Thursday, February 11, 2021

Surrendering to Hopelessness: Catharsis for the Modern Communist

“How does it make troubles heavier by bemoaning them?"  Seneca

There is a propensity amongst those on the left to discuss revolution in the context of physical violence. I do not know of any communist who has not, at one time or another, spoken feverishly of toppling the old order with brutal excess. Of guillotines and street mobs. Of destroying landlords, capitalists, and petty shopkeepers alike. I am certainly not above and beyond talking in this way. When one observes the world through the lens of class struggle, it is easy to succumb to emotional reactions. Oftentimes, that reaction is one of despair, frustration and anger. For many of us, to be a communist is to be furious, to be constantly broiling with an anger that bubbles away just under the surface. Without sufficient means to channel this anger in a healthy way, it can so easily develop into blind hatred. A hatred for the capitalist system; a hatred for the capitalist himself. A hatred, even, for our fellow working people who have not seen the light that is so blinding to us.
The working class has been broken. It is shattered into millions of pieces. We are forced to sell off exorbitant amounts of our lives for paltry recompense. A single job does not ensure a comfortable home, nor good health, nor sufficient food. We can dedicate sixty hours a week to making money for capital and still find ourselves drowning in debt. We have watched COVID-19 sweep the globe, stealing away the lives of our loved ones. We have seen the excruciating contradiction of ‘key workers’ forced to work on minimum wage, with no promise of pay rises, or even better working conditions. We have seen the British government funnel the disease through care homes, where it festers away, swelling in size to devour those most vulnerable within our crumbling society. None of this is fair. To add insult to injury, we have all been rendered impotent by capitalism. Forced to scrabble in the dirt for table scraps, we have little time for organising or educating, let alone revolution.
So, without recourse, we turn to the power fantasies of the oppressed. We swaddle ourselves in anger and a righteous sense of hatred for those who are stronger than us. We engage in masturbatory victim sessions online, crooning over videos of masked protestors punching the police, over news articles about day traders battering hedge funds, over music inciting violence against politicians that we know we will never actually carry out. There’s an important question that goes unasked despite all of this: who do these fantasies serve? Do they make you feel better about your lot? Does the constant feeble rage give you a sense of purpose and energy? Do you find community in the acquiescence to suffering?
Or does it make you feel tired? 
I have essentially unplugged from my Twitter account because I came to the realisation that my every waking moment was spent angry. Angry that I have to work in a job with no moral imperative. Angry that I’m underpaid. Angry that I can’t afford the renovations my home needs. Angry that climate change is getting worse. Angry that the pandemic shows no signs of slowing. Angry that a year of my life has been spent huddled and fearful indoors. Angry that we’re slipping deeper into an economic depression. Angry that critical thinking and the development of our civilisation have been sacrificed on the pyre of ‘freedom of speech’ as an offering to liberal capitalism. And yet, I wake up certain that I will go to work today and spend another eight hours making spreadsheets. My house will be a little more time-worn than it was the day before. The pandemic will grow worse, as will our economic decline. The world will continue on its path whether I’m angry about it or not. So I choose to succumb, and therein lies the real catharsis that I have never found as a voice of fury.
I accept that I have no power. I accept that I will not bring about any more change than that which has been predetermined for me by the ongoing development of a system that transcends a mere economic paradigm. I accept that suffering underpins existence: it is the very essence of life itself. I cannot escape it; communism cannot not resolve it. The only power I or anyone else has, for now, is how we react to this fact. 
I don’t want this essay to be seen as a sermon. I am not particularly invested in what I am saying. I am not trying to sell you anything. I am simply offering my perspective, because I do enjoy writing, and because our blog needs more content. So, here is the crux of the essay:
What if your reaction, your emotional response, to the ongoing tragedy of your existence, is the only control and power you will ever hold? What if denying our mutual situation anger, hatred, and other negative emotions, is the only way you will ever find liberation? Have you tried it? You can call it a victory if you want. It certainly feels like a victory at first. After spending so much energy worrying about pain, finding that this was all optional has been one hell of a relief. You don’t have to sacrifice knowledge that things are bad, or that injustice continues to permeate our lived reality, just the hope that it will all get better. As Seneca said, “whoever has nothing to hope, let him despair of nothing.”
Communists, especially statists, spend an awful lot of time worrying about the future. They prepare for the day when the working class has awoken so that they can guide us like benevolent shepherds towards the promised land. Again, I have perpetuated this trope all too often in the past. Only two months ago I wrote about the need for a "New Left" and the noble task of striving for progress. The danger in this line of thinking is that we sacrifice the present for a mythologised future: one that is unlikely to ever be realised. Moreover, we unwittingly allow communism to become a part of, and consequently the majority of, our Selves. To be a revolutionary without revolution around you is a depressing existence.
I think it’s important to note at this point, that this is not meant to be an anti-intellectual position. By all means, we should constantly be striving to expand our knowledge. I will continue to read economic and political theory. I will continue to debate the merits of communist ideology with my close friends. I do not intend to simply give up on my convictions, however I only intend to indulge them insofar as I can live them out. Viktor Frankl, the Austrian Neurologist and Holocaust survivor said this: “What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him.”
What is communism without kindness? What is socialism without compassion? All too often we discuss our ideologies in the macroscopic sense, in broad histories and with dispassionate statistics. We are eager to eulogise the failures of our predecessors, and in doing so we overlook the essence of inhumanity that often underpinned their existence. Perhaps that is due to a sense of constant need to defend the USSR, Cuba, Vietnam and China from the poor faith arguments of dishonest detractors. Ask yourself: why am I defending these regimes? You must see something idealised within them, or perhaps you see something of your Self within these states? The problem is that you cannot separate the USSR from the Tambov Rebellion, Cuba from the Grey Years, Vietnam from the Khmer Rouge and China from Tiananmen Square. Even in the so-called workers' states, we have suppressed, tortured, and murdered ourselves. Lao Tzu said, “Because wise rulers love the people, they lead without using force…While protecting the people, they do not control them.” A state with the workers’ interests at heart will not have to resort to purges, terror and destruction to achieve their liberation. Through good action and loving kindness, a harmonious state will arise from out of each community, and the whole shall grow stronger. If you give up guarding these governments, and separate your sense of Self from their ideologies, you will find more peace. What use is there in defending the USSR to someone who has no interest in an impartial, objective truth? Moreover, are you interested in the objective truth? Are you as interested in acknowledging the tragedies carved out in the name of communism as the successes? Or is it possible that your Self has become so entwined with the history of communism that you cannot stand to hear communist regimes denigrated without also feeling denigrated yourself? Know when to abandon emotional connexions and yield for your own sake. You can be the People’s Republic of China if you want to be, but it’s an awful lot of effort for not much reward.
Lao Tzu said “True goodness is like water; it nurtures everything and harms nothing. Like water, it ever seeks the lowest place, the place that all others avoid.” In fostering compassion for all living beings, you can nurture the peace within yourself and improve the world around you. It is easy to love your fellow worker. It is easy to find brotherhood amongst the oppressed. It is more difficult to extend compassion and understanding to our oppressors. The capitalist exists purely at the expense of the worker, and yet he suffers under capitalism just like us. In his obsession with ownership and control he has severed his connection to humanity. In his desperate pursuit to consume he has become utterly numb to bliss and true happiness. He will never derive joy or satisfaction from any Thing or Sensation without an excessive price tag (and even then, the enjoyment will be fleeting). He will never understand that community with kind and honest people is the ultimate source of blessedness. 
“Wealth on Earth cannot compare to the treasures of Heaven. In order to gain heavenly treasure, an individual has to forgo temptations on Earth, and if they are wealthy then their riches should be given away and used to help those in need and not stored up.” So said Jesus. 
In this context we can see that the capitalist, despite all the evil he unleashes upon the world, is perhaps more in need of understanding and compassion than anyone else. After all, what a miserable creature he is.
The communist hates the capitalist because the capitalist deprives the worker of the fruit of their own labour and forsakes them with poverty. Yet the communist could not exist without the capitalist. For the communist who has succumbed sleepily to the ego, the capitalist is central to the existence of the communist’s Self. Love your enemy, the capitalist then. Not because in loving them you hope to one day bring them around to your side, or to foster within them some realisation of the misery they impose upon us. Love the capitalist because without the capitalist You would not exist in the very literal sense. As Alan Watts said, we “depend on the nasty people in order to know that [we] are nice. [We] are as a matter of fact highly indebted to them.” The fact that the most dedicated communists amongst us have not taken our ideology to its most extreme yet logical conclusion, suggests that the preservation of their Self is more important than acting on all the sabre-rattling guillotining-nonsense that they are so want to indulge in. If they won’t become the revolutionaries that they pretend to be online, or in their little organisations, why bother at all? Moreover, why should you?
To put it another way: we are all actors. We all play roles over the course of our existence, which is itself a grand opera that never ends. If you go away and think about this and conclude that I’m right, why satisfy yourself with being an extra? And if you can’t or won’t take on a main role, why not find a new part to play? You can always reprise a similar role in the next act if things start to get more interesting, and your old role becomes more relevant to the central story. Maintain communism as a part of yourself but deprive it of an emotional attachment, and you will find catharsis despite the ongoing decline of our civilisation. Be ready and willing to extol its virtues to the receptive if you wish, but do not take on the role of the preacher and expect to retain an unattached happiness and comfort.

