LUMPENPROLETARIAT—Gonzo:  Well, I went to the University of Missouri-Kansas City, apparently, leaving my spouse and son in the lurch back in California one cold January night in 2013 to pursue my radical economics and MMT adventures.  I drove halfway across the USA, convinced I had found the most radical economics department in the nation, after hearing Dr. Michael Hudson on KPFA’s Guns and Butter talk about UMKC, as the anti-Chicago School of Economics. [1]  At that point, I had already begun coursing through the California community college world toward transferring to a four-year university and focusing my studies upon the discipline economics.

And I watched myself become hypnotised by UMKC’s erstwhile Economics Department Chair, Dr. Stephanie Kelton’s striking eyes, dynamic presentations, and engaging rapport with her growing MMT audiences.  Dr. Kelton is a dynamo.  I had already become somewhat familiar with Dr. Kelton‘s work through transcribing my acquaintance Bonnie Faulkner’s seven hour-long broadcasts (Guns and Butter, Pacifica Radio, KPFA) covering the 2012 MMT Summit in Rimini, Italy.  Some of those transcripts were published in Dr. Michael Hudson’s, Finance Capitalism and its Discontents: Interviews and Speeches, 2003-2012 (Dresden: Islet, 2012).

So, with the support of my spouse, I had decided to transfer to UMKC, magnetised by Dr. Michael Hudson, who also attended the MMT summit, alongside UMKC’s Dr. William K. Black [2], Marshall Auerback, and Dr. Alain Parguez.  And that summit also introduced me to another brilliant economist, Dr. L. Randall Wray [3], even though he was not in attendance.  His presence was.

As soon as I got the chance, I brazenly sat in, during my first weeks as a UMKC undergrad, on Dr. Wray’s graduate-level lectures.  I literally felt I was in the presence of God, hoping such a divine and benevolent force could exist.  And it was not so much a spiritual experience because of a blind obeisance to a cult of personality.  It was the sheer energy generated by a room filled with, arguably, some of the most important students busting their asses to become the best economists they could be. [4]  You could feel the earnestness in the air, as Dr. Wray breezed through Keynes‘ entire General Theory in one or two lectures.  My head was spinning.

But the first professor I was desperately looking for, I never found.  Unbeknownst to me, or like men who stare at goats, I hoped I could will it to go my way.  But Dr. Michael Hudson, as far as I know, never set foot on campus; and I practically attended every single economics seminar, conference, and presentation at UMKC since January 2013.  Oh, well. [5]

But the coolest thing I found at UMKC’s heterodox economics department were the grad students.  They made the experience at UMKC an infinitely richer one, getting to sit in on all of their heady debates.  I owe them a debt of gratitude.  UMKC heterodox economics.  Reprazent.

—Messina

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Michael Hudson, Finance Capitalism and its Discontents: Interviews and Speeches, 2003-2012 (Dresden: Islet, 2012).

Table of Contents

0  Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1  Productivity, compound interest and poverty . . . . . . . . . . . . . . . . . .001

2  The road to debt serfdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .015

3  The economics of austerity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 041

4  The politics of debt deflation in Europe . . . . . . . . . . . . . . . . . . . . . . .067

5  The coming American debt deflation . . . . . . . . . . . . . . . . . . . . . . . . .083

6  The end game: government bailouts . . . . . . . . . . . . . . . . . . . . . . . 127

7  Forecasting the Obama Administration . . . . . . . . . . . . . . . . . . . . . . . 111

8  Financing the war, financing the world . . . . . . . . . . . . . . . . . . . . . . .127

9  An insider spills the beans on offshore banking centers . . . . . . . . . . . 135

10 Progress and its enemies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157

11 Financial Predators versus labor, industry, and democracy . . . . . . . . . 195

12 How do we fix this mess? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

13 Reforming the financial tax system . . . . . . . . . . . . . . . . . . . . . . . . . 259

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[1] By radical, I mean grassroots, which is to say the most honest.

That reminds me:  I’m sorry, Bonnie!  I still have to get back to you about those MMT summit transcripts I published at Media Roots, plus the other Dr. Michael Hudson transcripts.  (I’ll have them up asap at Lumpenproletariat.org, so you can share them at GunsAndButter.org)  My phone died over the summer, so I lost many of my contacts, including Abby Martin’s at Media Roots.  This semester has been hectic, especially, with studying calculus, which seems like a black hole, which sucks up all of the time in the day.  Nothing can escape its force.

