And I still like walking around there. But this was a really special group of people, who were well to do, highly intellectual, well read- across the whole ambit of the tradition of literature, classical and modern- at the time.

And they- effectively- had independent means, as we say. Keynes was a very successful speculator on the stock exchange. So, they were wealthy, they had nice houses, and they had very interesting lives, in one respect. And so for them, the idea of greed was rather tawdry, that it was low rent behaviour, if you were grasping and motivated by money.

And obviously, that class- the gentleman’s class, if you like- could afford to entertain those sorts of ethical views, because they had it all anyway. So, they had plenty of capacity to engage in other higher, and much more sophisticated ideals, relative to the factory worker up in Lancashire and the industrial area of Britain at the time.

So, it’s not unsurprising that the working class literature, and the working class itself, that was attracted to- at the time- exponents of Marx and Engels, etc., would have not been appealing to a guy like Keynes. And he was very antagonistic. And the other part of that was that- for them- they saw capitalism as a way of enhancing innovation and technology, and making everybody prosperous.

That was their idea, that here was a system that was highly productive, encouraged people with very creative instincts and capacities, to come up with new ways of making things and marketing them, and improvements in medical science and transport and engineering. All of these things that came out of that creativity, they saw them in a benign way.

Because their ethical position was that nobody would be ridiculously greedy and dog eat dog, because they were all so very generous, and philanthropic, and supporting of charities and things of that variety. And the reason they couldn’t conceive the dog eat dog world, is because they didn’t see anything special about capitalism, other than it was like free animal spirits to be creative.

Whereas Marx saw capitalism as a incredibly loaded system. Go back to what I said at the beginning, where the owners of capital wanted to get as much out of production as they could, and pay the owners of the majority resources- labor power- as little as possible. And that dynamic creates all sorts of negative aspects in production, starting with control systems, supervision systems, suppression of wage bargains, and attacks on trade unions, and all the rest of it.

Well, Keynes didn’t envisage any of that, in my view. And I think, for a modern progressive- to really get to grips on the problems and the potential solutions- you’ve got to start from there, not from a bourgeois layer of material comfort.

[00:24:21] Grumbine: In your article, you say the author’s [Keynes’] solution- achieving a more equitable world- requires government intervention, which should mean that governments tax the rich more fully. And you say that is the purpose of the article, to advance this notion, that we should be taxing the rich and giving proceeds to the poor, to help them transit to more leisure.

And then you went into some more information, regarding the way the author had put it out there about a fairer society; ‘we cannot build a fairer society by leaving people to their own devices, fortunately, a growing number of people- including several of the world’s billionaires- are committed to addressing today’s extreme economic disparities, even though that would be to their own disadvantage.’

You reject that.

[00:25:09] Mitchell: Yeah.

[00:25:10] Grumbine: I think I know why, but explain it. You say “I reject most of the summation of the problem and solution.”

[00:25:17] Mitchell: Well, I remember that article that I was writing, was a response to another article. So when you quoted the author, that was the author of the article that was making those statements. We’ve been through this before, I think, but the progressive narrative is dominated by this ‘tax the rich’ narrative, that it makes people feel warm inside, that they can solve the degradation of public transport, public infrastructure, public education, denial of basic health care to people, the so-called claims that ‘we don’t have enough money to address climate change and all of this’, the solution- to the majority of progressives, I would say- is what we’ve got to do, is tax the rich.

Why? Because they’ve got all the money. It was unfair they got all that money. Yes. They got plenty. Yes. They can now fund basic income security for the most poor citizens. Now, if you go back to, within the literature, I’ve always thought that those sort of arguments are almost consistent with Ayn Rand’s Atlas Shrugged, the epitome of libertarian thinking. Where all of us servile, pathetic workers, are characterized as being dependent on the humanity and the productiveness of the entrepreneurs. Who are generous enough to dollop out some of their productivity and their creativity, so that we can survive.

That was Atlas Shrugged. That all of us pathetic creatures are dependent on the top end of town, to give us some of their skill and their capacity in generating wealth. And I really see the ‘tax the rich’ argument, as being not real different to that. That all these characters have got all this money, and we really need it.

Then we can provide some income support or some basic public infrastructure. Now, then if you have an MMT understanding, we know- immediately- that we don’t need the wealth and income of the rich to provide good public services and good infrastructure and deal with climate change. In a financial sense, the governments that we elect as our agents, have all the currency that they need.