    - wielisc

Monday, January 18, 2021

A Brief Question of Syndicalism

“For the machine, because of the way it is built, can work only in a given direction, no matter who pulls its levers.”  Rudolf Rocker

Ever since Karl Marx outlined his analysis of capitalism and the inevitable socialist society that would replace it, history has observed countless experiments in the name of “socialism” or “communism” which have had drastically varying degrees of success. These have ranged from anarchist interpretations to outright totalitarian bastardisations of Marxist thought. One such experiment which appears to have been long forgotten and stamped into tragic irrelevance is that of syndicalism: the radical labour movement that advocates workers’ self-management, organisation, direct action and unionisation in order to abolish the capitalist order (1). As Rudolf Rocker explained in 1938, the history of syndicalism predates Marxism and draws its temporal roots back to the early 1800s, with the birth of the modern labour movement in response to the absolute destitution and misery which the industrial revolution had levied on the working masses of Britain (2). The movement has a tumultuous, indeed horrifically violent, history and was an overt exposition of one of the primary drivers of history: class struggle. Countless now-forgotten working class people lost their lives during the fight for better conditions and the right of working people to assemble and unionise. Poverty itself was criminalised and 1812 legislation, the so-called ‘Destruction of Stocking Frames, etc. Act’ imposed capital punishment for “luddism” – the destruction of capitalist machinery during protest (3). Fourteen workers were hanged at York Castle in 1813 and thousands were deported to Australian penal colonies (4). Many more died during brutal state repression of mass meetings, such as the 18 proletarians killed in St. Peter’s Field in 1819 (5). Such were the events that first gave rise to syndicalism.

Marxist and early socialist literature informed the modern labour movement and gave it a revolutionary consciousness and purpose as opposed to earlier goals, such as that of Chartism, which simply aimed at political reform rather than the cessation of capitalism (6). The result of this synthesis, syndicalism, has had varying definitions throughout history but can be summarised thusly: the establishment of worker-owned and worker-controlled organisations or unions, proletarian ownership of the workplace, advancement of workers’ demands through strikes or other direct action and use of the general strike as the ultimate revolutionary armament, through which capitalism would be overthrown. Victor Griffuelhes described this final, ultimate, revolutionary general strike as “the curtain drop on a tired old scene of several centuries, and the curtain raising on another” (7). The most popular form that this revolutionary labour movement took was that of anarcho-syndicalism, with the writings of Mikhail Bakunin, Rudolf Rocker, and Georges Sorel forming an informal theoretical framework for it. It thus became commonly assumed that syndicalism was intrinsically linked to anarchism: that state and corporation were two sides of the same oppressive bourgeoisie coin, and both had to be done away with, in order for co-operative, worker-controlled, democratic systems to arise. However, the concept of syndicalism is not dependent on the absence of a state; this was simply the most popular historical form the philosophy took.

Here is where I would like to posit the inevitable question: could syndicalism have been the cure for our malady? Could we have abrogated this absurd and deeply malevolent capitalist world in which we now live, which appears to be edging ever closer to collapse, had we listened to Bakunin during the First International and followed a path of syndicalism? I believe this question is worth exploring. Perhaps a syndicalist society is the one which most truly conforms to the original conceptualisation of socialism by Marx, as it would necessarily entail the means of production being directly in the hands of the working classes, the proletarians, through worker co-operatives, unions, boards and committees rather than in the hands of the state through bureaucrats, autocrats, politicians and dictators. History’s “socialist” experiments have too often resulted in the exaltation of authoritarianism and a lack of direct democracy, handing the means of production to the state as so-called “public ownership” rather than directly to the people (8). This was one of the most successful deceptions in history and spawned a multiplicity of “socialist” nations founded on the principles of “Marxism-Leninism” (9). This, Stalin’s bastardisation of Marxism, lacked almost any resemblance to the original formulation.

These regimes have often failed to keep up with social development and instead remained static, which is in direct contrast with the recognition of constant change supposedly underpinning the dialectical materialist ideology that guided their existence. This doomed them to failure. It has been evident in the USSR, Cuba, China and other nations, that once a new elite had established power, there was a lack of motivation to move beyond the dictatorship of the proletariat. This eventually resulted in the creation of, as Trotsky termed it, “degenerated workers’ states” (10). The unwillingness to lend more direct control to the workers, friction between development of the means of production and advancement of society led to paradoxically renewed class antagonisms: an irreconcilable friction between workers and bureaucrats. History has shown us that the inability to resolve these antagonisms leads to a disintegration of the “socialist” state. Thus, the unmovable power structure that is the “dictatorship of the proletariat” is one that cannot withstand the forces of social development and, in response to social change, the authoritarian leadership entrenches itself further, condemning the project to decay (11). In reality, these states were just autocratic, centrally-planned, state-capitalist nations which opposed Western imperialism: they did not achieve socialism.

