The Fight Club: Debt Q&A

good evening good morning um wherever you find yourself my name is tara needham i am the assistant academic director at the hannah arendt center for politics and humanities at bard college in the hudson valley of new york state if you are zooming in from afar and abroad we are so thrilled to see so many people logging on and logging in for this very important conversation about debt and finance capital we're also thrilled to be co-sponsoring this event with the museum of care and with the economic democracy initiative at bard college you know when we were approached by mika dubrovsky we felt the words a real resonance between um what she described as the mission of the museum of care which projects uh whose projects aim to create a public space to discuss what dostoyevsky called the cursed questions what is power what is freedom value and so on the hannah rent center similarly promotes bold and risky thinking in the spirit of a rent and to aims to create forums for the debate of ideas on pressing topics of our time there's no doubt that debt and finance capital are such issues that have immense bearing on topics that were of great concern for a rent democracy freedom the possibility for spontaneity and political action that said our participation is not to suggest that a rent herself would have or that the center necessarily agrees with or endorses all the views of the panelists rather our goal is again to invite and foster lively debate and we hope that participants will respectfully challenge question and clarify clarify the points of view presented tonight so it's now my great pleasure um to introduce niko dabrofsky who is an artist and an author who grew up in the unofficial cultural scenes of squats and samidzat of the late ussr she's written for many publications and exhibited at among others the tel aviv museum galleria nova zagreb showroom london fabrica moscow and apex art new york she works on several publishing and artistic projects including yes women group art activist feminist community and others after her husband david graber's death mika and friends organized carnival for david which took place in 250 places around the world carnival for david evolved into the informal community of the museum of care which is creating projects like the one tonight at the intersection of academia activism and contemporary art so welcome to nika our panelists and everyone participating so thank you very much for hosting this event and um [Music] yeah the the first of uh the fight club between michael hudson and thomas piketty was held on the 10th anniversary of the edition of david greber's book 5 000 years of death i want to say that a lot has changed for the better since then the public discourse has shifted now many people recognize that for what it is structural violence second the abstract that was created and i'm especially happy that astra taylor is with us today astra is not only shares the ideas of david michael hudson and steve king that all deaths should be abolished but it's strike them is successfully buying out unfair debts for example student medical debt acting essentially in the same way as abolitionists did freeing people from that slavery and i want to encourage everyone who watches today to help them i would like to announce our next fight club that will be at house culture developed in berlin the spring with actors and activists david's friends to perform an imaginary fight between david grabber and thomas hopps and david greber versus jean-jacques rousseau of the yes man reverend billy and salvatory d of the church of stop shopping this fight is a major point that was explored in david's last book dawn of everything that he wrote with an archaeologist david van gro in the first fight club the fight had so many rounds that we didn't have time to answer questions from the public so in the spirit of the boxing match we are going to have our combat michael hudson conduct a post-match debrief where the public can ask questions and get answers so meet steve kim michael hudson pavlina cernova and astra taylor what do you think we have a problem let's solve it together the game okay everyone my name is astor taylor can you guys see me or okay great uh my name is ashley taylor thank you so much for the kind introduction nika and i just want to reiterate thanking our hosts the hanoran center and the museum of care thanks for for having us um and i watched the first fight club with great interest uh noting the paradox between the terms care and fighting so this will be a loving debate um with a lot of i think agreement among the participants but um one thing i will say is as an activist and organizer working very hard on the issues of debt cancellation i am constantly encountering critics and criticism so i will do my best maybe to channel some of the contrarianism that i face when i share these ideas so my name is astrid taylor i'll be i'll be quick but just to set the stage uh yeah my uh my my friend the lighting great david graber sort of recruited me into uh what became a kind of debt resistance movement he actually invited me to the planning sessions of occupy wall street uh so this was back in 2011 and um i was at that point recently defaulted student debtor and you know understood that my condition was political but didn't have any people to share that that uh sense with certainly didn't have the sense that the the wider world you know shared my sense of injustice uh and uh out of the ashes of occupy wall street we started organizing around debt based on the recognition that a lot of people came to occupy were in debt for education for health care of course it was the mortgage crisis that that it was the larger framework so debt was everywhere when she started looking at it and uh since then you know david eventually went to the uk i kept organizing with people and we launched something called uh the debt collective which is a union for letters and we have been organizing primarily around the issue of student debt cancellation though we though we also work on other types of debt for example some of our co-founders planned the first protest demanding full student debt cancellation and free public college in 2012 marking one t day the day student debt surpassed one trillion dollars it's now 1.8 trillion uh so math in terms of pure math things have gotten a lot worse but as nika said rightly the discourse is much better and partly because of the debt collective we've unearthed the various legal mechanisms by which it is actually very possible for the government to cancel student debt and we have forced them to cancel upwards of 10 billion dollars of student debt just in 2021 alone so debt cancellation is we've proven it's a realistic demand it's a very popular one i i just saw an ad for stacey abrams who's running for governor of georgia and she talks about medical debt cancellation in her campaign ad so i think that's another sign of the times so i think um you know i won't delay us but but we are definitely in a in a moment where i think the question is how can we keep expanding the public imagination on this issue how can we address some of the doubts people have because not everybody agrees and then yeah strategically what do we do where is the power and we have a great panels here to talk about these issues and and to address some of the common concerns you know people are worried about the the deficit right worried about the way that this will affect uh there's a lot of misapprehensions about how personal debt and public debt relates hopefully we can set some of those straight here uh some of the questions that we can return to according to the materials circulated in advance should student debt be cancelled i already answered that yes and it can be can the government run out of money what is money what is debt um so if people i want to invite people to touch on those points since that's what the audience was told they'd hear about uh i also want to invite people to use the q a function that is that is here we're going to also address some of the questions from the last session as as they as nika said they didn't get answered so i'm going to briefly introduce our panelists the esteemed uh michael hudson who you know has been working on the question of jubilee for a long time and really is in many ways inspiration for david's work for the debt collective's work really blaze an incredible trail talking about the history and precedence and philosophy of jubilee and more michael hudson is president of the institute for the study of long-term term economic trends a wall street financial analyst distinguished research professor of economics at the university of missouri kansas city he is the author of and forgive them their debts 2018 and j is for junk economics and assume there are many other books steve keane is an australian economist and author he's the author of debunking economics and more recently the new economics a manifesto pavlina chernova is an associate professor of economics at bard college and a research scholar at the levy economics institute she specializes in modern monetary theory and public policy uh public policy so a warm welcome to all of you and i'm going to pass it over to steve keane to offer some thoughts on the last uh fight club session and maybe give us some some brief thoughts on debt what is it why should it go okay my sound is coming through good all right okay um the i'll start first of all with the thank you to thomas picketty who couldn't join us for this session um it is very rare for mainstream economists to engage with critics like myself and and michael and patlina so it's uh a tribute to him that he was very generous with his time and i thought also he's very generous with his perspective in the debate if i can characterize how thomas would differ from myself and michael thomas's recommendations at the end of his magnum opus capital were fundamentally tax the rich and the attitude which michael and myself and have are concerning debt is abolish the debt uh now of course you think about what taxes and what interest payments are and what profit are they're all flows they're flows of money per year that's how they're denominated and what taxation says well let's re let's take some of that flow away from the rich and direct it to the poor that is the conventional attitude towards taxation and i'm sure pavlina will get in here and elaborate that tax doesn't actually pay for anything