So, when progressives say ‘let’s tax the rich to get money, to provide services’, really, they should be making a step to understand MMT, because they’re falling into the mainstream narrative that the government is financially constrained and hasn’t got the money to do these things. So, that’s the first point.

And then of course, the progressives come back at me- when I say these things- and say ‘oh, right, so you don’t want to tax the rich, you are just an apologist for unequal distribution of income.’

Well, not at all. I want to tax the rich out of existence, but not to get their money, I just want them to have less money. Because as government, I don’t need their money, I just want them to have less. Why do I want them to have less? Well, because I understand the way in which the capitalist system operates. That they pervert our understanding of the internal dynamics of that system, by being able to buy lobbyists, and buy media companies, and buy time on TV, and have newspapers. And run public relations campaigns, that pervert our capacity to understand what’s actually going on. And to condition us to form a narrative, that is really just serving the interests of capital, rather than our own interests.

And that’s why I want the rich to have less money, because money buys power. It helps buy influence, helps influence media and own media, and pervert knowledge and pervert information.

That’s why I would want to tax the rich, but nothing to do with getting their money, I just want them to have less money. Now that’s a fundamentally different conception, and it leads to a fundamentally different set of understandings, that then influence the way in which you view everything. And I think the progressives, by initially falling into the ‘government doesn’t have the money the rich do’, limits the scope of their questioning and their vision so greatly, that really, they’re just doing the work of the elites anyway.

Because we know that within this unequal ownership of capital, the rich are never going to surrender their hegemony anyway, by a government just announcing, ‘Oh, we’re going to tax you more.’ So, you’ve got to start at the core of what the problem is.

The core of the problem is that we have a capitalist system, that’s the reality. And that’s where progressive should start. And that’s where they used to start, but they don’t anymore.

[00:31:02] Intermission: You are listening to Macro N Cheese, a podcast by Real Progressives. We are a 501(c)(3) nonprofit organization. All donations are tax deductible. Please consider becoming a monthly donor on Patreon, Substack, or our website Now back to the podcast.

[00:31:27] Grumbine: We’re going to try and bring that back, in our own little way, because I’m with you Bill. Your book that you had written- I told you last time, I said, “this is the greatest book ever”, when it was Reclaiming the State… and you’re like, “well, you need to read a few more books then, Steve.” So, self deprecating, but it really, truly is.

And books like that- when you’re starting to put the pieces together and somebody takes what you’re thinking, and you can’t quite thread the needle- and you do it perfectly in that book. When you explain the neoliberal era and how it came to be, that really was huge for me.

But one of the things that I’ve added since then- and you touch on that in your article- is the first few decades of the post-war era, government certainly sought ways of trying to make income distribution fairer. But I also want to add to that, post-war, the vast majority of the efforts of the allies- minus their Russian ally- was this anti- communism push and anti-socialism push. The United States created all these global NGOs, on top of the Bretton Woods accord- including things like the World Trade Organization, the World Bank, the IMF, the Peace Corps, all of these different things- as a direct attack against any chance of socialism or communism coming.

Because what came out of World War II was the triumph of capitalism, because the US was the last remaining superpower, that had not been bombed to hell and back. So, they put all the benefits into the United States. And over the course of time- leading up to the neoliberal era and the rise of the Mount Pelerin Society- we have seen that real class war, to repeal what benefits we got from the New Deal in the United States. But around the world, the United States has been exporting this fascist capitalist ideology. Where does that play in today’s modern analysis of the economy? I don’t see any of the leading folks- including heterodox economists- discussing those impacts. And they are the stain of yesteryear, that are haunting us today.

What are your thoughts on that?

I’d love for you to explain to our listeners, more about that period of time, and how it transitioned us to where we are today.

[00:34:03] Mitchell: I’m not so sure America won the second World War, by the way.

[00:34:07] Grumbine: Yep.

[00:34:09] Mitchell: America came very late into the second World War. And what exposed Hitler and the Axis, was not the Western front, but the Eastern. And I’m not an expert on the second World War, but I’ve read enough. And I know that Hitler made some very strategic mistakes.

I think he was probably mad at that stage, if he wasn’t always mad. But I think he made strategic mistakes, combined with a very bad winter on the Eastern Front. And it was really the Soviet armies that caught Hitler out, which then weakened him on the Western Front. And why I said that, was because capitalism didn’t win the second World War, because the Soviet performance on the Eastern front was driven by socialism. Well, they were all driven by nationalism, but that’s another matter.