A full analysis and interrogation of history’s previous “socialist” experiments goes beyond the scope of this piece, and there were indeed both noble and abhorrent outcomes as a result of their formation. I do, however, propose that these were great tragedies, with anti-capitalist revolutionary fervour diverted toward the incorrect solutions. Hence, we are still faced with our current worldwide malady of end-game capitalism. These failures of history were due to the fact that state-monopolised property is simply Bourgeoisie property in new clothing, whether it is controlled by autocrats or, in liberal democracies, indirectly by capital. Private property has never truly been abolished and entrusted to the proletarians directly, yet this is what syndicalism would achieve. Bakunin once authoritatively explained how the state is an extension of power and acts as an oppressor just as capital does, whilst the institution of authoritarian regimes in the name of communism simply replaces the Bourgeoisie with a new elite oppressor class (12). His prediction that Marxism would lead to a new despotic “red bureaucracy”, more dictatorial than a capitalist system, played out through history as if prophecy (13). The truth is that socialism has failed in most of its trials throughout world history because the “social” within “socialism” was forgotten: power was never truly socialised to be in the hands of the masses, only abstractly or on their behalf by the state, and this has led to great atrocities in the name of proletarian liberation.

Marx was profoundly prophetic and correct in his analysis of capitalism, its exploitation, and class struggle, with the dialectically inevitable remedy of socialism as strikingly obvious today just as it was in the 1800s (14). However, humanity has failed in its implementation of this antidote, and so our malady remains. Marx once wrote that the dictatorship of the proletariat “begins with the self-government of the commune” (15). That is to say such a dictatorship would be a bottom-up system of direct democracy, rather than top-down control. The contemporary theorist Richard Wolff often defines socialism as “the democratisation of the workplace” (16). I would argue that syndicalism on a national or international scale is the exact exposition of such an idea: the syndicalisation of society would put direct democracy in the hands of the working classes, would directly democratise the places in which they work, and would grant them the ownership of the means of production which has historically evaded them so heinously. It could be the very essence of socialism.

    - Mustapha Mond


1. A short history of British Anarcho-syndicalism | Solidarity Federation [Internet]. 2021 [cited 16 January 2021]. Available from:

2. Rocker R. Anarcho-Syndicalism: Theory and Practice. 3rd ed. 1938.

3. 1812: 52 George 3. c.16: The Frame-Breaking Act [Internet]. The Statutes Project. 2021 [cited 16 January 2021]. Available from:

4. Fourteen Malefactors [Internet]. English Crime and Execution Broadsides - CURIOSity Digital Collections. 2021 [cited 16 January 2021]. Available from:

5. Poole R. 'By the Law or the Sword': Peterloo Revisited. History. 2006;91(302):254-276.

6. Rogers N, Epstein J, Thompson D, Thompson D, Wilks I, Jones D. Chartism and Class Struggle. Labour / Le Travail. 1987;19:143.

7. Darlington R. Syndicalism and the transition to communism. 1st ed. 2008.

8. Petras J. Authoritarianism, democracy and the transition to socialism. Socialism and Democracy. 1985;1(1):5-27.

9. Black C. Marxism, Leninism, and Soviet Communism. World Politics. 1957;9(3):401-412.

10. Trotsky L. The revolution betrayed. New York: Pioneer Publishers; 1936.

11. Mayer R. The dictatorship of the proletariat from Plekhanov to Lenin. Studies in East European Thought. 1993;45(4):255-280.

12. Bakunin M. God and the State. 4th ed. 1882.

13. Guérin D. Jeunesse du socialisme libertaire. Paris: Marcel Rivière; 1959.

14. Marx K, Engels F. The communist manifesto. 4th ed. 1848.

15. Marx K. Conspectus of Bakunin's Statism and Anarchy [Internet]. 1926 [cited 16 January 2021]. Available from:

16. Wolff R. Start With Worker Self-Directed Enterprises [Internet]. 2017 [cited 16 January 2021]. Available from:

Sunday, December 20, 2020

An Absurd World (Part I) - The Death of Free Will

“Whether I'm broke or got fame, sunshine or rain, ain't a damn thing changed.” – Lord Finesse

With the passage of each day we observe the world becoming increasingly absurd and devoid of all rationality. Indeed, we find ourselves in the middle of a swirling, entropic, ever-expanding universe that is rampant with contradiction. We see this exemplified when we note the exponentially rising, staggering concentration of wealth in fewer and fewer hands whilst the rest flirt with poverty and are increasingly reliant on the state for subsistence. We witness how politicians grant lucrative contracts to shell companies owned by their close associates whilst working people die in their droves during a pandemic. Society is more polarised than ever, with people clinging dogmatically to their partisan views despite overwhelming evidence against them. The threat of climate catastrophe looms and civilisation teeters on the edge of extinction but humanity continues to extract every last drop of fossil fuel out of the earth. People wage war against eachother in the streets. Their behaviour and ideologies are moulded by subliminal, advertiser-funded, artificial intelligence techniques propagated through social media. As these opposing sides of citizens tear each other apart, banks continue to silently drive private debt to oppressive levels, threatening a deflationary collapse, and the same establishment politicians get elected. All the while, these theatrics are narrated by multi-millionaire celebrities who lecture the masses on their contemptibility. 

Nations in the developing world continue to be plundered for natural resources to produce the latest technological gadget, leaving millions dead. As this chaos occurs in one part of the world, in another, people mindlessly post deceptive images of their best selves on social media whilst humanity’s collective mental health steadily worsens. The scientific method purports to enlighten us and lead to progress, yet we are closer than ever to extinction. Philosophers and scientists alike warn us of the dangers of artificial intelligence yet gargantuan sums of money continue to be funnelled into its development. Data is manipulated to support pre-ordained conclusions, science is politicised and fake news is rife: one can no longer discern what is true. Governments assassinate their enemies with remote-controlled drone strikes and the most bloodthirsty members of the elite are paradoxically rewarded with Nobel peace prizes. Monetarily-sovereign nations sit idly by and allow unemployment, poverty and depravity to rise amongst their citizenry and do not take action to abrogate these ills, instead preferring to espouse ideologically-driven lies. One crowning moment of insanity is watching Rudy Giuliani alleging some of the most serious election fraud in US history on an online broadcast, only to cut off halfway in order to promote “real cigars from a real cigar shop”. Reality blurs into the surreal.  

As this maelstrom rages, it is becoming apparent that our lives are increasingly governed by forces outside of our control: social media, technology, propaganda, data-harvesting and the cruel vagaries of the market shape our actions. Our elites, such as those at the World Economic Forum, propose solutions to the madness, advocating a “great reset” and the International Monetary Fund discusses “digital cash” as the cure for our pathology. The current state of affairs is approaching such irrationality that humanity seems to be marching, flailing wildly, towards the precipice. Surrounded on all sides by absurdity and the decline of spirituality, man looks for meaning. He is baffled by the howling, cold universe into which he has been plunged. We begin to ask whether this could have been any different, had certain individuals in the past acted differently or if historical events had taken the opposite course, or were we always doomed to descend into this calamity? And thus, ancient questions of free will, existence and futility once more bubble up to the surface.

Free will is dead; we have killed it

It seems to be the fashion in academic philosophy and neuroscience to regularly dig up the age-old debate of free will and give it another spin around the literature. Despite the fact that, every few years, new empirical evidence emerges against the very concept of a will that is “free”, irrelevant theorists and desperate professors routinely rally against the concept’s demise. The unpalatable data which condemns free will enrages both philosophers and scientists alike, who, somewhat embarrassingly, rush to defend the antiquated idea, terrified of a world without freedom. These so-call scholars are each so sure of their own free will and so eager to defend it, that they carry out impressive mental and semantic gymnastics in order to realise a half-baked, philosophically shaky definition of free will which, in their own minds, makes it out of the discussion unscathed. 

