Deconstructing Economic Paradigms: Insights on MMT and Marxism with Jonathan Kadmon

Get ready to challenge your perspective as we embark on a journey through the intriguing world of economics, Marxism, and the nuances of Modern Monetary Theory (MMT). We're joined by none other than Jonathan Kadmon from Real Progressives, a progressive change advocate with a unique take on socialism, commodities, and state-based insurance initiatives. Jonathan shares his insight into these complex topics, weaving in fascinating perspectives on Marxism, MMT, and the inspiring work of esteemed researcher, Claire Matai.

Strap in as we delve into the story of the Calcare debacle, shedding light on the forces protecting conservative ideals and the reality of advocating for progressive change. From the gradual privatization of Medicare Advantage to the momentum behind Medicare for All, our conversation takes a hard look at healthcare reform and its feasibility. We also explore the rich history of currency, the gold standard, and its implications in today's economy. Everything from the value of gold and the role of the US dollar in international markets to the challenges of understanding abstract money concepts is on the table.

As the discourse builds, we examine labor discipline, inflation, and the economic factors that have contributed to inflation. We also touch on the complexities of fascism, its historical context, and its manifestation in contemporary American politics. The conversation concludes with an engaging analysis of neoliberalism, its critiques, and the potential of modern fascism. This episode is a treasure trove of knowledge, offering unique insights and thought-provoking discussions. So tune in, expand your understanding, and join us in this enlightening exploration of economics and beyond.


The following articles are discussed:
It Almost Happened Here
The Pied Piper of State-Based Single Payer
The Emperor's New Commodities 

Musis by Bitterlake, Used with Permission, all rights to Bitterlake

Chapters

• 0:48 Jonathan Cabman Discusses MMT and Socialism
• 12:55 Challenge Healthcare Reform Feasibility
• 20:50 The Intersection of Economics and Marxism
• 28:36 Money, Currency, and Economic Theory Discussion
• 47:17 Understanding MMT and Money System Critiques
• 54:12 Labor Discipline, Inflation, and Economic Factors
• 1:11:36 Understanding the Complexity of Fascism
• 1:18:06 Authoritarian Tendencies in American Politics
• 1:23:21 Political Struggles and Economic Analysis
• 1:33:37 Analysis of Marxist Economics and Keynesianism
• 1:41:14 Neoliberalism and Its Critiques
• 1:45:28 Labor Arbitrage, Capital Flight, Recommendations

Transcript

C. Derick Varn: 0:48

Hello, welcome to Varm blog. And today I'm here with Kadmon of Real Progressives and we are talking about a bunch of stuff your interest in MMT, your increasing interest in socialism, commodities, state by state, best insurance initiatives, the work of Claire Matai. We're gonna be talking about a lot of stuff today. Jonathan, you've been with Real Progressives for how long? About a year and a half. Okay, that actually makes you a little bit late to the modern monetary theory game. When did you get interested in MMT?

Jonathan Kadmon: 1:42

Probably a year prior was when I stumbled onto it.

Jonathan Kadmon: 1:47

It was in the process of kind of a decision that I made at a certain point that I really need to reteach myself economics because what I did or what I thought I knew, which was very simple and rudimentary, was not adding up.

Jonathan Kadmon: 2:06

So in the course of that journey I sort of accidentally stumbled upon first some MMT adjacent people that started making a whole lot more sense to me than a lot of the traditional New Keynesian or post Keynesian regular people. And I think it started with I'm wanting to say it was Mariana Mazzucato whose work I liked and I found she had done a book called Rethinking Capitalism where people like Randy Ray and Stephanie Kelton and a few other people had chapters and reading through. That was how I got turned on to their work. But I'm one of those weird people that I don't need to learn things in sequence, like I don't mind if you spoil the end of a movie or something like that. I actually kind of like the notion of working backwards. So I sort of backfill as I'm learning and developing and growing and kind of growing my body of understanding that way.

C. Derick Varn: 3:17

Okay, and how did you get interested in socialism? Because, while MMT is sometimes associated with it, it doesn't have to be so.

Jonathan Kadmon: 3:28

I had a predisposition to being broadly, I guess, leftist, you might say, before I actually started getting any real exposure to any of the literature and theory around socialism.

Jonathan Kadmon: 3:49

I just I had a predisposition towards it, but largely I had come to those conclusions on my own.

Jonathan Kadmon: 3:54

I'm like, oh look, somebody came to the same conclusion a century, a century and a half ago.

Jonathan Kadmon: 3:59

But I'll admit, just as a kid that grew up Jewish, even spent some years in religious school and have had ongoing encounters with the religious Jewish community, even though I was never one of them myself, it kind of reminded like there was a certain degree to which I was a little bit prejudiced against Marxists, because certain aspects of Marxist orgs and the way they talked to and amongst one another reminded me unpleasantly of a bunch of rabbis arguing about the Torah, and so it took me a good long while to actually kind of get past that and start plugging in some of these notions like dialectical materialism and things like that, even after I had come to the conclusion that all of these things were interrelated, because I had also done kind of deep dives and teaching myself psychology, history, all kinds of other things besides just economics, and realizing that these things are all interconnected and they have a strong matrix of class and a class overlay and a strong degree of like their patterns of intentionality and everything, even though not everything is obviously somebody pulling a string like you can see these patterns of powerful people kind of influencing these things in just such a way, in just such a time, and it's kind of it's hard to avoid and so it leads you down a path and the more I backfill, the clearer things become.