But when I was a kid, it was that era where war shows were common on TV. Combat, and all these American programs would come flooding into Australia, and it was if three American GIs won the second World War. Which was deeply offensive to Australians, of course, given that we lost- over the two wars- probably more, per capita- than any one- of our men and women. But anyways, the point about the post-war period was that- and I mentioned this in that blog post you’re referring to, as the motivation for our talk today- we talk about the dark web now, but I’ve always had this view that there’s this layer in society, that’s really beyond all of us.

And this is not conspiracy theory, because occasionally we acknowledge about this layer. And I watched a Netflix series not long ago, on the scandals where the Department of Justice, the journalist [Gary Webb] that got murdered. The American journalist that got caught up in a scandal, where the American Department of Justice had stolen software from a small company, and then the journalistic investigation started to dig deeper and reveal that the Iran Contra Affair, Reagan, Bush were all involved in these secret, elaborate drug money laundering schemes.

And that’s what I’m talking about here. This layer of society that’s really out of the reach of most of us, that pulls all these levers all the time. And it’s an interaction between the political class and the corporate class. And of course, the two classes are highly interactive, through revolving door arrangements and all of those things.

And for the most part, you and I don’t come in contact with this class directly, and they leave us alone. And in the post-war period, we thought we were doing quite well. They were dolloping out good wages, growth, and we were able to buy homes and have a car and send our kids to school, and whatever.

And occasionally, of course, one- or more- of us find out stuff about this layer. Which is, this journalist in America found out- and the Washington Post found out, during the Watergate stuff- and occasionally- and this is the whistleblower effect- and normally that has terrible outcomes for the whistleblower-

[00:38:02] Grumbine: Julian Assange…

[00:38:03] Mitchell: Julian Assange, it’s an absolute scandal the way they’re treating that man, but…- and then life goes back to normal. But moreover, over time, this layer of society is continually working out ways to reinforce their position, and make them wealthier. And it does impact upon us then, but we don’t know why. So, you transit from well paid, full- time employment, to casualized, precarious employment, as if it’s just a natural evolution. But it’s totally engineered.

Because as circumstances change and technology changes, methods to enhance the power of capital evolve. So, that impacts upon us, but we’re in the dark about why it’s happening. We’re told by economists, there’s this natural world, natural rate of unemployment from the 2%, and then suddenly it’s 8%. Well, for God’s sake.

I think all of these developments you mentioned, the multilateral institutions, were initially set up with good intentions- like the IMF and the World Bank, and these type of global entities- were set up with reasonable intentions, but then were captured by this layer of elites, because they were institutions that could funnel resources back to them.

And the modern day IMF and World Bank are disgusting versions of their initial setups, and they just become vehicles for enhancing this elite layer. And the rest of us- and a lot of progressives who don’t start with class, and that dynamic we mentioned at the beginning- just can’t comment on that.

They really don’t have a way into that debate. So, they see the rich as ‘spectacularly rich’- which they are, and they’re getting richer, which they are- and so they say, “oh, well, let’s get our hands on that, let’s tax them”.

But they don’t talk about how the rich have become like that, and what it would mean if we started taxing them. It means that we would have to fundamentally address this elite layer, and how they maintain their ambiguity and their anonymity. And occasionally, you have these movies come out that tell us. Inside Job was one.

[00:40:39] Grumbine: One of the core elements of MMT, is that the nation state- the currency issuer- places a tax, that serves as an obligation that drives the currency, whether it be fines, fees, penalties, taxes, that are payable only in the unit of account. And looking at the IMF, well, we can’t tax Argentina in US dollars, that’s not their unit of account. We can’t tax African nations in our unit of account.

And this whole idea of debt peonage- using the IMF structural adjustments, and the liberalization of markets, and all the anti-protection for the national development within their own country- the tax, the payable in the foreign currency, creates- what I consider to be- a defacto tax, that operates to maintain the hegemony of the currency, beyond the borders of the nation.

Am I close to right on that?

[00:41:50] Mitchell: That’s what’s going on. When capitalism started in Britain- in the start of the industrial era- with the small cottage industries, and such. The elite worked out that the ‘putting out’ system wasn’t such a productive system, because the workers would only work a couple of hours a day on their spinning wheels, and then enjoy life- as best they could- after that.