It must of course be noted that for any regular person, the intuition that one is free to act as one pleases and has ownership of their own volition is obvious and seems to be common sense. There is discussion that this intuition, as well as consciousness, has an evolutionary benefit. This is likely part of the reason why we feel that our actions are our own so strongly, and why well-meaning intellectuals fight to preserve free will despite all the evidence against it. Yet it should also be emphasised that for those well-versed in the scientific and philosophical literature, thinkers who jump to defend free will in the face of damning evidence are foolish. They are acting religiously, like fideists, and even those with extremely valuable contributions to other fields of philosophy or science dissolve into baffling irrationality when it comes to the topic of determinism. Any intellectually honest individual should be at least sceptical about free will and be aware of the real-world implications of its nonexistence.

Before delving into debate, one must first accurately define exactly what is meant by “free will” as it has become popular in the literature to twist and mangle the meaning of the term. Despite this, there are a few commonly-used and prominent definitions in philosophy which can be broadly interchangeable for our purposes. One such definition is that free will is the ability to freely and actively choose between multiple options or futures. Another is that free will is the ability to have “done differently” or “done otherwise” in the past, regardless of whatever reality you face in the present. Some philosophers try to manipulate the definition in order to exclaim proudly that “we have free will!” despite the truth of determinism: they argue a will is “free” if one can act without hindrance or coercion. We will elucidate the foolishness of this line of reasoning later.

The traditional philosophical positions in the discussion surrounding free will are as follows: hard determinism, soft determinism (or compatibilism), libertarianism (not to be confused with the political philosophy) and indeterminism. I do not contend that this paragraph is an exhaustive interrogation of these ideas, merely a concise summary. Hard determinists hold that everything in the universe has a preceding cause, that all human action is causally determined and therefore we never act freely. This position also proposes that, as a point of logic, people cannot be held morally responsible for their actions, which have been predetermined by causes over which they have had no conscious influence. Soft determinists concede that the universe is indeed mechanistic and causal, thus determinism is true, however posit that free will is “compatible” with the truth of determinism. The usual argument these charlatans offer is simply to redefine free will as being the freedom to act according to your own motives without hindrance from other individuals or institutions, despite the fact that your motives are predetermined. Compatibilism asserts that as long as the individual is the cause of their own actions, or indeed as long as we “own” our actions, even if they are the result of prior unconscious causes, then we have free will. This, as Daniel Dennett puts it, is the free will “worth having”, despite being an obviously self-defeating paradox and a fallacious strawman. Libertarianism is the now extremely unpopular position of contending that determinism is false, humans are free and we are morally responsible for our actions: a delusional fantasy which is at odds with our scientific understanding of the universe. The libertarian model of free will is also logically impossible. To have libertarian free will, one must be able to control one’s own thoughts. These thoughts are either caused or uncaused. If they are caused, then one cannot be in control of them, yet if they are uncaused, then one also cannot be in control of them. It therefore follows that it is logically impossible to control your own thoughts, whether they are caused or uncaused, and thus libertarian free will is impossible. Indeterminism is a philosophical position popularised by the advent of modern quantum theory, which holds that actions are random and due to chance, as opposed to causally determined, yet free will is still impossible as our choices are grounded in randomness. 

The standard argument against free will

The most formidable argument against free will, fuelled by modern discoveries in both neuroscience and physics, is what I will term the “standard argument”. It has been espoused by renowned, or perhaps now infamous, intellectuals such as Sam Harris, John Searle and Peter Van Inwagen, amongst others. The “standard” line of reasoning propounds that the universe is governed according to the laws of physics, which are either causal and deterministic in the Newtonian sense or random and indeterministic in the quantum sense. If they are deterministic, then the will cannot be free, however if they are indeterministic then the will also cannot be free, but is simply a result of the vagaries of chance, luck or randomness. This position is championed beautifully and succinctly by Owen Flanagan in ‘The Problem of the Soul’ when he writes that “free actions, if there are any, are not deterministically caused nor are they caused by random processes of the sort countenanced by quantum physicists or complexity theorists” and that “free actions need to be caused by me, in a nondetermined and nonrandom manner”. When laid out in these plain terms, one would think that even the most indoctrinated academic or disinterested layperson could see that there is no combination of randomness and non-randomness that is compatible with free will. Just as we cannot consciously control the preceding deterministic causes which dictate our actions, likewise we cannot control random events which may somehow culminate in human activity. As Harris puts it, “however you turn this dial between the iron law of determinism and mere randomness, free will makes no more sense”. Interestingly, Harris goes further than the usual proponents of the “standard argument” and condemns the very notion of “free will” as incoherent. He argues that thoughts and intentions emerge from a background chain of causes of which we are unaware and over which we exert no conscious control. That is to say, an infinite chain of prior causes predetermines one’s actions, therefore they cannot possible be “free” nor does one really “will” anything and thus the term is defunct. We are simply conscious passengers enjoying the ride on a chain of causes over which we exert no authority. The “standard argument” is worth breaking down further, as follows: the conscious mind and “choices” are the result of prior chemical causes, governed by natural physical laws, over which the conscious mind had no influence. To put it bluntly: your actions are the product of unconscious particles. Whatever feeling of “choice” you have is an illusion, evolutionarily useful, but an illusion nonetheless. Consciousness simply allows one to bear witness; we are not in control. 

The “standard argument” has been under scathing attack throughout modern philosophical history. One of the most notable and persistent opponents is Daniel Dennett, who clings to his beliefs on free will with admirable stoicism for understandable reasons: namely that his career is partly built on them. Dennett is a modern compatibilist and argues that the truths of both determinism and indeterminism are compatible with free will, or at least his bastardised version of the concept. His main point is that, despite the neuro-scientific picture of the brain being empirically true, human beings still remain free in the ways they act and think in all the ways “that actually matter”. In his version of “free will”, thoughts and actions are the products of unconscious causes but are still “ours” as we own them and embody them. Consequently, he holds that anything that your own brain does or decides to do is still something that you have done as an organism, as a person, and it is you that has decided to do it, regardless of the fact whether you exerted conscious influence or control over the process. He eloquently explains that our conscious and unconscious selves interact and work in conjunction to produce out actions, and this is the foundation of his “free will”, and through the interaction of consciousness and unconsciousness, we are free to shape our own world. This line of reasoning continues to descend into absurdity when Dennett essentially argues that just because one cannot influence the unconscious machinery that determines what you choose to do, it doesn’t necessarily mean that what your actions are involuntary or outside your direct control. It is important to note he offers no evidence for these rambunctious claims, only very intelligent-sounding philosophical gibberish. He even goes as far as to posit that the notion of free will that proponents of the “standard argument” defend is a “popular” layperson version of the concept, is “a mess”, philosophically unsound and, ultimately, the wrong type of free will to be interrogating. He also contends that the negation of moral responsibility is so utterly intolerable, that free will must exist, for the alternative is “blind to the chilling lessons of the not so distant past”. Finally, Dennett bizarrely allocates a substantial portion of an essay in response to Sam Harris with commentary on how most philosophers are compatibilists and subscribe to a similar view to him, therefore he must be right. 