Jonathan Kadmon: 5:48

But I will say there are certain aspects of Marxism and a lot of the Marxist orcs that I still find a bit intimidating and I rely, and I have relied heavily on people like you who have gone deep down that rabbit hole to kind of interpret and give me the reader's digest version rather than waiting super deep into it myself.

C. Derick Varn: 6:15

You don't wanna read 700,000 pages of Marx and then several libraries full of interpretation and secondary literature.

Jonathan Kadmon: 6:26

I have started reading capital, but I got Gundrisa and I was told don't bother read the reader's digest versions of it.

C. Derick Varn: 6:34

Yeah, I mean Gundrisa is interesting because Gundrisa has more in it that's more compatible with neo-chartalism, because it doesn't assume only commodity and credit money. It does talk a little bit about state money and fiat money, which Marx like plays around with, like this for those of you who are listening and watching this with me waving my hands, I think there's reasons for it and it's I'm not gonna get into my critique of contemporary MMT too much today because it's not actually a MMT is wrong. It's a MMT has naturalized certain conditions that we currently exist in, but it have existed in in the past, such as in colonial America, ancient Mesopotamia, Mesopotamia. But the work of a friend of mine named Colin drum goes into periods where it doesn't apply and that's going to be interesting for the near future.

C. Derick Varn: 7:57

My main critique of MMT has not been actually about its economics. It's been about the fact that it has no real sociology attached to it, and so you can be an MMT or and have a pretty good understanding of fiat currency and what it can do, how you can use it to target and generate production, how you can use it to generate credit, but there's no way anyone's just gonna give you a jobs guarantee, right? It's not really in their interest. And that was always. My critique is that I thought some MMT years not all Bill Mitchell can't be can't be accused of this and some other MMT Marxist hybrid people can't be accused of this, but kind of had a naive view of like why the ideology of austerity was so common and basically that it was mistaken ideology. And basically that it was mistaken ideology. And I mean no, they know what they're doing, Like you know.

Jonathan Kadmon: 9:03

And that's the beauty of what Claire Mitae kind of brings to the table is and I've seen little bits and pieces of that elsewhere as well and her even the original research she does kind of helps validate and connect some of that stuff that there is absolutely intentionality behind a lot of that stuff. And you have to if you actually wanna make any real changes. You have to understand what you're up against and who's against you and what they're prepared to do to keep things the way they are. And that gets really ugly when you know the history like really ugly, violent, dangerous, very scary.

C. Derick Varn: 9:46

Well, it's one thing. You know. Your recent article on Unreal Progressive is called almost happened here about the banker's plot. More or less it's like the most obvious example of that. But when you read Claire Mitae's work and for those of you who don't know what we're talking about, her recent book the Capital Order, which came out last year, it becomes pretty clear that this has been a longstanding sort of assault on, and a structural assault on, popular sovereignty and anything like welfare. What welfare games we've been given have been clawed back, and often clawed back in ways that aren't obvious. I mean, there's the obvious austerity. There's lots of small ways too, and then a lot of the solutions we're giving and this actually gets to an article you wrote about a year ago, but I thought I was actually really smart. Our solutions that we kind of know won't work. So, for example, state-based single payer initiatives are a bad idea, right? So would you like to talk about like why, in some ways, those things may actually be helping the Capital Order instead of hurting it?

Jonathan Kadmon: 11:03

Yeah, in that article I put out kind of a list of various kind of angles at which it's a problem. It's a problem and one of the conclusions you kind of get when you put all those things together is that to a large degree, it's kind of like a fly trap for activist energy because, for example, there is the fact that it's much cheaper to buy a state legislator for a lot of these big insurance companies than it is to buy a federal legislator, and that these guys are really tightly buttoned down and they know what their job is. There is the fact that, of course, states are users of currency, not issuers of currency, which means they have very, very hard budget limits. And it would be super easy for these gigantic mega corporations, who are all, each and every one of them, and not just the insurance companies either, but the pharma companies, the distributors, the dialysis companies, the hospital companies. They are all at the very tippy top of the Fortune 500 list and many of them have greater assets, greater profit revenues than the vast majority of the countries that are in the UN. And these are countries with millions of people, with armies, with air forces, with navies, like that's the kind of resources you're talking about. Any one of these companies could easily, if the worst happened, bankrupt the state, like just by withdrawing their resources from that state. And these like these, they know the game. Like these, people know the game and so do the politicians that are being lobbied.