So then, they had to bring them into a factory, and then of course, the factory had to be supervised, so that workers were working flat out. And eventually, the capacity to extract surplus out of that, was seen as being somewhat limited, so what do you do? You’ve got to extract surpluses from outside your country.

And so, colonialism was a fabulous vehicle for plundering the resources of other countries, and why not just start off with slavery, which they did. And then of course, that offended religious groups eventually. And so, you have to have some other vehicles. And then, as we evolve in the sophistication of our societies, we have to be somewhat more sophisticated in the way we do that.

But all of these multilateral schemes involve, just a- really- replay of all of that. That- as you mentioned- the structural adjustment packages, well, they were vehicles to ensure that these less developed countries- and I mean ‘developed’, in terms of less developed capitalist countries ‘behaved themselves’, and didn’t try to start using their own resources for their own benefit, but would ‘behave themselves’ with stable governments, so that the ships could funnel the resources out to elsewhere.

And anything that was produced locally in those countries, you’d have to have a financial overlay to make sure the surplus of local production was extracted as well. And that’s where we’re at for sure. And we’re still there. And if the country gets a little bit ‘Bolshey’ [Bolshevik-like], then the American Secret Service or whatever- the representatives, this top layer I talk about- will go in and assassinate a leader.

And there’s been lots of assassinations of African leaders, by global forces, when they became too threatening to the global elite. In 1974, for example, a democratically elected government in Australia was sacked by the Governor General- which is the representative of Britain- because we’re still not a Republic.

And there’s coherent evidence that the CIA were behind all of that. If you remember the film, The Falcon and the Snowman

[00:44:48] Grumbine: Oh, yes.

[00:44:49] Mitchell: it was touched on there, that the intelligence was coming from an Australian intelligence source. And what was behind that, of course, was that the government of the day- a Labor government that was elected in 1972- was threatening to take back Pine Gap. So, Pine Gap- for American listeners- is a part of Australia, that the Australian government have ceded authority, to the American government. And it’s a spy station in Australia, that serves the American spy network in the Indian Ocean. And the Australian government- at that time- had realized that this was a surrender of our sovereignty, and was making noises that it would take back control of that whole area of Australia.

And of course, that was the anathema to American intelligence services. And the solution… get rid of the government. And that’s what happened. A democratically elected government was sacked, and a stooge conservative government was put in its place. And talk of Pine Gap being taken back by the government, was abandoned forever.

So, that’s what you’re talking about. That’s all part of this capitalist dynamic.

[00:46:06] Grumbine: I’m going to get back to your article here. You say ‘around the world, the gap between growth in real wages and productivity, has widened since the 1970s. As capital pressured governments to introduce legislation, that allowed them to increase the profit share, at the expense of workers. What Keynes failed to take into account, was that the capitalist system is loaded and built on class conflict.’

The reason all those Nobel prize economists were perplexed, is because they also do not evaluate economic trajectories, in terms of that class conflict. I have come to find- and there’s a Princeton study that speaks to this exactly- that me voting for somebody, has precisely zero impact on outcomes, and on the outcome of pursued legislation. And even within the MMT community, the framing of, ‘we just have to source the vote’, as if politicians are just going to do our bidding because we vote for them, as opposed to that layer, that stays just out of sight, that controls and pulls the strings. And it’s that lack of awareness, class consciousness, and honesty, that makes MMT sometimes fall flat, on people who have been studying class conflict their entire lives.

And we’re trying to bring them into knowledge. And instead of recognizing that they know something- they may not understand macroeconomics, they may not understand currency issuing governments and currency users, but they understand class conflict- and if we could put the two together, we’d have a full person. Because without it, you just have a bunch of people saying, ‘Biden’s great, he stuck the landing.’

And this, I consider to be an extraordinarily naive perspective, that I once held, that I am now to the point where I feel like I was cheated on. That’s what it feels like. It’s that kind of an awakening that embitters you to radicalize. I’ve been duped, I’ve been lied to. And it’s just not new.

The reason all these Nobel Prize economists were perplexed, is because they do not evaluate economic trajectories, in terms of that class conflict. Can you speak to that?

Because I don’t want to be guilty of putting out vanilla propaganda, that people take to heart, because they believe that I’m fighting tooth and nail, and being honest and truthful and to the best of my ability, I am.

But if I’m misleading people by giving them a Pollyanna, ‘yeah, just vote for a few more progressives.’ It seems like this lie, is almost meant to stop the working class from getting together, organizing, and fighting back. I don’t see any other reason for it, because -as of now- we’re supporting people that have got 0% integrity and class awareness. All their efforts are put to enlarge Wall Street. None of it is for working class people. Your thoughts.