It is worth dedicating a paragraph to dismantle Dennett’s line of attack. Through his contorted mental gymnastics and clever word games, Dennett contends “free will” to mean something which is not defeated by the “standard argument”. However, this is simply a strawman. He does not address any of the underlying issues that are exposed by the “standard” line of reasoning, and instead works extremely hard to redefine the meaning of free will, freedom and blurs the idea of agency, and at the same time is able to claim victory. One could easily use Dennett’s method and reinvent free will ad infinitum in the face of any opposition so as to never concede the argument: this is intellectually dishonest. Furthermore, his position that the inability to control what controls you does not mean you are not in control is ludicrous and a contradiction in terms: it is self-defeating and logically incoherent. Dennett’s overall criticism of the “standard argument” can be summarised as follows: it seems like we make choices and our physical bodies act them out, therefore we do make choices. This is quite clearly a weak and illogical line of thought, which does nothing to abrogate the key points of the “standard argument”. His contention that a world without moral responsibility is too unpalatable and therefore cannot be true is simply an appeal to consequences fallacy. Dennett does not think a world without moral responsibility is desirable and therefore concludes that it cannot be true, which is logically fallacious. Perhaps the most entertaining fallacy Dennett commits is the appeal to popularity. He furiously delves into the academic literature to fish out statistics that show how popular his position of compatibilism is amongst the philosophical elite. For example, he states that “just over 59%” of philosophers are compatibilists and “between 60 and 80%” of “experimental” philosophers are in agreement with compatibilism. Dennett’s arrogance here is overt, and his position is essentially “most philosophers agree with me, so I am probably right”. Needless to say, this is not only a childish assertion, but also not a legitimate intellectual perspective. Overall, Dennett’s approach initially appears scholarly, impressive and dazzling, but is a failure.

The case against free will from neuroscience

In addition to, and supportive of, the “standard argument”, there is now a large and robust body of work from neuroscience which provides evidence against the concept of free will. One of the progenitors of this movement was Benjamin Libet, a neuroscientist who discovered the link between the “bereitschaftspotential” or “readiness potential” and volitional activity. His landmark experiment involved subjects being asked to flex their wrist whenever they wished to and to note the time on a clock when they had decided to carry out the movement. An EEG with electrodes attached to the motor regions of the brain measured electrophysiological activity. In short, he showed that voluntary acts are preceded by a specific electrical change in the motor cortex and supplementary motor area which begins 550ms before the motor act, and 350ms before subjects even had a conscious awareness of willing the act. It is important to note that no such readiness potential appears before involuntary acts such as in Tourette’s syndrome. We can therefore make the tentative conclusion that unconscious processes in the brain are the true initiators of voluntary acts, not free will. However, this conclusion, and the methodology of Libet’s study, are the subject of criticism which is worth dissecting. Even Libet himself argued that his work left room for an arbitrator-type free will, which can modulate and veto unconsciously-generated activity after the readiness potential. This has been echoed by recent work, which proposes that such actions are vetoable up until a “point of no return” 200ms before the movement. However, Kuhn and Brass have shown that even such a veto would be the result of unconscious processes

There were clearly methodological issues with Libet’s study. For one, “the awareness of the intention to move” is ambiguous and could be interpreted differently by different subjects, introducing bias. The requirement of the same subjects to then accurately report the time on the clock at which they felt said intention further introduces subjective recall bias. Furthermore, the very use of a clock could be deemed a distraction to subjects, and a limitation of the experiment. Daniel Dennett also couldn’t resist wading into the discussion. He furiously wrote that neuroscientists “have been on a rampage – writing ill-considered public pronouncements about free will” and condemned them as socially irresponsible for doing so. Putting aside Dennett’s emotional outburst, his critique of Libet was lucid: that there is the potential for temporal mismatch during the shift of attention from one’s intention to the clock and discerning the time. He further argued that Libet’s reliance on accurate reporting by subjects of the experiment is flawed, as the report may simply be where it seems to the subject that things come together, as opposed to when they actually occur. Banks and Isham replicated Libet’s study but they used a delayed tone following when participants pressed a button to indicate the time of their intention to act. They found that the time reported by these individuals shifted to correlate with the time of when the tone sounded, implying that this report is retrospectively constructed rather than pre-determined by a readiness potential. Miller and Trevena built on this critique and posited that the readiness potential doesn’t represent a decision to move, rather it is EEG evidence of the brain paying attention. They used an audio tone in an experiment to indicate to volunteers to decide whether to tap a key or not, and the potential was the same in both cases, suggesting that it isn’t evidence that a decision is made to move. However, Libet’s colleague Patrick Haggard has explained that there are separate stimulus-response and voluntary circuits in the brain, and therefore these researchers applying external stimuli such as noises were not testing voluntary neurophysiology.

An important blow to Libet’s work on the readiness potential occurred in 2012 with the publication of “An accumulator model for spontaneous neural activity prior to self-initiated movement” by Aaron Schurger. He developed an argument that the readiness potential is empirically accurate but the conclusions are not. His work focused on a churning, always-on, fluctuating, background buzzing of neuronal activity present in all our brains which emerges as the result of spontaneous electrical flickering of thousands of interconnected neurones at rest. He noted that this electrophysiological noise rises and falls in tides without being matched by physical activity. However, if one was to analyse the data by ordering it by its peaks and reverse-averaging it, it would visually look like climbing, purposeful trends, and this was the methodological technique that Libet used. Schurger concluded that the readiness potential is simply a circumstantial epiphenomenon, rather than a causal phenomenon: once the ebb and flow of background neuronal noise reached closer to the threshold for initiation of movement, otherwise uncued subjects were flipped over into activity rather than inactivity.  However, where Schurger’s otherwise impressive exposition fails, is that it does no favours for free will. He simply replaces a causal readiness potential with a random, meaningless background neuronal hum that can push a person towards a particular choice if it reaches the appropriate magnitude. This is simply an appeal to indeterminism, rather than a defeat of determinism. Moreover, a multiplicity of authors have now replicated Libet’s findings using a variety of techniques and data interpretation methods. Overall, it is clear that Libet stumbled onto an observation that was gargantuan in its implications for philosophy, albeit with flawed and outdated methodology by today’s rigorous scientific standards.

Neuroscience’s case against free will has been strengthened time and again throughout the 21st century, to the dismay of professional philosophers. Cognitive scientist JD Haynes replicated Libet’s findings using advanced fMRI techniques, which showed that the prefrontal and parietal cortices contain electrophysiological information about which button a subject will press in an experiment up to 10 seconds before the same subject is even aware of making such a decision. The brain is already unconsciously bubbling up neuronal activity in order to produce a motor action far in advance of one’s conscious awareness of a “choice” to carry out the action. Upon criticism that the “choice” to push a button was too simplistic and not generalisable to human activity, Haynes repeated the study but using the complex task of adding or subtracting numbers and found that the same neuronal activity was evident 4 seconds before subjects were aware of making a decision to calculate. Similarly, Fried et al. reproduced these findings at the minute level of individual neurones. They found that solitary neurones fire 2 seconds before a subject reports a “will” to act, and that the activity of only 256 total neurones is sufficient to predict with 80% accuracy a person’s decision to move, up to 700ms before they are aware of it themselves. They concluded that “at some point, things that are predetermined are admitted into consciousness”, that is to say, consciousness is a mere biochemical afterthought, rather than the causative factor. The assertion was further echoed by Adam Bear and Paul Bloom’s work, which makes the case that the brain rewrites history to deceive the person into believing they made a choice all along, a “postdictive illusion”, when in reality one simply becomes aware of the experience of a “choice” passively. Their data suggested that subjects’ minds swap the order of events to make it appear that they had made choices, even when they didn’t physically have the time to do so. In similar fashion, Wegner and Wheatley showed that the experience of intentionally willing an action is just a post-hoc causal inference, not a factor in producing behaviour. Later work by Stefan Bode detailed fMRI experiments which once again showed it to be possible to decode the outcome of “free” decisions several seconds prior to the decision reaching conscious awareness. Philosophers, such as Alfred Mele, have argued that the previously described neuroscientific experiments have been flawed, quantifying things in milliseconds and relying on accurate temporal pinpointing by human subjects. A common criticism is that the data is based on simple, binary decision-making whereas free will involves complex, multifaceted, detailed, social situations, and thus the data is not generalisable to reality. Despite all of this, there has been no critique able to destroy the fact that unconscious neuronal activity precedes the conscious experience of willing an action.