[2]  I attended Dr. Black’s UMKC Law and Economics course at UMKC’s law school.

[3] I attended Dr. Wray’s UMKC Intermediate Macroeconomic Analysis course.  Only the fact that it was Dr. Wray’s course (with Sudeep Regmi working as the TA) persuaded me to take the online course.  But it was dope because it also included Dr. Kelton’s video lectures, as a bonus, and Sudeep Regmi as well as Dr. Wray also provided us with some in-class lectures.

[4]  I emphasise the importance of the students of economics at UMKC’s heterodox (interdisciplinary and pluralistic) economics programme because there are, apparently, less than a dozen such economics departments in the nation.  The rest of the economics departments are neoclassical, which means they are programmes which depoliticise the discipline of economics.  Economics is a social science, which investigates the social relations permeating the economic dimensions of our lives.  However, neoclassical economics seeks to remove economics from its political consequences.  Or, rather, neoclassical economics seeks to persuade the world that economics is not political, that the economic outcomes we observe in ghettos across the nation and working class families struggling to make ends meet and all of the rest of the wanton human suffering, is natural or the result of rational human nature.

Indeed, what we now know as economics, used to be known as political economy.  Today, we have economics (neoclassical) and political science; and never the twain shall meet.  A good heterodox economist is capable of describing and prescribing optimal policies for optimal economic outcomes, eliminating unemployment (e.g., MMT’s job guarantee programme) and mitigating human suffering.  Neoclassical economics seeks to mathematise the discipline of economics and reduce the economist to a marginal weatherman, merely forecasting narrow economic trends for capitalist investors.  For more on the contending theories in the field of economics, which are censored from virtually all of the economics departments across the USA (and, indeed, around the globe), read Dr. Richard Wolff’s important book, Contending Economic Theories: Neoclassical, Keynesian, and Marxian.

[5]  At least I did have the good fortune of getting some props from Dr. Michael Hudson (!) for transcribing some of his speeches and publishing them at MediaRoots.org.  Taking a cue from Ralph Nader’s level of civic engagement, not to mention the countless revolutionaries who have sacrificed so much in the struggle.  E.g., Malcolm X, Che, MLK, Fred Hampton, the MOVE organisation, Mumia Abu Jamal, David Gilbert, etc.  We encourage you to get involved in your local sangha.  Respeto al derecho ajeno es la paz.

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R.D.WOLFF—Marginalism has not destroyed the labor theory of value except in the minds of fundamentalist marginalists. The marginalist school of economics that emerged in and after the 1870s in Europe – and nowadays usually called neoclassical economics – was an alternative to and thus a competitor for the labor theory of value. These were and are alternative ways to think about the market relationships – exchange values or prices – between commodities produced for sale. Marginalism focused on desire – how different people felt about/preferred one commodity to another, working and income versus leisure. It explained both the demand for goods and also the supply of labor that produced those goods as outcomes of people’s preferences. Their focus on preferences and demand made them disregard or simply ignore other factors shaping supply, demand and thus prices. In contrast, Marx’s labor theory of value focused on the “toil and trouble” that went into producing everything and that shaped its exchange value or price [it is important to remember, by the way, that the chief expositors of labor theories of value before Marx were Smith and Ricardo]. Marx’s focus on labor made preferences and demand secondary, although Marx explicitly kept them in the picture. To say that marginalism has destroyed Marx’s labor theory of value is a little like saying that knives and forks destroyed chopsticks as ways of eating. It is far better to recognize that these are two different, alternative ways to eat; they are two different ways to experience eating. Marginalism and Marx’s labor theory of value are different ways to think about economies; they contribute to different ways to act inside those economies and different ways to identify and solve those societies’ problems. What matters are their differences and the social consequences of those differences. A debate over which manner of eating is “right” or “correct” – chopsticks or knife and fork – would strike most of us as absurd; the same applies to a debate over whether marginalism or the labor theory of value is “correct.” When advocates of one theory claim it has “disproved” or “destroyed” another, that is just a ploy to dissuade their audiences from inquiring about how the other works, what analyses it produces and what conclusions it reaches.

Learn more at R.D.WOLFF.

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[Last modified 15:26 9 MAY 2015]