[00:49:17] Mitchell: Yeah. Well, if you think about the state of the world, at the end of the Second World War, capitalism was precarious, and totally dependent upon government assistance. The European economies were ravaged. Japan was destroyed by the inhumane use of nuclear weapons. And Australia was quite a poor country in those days.

And we- as a society- also had a great sense of solidarity and collective will, among citizens. I remember that it was also a continuous 15- year period, where we’d had 10 years or nine years of great depression- which caused incredible hardship for the working class, and had exposed what capitalism does, when there isn’t strong government intervention.

And the only reason the great deppression ended, was because of the massive government spending on the weapons and the military effort. So, people identified that. So, there was this great aspiration in the later part of the ’40s, into the ’50s, of ‘maybe we can tame capitalism, and if governments act as a mediator between capital and labor, and somehow broker an arrangement, where capital is willing to give up a bit of the largesse and enhance the wellbeing of the workers, that we would have a better future.’

And that was expressed through the political processes in our countries. And, by and large, it was the rise of the social democratic era, where governments did broker deals with capital, so that workers improve their lot. But the dynamic was still there, underlying in the 50 year release of the archives of the Australian cabinet papers, a little while ago.

In the late ’60s, there’s letters to the Australian treasurer- the boss of fiscal policy- urging the treasurer to cut back spending, so that unemployment rises, so that the rising power of the working class to extract wage rises, is reduced dramatically. These are letters from top end of business, to the Australian government, demanding that they create unemployment.

And by the late ’60s and into the ’70s, the debate in all of our countries was trade union power, and too much being given to workers. And we’ve talked about it before, the Powell Manifesto- in America- was a strategy designed in the early ’70s, to win back power from the social Democrats, and redistribute income back.

And so, since the ’70s, we’ve seen that happen. Now, I think the problem on the progressive side of the debate- and this is what we covered in the book, Reclaiming the State- the progressives were duped into believing that global capital was now all-powerful, and that governments had to behave themselves, and appease capital.

Now meanwhile- back at the ranch- the elites were reconfiguring the state away from being a mediator, to being an agent of capital. And all the major neoliberal manifestations have occurred, through the aegis of the state. Now, in some cases, capital has encouraged American armies or militias, to go in and just take control.

But in most of our countries, that would be not easy to accomplish. We’ve reached a level of sophistication that would eschew that type of strategy. So, what do you do? You work for the legislative capacity of the state, and that’s what they’ve done. And most progressives think that, “oh, we’ll just use that capacity to reverse all of that.”

Well, MMT has given people a new breath of fresh air. “Oh, we know that the state can’t run out of money, oh goodie! it can’t, so therefore, we can do this and we can have a green new deal, and we can go on back to fun.” Well, the problem is that most of us are now operating with an understanding, that we really can’t do much about any of this.

Whereas I operate from the view that, if all of us got together, then we could counteract, and force that top layer into, either military action against us, or some concessions. Now, to me, this is all coming to a head, with the fact that what capital didn’t envisage, was that an existential threat to them, isn’t going to come from working class revolution, but it’s going to come from climate disasters.

And Marx would have never foreseen that, nobody did. And we’ve known it since the ’70s, that it was emerging. But that- to me- is the fundamental, existential threat to capitalism. And so, progressives are still batting on about green new deals, and green growth, and just naive to the underlying resistance that’s going to come from any fundamental solution. And… the planet can’t support ‘green growth’, in my view. So, we’ve got to have ‘no growth.’ And I know that view has been criticized by many progressives, as being very bourgeois- in the sense that- ‘oh yeah, you’re already well off, blah, blah.’ No, zero growth doesn’t mean there can’t be any growth in some countries, because there has to be, to raise the material standard of living.

But what it means, is a dramatic reduction in growth overall for many countries, and a massive redistribution of income within countries. Now, in my view, that can’t be accomplished without a fundamental challenge to the capitalist profit motive. And that’s where I think the debate has to go. And that’s my next book. But I just believe talking about ‘government can’t run out of money therefore, we can have a green new deal, and all is going to be well’… Well, that’s naive to the extreme.

[00:56:33] Grumbine: I remember, not only talking to you, but actually talking to Randy [Wray]. You guys both said it differently, but the same. I said, “we’re making headway” and I think you chuckled and said, “Oh, I think we’re a little bit further away than you think”, or something to that effect. And Randy smiled and said, “I think that’s a little naive.”