when you take a look at the modern monetary theory perspective on how government money is created the government creates money by running it by running a deficit so government spending creates money taxation destroys money and it doesn't actually contribute to anything it's the government as one of the two primary money creators in a capitalist economy can create the money it needs for any particular task it doesn't need to tax so what then is the perspective on tax from from this position it is fundamentally that taxation decides whose bank account goes down to reduce the excess money created by government spending and what we know from the last 30 years or so is the rich are incredibly successful at making sure it's not their accounts that get affected so what what would be what we'd be doing with um uh with with taxation isn't doing what uh is the perspective from uh pickett's capital in the first place and secondly the rich are very very good at evading it uh now the point from michael and i'm sure michael will elaborate very effectively here on his own behalf but what we see and this comes out of my own mathematical modeling i might add is that debt increases the income of the rich which is quite obvious it increases the income of what we would call rontiers but it actually in my mathematical modeling of minsk's financial instability hypothesis it actually directly reduces the income share of the workers uh if i in my simple models which i'll explain in the written manifesto um the debt is by money is in that modeled model exclusively by the firm that's the simplification i make to start the model and i did not expect this outcome but what happened was the profit rate that capitals got the owners of the firm vary around an equilibrium level as the level of private debt went up the level of income going to workers went down it was a direct relationship and i explained the causal mechanism in manifest so i won't try to elaborate here so fundamentally reducing the debt will increase the share of income going to workers and it's and and on top of that we have the modern monetary theory case uh that the government doesn't need to borrow an order to spend uh doesn't need to tax to finance it so all the things like student debt are a travesty when you intellectually understand how money is created i'll hand back to the other panelists thank you wonderful thanks for that i want to hand it to pafflina uh to give her a perspective on debt and you know i i wouldn't it's modern monetary theory is really useful in this but you know one thing we encounter over and over again is this assumption people have and it's because it's part of right-wing ideology in their frame that you know the state is like a household you know they can run out of money you got to tighten your belt and budget in this limited way so maybe i think commenting on that if you're inspired to it would be great yeah thank you uh thank you for the invitation um i want to start with uh actually david graber's comment on um paradoxes that we have in our daily lives how we have turned like absurdities into like common sense what people perceive to be is common sense and this idea that the government must behave as a household and especially when it comes to its financial affairs uh is one of those paradoxes that we like we have created such mythology and you know just uh uh culture of acceptance of of this um basically flawed idea and it's all built on a completely flawed understanding of money on the history of money on the origins of money and i will not go through all of it now but um just to say that even on the face of it when we consider a very basic simple reality that the currency in our pockets comes from one place and one place alone and that comes from the public sector just when we consider that basic stylized fact it can't possibly be true that the government needs to get money from us to pay for its expenses when it has the ultimate means find issues the ultimate means final means of payment so um mmt really zeroes in on that under theorized aspect of the monetary reality there is private debt there is private uh money creation of all at all levels we use this hierarchical model to describe it but the public currency is under theorized and so governments have had this prerogative to issue their currencies and and even in the old days to stamp their gold coins they have had this prerogative and they must first provide the currency before they can retrieve it back in the form of tax payments or or bonds purchase bond sales and so what mmt basically stresses is that the the causality is completely upside down it's reversed the issuer must provide the currency before the users can use it to pay taxes to purchase government securities so a fundamental contribution from an mmt a point of view is that a government is self-financed but you must also look at the kind of government you're talking about we have so adopted these mythologies that governments must behave like households that we have created these monetary systems in these monetary regimes which artificially constrain this very basic prerogative of government and then we force the public sector to behave like a household to tax in order to pay so you know countries that give up their own currencies the dollar eyes that accept or that that actually inherit colonial currencies you know they are fundamentally constrained in in many ways in managing their domestic economic affairs so um the public sector we need to be looking at what kind of uh monetary regime we're looking at what kind of institutional design we have what kind of coordination we have between our institutions to meet our economic objectives so lesson number two from mmt is that zeroing in on these arbitrary ratios debt to deficit debt to gdp deficit to gdp ratio these are really red herrings they divert our attention from the important issues how does the government spend on what does it spend what kind of policies do we as democratic polity demand of the government and have we surrendered them to this false ideology that the government does not have money and that it must uh pinch its pennies like a household i'll just pause here and we can carry this further yeah so much to dig into but michael would you like to weigh in and respond to these comments and maybe say anything you didn't get to say in the last session before we go deeper pauline is quite right when she says that uh public debt is not the problem uh private debt is a problem so i want to pick up what uh steve keane said because he was addressing the issue that kept coming up uh in the debate and uh what was the argument uh with picketing uh piketty wanted to tax wealth to make uh people more equal the problem is that taxes leave the existing economic structure in place so uh if you had if you taxed uh the banks uh the debts would still mount up you'd still have student debt you'd still have foreclosures you'd still have insolvency but uh the some the rich would have to pay some of the cost of impoverishing society to the government which doesn't really need it anyway uh so i don't think that uh taxes uh address the problem that steve and i are talking about that the economy has a real structural problem and uh from what david graber and i talked about for years uh debt is what the 99 percent owed to the one percent most people are in debt and most debts are owed to one percent of the population and paying this debt leaves less disposable income for the debtors uh less for students because if they pay student debt they can't afford to buy a mortgage to uh take a buy a home uh homeowners i have to pay mortgage debt uh and can't afford to buy goods and services uh credit card companies auto loans uh most of the people who wanted to disagree with what uh steve and i are saying about the need to cancel this debt that is bankrupting the economy is well isn't that a choice it's a voluntary bargain between uh uh borrowers and debtors why do you want to interfere with the free market and the voluntary bargain well the bargain is your money or your life you want a home or you want to be asleep in the sidewalk oh you want a home you got to go into debt uh do you want a job well you're going to have to get a degree get a degree you're going to have to go into debt unless uh your parents were uh bankers or had enough money uh to put to put you through uh so most uh most deaths throughout most of history weren't voluntary they were arrears they were uh cultivators on the land that uh there was a crop failure there was a war they couldn't pay the debts most debts were just uh regular income that couldn't be paid and uh the creditors use the misfortune of society like the covent crisis as uh an opportunity to make money and uh you can see that here in new york uh where uh we all are uh right right now there are a lot of people that have lost their jobs a lot of people uh uh these people either are renters and can't pay the rent or if they've bought a home that can't pay the mortgage there was a moratorium biden said well we can't just throw all these people out on the street let's have a moratorium it expires in february in february tens of thousands of new yorkers are going to be evicted thrown onto the street and uh their houses are going to be put up for sale uh and there are a lot of uh investment companies just waiting to pick up uh all of these houses so uh that what steve and i are talking about is debt is not in equilibrium debt grows exponentially and it it uh ends up engulfing the whole economy and that's why uh you get to choose do you want to keep the debts in place and let the economy polarize and uh shrink or do you want to write down the uh cred the savings of the one percent that are invested in loans to the 99 percent yeah well said one phrase from the debt collective to get at this point you know they're making your money your life is we're not in debt because we live beyond our means but because we're denied the means to live and so i think it i i'm sure people here you know everybody agrees that debt abolition a dead jubilee is coupled with social provisions right pavlina's written about jobs guarantee right i mean the thing is this was the old idea of a jubilee too debt cancellation plus you'd get land back or you know the means of the means of survival um but you're you're making the really important point which is you know people are basically and this is stuff we just see at the deck like of every day in