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MMT is a state theory of money, but what is needed now, as the title of my essay suggests, is a money theory of the state: how money power both makes imperialism possible *and* subordinates and constrains the empire itself. https://brooklynrail.org/2021/02/field-notes/The-Money-Theory-of-the-State-Reflections-on-Modern-Monetary-Theory
The increasingly sterile debate about whether MMT is right or wrong is pointless, because it is already the organic ideology of the post-neoliberal crisis state. The “monetary sovereign” has to spend like mad to stabilize the monetary system, so ideas are adapted to this reality.
Why does it have to? For better or worse the dollar is world money, so the U.S. gov has to provide enough currency and debt to satisfy the world demand for dollar assets. It doesn’t borrow or tax to spend; it spends and borrows in order to keep the global monetary system alive.
The growing scale and intensity of these policies over the last decade is why MMT has only recently come to be taken seriously, despite having been around since the early 90s. The objective, structural context of policy has changed, so it no longer appears as crackpot nonsense.
But in this context the U.S. can only act as a responsible general steward of the dollar system by enriching the transnational class of asset owners whose wealth and power are built upon it, widening the barbaric, global inequality gap between the owners and labor.
Globally, the dollar’s main function is to uphold this transnational class structure, which is the real referent when the Fed or Treasury officials talk, in earnest, about the need to “safeguard the stability of the financial and monetary systems.”
But of course, the dollar is also a national currency rooted in a particular nation state. As such it is, in principle, supposed to serve the general interest of its citizens, not inflate the wealth of elites across the world market.
This is the basis of all the demands to “democratize” money, or democratize the Fed, democratize finance, etc., and it animates MMT’s vision for fiscal nationalism. Supposedly, because we don’t need to tax the ruling class, we can go wild with the money magic.
But this amounts to simply wishing away the power of this class, who could care less about MMT’s formal models and national accounting exercises. They well know that money is part of the machinery of class power, a weapon for their ability to discipline and control labor.
This world class structure is the basis for actually existing MMT policies. As long as “systemic stability” is identified with the interests of that transnational rentier class, a social-democratic revolution fueled by fiscal nationalism will remain only a pious wish.
This contradiction between national identity and world money cuts through the heart of the monetary sovereign: its political constitution and the transnational class structure it serves pull it in opposite directions, slowly rending it apart.
The result is a kind of schizo state, ideologically incoherent and increasingly incapable of governing. The U.S. comes to resemble more than anything else a world central bank with a country vestigially attached to it.
This process of diremption is also the objective basis for the culture war between “urban, cosmopolitan elites” and the self-appointed spokespersons for the “real America,” who have recently re-christened their perennial grift as “national conservatism.”
Needless to say, this has nothing to do with the actual class war, which, as always, is irreducibly transnational. So we need a global understanding of money that, rather than taking the reified standpoint of the state, proceeds from a critical analysis of the state.
Though affiliated with a particular country, world money is an emergent, transnational assemblage that reflects the equally transnational organization and association of labor. Like class itself, money is an evolving social and historical process greater than any single state.
Unless we incorporate this understanding and articulate a politics adequate to it, the left will only accelerate the current global trend toward national fragmentation and geopolitics, which is being driven by an underlying decline in the global rate of productivity growth.
This trend is the objective result of a general crisis of accumulation, of the inability of the global economy to reproduce itself as a system of social reproduction, and the absence of any viable replacement for the regime formerly known as neoliberalism.
The left still thinks about imperialism like it’s 2003. But we’re now in a situation of great power conflict and inter-imperial rivalry b/t the U.S. and China, which is totally different. The rising belligerence on both sides is about who will pay the cost for a dying society.
In the coming years, the steady escalation of domestic instability and political violence will further push U.S. elites to externalize internal conflict, b/c they have no other ideas. This will accompany more frequent domestic crackdowns from the state security establishment.
Given the current balance of political and class power, fiscal nationalism guided by “monetary sovereignty” will continue to only be accepted insofar as it advances the geopolitical aims of the U.S. state, which will inevitably ratchet up tensions with China.
Additionally, China and Europe are not likely to quietly comply with any monetary agenda that significantly expands the global footprint and political reach of the dollar, for their own geopolitical and geoeconomic reasons.
But even disregarding the class and geopolitical problems, domestically the simplified narrative about how we can create as much money as we need will not help to forge a viable left mass politics, for reasons we discovered in the 2020 primary.
For an electorate who just resoundingly rejected a Dem candidate who supports the policies they mostly support in favor of one who explicitly doesn’t, preaching the gospel of magic money isn’t likely to convince many people. As always, pure idealism won’t get you very far.
So money cuts across all the present emergencies: rising racist nationalism and neo-fascism, the new Cold War, and an increasingly violent natsec & domestic security state. They all are driven by the conflict between national and world money endemic to the dollar system.
In the end, the only way out is a transnational strategy for labor that connects the interests of workers in the Global North with those in the Global South, articulated through a language of power about our shared, common fate. There are no shortcuts.