Jonathan Kadmon: 12:55

There is that kind of naivete you were talking about earlier in advocating for something like this, in not realizing what you're up against and the forces are rated against you and the only way that you could think something like that would work and that you're not gonna get a rapid and decisive counter attack is going to squash it before it's even born. You're deluding yourself. There is one force that you would have to hijack that is still powerful enough to stand against forces that big, and you will have to go to war with those forces within the federal government before any of that stuff will ever be allowed to happen. And like even now, because these people adapt a lot faster than we do. Okay, even now. You see what they're doing with Medicare Advantage. They are hedging because they see that in the public opinion polls that momentum is going in that direction, that there's a great deal of support for something like Medicare for all, so they are making sure that they still have their fingers in the pie, even the Medicare, and they're privatizing it with Medicare Advantage. So they know what they're doing.

Jonathan Kadmon: 14:06

And this notion that you can go state by state and they're just gonna sit idly by and allow it to happen is nonsense. And I think we saw that with the Calcare debacle. You have somebody like Gavin Newsom promising, when the stakes are non-existent oh sure, I'd sign something like that into law and when he thought there was a danger, something like that might actually pass, and they asked him about it, he started hemming in hawing and then they basically made sure that thing was killed before it ever hit the floor. Yeah, so that was the short, short version of it, but I do lay out in the article kind of a lot more specifics, more drawn out arguments for why these things are the case, that I hope people that are kind of entertaining that it's harmless or it's we should keep doing it. At the same time, we'll take a look at and realize why it's not just it's not harmless, it's actually quite actively counterproductive and distracts energy from where you need to be putting it.

C. Derick Varn: 15:12

Well, one of the things you point out is a lot of the models for this are based off Canada, where they have to ignore some of the problems with provincial administration of education and healthcare, and that's with the Canadian federal government making sure to some degree that these programs are backed monetarily. And Canada is a big enough country that it has relative currency sovereignty, at least compared to some other states that are near to our orbit, and so it still creates problems for Canada. You talk about the 1962 Dr Strike, for example, and when you're thinking about the United States, where there could be to some degree healthcare flight and just budget problems, because, you're right, non-federal agencies are takers of currency. They cannot set currency policy, they do not have anything like currency sovereignty. Nor could they either constitutionally, and I would argue maybe California could and Texas could, but even they wouldn't have trade parity to be able to pull it off if we did have fragmented currency. So you shouldn't want anything like that anyway. It just seems part and parcel, because one of the things I have noticed about the clawing back of anything that came out of, say, the New Deal or the Great Society is that state block grants are great for screwing that up. One because it allows the state to administrate it locally, which also often turns people against these programs because the programs are administered separately. But two, it means that states who have to collect taxes have to actually raise revenue or deal with bonds on the bond market and risk their states' standard and poor's rating, et cetera. And a lot of these states have balanced budgets amendments so that, well, it will turn people against it because it'll raise their taxes in ways that if the federal government does it, it's not necessary, right? It's just the federal government can run a deficit. If there is any danger to running a deficit.

C. Derick Varn: 17:51

It is two things that come up in M&T. One is you outstrip production that can actually cause inflation. The idea that M&Ters don't have any theory of inflation is wrong. There's a couple of them, though. Roar and Moser's is one of them are interesting. And then there's also I think Kelton has one that's kind of similar, but there's a lot of literature about. You know, you don't have to worry about inflation until your production goes down. And the United States, despite the fact that it doesn't employ a lot of people in production, is still a second or third, depending on the year and the time, most productive economy in the world.

C. Derick Varn: 18:39

So I think that's really interesting to think about, like subtle ways in which austerity and clawing back have happened through block grants, through federalization, through state administration, through farming this out, even constitutionally, and also making our system impenetrable to navigate from state to state because all these things have different state laws. I mean, there's basically 50 different sets of laws for the administration of federal programs. Most of the time there's a few exceptions to that social security, but in general, that's the way it works. So, yeah, I think that's a great point. You know, one of the things I was thinking when I read your recent article and, by the way, I'm gonna link these in the show notes for those of you who are following along about the banker's plot is that the banker's plot was too obvious, like they got smart. But what did you learn studying the banker's plot? Because I actually found your article on interesting, and so what did that make clear to you?

Jonathan Kadmon: 19:54

It made clear to me that it was never like these people understand how money works. It was never about the gold standard itself, it was never about the money itself. They were not worried about their assets. What they were worried about was their system, the system in the face of a lot of popular uprising, you know, a demand for accountability amongst the public. You had a massive wave of public education that I've referenced in previous articles. That put money power and the people. But you had even these farmers, you know, going to mobile libraries and taking any book on money, economics, monetary policy that they could get their grubby hands on and reading those things by lantern light. Have you ever tried to read a book by lantern light? It's a very flickering, insubstantial light. It's headache city Like.

Jonathan Kadmon: 20:51

These people were serious and they were demanding accountability and they were starting to become aware, more aware at least, of what was going on.