the debtors we speak to who are desperate sometimes suicidal you know i mean this is um this is such an urgent issue for so many people uh that you know makes people poorer but it also you know makes people sicker and there's a lot of evidence to back that up um but people are robbed twice right they're underpaid at the job and then forced to borrow to survive and this is definitely a means of wealth extraction it makes makes the rich richer the poor poor i another way to put this is that that isn't just about money it's about power and you all have hit on that um do people want to say anyone feel inspired to take that up right i mean this is you know why do we have this system why does it stay if we can point out all the ways it's seemingly irrational and fair you know why is it so entrenched and that's because this is this is power it's not just a way to get money it also keeps people under the thumb of predators and david graper was not just of creditors but um of employers uh do people want to speak to that at all the way debt is obstructs democracy keeps people down well it wasn't supposed to be that way power that was uh the first deaths uh anthropologically were uh the virgil debts if you were in a primitive society and you injured somebody uh you have to pay reparations you have a choice if you beat somebody up break his arm or kill someone either your family would feud with them and you'd all begin fighting or you'd pay reparations uh the whole idea of debt the whole economy functioned on credit long before there was money there was credit uh if if you were a farmer in mesopotamia in 3000 bc uh you uh get the cro what do you do during the crop year uh money was used one day a year for the farmers in mesopotamia that's when the harvest time came in uh on the uh and the debts that they owed for uh the beer that they drank at the local uh ale house and we have the records of the ale house uh and for the uh food or for the horses or for the water uh when you go to the ale house you'd uh run up a bill uh a tab just like today and it all came due uh on at harvest time and everything would be paid and uh that worked except once in a while there was a crop failure uh or there was a drought and hammurabi would say if the people can't pay the debt we're going to cancel it because if they can't pay the debt and they become a slave of the ale lady do we really want the cultivators all to end up the debt servants in bondage uh owing their crops to the ale lady and then we're not going to be able to get them to work on the corvae work to build palace walls and temples and big ditches and we're not going to be able to uh get the uh crop taxes uh from them so the whole idea depth was supposed to be an equilibrium and when it couldn't be paid every early society wiped them out and all of that uh occurred until greece and rome it was really rome that made debt a means of getting getting labor into debt and having to work off the debt on the land of the uh the creditor and uh we're still living with the uh backwash of roman law uh and that that's the problem our legal system uh is uh a pro-creditor and this went against every society that preceded rome and that's become the legal system of western civilization yep really interesting yeah pavlina you want to win i i love where uh michael took this conversation you know um when we look at graber's book you know debt is a social relationship and it became monetized through time but even early on there was this kind of coercive relationship between authority palace king and subjects and that was the tax that's a debt that's a sort of debt and that tax was always there to to compel to force the production of goods and resources to provision the palace okay this is unavoidable and that tax was used to eventually you know kind of standardize the unit of account how we pay these debts and michael's work is very good um in illustrating that when private creditors gained so much power over credit creation um then the peasants were obligated to the private creditors and they were not as obligated to the state in terms of delivering corn and barley and grain to the palace so the palace actually that weakened the palace capability to do dead jubilees because the palace could say i forgive you your debts if you had a crop failure you don't have to deliver the grain to me but the private creditor would not do that now why does the palace tax because the power is not only needed to provision for itself and you know again it's the riches it's all power but also they did build you know corvae labor was infrastructure it was public work so there was some semblance of kind of public goods provisioning however coercive that was that is very much fast forward to the present day that is very much the function of the tax today the public sector which issues its own currency does not need to tax to collect the tax to finance its public projects the function of the tax is still for the public to require the public's currency to work in exchange to provision goods and services and it is you would you would you know one might argue in a democratic sense our expectation of the state is then to provide public goods um that will provision for the community as a whole now what does this have to do with student debt well i mean student debt is one of those debts that actually can be forgiven that the vast majority of student debt is held by the public sector it is there is a small proportion that is held by private you know you know privately issued debt and not backed by government guarantees but as we have said shown at the leaving institute um it is uh without major disruptions in fact to the private sector which you probably want to create disruptions you can cancel it you can have a debt jubilee with student debt um and so i think that broadly i would think about taxes in this way that they are you know certainly historically a coercive mechanism they are certainly a force that compels us to work in exchange for money and now we and and we have had you know uh you know various campaigns about you know taxation without representation which presupposes certain democratic demand right that we want the collective to do something for all of us but we need to kind of connect that to theorizing what the money can do what the public sector with the public currency can do um if it is going to tax and if it's going to attract resources then it has a reciprocal obligation to then quote unquote provide for the good life and this whole mythology that we can't cancel the deaths that somehow it's inequitable for the rich kids to have their debt cancelled along with many other things are just um disempowering narratives uh that we can do x y and z can i elaborate something that uh paulina just said she's absolute she pointed to the key point that uh the reason that student debt can be cancelled is its own to the government not private banks so there's no lobbying organization that's going to come in and say uh you can't interfere with private enterprise uh she began but earlier uh she said that the uh the debt was the power of the ruler uh over uh the debtors uh that the people that the rulers of mesopotamia really wanted power over was that over the creditors every early society stabilized itself by preventing the emergence of a creditor oligarchy and uh the uh over and over again you'd see creditors getting rich then all of a sudden they would disappear from the record uh and uh the idea is that uh all the way down through the byzantine empire uh the rulers uh would say we don't want a wealthy credit or oligarchy because they're going to use this labor as an army and they're going to overthrow us and then they're going to write all the laws and then we won't get any more taxes uh they'll get all of the money and they'll be the new kings so uh the uh the look at china for instance china is in the position of uh to its uh economy that is the u.s is to the student debtors it's easy to write down the debts if the debts are owed to yourself that's why the mesopotamians were able to write down the debts it's because they were all owed to the palace and the temples and uh they also would make sure that the debts to the private creditors uh were cancelled and they'd move against the creditors so the key in preserving democracy was to have what president biden calls an autocracy an autocracy is someone who says the public interest is more important than the interest of creditors i think this really you know for me coming from the deck like there's a lot of really interesting strategic questions here because that is why we focused on student debt precisely for this reason because we know we you know what it the majority as you say is held by the federal government nevertheless the government was pretending it didn't have the power to cancel it so we had to throw that in its face multiple times and you have made headway there and and you know if there are leverage points against private creditors it's that they're violating laws consumer protection laws that they're engaging in robo signing or shenanigans but we have less we do have less leverage and i think there's really there's some strategic major strategic challenges that are being raised here steve would you like to come in um and maybe uh i don't know the standard you know response to some of this talk is you know but we need the creditors they're they're productively investing capital and if debts are abolished won't they go on strike and not you know lend to people yeah i mean the the important point i think we've i like the way that we overtake overtaken with havelina as well uh to talking about where this originated because we go right back and i'm i haven't yet yet i must admit uh david graves like the latest and last book um that's my reading on my flight to australia on from on friday um but if you look at where this we all did again humans built societies built on mutual obligation and we'd actually do things for each other it was actually fundamentally a gift based society was the the ancient basis of how humans behave towards each other and that has been perverted over time into what we now call debt it first of all went through the mesopotamian systems where michael explained the role very well now it's been taken over by the private sector and what we have is i divide the world into three major social classes workers capitalists and bankers and what has happened is the bankers are the ones the financial