A talk with Radhika Desai, Professor, Department of Political Studies, University of Manitoba, and discussants Yasin Kaya in Toronto and Gary Porter in Victoria, B.C.
Among the many ideas the pandemic has revived for reforming our broken economies, two have dominated. One is the idea of universal basic income and the other is Modern Monetary Theory, which claims that there is no limit to our governments’ ability to print money and thus undertake all the social expenditure we want and need, including UBI. There is, as the saying goes, a magic money tree.
However, often ideas that erupt in the early stages of crisis are ideas that have lain, neglected and unexamined, for far too long. Amid the very practical scrutiny, they often melt away. Ideas of UBI are melting under scrutiny. In this lecture, we will raise some important questions that will enable us to separate the rational kernel of MMT from its less credible elements. Yes, governments can print money and lots of it. However, there are two limits: external pressure for devaluation must be managed by capital controls and the economy has to be organised to produce or procure the things the money will buy. So, our answer will be, ‘Yes, there is a money tree but it is not magic’.