Jonathan Kadmon: 21:01

And that was what these people were terrified of and they were prepared to go to fairly extreme measures to essentially keep Pandora's box closed, because they reckoned that once these people realized that, you know, gold standard based austerity was a giant lie, that their hands you know the government's hands were not tied, the government was perfectly capable of making their lives better, of making society more democratic, of making sure that, you know, labor had a much more significant share of control over the future of the country that they were like.

Jonathan Kadmon: 21:49

They were so alarmed that they were willing to risk, even though they had a great deal of control over the political system already. They were willing to risk potentially, you know, something as extreme as as charges are treason, which still carries a death penalty, and you know, to get this stuff done Now they failed pretty spectacularly. But, you'll notice, nobody was held accountable, nobody was charged with anything, even though the congressional committee concluded that, yes, a conspiracy did take place. But you know, at the end of the day they decided, like you said, to get smart and to keep it subtle, that the direct approach was at least off the table for now. But that was kind of the conclusion that I got from it, that these people were protecting a system, not their pocketbooks.

C. Derick Varn: 22:47

One thing that I have known for a while is commodity money like true commodity money, like actually trading in gold. Because commodity money for people who don't know how we use this term in MMP circles and Marxist circles is a literal commodity. It is not a commodity-backed money. It is not a credit money or a fiat currency or a stake currency as you call it in MMP. It's literally trading in some kind of stamped and controlled goal, like England in the 13th century. The United States has never really done that. I mean, there has been a gold trade internally, but it's never been our official currency, and that includes pre-revolution. One of the things that I learned from Christine Dawson and I have been reading some critiques of her that I think should be taken seriously but how much the colonies actually ran off of script money basically and how they would control inflation and whatnot was literally just taxing to destroy currency. So it's not even commodity money, is not a huge part of the American system. Commodity-backed money was always also kind of an interesting thing because how much gold was backing a dollar was variable, even during the Britain-Wood system. So it's always interesting to me, like when people go we need to return to the gold standard I'm like. But I don't think the gold standard is the same as the gold standard. I think it's the same thing. I don't think the gold standard works the way you think it does. A it's deflationary, it makes debt go nutty, it hampers your ability to adjust to the business cycle, which means recessions and depressions are much worse.

C. Derick Varn: 25:06

But even in Marxist circles. I mean, you're right about the Tumudic nature of Marxism. In fact, one of the three big Tumudic debates of all Marxist is one markets are no markets. Two, until socialism, do we or do we not try to link ourselves to the gold standard, which is a minority position, but it was position believed by people like Trotsky actually. And three what is value, which Marxists don't? I mean. Yes, we all Marxists more or less believe in labor theory value, but as to what we think that is, it's actually a huge debate.

C. Derick Varn: 25:53

M&t is interesting to me because it just brackets all that out Like one thing that I think is interesting, though, as a person who does believe that the Marxist value stuff actually kind of does matter. It's interesting seeing M&Ters read people like Claremontet Matai, because she actually does think that value is super important to understand the capital order, but she's not one of these people who rejects fiat currency or thinks it's some kind of I don't know. My favorite crackpot Marxist theory is when they call everyone who proposes fiat currency fascist. That one's fun. She's not one of those people. So what have you made out of engaging with people from like Claremontet, who come from a different tradition than M&T?

Jonathan Kadmon: 26:50

There's a certain degree to which they kind of they can plug into one another in the sense that, like even skipping around capital, like when I was looking at kind of how he describes money he describes there's a lot of descriptions of certain aspects of money and value and things like that, but there's not that kind of, there's not a whole lot of deep diving into the deeper nature of money itself. And if you combine those two things they can work well together. But to me, like you can't understand the world without a lot of the insights that come from the Marxian tradition and the connections between sociology, psychology, history, material relations and that sort of thing. And the M&T economics is in a sense kind of at least to some degree a victim of the mindset that Claremontet describes and the various other people have described in economic thinking, this notion that it's in a completely isolated abstract, like a natural science sort of thing, like a pure science, that you can just determine these things in a vacuum and you do have to understand how these things connect and how they interact. And I promise you the people on the other side of the equation absolutely are doing that.

Jonathan Kadmon: 28:36

And we pointed out, I think, in our organization one of our favorite videos to share is Alan Greenspan explaining to Paul Ryan that no, social security is not, doesn't need to, is not gonna go insolvent.

Jonathan Kadmon: 28:55

There's nothing to stop the federal government from, if it goes empty, just filling it right back up again. The issue is real resources, but you'll notice they don't spend a lot of time talking about that out loud to the public, but they know it's a thing and they use those insights into how money works when it comes to spending on things that perpetuate the current order, that benefit imperialism, military, industrial complex, corporate welfare, things of that nature. But when it comes to things like, say, medicare for all that average people need, they're like, oh sorry, our hands are tied. And so in some ways, they found additional roundabout ways to institute, were to substitute for the gold standard kind of austerity, like our hands are tied and that consensus that is kind of public common sense now that budgets have to balance is what they've so carefully maintained, even though the gold standard is gone and it's not truly applicable anymore.