So, you both came to me with that. I was so excited with this knowledge, and telling everybody I could run into, MMT. And I still believe MMT is super important, or I wouldn’t be doing this. But I think, ‘MMT as more of a radicalizing tool to expose the capitalist system’, is the key insight at this point, because you can know all the econ you want, but if you can’t touch the levers of power, it doesn’t matter how well you understand your ledgers.

What matters, is that you need to understand your opinion on the matter, doesn’t matter. And I see a lot of well meaning people out there, thinking that “if we just get these progressives to understand, everything will be okay.” They don’t understand capital. They refuse to hear about it, because they’ve been conditioned not to understand it.

And I want to go to the conclusion of your paper, to finish this off here. As a part of this, you say we will never reach the nirvana that Keynes envisaged, because the structure of capital ownership will never permit it. Governments can tinker around the edges, but ultimately, they have demonstrated a lack of resolve, to stand up to the demands of capital.

Any currency issuing government has the capacity to overpower capital, should it desire. But with revolving doors and all that, the politicians tend to move between their political office and their corporate office, over time. A fundamental shift in the system, of production and ownership is required. Getting there is the challenge, and the problem. Now, I will say that you’ve already captured that very well. You said it earlier, but I want folks to really understand one key line there. Any currency issuing government has the capacity to overpower capital, should it desire… but they don’t. One final thing, that is not totally related to that, but is related specifically to you, Bill.

I had never heard of Michael Kalecki. That’s where a lot of your ideas about the job guarantee and other things came from, and you say that you don’t follow the post- Keynesian tradition. You wouldn’t say post- Keynesian is your lineage. What would you say the key differences are, between your views as a Kalecki guy, compared to those of the post-Keynesian. What would you see as the key differentiators?

[00:59:30] Mitchell: He was a Polish Marxist. He went to Britain and hovered around the Cambridge set, where Keynes, and Joan Robinson and others were. And there’s a dispute in the literature, as to whether Keynes ideas were really from Kalecki, watered down in a non-capitalist specific way. And there’s good evidence that Kalecki was very clever. And in his later published writings from that era, it’s quite clear that he had a complete view of the general theory, down very early, well before Keynes published. And much more sophisticated dynamic theory.

But of course, the British publishing industry would have seen a Polish Marxist, who spoke English with a clipped accent, as not publishable- in the same way that the elites from the Bloomsbury set- were publishable. Anyway, so my inspiration really in economics, came initially from reading Marx- and the derivative literature from him, Hobson, Rosa Luxembourg, and others- and then Michael Kalecki, when I became aware of his work, and Oscar Langer and within that socialist tradition.

So I never thought of Keynes as being very interesting. The general theory isn’t a well written book in my view, and moreover, doesn’t talk about capitalism as a specific system. Now, the majority of post-Keynesian economists who take their lead from Keynes, and then through that traverse, also just adopted Keynes’ view, and they focus on uncertainty and expectations. And Keynes was very interesting, and had very interesting ideas, which we’ve incorporated into modern monetary theory, without any doubt. But the missing link- in my view- is that he didn’t see capitalism in any special way, other than to think of it as being a very productive system, with great ability to have technological innovation. And we talked about it earlier, because of his philosophical views coming from that position of being an elite within the London intellectual set, he didn’t really ever envisage, that the owners of capital wouldn’t want to share out that technological largesse, in the form of incomes and leisure for all.

And so most of the post-Keynesian literature implicitly adopts that view, as well, in my view. So, I’ve never considered myself part of that tradition, that Keynes tradition. I always considered my work as part of the Marxian tradition, and MMT is really agnostic about all of that. And that’s why it’s only part of the story.

Yes, it provides a first class lens into monetary operations, but it doesn’t have a theory of power, and you have to add that ideological layer for it to be, in my view, a purposeful framework for advancing systemic change. Just have an MMT understanding, provides you with no additional tools to work out systemic change.

And I think that’s what- over the last many years of the development of MMT- you’ve seen the MMT community- we could use the word fracture, I won’t use that word- the MMT community dispersed, into those who argue for change within the system, and those in the minority- like me- who argue that the system has to change.

And I think that’s the difference.