sector are the ones who have completely distorted that original role of the thing which makes us a human society and that made it into a form of bondage uh for part of that society but the trouble of that bondage is described as disguised by economic theory and if you have any exposure to neoclassical economics you would know of things like what's called the medigliani miller uh hypothesis that says it it's actually up ultimately if you're paying interest at all it's better that a corporation be 100 financed by debt you get uh the argument that the government has to borrow off the public um which really treats money as being something like uh as is my good friend michael kumoff the only neoclassical economist who understands money uh says it treats something like gravel that has to be dug up and dumped in some person's um storage system and then dolled out when necessary there's a physical thing rather than a sense of obligation uh designed either between the public and the government or the public and the private bank sector so once we if we realize that the that we have two major institutions to create um to create money governments are spending more than they get back in taxation or banks lending out more than quebec and repayments the question is what ends up those is that money used when we take a look at the private sector uh the financial sector has used economic theory without knowing they're doing it but use economic theory as a cover to finance asset price inflation and to put us in debt into into bondage for the remainder of it it is not a creative use of money at all uh banks when after the great depression which is the last time we had a serious uh debt crisis that then led through dramatic transactions to society bankers were under were a despised class in the beginning of the 40s and 50s and they were controlled their role was to provide uh investment finance for for industrial capital that back in those days the level of private debt the the non-financial sector's private debt was roughly 40 percent of gdp and most of that was corporate there if you fast forward to the financial crisis that rose to 170 of gdp and it was predominantly household debt and the large part of that household debt was actually what gave us the bubble in the in-house prices in the first place you had a negative a damaging feedback relationship between debt asset prices and ultimately a financial collapse so we have we need to have a decent theory and mmt is part of that theory the other part is minsk is financial instability hypothesis they are quite compatible with each other and what they tell us is we should reduce the level of private debt and if you do that rather than taking money away from the poor rich as well in what you do is give more money to workers who spend more so you actually get when i've modeled a modern debt jubilee you get a boost in economic activity and ultimately even the capitalists benefit so this is one of those terrible cases where ideology leads us into a trap that makes everybody off but put some people in power over the poor yes uh really interesting comments i'm i'm here scanning some of the questions from the last fight club and we have actually answered a couple of them um i mean one you just used the word stabilizing one person asked uh wouldn't um wouldn't cancelling debts be destabilizing and you're actually saying the opposite which i think the research shows which it actually would be good for terrorism in a kind of idealized version of it where it actually wants to share prosperity uh yeah michael you're pointing to everything about uh cancelling the debt and why it's stable is you cancel savings on the other side of the balance sheet we're talking about debt but all this debt is somebody else's savings and uh the problem is that almost all the savings in the economy are now owned by the one percent that's why david popularized the concept of one percent and the best thing you can do uh if you cancel the debt to the one percent you wipe out their savings and you take away their dominance just like the 19th century finally took away the power of landlords that they had since feudal times and that was what triggered in the takeoff of industrial capitalism you have to cancel this rontier uh claims on society that uh the creditor uh doesn't really play a productive role he collects interest in asleep just like the landlord collects interest in his sleep landlords creditors rontiers monopolists they do not play a productive role so what do you destabilize you destabilize the destabilizer papalina did you have a thought yet if i can come back okay yes uh okay sorry i'll go yeah yeah okay finish steve and i'll step in i'm sorry okay um you know what we if we did that that is the ideal let's get rid of the the power structure but of course the instructions got the power so we would lose that battle inevitably so the proposal i've been putting forward which actually uses the concept of mmt as well is a modern debt jubilee and that says look there are there are two ways you can create money the government can spend more than it gets back in taxes the private banking will then get back in in repayments now if you use the government's power you could actually give everybody an equal amount of money and say if you have any debt you must cancel that debt so you create money which means that for the for the for the uh creditor class what they have is their loans disappear but they get they get money in bank account and step okay they get reserves fundamentally so they don't actually end up losing out but what it does is by giving everybody the same amount of money you give far more to the workers than you give to the capitalists and rontiers and by that mechanism you actually end up stimulating the economy you can even set it up so that the bonds interest paid on the bonds by the government takes place of interest paid on debt by the private sector and the rentiers end up coming out getting the sort of money that you submit the the role of banking was described as the i think the numbers are three six and three uh borrowed three judge charge at six and be on the golf course by 3 p.m now that's where they bloody well belong they don't long running running washington in what i now call the financial politico complex get them back on the golf course where their uselessness can be put to something productive well steve your proposal to bail out the billionaires is very good for you billionaires uh sitting there but uh the fact is we really want to leave these billionaires with all the money this this debate came up with a civil war uh when you wanted to get rid of slavery uh people said well if abraham lincoln cancels slavery he has to pay the slave owners and lincoln said absolutely not slave owning is wrong and we're not going to create a new wealthy class to dominate the country by paying them for all the money that they've got from slaves you don't want to bail out uh to make the creditors whole come on uh uh i don't have a billion dollars like you but uh i certainly might want to bail out these passages so paulina i want you to respond to this but i also want to throw you one more question from the last session that i think and this person asked uh the main result of quantitative easing appeared to be an increase in the value of assets such as share prices and housing i'm assuming they're talking about you know early 2020 when covid hit when the government bought a lot of bad corporate debt steve mentioned corporate debt so the person asked to what extent are the central banks captured by the interest of the richest in society and what should be done about this okay so that's exactly where i was going to go with this conversation i mean dead jubilees happen all the time you know what did we do in 2008 you know the government stepped in with extraordinary budget and purchased enormous amount of toxic financial assets it i i don't know what else we can call it do you believe not you know making these assets whole um you know so it is it's a it's a type of dead jubilee um what did we do during covet you know we passed the economy uh governments appropriated again budgets that they had not uh appropriated in post-war history in any crisis you know japan i think it passed 56 percent of gdp a budget overnight the united states 27 that has to concentrate the mind the government has enormous the government has all the financial resources that it needs to grease the economic wheels to pause student debt to pause moratorium on on mortgage payments um on so it's just a matter of choices um i would say that um you know the tax system obviously doesn't doesn't do this what we want to do is simply eliminate extractive services right we want to to eliminate kind of unproductive predatory practices you know unsustainable practices i think that there is a way to certainly you know pacify the rentier class by replacing private debts with public debts because those are default risk-free and that's what we do all the time and so i think for the debt collective this is an argument to say you have a public purse that is regularly used for these kinds of purposes to forgive debts in the private sector we can certainly deploy it for student debts and i so so the question here is um the state the government creates the only default risk-free asset that's the only one that can do this you know europe is grappling with this you know they have designed a system that they cannot create a default risk risk-free bond and they changed and broke their own rules during the pandemic to make sure that the european central bank actually purchases these government bonds to make sure that the bills are paid and there's no question asked that is the monetary reality and we just work around it to kind of limit our policy space so qe what was huey i mean qe was a a way of basically you know ensuring the positive value of something that is essentially worthless some insurance on some you know derivative that uh you know the financial sector created just to create financial return financial profits there's no productive you know uh value to this kind of activity we are essentially validating the financialization of the economy through qe in order to uh to prevent some sort of financial global class collapse could we have done it differently of course we could have made companies whole we could have made households whole we could have made big industrial you know firms whole we didn't