C. Derick Varn: 30:10

So yeah, I mean even internationally, as long as the United States has a fairly strong productive economy, they will be included in forex. Even if, like say, the petro dollar ends which is a real possibility there is still enough of a role for the US dollar because of its productive capacity to be at least part of a forex basket, which means it will have still international purchasing power. Right, and that's what it's important. One of the things I think is interesting and different conjurams pointed out when world systems break down, currencies tend to go two ways they either tend to be really internalized and self-contained, like those colonial currencies, or they tend to go to some kind of hard commodity. But that's because the systems are breaking down and there's like no Singular or there's no, there's no state or even quasi state entities that can can actually enforce a currency.

C. Derick Varn: 31:16

But, as you know, as even Mark's realized, gold only has value because we think it does like it. Like you know, it's not, it's that there's nothing inherent to it and in fact, in so much that it has use, it's a bad currency. You know, if you eat your currency literally by using it, then you are hyper deflationary and If anyone wants to know the problems with that, they can just look like Bitcoin, because Bitcoin was designed by gold buggers and it was designed to act like gold, which means it's hyper deflationary. Might be useful as a Ponzi scheme investment, but it's not useful for anything else.

Jonathan Kadmon: 31:58

Right. And the other thing is that, you know, one of the the aspects that you know MMT tries to emphasize, which you know certainly it shares with other conceptions of money, is that fundamentally, you know, one of its most important functions is as a unit of value. It's, it's a, you know, kind of a measuring stick, in a sense an abstract measuring stick. So this gold, the value of gold, has to be measured in something units of account. And that's an important function of, you know, these kinds of of state monies or Script or any of these kinds of things, is Measuring how much this stuff is work. Because if you can't trade it for something that has some sort of quantifiable, you know, unit of account, then you know it's just a rock you're holding.

C. Derick Varn: 32:54

Yeah, shiny metal, rock and and that's that's an important thing to realize. I mean, if you go into the deep history of money, like Electrum, which is one of the earliest forms of money, is Used because it's convertible, not because it has any inherent value, but like you can melt it down and and trade it and then turn it into things you can wear or whatever. But what's interesting about that is, if you really look at it, its values not set Like from across the trade route. It's actually specific to each polity. So, like each city, they have a, they have like a trade exchange between each other and then and then internally there's something different Internals, and this is something I will say marks actually does get wrong because he just assumes the story and Adam Smith is correct.

C. Derick Varn: 33:50

Most societies do not actually ever develop currency from barter, not internal to themselves, like if there's trust in the society, there's credit and debt, and that's how it works. It's basically you go from a gift to economy to a credit and debt economy. Charles Knapp I mean that Charles Knapp, that's Charles in this, but Fred Frederick Knapp is the first to To really come with a theory, although he accepted the bar theory in this in England is Is the big person who points out that's not true and then later anthropological studies verify that that like no, we did not barter with one another. We have basically an internal gift economy and a debt credit economy, and that's how most of these things have functioned. If there was a big problem with the barter theory, if there was a unit of something like commodity money, it was usually to trade between Cities, not within them.

Jonathan Kadmon: 34:51

That's a good measure, goes into that. That's. He's somebody that we've had on the podcast a couple of times, the macro and cheese podcast. He's kind of a. He's a like an economic anthropologist, does some archaeology stuff to ancient history of money and and he goes into a lot of that, that kind of stuff, and has has discovered some, some fun stuff about. You know even Some situations where they were using like bricks of Salt to trade between one another, but it was, like you said, things that were set independently.

C. Derick Varn: 35:31

Yeah, yeah, yeah. I mean actually you know, the popularization of this anthropological research is David Greber's debt from like I guess now 13 years ago, and and anthropologists have kind of known this for a while, both anarchist and Marxist ones, so it's it's taken a while to kind of Dribble out into society, so that that's interesting to me. One of the things I've been really kind of fascinated with In quote heterodox economic theory, which is just everyone who's not a neoclassical Is kind of the split between Keynesians and post Keynesians. Because when I first encountered MMT it was large. It was not the kind of revival of the chartillist tradition that it is now, is actually sort of Chartillism as interpreted through Minsky. This was, this was like a decade and a half ago at this point and it was kind of concurrent to Warren Mosler's early books. And what I find interesting about that is like basically there's I don't think Keynes is actually consistent on what money is, for reasons that I don't entirely understand, because at some points he seems to be very close to like an MMT understanding and then other points he's not.

C. Derick Varn: 37:04

But it's basically now with post Keynesians you have two schools. Well, you have multiple schools. You really have like the ones that have moved closer to chartillism. And then you have this other variety that has dropped even the basic Keynesian Proviso of like spin run deficits when times are bad, tax when times are good, and Instead they've embraced neoclassical monetarism. And we see this with An austerity hawk like Larry Summers, or even someone who you know, mr Print the coin himself, paul Krugman, who's like really seemed to have ran Precipitously in the other direction in the past five years. What do you think is driving that? You think it's like? You think that's only capture? Do you think it's ideology, think it's some kind of subtle mixture of both?