[01:04:01] Grumbine: Call me 100 % in Camp Bill on that, because I consider myself to be a well traveled guy, considering I came from the far right. My eyes are just wide open, and I’m consuming as much information as possible. I’m trying to create an analysis, because I consider MMT the base case. But I consider that political economy, that concept of power, that socialist view, as the key to making the brilliance of the lens come to life.

And this is why I am 100% in the degrowth camp.

[01:04:39] Mitchell: History tells us that human civilizations collapse. That’s what history shows us. And they normally collapse through excesses, and corruption, and behavior of the elites, and uprisings of the downtrodden, and all of that. And if you think of each of these epochs as being, whether they eventually became not fit for purpose for the challenges of that era, then you understand, that’s why the civilizations collapsed and evolved into something new.

And I think that we’re at that stage in history again. Where the current structure of the way we organize our economy, and our distribution systems, and our impact upon the planet, is no longer fit for purpose for the challenges that are before us. And that tells me that we’re in the end stages of this civilization.

Now, what ‘end’ means, in years, is… I’m not a prophet, but I see the polycrisis that we’re now facing all around the world, we’re even talking now back to world wars happening. What’s going to happen if Hezbollah surround Israel. What’s America going to do? Well, you can predict and what will the Saudis do, and the rest of it.

And we’ve already seen that the American military machine really can’t touch the Houthi and they’re severely disrupting the whole global supply chain, so the boats are going around the Cape again now. So, I think we’re at a stage where all of these things are coming together at whatever speed, slow or fast, probably faster than slow.

And that civilization is now at the stage of collapse, in my view. I heard a podcast not long ago, where an environmental scientist was predicting that the earth- given climate change and given we’ve gone too far, we can’t really reverse a lot of it, we can perhaps stabilize it- but we’re at the stage where the food producing capacity of the earth, might be only capable of supporting a third of the current population.

That’s dynamic. That’s incredible, if that prediction was accurate, and I don’t know whether it is. But I think we’re at the stage where civilization is at the end point. This current era. And progressives, in my view, shouldn’t be operating as ‘reforming the system’, but rather ‘changing the system.’

[01:07:19] Grumbine: Amen.

[01:07:20] Mitchell: And I think that we’re going to have a monetary system in a new era, and MMT is still going to be applicable to that monetary system.

So, that’s why everybody still should be learning MMT, but we need a much wider structure of resistance and challenge. And that’s where my work’s heading, towards the end of my career, I guess.

[01:07:46] Grumbine: Bill, thank you so much. I can’t wait to read that new book and I appreciate you taking me through this. Again, when I read this article, I don’t think it was two minutes after I read it, that I was sending you an email, asking you to do this. I really appreciate you joining me. I know you just said you got a book coming, but tell everybody what you’re working on, where we can find more of your work.

[01:08:09] Mitchell: Well just go to, you’ll find my work. I’m pretty out there. The next book is going to be written with Dr. Louisa Connors, we’re writing it at the moment. That will be published by Lola Press, which is a European publisher. We’re hoping to get that out by the end of this year. There’s also a second edition of our macroeconomics textbook, our MMT textbook, with Martin Watts and Randy Wray.

We’re now at the final stages of negotiation with the publisher of Bloomsbury Press on that. So, I anticipate that’ll be out in 2025. And that’s my current projects.

[01:08:52] Grumbine: Thank you very much, Bill, for taking the time. I look forward to all that. Tell Louisa, I’d love to have her on the show. I would love to talk to her if she’s available. I would really enjoy that. It would mean a lot to me.

[01:09:03] Mitchell: She’s her own agent, so you negotiate,

[01:09:06] Grumbine: Well, okay. Louisa, if you’re hearing this podcast, I want to talk to you.

[01:09:11] Mitchell: She won’t be hearing it. She’s flat out at work. But, you negotiate with Louisa, she’s her own agent, I’m just married to her.

[01:09:18] Grumbine: All right. Sounds good. And I appreciate your friendship and I appreciate you coming on today. And I’m going to take us out here, folks. Thank you so much for joining us. This is Macro N Cheese podcast with my guest, Bill Mitchell. I’m Steve Grumbine. Thank you so much for your time, Macro N Cheese. We are out of here.

[01:09:48] End Credits: Production, transcripts, graphics, sound engineering, extras, and show notes for Macro N Cheese are done by the fantastic team of volunteers at Real Progressives, serving in solidarity with the working class since 2015. To support our work, please go to,, or


Ayn Rand 

was a Russian born 20th century American writer and philosopher.