The case against free will from physics

It is clear that we have already levied an extensive case against free will and have interrogated its criticisms. Nevertheless, it is important to describe supporting argumentation from the field of physics. Physicists, such as Sabine Hossenfelder, have asserted that the very concept of free will is not only incompatible with physical laws, but altogether meaningless. We know that the laws of nature are subject to differential equations, whereby the initial conditions at one moment in time determine events at any other moment in time. Extrapolating this, one can argue that every single detail of the universe was already determined at the big bang, the original initial condition. “Will” is grounded in biological neuronal activity, consisting of matter and thus subject to the laws of physics. That is to say, the particles which make up the brain are the initial conditions which determine future outcomes, and the actions you take are a consequence of the physical particles of which you consist. Hossenfelder also asserts that the fact that the physical system is partly chaotic does not change the conclusion, as chaos is still deterministic, only making predictions difficult, but not undetermined. Similarly, the true randomness and unpredictability of quantum events are not influenced by anything, therefore reality is determinism with the occasional, random, undetermined quantum jump. This leaves no room for free will. Some charlatans such as “information philosopher” Bob Doyle propose that the randomness of indeterminism is what introduces free possibilities from which one chooses possible futures. This assertion is utterly obtuse as randomness and chance are defined by the very fact that they are not chosen by anything. I would also posit that the idea of free will never made much sense anyway: if a choice was determined by your wants then it was not “free”, and if it was not determined by you then it was not a “will”.

So what is the point?

In conclusion, the evidence amassed by 21st century science, despite all the best efforts of a brigade of desperate free will fideists, is damning. Despite issues with Libet’s foundational work, and much of the criticism being well-founded, later research in neuroscience has solidified the evidence and the conclusion that voluntary acts are the result of preceding unconscious neuronal processes. This, alongside the view from physics and the “standard argument”, has levied a blow to free will from which it can never recover. To echo Nietzsche, not only have we killed God, but now we have killed free will. Evidence from all fields continues to mount against free will, and this should be celebrated, for not only is the truth important, but so are the real-world implications of the concept’s death. One may ask “well, what’s the point?”, if we are all just passengers without freedom then why bother with anything? To fall into such fatalism is a mistake: just because human actions are caused and determined does not mean they are unimportant, our actions have an impact in the world and we embody part of the causal chain of the universe. An accurate understanding of free will, or its nonexistence, has profound implications for moral responsibility, justice and society. People, deep down at the neuronal predetermined level, are not morally responsible for their actions. They are simply conscious passengers on a giant deterministic chain, products of factors over which they have no choice. This knowledge can open us up to a true compassion: awareness that “evil” people drew the short straw, and “good” people won the determinism lottery. Taking this further, it enables us to shift the aim of justice from punishment to rehabilitation, one such example embodied by Norway’s prison system. This is not to say that the safety of the public should be disregarded, and those who cannot be rehabilitated or remain forever dangerous should still be kept from harming others. The death of free will also reshapes one’s understanding of achievements and prowess in society: increased humility in those who have “done well” and a sincere empathy for those who are less fortunate. Such an understanding of free will is the foundation of a humanitarian society, and allows the construction of an economy based on equity and need. Free will is dead, let us revel in it.

    - Mustapha Mond


1) Kate Donald - The increasing concentration of wealth and economic power as an obstacle to sustainable development – and what to do about it (
2) Financial Times - Watchdog criticises government over awarding of £17bn Covid contracts (
3) UNDRR - The Human Cost of Disasters - An overview of the last 20 years 2000-2019 (
4) Today - Netflix documentary ’The Social Dilemma’ unveils psychological manipulation used by social networks (
5) Steve Keen – Coronavirus: Inflation or Deflation? Why we need a Modern Debt Jubilee Now (
6) Inez Benitez - Two Children May Have Died for You to Have Your Mobile Phone (
7) Nick Webb - Our Collective Mental Health Is Getting Worse — But Why? (
8) Bulletin of the Atomic Scientists - It is 100 seconds to midnight (
9) Zachary Arnold - What investment trends reveal about the global AI landscape (
10) Allen et al - Evaluating the fake news problem at the scale of the information ecosystem (
11) BBC - Nobel secretary regrets Obama peace prize (
12) Richard Murphy - How many things can Rishi Sunak get wrong in one video? (
13) Business Insider - Rudy Giuliani releases politics video pausing for a sponsored cigar commercial and blaming Fox News for Trump's defeat (
14) Klaus Schwab - Now is the time for a 'great reset' (
15) Kristalina Georgieva - A New Bretton Woods Moment (
16) JC Eccles - Evolution of consciousness (
17) Daniel Dennett and Greg Caruso - Just deserts (
18) Encyclopaedia Britannica - Free Will (
19) Gebharter et al - Free Will, Control, and the Possibility to do Otherwise from a Causal Modeler’s Perspective (
20) Freedom and Compatibilism (
21) Daniel Dennett - Free Will Worth Wanting (
22) Atheism and the City - Logical argument against free will (
23) Owen Flanagan - The Problem of the Soul (
24) Sam Harris - Festival of Dangerous Ideas (
25) Sam Harris - Free Will (
26) Eyal Mozes - The Dogmatic Determinism of Daniel Dennett (
27) Daniel Dennett - Reflections on Free Will (
28) Bourget and Chalmers - What do philosophers believe? (
29) Eddy Nahmias - Surveying Freedom (
30) Benjamin Libet - Do We Have Free Will? (
31) O'Connor et al - Brain–Behavior Relations During Motor Processing in Chronic Tic and Habit Disorder (
32) Schultze-Kraft et al - The point of no return in vetoing self-initiated movements (
33) Kuhn and Brass - Retrospective construction of the judgement of free choice (
34) Daniel Dennett – The Scientific Study Of Religion (
35) Daniel Dennett - The Self as a Responding - and Responsible - Artifact (
36) Banks and Isham - We infer rather than perceive the moment we decided to act (
37) Trevena and Miller - Brain preparation before a voluntary action: Evidence against unconscious movement initiation (
38) Patrick Haggard - Human volition: towards a neuroscience of will (
39) Aaron Schurger et al - An accumulator model for spontaneous neural activity prior to self-initiated movement (
40) JD Haynes et al - Unconscious determinants of free decisions in the human brain (
41) JD Haynes et al - Predicting free choices for abstract intentions (
42) Fried et al - Internally generated preactivation of single neurons in human medial frontal cortex predicts volition (
43) Adam Bear and Paul Bloom - A Simple Task Uncovers a Postdictive Illusion of Choice (
44) Wegner & Wheatley - Apparent mental causation: Sources of the experience of will (
45) JD Haynes et al - Tracking the Unconscious Generation of Free Decisions Using UItra-High Field fMRI (
46) Alfred Mele - Libet on Free Will: Readiness Potentials, Decisions, and Awareness (
47) Sabine Hossenfelder - You don’t have free will, but don’t worry (
48) Bob Doyle - The Cogito Model (
49) Friedrich Nietzsche - The Gay Science (
50) Christina Sterbenz - Why Norway's prison system is so successful (