Jonathan Kadmon: 38:06

I Definitely say mixture of both, because you know if anybody, if any group of people, are Kind of agents of the existing order, it's it's well, particularly Larry Summers, and you know this is Larry Summers, of course, being the the nephew of Paul Samuelson. You know the guy who basically sanitized Keynes for the for the post Cold War era, and you know not that the Keynes was any kind of socialist or communist. I did read that book we were talking about. He's definitely a defender of. You know the fundamentals of capitalism, but evidently they thought some of his suggestions, you know we're a little too dangerous and they sanitized it. But these are are definitely, you know, agents of the capital order.

Jonathan Kadmon: 39:02

You know very few people I would say are more responsible for. You know the collapse of of more economies Than Larry Summers. You know in the 90s, shock therapy in Eastern Europe, in Russia, in the you know there was the deregulation of of commodities futures trading. You know that basically led to the 2008 crash. You know, and, of course, him. You know basically Say I've got 13 bankers in my office if you don't bail out the banks right now, like that's.

Jonathan Kadmon: 39:41

Larry Summers is that guy and Paul Krugman of course is. I don't know if you ever got around to reading the Nobel factor, but that's definitely an instrument of propping up Economics that is beneficial to the capital order. So even you know, the people you might say are the most reasonable amongst Nobel Prize winners are still people whose work they found Beneficial to perpetuating the current order of things. So, yeah, I do think he leak captures probably the biggest part of it and also to some degree, probably a little bit in the case of Krugman, of good old-fashioned brain rot. You know, certain things they were, they were programmed into them that they're unwilling to let go of, no matter how much evidence they see to the contrary.

C. Derick Varn: 40:32

Yeah, I was actually thinking about. Hmm, there's literally one Economist I'll defend who won a Nobel Prize, and that's Eleanor Ostrom, and that's it, you know. And she's the person who Illustrated that there was actually a solution to the tragedy of the Commons other than privatizing everything. But Even her work actually can be interpreted in a capitalist way, which I've talked about before in this channel. But in general, yeah, I don't like if someone wins a, if the Swedish central bank, even though Sweden is theoretically a social democratic country See my episode on Sweden from a year ago with near ball about why that's kind of misleading.

C. Derick Varn: 41:22

If the Swedish, since Rebeck, gives you an award, you're probably not on the side of the angels, right? Just just to put that out there. I mean, they're not all equally bad. I mean, like, I think, krugman and Crueman crewman, you're right to me. I just can't explain because he's been on both sides of these questions often. Like I said, I remember him being one of the first people to scream meant to coin a decade ago. So he seemed, at least Theoretically, open to things like MMT. But now he's an active enemy, seems to be more and more in the Larry Summers camp. Larry Summers has always been a ghoul. Paul Volcker is always been a ghoul, and one of the things that I have pointed out to a lot of progressives is that a lot of these, like soft social democratic in Keynesian states, actually neoliberalize further because it's easier for them to do, because they can basically switch, flip a switch which I don't think people realize.

C. Derick Varn: 42:35

I, ironically, when I first figured this out it was from reading Naomi Klein's the Shock Doctrine, a book that I don't love, but she kept on describing like, oh, all these Keynesian regimes neoliberalizing even further than like their right wing counterpart. The big example she gave was the post Pinochet government versus the Pinochet government. The post Pinochet government neoliberalized further, even though it was obstinably left in quotation marks, and so you know, that's always been my hesitation, and when I first encountered him in tears about a decade ago, and then, especially after Stephanie Kelton, who, whose work I like, ish, they would tell me this was an ideology problem and I'd be like I don't know, man. I look at the history and this does not look like an ideology problem, as we've been saying like. It looks like they knew what they were doing.

C. Derick Varn: 43:36

They were on deficits, fine, when it's not about welfare and and whatnot. This seems to, but this seems like they absolutely know that they're defending the order. And it's not just that they want the money, it's that they want the power the money brings, that they want to be able to command labor. One of the reasons why Marxist have always said like don't promise under capitalism a Job guarantee, is because the capitals will never let it happen.

C. Derick Varn: 44:04

That would destroy, absolutely destroy the power of the sack right, right, you know, and all of a sudden, what they can't control their the workers anymore. I admit, for example, that like a jobs guarantee would do more for workers than a minimum wage, which is why it won't happen unless you have a lot of power, like and, and I just, I just remember just looking at MMP years and going how are you just naive? And then I was like this is willful, not that you're, not that you're like part of the capital order, but like you, it's a. I don't want to have to To say that we're gonna have to do something more radical than what I'm trying to sell.

Jonathan Kadmon: 44:48

Right. Well, in some cases, yes in a lot of cases, I can say as somebody who it was a process getting there. There is, you know any older you are, the worst it is, but there is. I think people underestimate because I've also done a deep dive into, you know, psychology, mass communications and propaganda, things of that nature, understanding how these things work on human psychology, and I think people underestimate the degree of milieu control that these. You know that the people that were steering the ship have really had over, particularly people in the United States, but really all over. You know the Western Global North in particular.