Michal Kalecki 

was a 20th century Marxist economist of Polish descent. 

Michal Kalecki and the Politics of Full Employment (



Modern Monetary Theory (MMT) 

is a heterodox macroeconomic supposition that asserts that monetarily sovereign countries (such as the U.S., U.K., Japan, and Canada) which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending. 

Put simply, modern monetary theory decrees that such governments do not rely on taxes or borrowing for spending since they can issue as much money as they need and are the monopoly issuers of that currency. Since their budgets aren’t like a regular household’s, their policies should not be shaped by fears of a rising national debt, but rather by price inflation. 

Modern Money Primer by L. Randall Wray 

Federal Job Guarantee  

The job guarantee is a federal government program to provide a good job to every person who wants one. The government becoming, in effect, the Employer of Last Resort. 

The job guarantee is a long-pursued goal of the American progressive tradition. In the 1940s, labor unions in the Congress of Industrial Organizations (CIO) demanded a job guarantee and Franklin D. Roosevelt supported the right to a job in his never realized “Second Bill of Rights”. Later, the 1963 March on Washington demanded a jobs guarantee alongside civil rights, understanding that economic justice was a core component of the fight for racial justice.  

Federal Job Guarantee Frequently Asked Questions with Pavlina Tcherneva 

Taxation within a Fiat System 

The monetary system that the United States employs is a state money, or fiat, system, and from that framing, the most important purpose of taxes is to create a demand for the state’s money (specifically, for its currency). Further, being the monopoly issuer of its own currency, the state really does not need tax revenue to spend and can never run out of money to pay debts or provision itself so long as it’s spending is denominated in its own currency. 

Monetary Agency  

The term monetary sovereignty is sometimes used in MMT literature to describe governments that issue their own non-convertible, floating currency. Recognizing that no nation is truly independent or sovereign in an absolute sense in our interconnected world, we prefer to use terms like monetary agency or fiscal capacity. In any case, the key point is that any nation that issues its own currency (e.g. the U.S., Japan, Canada) will generally have more fiscal capacity if it can maintain the following: 

    • Makes no promises to convert its currency to other currencies or gold at a fixed rate.
    • Allows the currency to float in foreign exchange.
    • Has no (or minimal) debt in other nations’ currencies (or gold).
    • Operates a central bank function to manage interest rates and payments.

Countries that do not meet one or more of these criteria are often subject to greater domestic fiscal policy limitations. 

Post Keynesianism (PKE) 

is a school of economic thought which builds upon John Maynard Keynes’s and Michal Kalecki’s argument that effective demand is the key determinant of economic performance. PKE rejects the methodological individualism that underlies much of mainstream economics. Instead, PKE argues that fundamental uncertainty and social conflict require an analysis of human behavior based on social conventions and heuristics embedded in specific institutional contexts. 

Gross Domestic Product (GDP) 

is a monetary measure of the market value of all the final goods and services produced and sold in a specific time period by a country or countries. 

Green New Deal 

In 2006, a Green New Deal was created by the Green New Deal Task Force as a plan for one hundred percent clean, renewable energy by 2030 utilizing a carbon tax, a jobs guarantee, free college, single-payer healthcare, and a focus on using public programs.,focus%20on%20using%20public%20programs 

Climate Change Solutions Through the MMT Lens 

Governments with currency issuing powers already have a unique capacity to command and shape the profile of how national resources are used and allocated. This would be achievable through a combination of fiscal deficit investment in green technology alongside a more stringent legislative and tax framework to drive the vital behavioral change essential to addressing the life-threatening effects of climate change. In this way, and by moving the emphasis away from excessive consumption and its detrimental effects on the environment, governments could focus on the delivery of public and social purpose with more appropriate, fairer and efficient use of land, food and human capital in a sustainable way. The implementation of a Job Guarantee Program could also play a pivotal role in reshaping our economy and making the necessary shift towards a greener and more sustainable future. 


is a term used for both a political, economic, and social movement as well as a set of theories that criticizes the paradigm of economic growth.  Degrowth is based on ideas from political ecology, ecological economics, feminist political ecology, and environmental justice, arguing that social and ecological harm is caused by the pursuit of infinite growth and Western “development” imperatives. 

Bill Mitchell on Degrowth 

Green Growth 

is a concept in economic theory and policymaking used to describe paths of economic growth that are environmentally sustainable. 



Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World by William Mitchell and Thomas Fazi 

Atlas Shrugged by Ayn Rand 

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