have to necessarily to rescue the financial sector which is the way we went about this and so um i don't quite believe that the qe is what fed an asset bubble it definitely supported values of assets that had no value the market suddenly realized these are not worth anything and so we supported those assets it's that we permit the financial sector to do what it does that feeds this financial bubble and we don't have the regulations i don't think interest rates are going to do the job or stopping qe will stop this kind of speculative behavior so is the banking sector captured in many ways and one of the most important ways is ideology is this this belief this this deep belief that somehow we have to manage our economic affairs through this this construction the private market rather than acknowledge the powers that we have in our public institutions and deploy them i mean but part of the appeal of bond financing things isn't just that uh you know rich investors get their payments but that it's a way of circumventing democratic deliberation too right that's part of the benefits like oh well sorry you know we we have to pay back the bondholders so democracy goes out the window right so there's all this value added for the one percent even that is such a mythology like what is a bondholder the bondholder is not financing the government the government is providing the bondholder an opportunity to earn interest so it's completely upward absolutely not a necessity that's right we don't we don't need to have i like to have treasuries in my retirement portfolio okay it's the default risk-free asset but uh it's not for pacifying the bondholders that we need to be doing all this so we got we're getting i'm just trying to bring in the questions from the q a which there's a lot of great stuff but nicole brummer said the bailouts and the crisis were like a jubilee but only for the rich one percent so we're saying yes indeed we could call these a kind of jubilee how to make sure the jubilee isn't stolen by the rich well we i mean my sense is we haven't figured that out because we don't have enough counter power debtors aren't organized creditors are um there's all this ideology we have to debunk but curious if other people have some thoughts about that moving forward so the next emergency isn't as profitable yeah i mean that i think that's a very good point and that comes back to the power structure talk to michael and i'm having a difference of opinion over there uh because at the moment the power is entirely uh vested with the creditors and they dominate how the government thinks as well we need to break that nexus uh i i would rather break it by a way that actually shuts them up by stuffing money in their mouth which is what they seem to prefer to have to do rather than trying to decapitate them because i've got a feeling that at the moment um they have a more powerful way of arguing than i have i wouldn't like to see an abraham's track uh abram's tanks turning up outside my house because my arguments were a debt for a debt jubilee um so uh we we do have in the current situation they will take over everything so if you remember back when obama i was supposed to be our progressive uh president um there was is part of the proposal to solve the cri the financial crisis was enormous amount of mortgage reset that never happened what did happen with that gigantic transfer from from uh from what eventually became qe and just to elaborate on pavlina to some extent uh when qe takes place that is fundamentally the central bank with an unlimited capacity literally unlimited getting reserves for for financial institutions in return for bonds now when they do that with banks that are just an asset swap but the bank can't do anything with that money but when they buy them off non-bank financial institutions which frankly are owned by the banks then those are the financial institutions end up with reserves they can't get any investments burned out of so they go and buy shares so and all housing uh so in that sense yes qe did directly boost house prices through the purchases of bonds off the non-bank financial sector so there's lots of great questions here here's a provocative one from one of our hosts at the uh hannah rentz center um if we abolish this is kind of utopian begins with the utopian premise in a way if we abolish taxes and abolished debt it was gone um and the government spends to provide welfare and services don't we experience incredible inflation is that sustainable so that is from roger berkowitz uh it's not of course it's sustainable because right now you have a choice either the banks create credit and charge interest on it or the government creates credit and spends into the economy uh why is the government money any more inflationary than uh bank money the fact is that when the government spends money into the economy it's usually on infrastructure on payments to people and the production and consumption economy when banks lend money create money they create it just like uh the government prints money but they created for people to bid up the price of houses for people to take over other corporations they bought to buy assets not for goods and services so the government creating uh this money that banks are creating is actually much less inflationary it will not increase the price the cost of housing it will not uh increase stocks and bonds it will just be spent into the economy uh and the fact that the government creates it as opposed to somebody else is doesn't mean a thing i'm going to come back to michael have a good argument here we've been at this for a long time uh but i'm actually going to point out that one of the problems with this is that if you look at the scale of government spending back there for the first world war it literally thought in the american economy government spending was less than five percent of gdp now if you finance that by spending without taxation that's not a problem because you actually want your economy to impact before we hit ecological crisis which is another question i've seen there before we hit the ecological limits you wanted the money supply to be growing by about at least five percent per annum to enable commerce to continue expanding in an expanding economy but now when you when you go up after the stage of big government which occurred after the second the great depression at the second world war government spending is the order of 30 of gdp now if you injected 30 of udp every year into the economy with money that does not itself depreciate then you would have runaway inflation so the problem actually is not just the the the creation of money the need for taxation and so on it's the thing we actually create allegedly has a value which remains constant and doesn't fall now gazelle keynes praised the monetary theorist gazelle by saying gazelle's idea of depreciating money was a very effective idea that you could create money and if you didn't use it it depreciated rapidly and that was actually used in the the town of wargle during the second world during during the great depression to fight the the collapse of the economy caused by the credit system failing and wargle ended up having full employment until they were shut down by the austrian central bank so it is actually fundamentally the fact that money is set up so that it shouldn't depreciate when in fact when you look at an ecological sense and a social sense maybe we should have created a form of money that depreciated on its own and then you could have had government spending whatever scale was necessary and the money depreciating over time without needing taxation to cancel its excess create creation compared to the scale of economic activity in the economy so i want to yeah go for it and then i have this because i kind of agree with both government spending is not inherently inflationary but government spending without taxation as steve keane is saying is very large contribution to the economy and tax taxes retrieve some of this purchasing power but i would go even further let's go back to the history of money that that the role of the tax is very important in the launch of units of account and uh of what you might call like you know the the state money so what is the purpose of the tax it is that the purpose is to transfer resources to the public sector and so if we abolish that if that has implications for the value of the currency currently occur you know without a doubt but also it has implications for this transfer of resources from the public private to the public domain and so i'm very willing and happy to entertain ideas of collective provisioning but clearly the tax serves this function of providing some sort of resource to the public sector which today we expect that will be then redistributed in a more equitable way real resource not money so i want to take us uh i want to take us back to the ecological question that came up in the last session in a minute but first there's quite a few questions actually here about student debt which is what we advertised the panel to be about so i just want to read a couple of them and i think i might be missing some sorry uh nay uh uh nejla asks how is the national student debt forgiveness program likely to affect university enrollments wouldn't it need to be paired with a future solution such as free college is that problematic i do want to say you know and this is partly a david graberism we actually reject the term forgiveness which implies a that the the borrower did something wrong part of why we try to use uh words like cancellation uh abolition etc uh and then this ties another question if i can find it related there's a um in dr graber's book jobs he had proposed universal basic income as a potential solution in reducing the leverage and balance between workers employers could this be a potential solution to reduce and eliminate student debt i think there were some others as well but people want to speak on any of those i'll just dive into the the extending for education is one of the classic cases in which the government can spend money into the economy and not have a bureaucrat decide how it gets spent you give it to the students and say you spend it and in that sense it's the it's almost the perfect means for government money creation when one of the replies about government creation is you don't want bureaucrats deciding what to do you want consumers and you want entrepreneurs well give it to the students