Jonathan Kadmon: 45:34

And there's a lot of assumptions that we are trained subtly not to question, or that you know people don't question until they have a really good reason to.

Jonathan Kadmon: 45:44

And you go along with these kind of mental shortcuts, these assumptions, without ever really stopping to interrogate them, and sometimes it's become so core to what you're, what you've been doing, that people experience a considerable degree of psychological distress, sometimes bordering on physical pain, when they're too invested in in that assumption, or they've made too many assumptions based on that assumption that they never bothered to question, and it's, in the best of cases, cognitively difficult for people to Break out of those kind of invisible barriers that have been placed around them.

Jonathan Kadmon: 46:25

And so I do think there's a lot of people that are sort of consciously but you can see it in their body language almost avoiding the the distress of stepping into the unknown and outside the comfort of what they thought they knew and Really just upending their whole view of the way things work. And so I do think that's the boundary it's hard to get people across. Even though they can see parts of it, they still want to Retreat towards solutionism and think if we just tweak this one little thing, or if we just get this one little person in the right position To change these things back the way they were. Everything's gonna be okay and it's not. It's not gonna be okay.

C. Derick Varn: 47:12

What to defend. To defend you guys over the MMT camp a little bit. That is also in Demek, amongst socialists and Marxists who are not MTRs. Um, I mean, one of the weird, one of the weirdest Periods of my political life was the early, was the, was the post 2016, but pre-2020 Bernie years when, like MMT, ears and Marxist were both on the same side of the aisle on who we were supporting, but also at open war with each other, which was kind of strange.

C. Derick Varn: 47:50

And then there were there's a slew of social Democrats like sound money Marxist, like people like Doug Henwood, who really Went after MMT and not for the reasons, like I might say, which is like, well, you're incomplete, you don't have to your sociology, you need to think about international politics more, you have to look at, you know, international trade more, but you know, as far as you're describing stuff within the US, it's more or less true, and other countries could do this Right if they have counter power blocks that are not subject to US, to Jiminy in the same way, and I've even gone so far to say like, yeah, if we had like people's banking and a transitional economy to something like socialism, mmt would probably be universally Practitionable. Not just practitioner will buy the great powers. But you know, that's my critique, right? Whereas Doug Henwood was like y'all are not good with money, that's really what I got.

Jonathan Kadmon: 48:49

I was like, okay, yeah, he has no detailed critique or understanding or any of that stuff. And I think Randy Ray's tried to engage him in constructive dialogue and he just kind of replies with like trolling and and Contempt and and whatever, just unserious stuff. I don't you know know why he's like that, but it's there's again, like there's, there's stuff about it. Took me a long time to get my head around a lot of the money stuff and I had to read a bunch of books because when I first started encountering some of the Assertions that MMT years were making, I'm like that can't be right, that doesn't sound right, that doesn't seem right. Because I was conditioned with a lot of that kind of sound money stuff too, like of course you have to tax before you can spend, and that kind of thing, and actually wrapping my mind around the way money works. And this is not by accident, I'm sure of that. But it was really really difficult.

Jonathan Kadmon: 49:47

Okay, it's a, you know, very abstract. There's a lot of kind of Convoluted processes you have to get your head around. You know balance sheet, accounting, you know just all of these stuff that I think people are and nobody really teaches you this stuff. And I had to he. I had to read a whole bunch of really dense, really boring books. You know, even the best of them were I had to go through slowly. I had to hear it explain to me the same concept a bunch of different ways, a bunch of different times Before I got my mind around it. It's not something I can just expect. You know, I can tell somebody something and they'll they'll grasp it, and so I forgot where I was going with this.

C. Derick Varn: 50:34

Well, it isn't easy to pick up MMT because, because, like yet, at your first, your first response is why do they tax? Then, right, like, and you're like well, they're main, like, the taxability of the receipts is what makes the system semi-close, not totally close, and the taxability of the receipts is why it matters. But if you have a fiat currency bonds, which is lending, is literally your money supply. So if you're, if you're not actually running a deficit, you are Contracting your economy actively, which does take a while to get.

C. Derick Varn: 51:24

And one of the reasons why that's important and why like, why you know, why do, why the why do societies keep coming back to forms of fiat currency? Because it's happened and fallen away and happened and fallen away multiple times in human history. Right, and it's because if you run like an actual commodity money, you have to, you kind of have to be even more imperialist and you have to like not buy stuff From other countries because it starts siphoning out your metal. So, like, if you're, I mean, I remember people being like oh no, we don't want people buying nice dresses or our wine because we're gonna lose bullion to that. So let's like ban these trade goods, which, of course, actually hurt your economy, even in the capitalist sense, and you know, there you go. And Also, for example, deflation. Deflation that helps debt Holders a little bit, you know it does, you know absolutely. But eventually it even hurts them because it stops production. Because you need, you need credit.

Jonathan Kadmon: 52:24

And I think, I think people don't realize, like you know, another word for depression is a deflationary spiral and you know, obviously, a little deflation.