Sunday, December 6, 2020

Modern Monetary Theory - A Primer for the Uninitiated

 “Money is not real. It is a conscious agreement on measuring value." - John Ralston Saul

Neoliberalism is dead. The game is up. The truth is free

We are living in an extraordinary time of paradigm change, a time when the group-think of  establishment economists and the most irrational of their postulates have been challenged and debunked by reality itself. This post is to serve as a nice little introduction to this new economic paradigm, Modern Monetary Theory, or MMT for short, and hopes to explain what it is, why it is different from the previous mainstream view, what are its key takeaways and some general economic ideas along the way. It is constructed with sectors describing MMT specifically and macroeconomic concepts separately, such that a new initiate to macro might  read it all, but one with a classical background may only read the MMT parts. With that in mind, let's dive right in.

What is MMT exactly?

The first thing to know is that MMT is a macroeconomic theory. This means it attempts to describe the reality of economies and how they actually operate in real life. It is not a series of policy prescriptions e.g. “the government should do this or that”. It is not “only a theory” insofar as a brief outline of ideas or unproven postulates. Instead, it is a robust framework for analysing the inner workings of economies, a lens through which to observe economic phenomena (real employment rates, wages and productivity, GDP growth, etc.) and determine why this is occurring, which governmental or central bank policies are having an effect and why, and which are not. It is based on factual evidence in the form of economic occurrences, central banking reports, documents and real world examples of some traditional “extremes”. 

From this some policy prescriptions may arise, but it is important to note that in and of itself MMT is no more political than previous economic paradigms such as Keynesianism or Monetarism, and as such it can be used to justify just about any general economic policy by any political sphere, although some may find previously justifiable policies harder to do so. The very reason some may find some policies harder to justify, is because its very core insights which differ from the previous mainstream view. The most extensively obvious of these is its view on “the national debt”. Namely, that is it largely unimportant for sovereign currency issuers, those who can issue their own currency at will, leave it unpegged and free floating, unbeholden to real resource constraints and the like. Some examples of these are the United States of America, Japan, the United Kingdom and Australia.

Interlude 1: The National Debt and Bonds

The National Debt; it summons images of our kids paying back our outrageous and dangerous spending, the country “going bankrupt” and many other horrible visages. But what is the national debt? 

Most of you will have read an article or heard something discussed on the Beeb with some perfunctory simplified explanation of government finances, namely that the government gains “income” from taxation, any shortfall it makes up by issuing “debt”. That this “debt” must be paid back in the future, that this paying back in the future is likely to lead to higher taxes and that issuing debt puts a limit on growth in the future consequently. However, they often neglect to go into more depth than this. 

When the government issues this “debt”, the treasury creates a set number of saving instruments called “government bonds” or in the case of the UK specifically “Gilts”. The large majority of these bonds are paid for with a set sum and over time pay money (usually a fixed yearly sum, the coupon rate) back to investors, upon maturity (i.e. the bond term elapsing) the holder of the bond is then given back the original sum, having earned additional on top. 

Unlike corporate bonds, they are sold in a very specific way, which is part of what makes them so special macroeconomically speaking. First, they are sold to the primary dealers, these are most often large banks, and these large banks will bid at auction to get a hold of these government bonds. The bidding process is a pain to explain, but the long and short of it is, higher demand leads to cheaper financing for the government, as banks will be willing to pay more money for any given bond and yet the government fixed payment per year is the same. Likewise if demand plummets, the government pays the same amount of money per year to the investor, but has gained less “financing”. After the primary dealers get their bids in, the bonds are issued to the highest bidders, who then either keep them or sell them in the secondary market. The secondary market is made up of pensions, corporations, foreign central banks and to a very small degree, individuals. Yes yes, it’s all very dull, but you’ll need the info later chaps and chappettes.

So what is the national debt then? Simply, the national debt is all of these government bonds added up, what is owed to investors and must be repaid to them in the future, lest we have a cataclysmic loss in faith in the government as a financial institution. Need I say, this is not a good thing.

What does this have to do with MMT?

Well this follows from the previous point. Since the 1990s we have been living in an age where the dominant economic theory has been a fusion of Monetarism and Keynesianism called New Neoclassical Synthesis (NNS), a loose mongrel of confused ideas, assumptions and falsities which have lead to neoliberal policies and are now finally coming away at the seams. NNS and other neoliberal theories emphasise the need to balance budgets (i.e. taxation and spending match annually) and worry about the national debt. They accept the ideas of Milton Friedman, a monetarist, and argue that increasing the money supply will lead to inflation (i.e. the general increase in price level across the entire economy), and that large increases in the money supply will lead to hyper-inflation. Most who follow this school do not deny that the government, as the monopoly issuer of legal currency, can “print” unlimited amounts of money, only that in doing so they substantially increase the risk of the dreaded spectre, hyper-inflation. They also have a lot of other bad arguments.

MMT rejects assertions such as these, namely by pointing to real world examples and explaining why this is so within it’s robustly reasoned framework. For instance, MMT claims that governments can actually print unlimited amounts of money without any inherent issues. Sounds farcical doesn’t it? Let's see why it's not the case.

Interlude 2: The Magic Money Tree is Real (Sort of)

On June 24th 2017, when Theresa May stepped onto a sparkling clean Question Time stage with a specific desire to spear her opponent or an audience member with the line “There isn’t a magic money tree”, she couldn’t have possibly predicted 3 years on, in the grips of a pandemic and economic crisis, a conservative government would in fact prove her entirely wrong. She may not have also known another nation, Japan, and also her own nation, the United Kingdom, had already proved her wrong too. Nonetheless, since the beginning of the Coronavirus pandemic most western nations have gone on a money printing bonanza. The United Kingdom has printed £440 billion in this year alone, conducted through Quantitative Easing, a financial operation where central banks buy government bonds back from their owners in the secondary market, giving them newly created money in return. 

With this in mind, and the total expansion in money printing since the beginning of QE in the United Kingdom (£875 billion), a mainstream economist of today might predict crippling, even hyperinflation. And yet, as of the time of writing, the UK annual inflation rate sits at a morbid 0.9%. One may argue, well, what if it came in the past? But the truth is over the past decade the UK has averaged roughly 2%, and in other nations with considerably more money supply expansion and debt to GDP such as Japan (a lovely 220%~), the spectre of high inflation has failed to appear also. In which case, maybe it is yet to come for newly initiated western nations? However, using the same example here, Japan which created QE in the early 2000s, once again, fails to suffer the supposed consequences to this day, despite constant nay-saying and alarmism to the contrary.

So what does this mean? Does this mean governments are free to spend willy-nilly? Fulfilling our every desire? Does utopia begin now? Sadly not.