they'll spend they're the consumers and it will turn up and the entrepreneurs will try to make make gain out of the student spending and and that is a very creative way for government spending to be undertaken and the the travesty that's one reason i'm delighted not to be in the university sector anymore the travesty of what student debts how students thought about their education and how a bunch of moronic uh bureaucratic uh capitalists took over universities and screwed them up completely uh we'd be of a far better university sector it was completely government-funded and the entry requirements were not with how much money you borrowed but how many how many brain cells you had and how well you didn't examine how creative you were that should be the barrier to getting into universities the university should be run by the academic not run by the bloody bureaucrats and the debt financiers there's a simpler way of explaining uh this point all over most of the world education is free uh and for most of the world throughout history education has been free it's a public utility just like there is public health that's free what is the there's no need to charge a penny for education china doesn't pay uh other countries uh have free education america is unique in uh charging an enormous amount of uh for for education that should be a free public utility where you get there by as you say with brains yeah and this is how i see universal basic income you know uh this is a basic income that is a guaranteed uh you know free access to you know what we consider to be the basic essentials of life uh what is social security it is an income guarantee because we a society we have decided that we don't want people to be working in their old age um free public education free um health care i think um i think the i the idea here is to rethink what the good life is and how we can attain it the idea that somehow a income grant alone addresses these kind of deep structural questions i think uh you know i would challenge that i think that basic income guarantees are essential uh for many people who are not participating in in whatever we call a market economy but we also want to think about the structural aspects how we provide this quality of life i can give you thirty thousand dollars a year and you cannot buy health insurance rent and all the other things on the market today um wonderful i'm going to actually self-promote here and put a little film in the uh chat that is called you are not alone that i released earlier this year that has some discussion of what you know free pub we really need if we're going to have couple student debt cancellation with free public college we have to make sure that it's abundant that there are now so all sorts of you can have you know a public good that isn't offered at the scale that it's needed and there can be other inequalities that manifest in that so it kind of gets into some of those deeper questions and problems um the ecology point uh because people raised this in the last fight club i think it's it's important you know where how does this all hook into the problem of growth um i mean i see two ways one is you know debt and interest locks us into a model of endless growth right the idea we're gonna have more tomorrow than we have today so we're pushed to exploit planet and people more but then also when we talk about that jubilee we often go it'll boost the economy it'll be great there'll be growth um i don't know is that is there a contradiction there uh how does you know we're we're we're in an ecological crisis let's talk about it kevlin you want to go first you're on camera yes sure happily i mean i i turned to graber again you know uh the the concept of the human economy that you know everything is premised on on care our entire existence is premised on care it's not on an economy and an economy this economy is a construct you know it's a modern construct but if we kind of really think deeply about the human condition of what we do even in a capitalist economy on our daily life what we do is we take care of our children of ourselves or our friends we entertain each other we feed each other we educate each other like the vast majority of our work is actually care work but we have just you know commodified it in this particular way so the the environment is this kind of crucial dimension because it's existential uh you know we can't quite reproduce a society if we have cannibalized you know the very basic resources on which we vitally depend so like you know for me it is like a fundamental rethinking of what what is work what the economy is doing what its purpose is why do we have even this market what is it supposed to deliver to us and if it cannot why aren't we delivering it in other ways it's it's a kind of reimagining so the the climate concern is i think you know the the conversation is quite correct you know growth cannot be a measure of success in pretty much anything and accept you know the profit returns and so with respect to these very large existential questions um we need to be thinking about the how to's and uh you know technology not just purely technical solutions but also the social implications of these technical solutions i'm going to dive in with my other work which is actually on climate change and economics and uh i i have been if there's only one thing that's horrified me more about the thinking of managing economists and how they treat money it's how they've treated the ecology uh the stuff which nord house got a nobel prize for is garbage that should never have been published and what's come after that is even even worse uh the the ridiculousness they are actually talking about a six degree increase in temperature causing no more than a ten percent fall in gdp as a recent paper saying that if we lose every major tipping point on the planet gdp will be 1.4 percent lower than if we didn't lose the amazon of the gulf stream greenland the arctic west antarctic it's ludicrous it's nonsense it's garbage that means we're actually on the energy cusp of gigantic ecological crisis and the only way out of it i'm afraid in my opinion is to it to finance at the monetary side of this we have to be spending on carbon rather than spending on money so i'll put a set of proposals together called carbon rationing and if you search for carbonrationing.org you'll find those ideas developed by a guy called adam hardy in the first instance and the idea there is that we'd have a parallel of two tubes price systems uh you'd get a universal carbon credit which you'd have to spend as well as spending money uh the universal carbon credit be given out equally richard murdoch would get the same carbon credit that michael hudson got uh but of course michael hudson would never exhaust his carbon credit whereas rupert would run out in half a minute and have to buy it off michael and that would be a form of redistribution of wealth as well as a way of limiting the damage we do for the carbon we're putting out into the into the atmosphere there is a particular relevance to global warming and pollution to what we're talking about debt uh think of the economy of debt pollution the debt uh is growing exponentially as steve has shown uh and any rate of interest is a doubling time uh think of all this growth of debt this savings that uh charges interest that's growing exponentially this is like carbon into the atmosphere the models are really very similar and in both cases uh this exponential growth stiffens stifles the economy and economists are responsible mainstream economists but frankly neoclassical economics has to go the most dangerous thing for capitalism is not these lefties here talking about dead evolution it's near classical economics avoiding the real issues in capitalism probably i mean what it also ties back into how we began this which is the the public money could do a lot of things like finance a green new deal right like finance adjust transition that i mean that i think is also the the debt logic the ideology we're in prevents us from saying hold on we have the money to finance the transformation we need to make sure everyone's taken care of right like that is that's that's kind of the core of of it um i want to ask a question here just because i think it's uh something that we're all hearing about um which is the inflation narrative um this question is one of the first ones we got um as the inflation narrative is increasingly being discussed in the mainstream media as a phenomenon that disproportionately punishes the poor versus the rich well economic theory recognizes that inflation um operates as a transfer of wealth from savers to debtors what role might inflation play in modern debt jubilee or you know does this conversation give us any tools to reject the the narrative we're hearing about inflation right now again pardon me jumping in quickly uh inflation can actually be seen as an accidental form of gazellian money uh the inflation uh actually reduces the debt burden if the if the money in circulation is falling in value uh while the uh actually if the inflation is occurring it's actually reducing the real value of debt and that actually is a lubricating thing for the the global economy and since the debt is mainly owned by the 99 cents of the one percent i see that inflation actually benefiting up to a certain point not not in hyperinflation obviously but benefiting the poor at the expense of the bridge and that's one reason why the rich are so anti-inflation so um i think in michael there's done plenty of work on that issue as well so uh inflation i would see it as some when it's below hyperinflation levels uh it is actually it actually benefits the poor more than the rich i mean i'll step in here and so inflation is one of those other mis-theorized macro phenomena by by the profession that has been used so effectively to like justify all sorts of things like we constantly use inflation as um not providing enough support for the economy or to me you know using unemployment to fight inflation i mean that is just like extraordinary feat of neoclassical economics to say that working people have to be the bulwark against inflation there's no other phenomena that is like supposed to be our defense against you know the dark inflation so it's it's just that there is just this mythology that we can't achieve both full employment price stability number two inflation is used to uh constantly disempower government spending because