Where Inflation Really Comes From

This has to do with a key insight of MMT, that economics isn’t really about money, it's about real resources and productivity, where money is just a means of exchange on the whole. With that in mind, whilst producing money out of thin air has been shown not to inherently produce inflation, inflation is still a very real and present risk in modern economies. The difference between the mainstream dogma and that of MMT, is that inflation is said not to come from the quantity of money in circulation, but from the forces of supply and demand acting on resources. That is to say, that when the supply of a good drops due to increases in cost and/or availability, but demand stays constant, then the price of the good is naturally bid up due to its relative scarcity. On the other hand, when demand increases for a good, but supply is unable to increase, then similarly the good naturally increases in price also. 

When applied to the economy as a whole, we talk about aggregate demand and supply, and what this means is the total net demand and supply for general necessities in an economy. With that in mind, inflation can arise from a variety of situations. For example, if crude oil supply was suddenly to drop, then as a nation we would be required to pay more to procure the same amount of oil. As refined petrol and other byproducts pretty much fuel our society in large part, we would expect widespread inflation to occur with no government intervention. Why? Because suddenly, food is more expensive to transport and make, commuting is more expensive, heat and power are more expensive, in fact nearly any good is more expensive to make and sell. MMT holds that the above, specifically the mixture of demand-pull and cost-push is how inflation occurs in reality.

And with this it becomes apparent the natural, as opposed to artificial, limitation on money creation by governments. This is that generally speaking, if the government creates money which is then used to buy goods and services, then attention needs to be paid as to how that money is spent. For example, if the government were to decide to build 100 billion homes starting tomorrow, then necessarily it would need to compete with the private sector to secure the services of builders. In order to get all the builders it needed, not only would it likely need to outbid every single bidder for new building, it would need to handsomely pay builders in current contracts to break them, it would need to also pay them to increase supplies of builders to match the required needed to build those unfathomable 100 billion homes. This would also have cascading knock-on effects, such as instantaneous bidding wars over raw resources used in building, such as wood, concrete, bricks etcetera. As such inflation would undoubtedly arise, and in an extreme fashion too. Here we see that it is the real resources to hand, what the money is spent on and not the money specifically which causes the inflation, and so MMT tells us that the limitation to government spending is inflation, and not the national debt.

Your Taxes Go in the Bin

Now that we know all this, I think it's safe to tell you the most Earth-shattering truism of all. Your taxes, they don't pay for anything. In fact, they go straight in the bin. Whenever a politician, an advocate, a friend or family member has said “tax-payer’s money” in relation to the government, they have been categorically wrong. The money deducted on your payslip, the money you forward to the taxman and the money you send to the DVLA all goes to the same place. The abyss. The government doesn’t need your taxes, no more than it needs a big pot of points to issue on people’s driving licenses. To the sovereign issuer of a currency, money is literally no object. Government spending is financed by fiat money creation, broadly in the form of ticking up a few electronic digits in bank accounts.

Now you may say, “Well Jesus Christ, why do I have to pay it then!”. A reasonable reaction. But the truth is tax has a variety of uses which make it utterly indispensable nonetheless. Based on what we already know lets broach the most obvious. Taxes are needed to manage aggregate demand. By effectively cutting away a certain amount of everyone’s salary, for example, you reduce the amount of spending power for those people. This leads to less demand for resources generally, which means less competition, which means lower inflation. Makes sense, right? 

The second of these reasons is that taxes drive demand for currency. That is to say, taxes are effectively what makes a currency the official tender of a nation, they are what makes people in the United Kingdom use the Pound, or people in the US use the dollar. Why? Because the government introduces a mandatory payment of taxes in said currency. In the UK, I could not pay any tax in anything other than pounds. Similar to Canada, Australia, Japan etcetera. In order to participate in society, you, your employers, local governments and generally the entire nation is required to make many payments in the native currency fairly constantly, which underwrites the solvency and utility of that currency.

And lastly, taxes are extremely useful politically. They can be used to encourage, by way of tax subsidies for specific behaviours, like film production companies shooting films in a country, or by way of shifting liabilities, for example companies buying goods to avoid corporation tax. Or they can be used to discourage, by way of taxing more for an undesirable behaviour or commodity, for example cigarettes or alcohol. They can be used to redistribute wealth, by way of reducing political power for those companies and people most well off, or by increasing the living standards of those worse off. In this way we see that taxes, whilst still personally very aggravating, have immense uses across society, regardless of your ideology.

So What is MMT Good For?

Well, that was quite a rollercoaster. The government can create money out of thin air. The national debt doesn’t matter, the government doesn’t need your money. But the government can’t spend whatever it wants, and is limited by inflation. 

So, what the hell is MMT good for? 

Well, in a better managed economy, perhaps not much. But as it stands, with a system which de facto guarantees unemployment, underfunds healthcare systems, refuses to invest in infrastructure and fails to meet catastrophic challenges, it turns out quite a lot. Nations like the US and UK have a whole tonne of unutilised resources, which means we can absolutely increase government spending significantly in many policy areas to increase both productive output and the wellness of nation states. We’re talking massive infrastructure improvements with carbon neutral jobs, we’re talking maintaining full employment 100% of the time with a job guarantee, we’re talking doubling the NHS budget, training twice the number of doctors and nurses and we’re talking about building half a million homes a year. On the flip side, if you were a more laissez-faire individual, you might justify reducing taxes across the board to encourage a generalised productivity boom... or something else rather daft knowing what we do about unrestrained capital accumulation.  

What we can say for sure is, with the latest instalment in MMT affirming real life evidence, the likelihood of a real return to the neoliberalism of old; the nonsensical budget twitchiness, the fear of the tax base collapsing, or bond vigilantes ripping the government a new one, the unrestrained and unexplained austerity, is extremely low. Perhaps non-existent. And I for one think that is a very, very good thing.

More MMT to follow.

- Billiam Lumbergh


Professor Bill Mitchell - It’s Modern Monetary Theory Time! No, it’s always been!

Warren Mosler & Mathew Forstater - Soft Currency Economics (proto-MMT)

The Gower Initiative for Modern Monetary Studies - A Brief Introduction to MMT

The Times - BBC Mislead Viewers on Scale of National Debt

United Kingdom Debt Management Office - UK Government Securities: a Guide to ‘Gilts’

Heisenberg Report - Stephanie Kelton Explains Taxes, Debunks National Debt Myth, Talks Dollar Depreciation

Marvin Goodfriend, Robert G. King - The New Neoclassical Synthesis and the Role of Monetary Policy

Quantity Theory of Money - Milton Friedman

Wikipedia - Crowding Out (economics)

The Independent - Theresa May prompts anger after telling nurse who hasn't had pay rise for eight years: 'There's no magic money tree' - QE Totals for BoE

Office of National Statistics - Inflation Rate for UK

The Bank of England - How does QE work?

CEIC Data - Japan Government Debt: % of GDP

Federal Reserve Bank of St Louis - Quantitative Easing in Japan: Past and Present

Bill Mitchell - Governments will always let inflation accelerate – apparently

Investopedia - Demand-Pull Inflation

Investopedia - Cost-Push Inflation

Deficit Owls & Stephanie Kelton - MMT: Inflation Is The Constraint To Government Deficits

Progressive Insider - Warren Mosler and The 7 Deadly Innocent Frauds of Economic Policy

Richard Murphy - MMT and Tax Havens

GOV.UK - Transactions in foreign currencies and VAT

British Film Commission - Film Tax Reliefs