the assumption is the government spending is inherently inflationary which we know it is not correct the pandemic bears it out we spend a third of the economy in one year and we see all the inflation coming in from the private sector from bottlenecks from supply chains for from logistical problems from shutting down various sectors in the economy globally and on top of it this is very well exploited by firms we just saw today the bloomberg article that the first giant corporations in the united states are posting record profits since the 50s they're exploiting this kind of partly media fueled fear of inflation a customer has resigned themselves that this is inevitable they're not gonna run away from their um from the firm but also their monopsonists like where are we gonna go and buy our stuff when we have this huge concentration of power and so they're using the pricing power that they have to be able to extract profit margins that are far higher i think inflation is definitely concerning to people and that can be a destabilizing social force and you want to mind you know how you know what happens to to folks purchasing power how they perceive this but there are ways to deal with this that are not um you know sacrificing uh growth in employment uh well-being etc finally what if there is inflation are we going to let the planet burn i do like this to me that doesn't even make sense like we we cannot wait we can't like structure the right commercial return or wait for the right inflation or get the right private interest to do the job we have public money we have a crisis we need to mobilize it immediately and we need to deal with it then we tackle inflation there are ways you know to deal with structure and i think there are examples of just you know structurally dealing with inflation around the world but uh i'll stop here yeah there's a really uh um sorry we're a little all over the place but that's that's that's a live chat here i think this one is it was is important though all around the world rising housing prices are locking out first-time buyers or forcing them to take out enormous mortgages will a debt jubilee on mortgages affect housing affordability uh you know and not everyone can take out a mortgage right that's forcing a lot of people to be renters but it is striking that we have historically low mortgage rates you know uh they really went down after the pandemic you know when you see mortgage rates of 2.85 or 3 you sure don't see that on credit cards or payday loans or other kinds of consumer debt um so it feels like there's lots of interesting things to talk about uh this and and um uh someone who who feels inspired to take it um and i'm also hearing resonances of michael's comments about the ren the victim moratorium's ending and i think it's important to underscore that yes people have had eviction more terms but that rent has been piling up right it wasn't a cancellation of people's rent so some estimates are saying people owe 50 billion 70 billion dollars of back rent um there's not michael go for it you're muted michael animate yourself it has to be said now can you hear me okay this question came up in the third century bc in sparta the king decided that uh the spartans were so much in debt he was going to cancel the debts uh and uh one of his relatives uh his uncle actually convinced them only cancel the mortgage debt well it turns out to cancel the mortgage debts who had the mortgages the the rich people if you cancel the mortgage debts donald trump will be the richest man in the country the most commercial property owners have um one percent or a tenth of a percent of their capital it's all debt you would be giving the biggest giveaway of wealth in american history to the large commercial uh in uh mortgage uh uh property owners that all of a sudden wouldn't have to pay the banks at all so the last thing you want to do is to give it away there is a way around this you would have to if you are going to cancel the debts on mortgage you want to make sure that the government gets all of that rental value that you're just giving away to the uh to the absentee owners by uh a property tax which is uh what what china's doing uh look at what happened in russia russia could have got back all of the mineral wealth and the housing that uh we also gave away simply by taxing away all of the revenue from what it gave away so if you do cancel the mortgages you'd have to replace it with a with a full taxation uh so that you don't give a free lunch to the most heavily indebted people the richer most of the debts the rich are the biggest debtors and you don't want to forgive the debts of the rich you want to forget the debts that people like also and that's then that's why i talk in terms of the modern debt you believe rather than the old traditional one because i if i modeled this in in manifesto you would have a modern day jubilee which would give you 100 000 per person to repay your debts and therefore rupert murdoch would have your debt for by a hundred thousand dollars and pavlina would have a debt fall by a hundred thousand dollars i think rupert would noted rather less than papalina so the idea is to do this at an equal level an equal footing create the money is the government's capacity to do that and therefore it dramatically reduces the debt of the poor and in fact the poor could end up being net positive uh while the rich still have those debts they don't get out of it so we have to think intelligently about how to do this and also i saw one question there about the housing issue uh getting rid of the mortgage that's below the mortgage of the poor rather than the rich um you would still have the capacity for this for the banking sector to recreate it and get us back in an asset bubble again and empirical research my own modeling shows that what actually causes rising house prices is rising levels of new mortgage debt so the way to stop that is to say and this is again it means a political shift as well to achieve it is to say that banks can no longer lend as much as they like for a house they can lend say for example no more than 10 times the annual rental income for a house now that would remove the amplifying feedback that currently exists between new mortgages and house prices get rid of that and and therefore you get rid of what's actually causing the bubbles in the first place that's exactly what happened in 1960s when i came to new york that's how things work uh banks would not lend uh anyone uh where the debt service uh was more than 25 of their income and now it's uh everything's been removed you're absolutely right this is how to do it the three of us are all talking about the economy as a system not separating uh debt in one part from another and cutting it apart we're looking at the overall system and that's not what uh uh neoclassical economics does papalina do you have thoughts on this or should we move on no yeah i mean i think just like we talk about a student that jubilee coupled with free public college we there's a problem with how we approach housing we have to approach our housing as a speculative asset instead of something that we live in and so there's all sorts of forms of social housing and other ways to provide for that human uh need so as we as we get towards the end i want to start asking questions that maybe uh are even even a bit pushed the envelope a bit further so i want to mix two one from um uh one from chad elsin he asked how much power are we willing to give to the government to manage our lives by giving it the control of the financial water we swim in i want to combine that with a question from nica that i just have to find uh um our wonderful uh co-host asks uh so the cat so um so the capital is power you say that the state or the palace is obviously better than private creditors i'm interested in whether a situation with more democratic distribution of power is possible or in other words what would a society look like where wealth is not automatically converted to power um so both of these kind of loop us back to some of the original questions about the creditor being the state or the private sector and add some wrinkles i think that's i think that's a very both very good questions framing uh the one of the strongest arguments people make against government money as that'll let bureaucrats control what happens rather than letting the public rather than letting private entrepreneurs control it spend the university sector and seeing the amount of money wasted by bureaucratic initiatives there i'm sympathetic to part of that argument so we do have to consider how do we stop uh people who's letting a subset of society control the rest of society and that again is why things like spending on infrastructure on education uh on health uh by the government over the government funds those entirely uh removes that issue you decide how much of your economy should be spent in education how much should be spent on health the government provides that money and then that money goes out through the professionals who decide how it should be spent and the individuals receive it they also decide how that money is spent so we don't have to get caught up in the situation where a bunch of bureaucrats make stupid rules uh that waste money and so on and of course at the same time i'm going to come back because they have a lot of very gifted bureaucrats and we need to get back to the stage where we can see people in the public sector being there for public service reasons we need to get that that ideology back into place and part of the nonsense buchanan has given us where we always regard bureaucrats is bad but out of that we've actually had a lot of bad bureaucrats and we need to reform the government side of things almost as much as the private money system so i would answer this um to say that it's not so much that the state per se is the issue but the way the state is governed and captured right and so which would be the disempowering narratives that we want to tackle head on for mmt it's very clear taxes do not pay for government spending that immediately disempowers the wealthy class we don't need the taxes of the rich we don't need them to fund our policy priorities because we have institutions that are perfectly capable to fund what we desire and so you see this dichotomy of people supporting uh you know universal healthcare education etc but they are kind of surrendering to this ideology that we oh we can't do this because we need to find the pay for that is the one gridlock that we see play out over and over and over again across the globe and we need to remove this tool from the conversation from people's liking you know like understanding about money we do not depend on tax says to fund um these public priorities i also then i am thinking about various wages in which society organizes itself right because we try together to to fill gaps where the state has not contributed right if we don't have universal health care we have solidarity economy if we don't have and we certainly can't expect that there will be a bureaucrat that can come into my community and say well you should do this this and this like the community knows like their environmental needs care needs this is where my own work comes in that you can actually deploy you can actually effectively do ground up support these networks solidarity networks endless variety of communities associations you name it that can that are already doing the kind of care work that we've been talking about but they are disconnected from this like important source of finance and they're captured in the ideology that they need private credit or some attacks from somewhere so i would you know i would actually bring these these two um to chain the paradigm the parents give the footnote to nobody has ever said uh you have to pay as you go when it comes to military spending somehow nobody's ever said where are we going to get the money they only say it when it comes to spending into the economy that you and i are talking about uh the people yeah well it's good to tax the rich too they don't have so much money to buy the political influence they have which you know absolutely this is this is absolutely and i think you know i would go back to the initial conversation you know i mean how high a tax do we do we need and the the concentration of wealth is so high that taxing income is not going to do the job you know do it 90 okay we've done it before but it's just not going to disrupt these other processes by which wealth is accumulating and so you need to think structurally about just removing these opportunities to make money like that would be my preference of restructuring the economy um and then you know yes you should tax certain activities out of existence you know but i wouldn't even say tax you just ban you know a certain kind of extraction you know maybe you know predatory practices you know regulatory tools can be used for that well somebody here asks you know are we avoiding the p word for planning it sounds that this is dt cochrane uh it sounds like we need to uh need planning to direct spending investment rather than leaving it to the market if so aren't we saying that if not how else do we get where we want and need to go i mean i i guess i would also just underscore another theme here which has been the way these debt relationships uh uh again circumvent or override democratic deliberation and democratic planning um you know by saying oh the again the bonds the credit rating agency says this we can't do that it's off the table um but what do you think about planning michael using every economy is planned our america is the most centrally planned we're more centrally planned to china but the central planning is done by wall street not by the government every of course uh it's it's centrally planned the question is who's going to do the planning ever since the uh the neolithic you had to plan for the crops you had to plan to allocate resources the government has left the planning to the uh to the financial sector and the financial sector lives in the short run governments are supposed to live in the long term so we're talking about uh short-term people looking at what they can grab in the next three months of the year uh and what uh steve keane's model and i are talking about or the long-term uh which is uh the public point of view pavlina yeah i mean you know institutionalists this is a kind of a starting point for institutionalist economic theory that you know uh planning is always there the question is who does the planning you know in the early roaring twenties is the cartels and the trust and then it was the corporate sector um we have always had planning minsky's work which is kind of you know evolutionary institutionalist financial theory you know he argues that there was a short period of time where we had um kind of a managerial economy where the public sector took the larger role of public investment directing public investment employment that was right around world war ii and soon thereafter but then we quickly liberalized and then we had planning by the financial sector as michael uh pointed out so that i think that that you know it's a dirty word but i think it's absolutely unavoidable if you just look a little closely more closely at just the institutional structure and the evolution of the economy and you know there are questions we have to ask going forward you know how we tackle climate uh responses and if if our insistence is that we're gonna have some you know private um you know mega corporations through incentives and nudges that they will do the planning i think we are definitely abdicating our democratic responsibility um uh yeah so i want to close this out with a really simple and elegant uh question and maybe we can channel david graber a bit who had some um but they asked would the abolition of debt also abolish borrowing right um or are we always borrowing each other and owing things is it something else that's a problem but yeah maybe uh pavlina begin with you and then we'll go to steve and then michael and we'll close up i i think that the question has certain premise that maybe i'm i'm not super comfortable with because you know for me uh in the graveyard sense right money is connected to debt but that is not social obligation and that's not something that we can kind of cancel and abolish we have this kind of you know a sense of reciprocation to one another and however we trace the history of those relationships money has been there and so money uh to me represents that i know what i think the question is asking that we are having this you know dependence on privately created private debt and i think that that you know requires restructuring but can you stop me from giving you a loan i don't know if that is a possibility the question is like what do we do with that i've i think we've taken the current circumstances we're in of a debt cri ecological crisis coming our way then we have to in that situation we have to fundamentally redefine money now if we think about the question about planning beforehand uh largely near classical economics and mainstream capitalist ideologies to let the entrepreneurs and let the business people decide how to plan they'll get it right well that was true wouldn't be facing an ecological crisis they are short-term thinkers we do need the long-term and the government is normally the repository that long-term thinking the trouble is of course their interests have been captured by the financial class and we've that's that's why we've delayed action on climate change for 50 years now if we have to redefine money in the context of an ecological crisis then most of the money has to be created in response to our ecological needs and that's where i my idea of a of a parallel carbon uh currency and universal carbon credits would be part of that to limit what we spend because country we've spent too much we as the human society on this planet takes up far too much of them well regarding debt cancellation resources and that is actually undermining us and destroying our capacities regarding debt cancellation when i began my uh uh harvard group on the history of debt in the 1990s uh the argument by archaeology by the right wing uh archaeologists and anthropologists was you couldn't possibly cancel the debts in uh uh in mesopotamia because who would ever lend money well obviously as soon as they cancel the debts it all began as pavlina said all began all over again and uh so then the uh people uh the uh right-wingers said you see it didn't work canceling doesn't work it begins all over again well of course it begins all over again it does work in wiping out the overhead of death and then the whole thing will begin all over again until society lets too much debt accumulate and when too much debt accumulates then you turn on the therm the debt thermostat and you wipe it out uh and that happened again and again uh with every new ruler in the bronze age in mesopotamia uh also all throughout antiquity uh so that's just a false argument that uh these people not only don't read history they try to prevent uh anthropological history from being uh read or or published uh just because it's ideologically against their uh right-wing pro-creditor arguments thank you all we're definitely seeing a war on history these days um uh so you know we know from history the debt cancellation debt jubilee is possible but i fully believe we need to build better power to get there so please join the debt collective um get organized our slogan one of our many slogans is you are not alone a space l-o-a-n one thing that does is it isolates us uh you know there's stigma there's shame so a first step is overcoming that and banding with others i'm gonna pass the mic to tara from the hanaren center so thanks all for being here um on behalf of this uh hannah aren't center and um uh all of our co-sponsors nika the museum of care pavlina and economic democracy initiative i want to just thank everybody for this fascinating excellent relevant topical discussion and um pavlina steve michael astra thank you for your tremendous moderating and um i hope that you all stay in contact with our organizations including astros debt collective the hannah rent center you can google us find us at bar.edu see more of our events um we have active youtube channels and i know nika there is there are more fight clubs coming up and it sounds like this conversation is still just getting started that's that's my my my feeling um that we could still keep going so and thank you most of all to our audience for staying engaged posing such great questions and um really pushing this conversation where it needed to go okay everyone thank you again good night

Channel: Hannah Arendt Center for Politics and Humanities at Bard College

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Length: 88min 19sec (5299 seconds)

Published: Thu Dec 02 2021