Jonathan Kadmon: 52:34

One of the reasons why a lot of these Institutions like the gold standard so much was that it was naturally just, you know, just deflationary enough to where, you know, these farmers were getting hurt because they would have to take out on credit to buy their seed or whatever, and by the time they had their harvest they were paying back in money that was worth more, I guess, or, you know, had had more purchasing power Than then the money that they took out, and so it was a form of Interest on top of the interest and that sort of thing.

Jonathan Kadmon: 53:13

But yeah, that does eventually, you know, hurt the, you know deflationary spirals. Like you lay people off, production lines stopped and prices go down further, you, you can wind up very quickly with a very serious problem spiraling out of control. That results in disaster. And if the point of money is to To basically get resources where they need to go, you know the fiat currency provides the flexibility and you know, obviously, as they've shown, even on pure fiat or the floating exchange rate, you can still, you know, maintain, you know the I guess the lies to the public to get away with policy wise, you know, instituting austerity and disciplining labor and still get resources where you want them to go.

C. Derick Varn: 54:11

Yeah, I mean, that's the thing. So much of this is about labor discipline and and the biggest thing for me that people have to explain to me now, I Want to say this I do think. For example, I'm gonna say this for you I don't agree with Warren Mosler that QE has no effect and that is the same thing as open market operations. But why didn't QE cause massive inflation? Because it didn't. It did not. What caused massive inflation was Basically the entire economy, right after COVID Having asset inflation and then people just starting to try to rent, seek that, and you know that seems to be a lot of what. What did it? Because the rent seeking increased housing prices and that set up a spiral.

C. Derick Varn: 55:11

And, as you know and I know one thing that I have agreed on MMT years on, since, since this whole inflation Busting thing is going on, the Fed knows damn well that raising unemployment right now Will not Really do much about inflation, but it will discipline labor. I mean real wages haven't gone up since 2021. In fact, they've been going down like and so what do I mean? Well, wages have nowhere near-paced inflation like. We've seen raise increases of like one or two percent. And and yes, in the beginning of COVID. There is a lot of places that kind of hit the $15 mark because the Fed as the major, not the Fed, the Federal government as a major employer a labor in the United States did set like a federal minimum around 15 bucks and so everybody has to compete with that or the federal government can just out hire them. But it's. It's pretty clear to me that, like if the quote demand theory of money is true, you know, which is like like credit causes a massive amounts of inflation, that we we should see more inflation than we even are.

C. Derick Varn: 56:34

Oh, right now, like the Japanese should be in triple digits by that standard and they really aren't right and what I have come to believe is is is a is a mixture of cost push and and and price gouging as what's driving us, and and Also monopsony pricing power, aka price it, you know, pricing power. Those things all together there's, you know, three factors. Demand doesn't play a lot into it. I mean, interestingly, I don't. I don't actually see evidence that in a fiat currency, society did demand really ever plays that much into.

Jonathan Kadmon: 57:13

Well, no, except in the, in a backdoor kind of sense, because I? I wrote one article, I think the. The title was the embers new commodities, that basically the. The issue is that these guys have control over Certain commodities that are price and elastic, things that people need rather than things they want, you know, like healthcare, like you know, energy fuel, like transportation fuel whether you need the transportation fuel or not, you need the food that uses transportation fuel to get to your grocery store shelves. So one way or another they know that you know, for things like that people will pay what they have and if they don't have enough they'll borrow, and that they have a certain degree of Very heavy coercive pricing power. It's every bit as potent as if you put a gun to their head and say your money or your life, and you know, using those kinds of things.

Jonathan Kadmon: 58:15

I think Isabella Weber Came out with a working paper in January, but she's kind of been been hinting at this for a while and writing little articles for Guardian and and and other other places that these systemically important commodities and the pricing power over them and the gouging of those prices were largely what was was Driving the inflation and she's got a whole bunch of receipts on that and you know this drove up the price of this, this and this and you could see even on the CPI that you know that elective goods, things like consumer electronics, were actually going down. So the notion that this had anything to do with those stimulus checks which you know Even the timing, is off. Warren Mosler pointed that out but you know that had anything to do with the stimulus. It checks, checks or his punishment from the magical Market gods for deficit spending, which is kind of what some of these people seem to be putting out there. It's almost a religious edict there.

Jonathan Kadmon: 59:20

I've not seen any evidence anywhere that money creation itself has any connection to inflation. Whatever, there has to be an additional step in the process of that money going somewhere and somebody using it in a certain kind of way that that does that. And you know the demand based inflation tends to so rapidly self-correct that you know people don't really notice it. So yeah, I think your, your assessment is is a hundred percent on point.

Jonathan Kadmon: 59:54

Yeah there's people, it'll back that up.

C. Derick Varn: 59:57

Demand grace, inflation also tends to only be real and things that are highly scarce and and are things that are artificially highly scarce, which is another fun thing which I actually Categorize that this is this is a Marxist proclivity, I admit as a rent, like where I'm like okay, well, you're making artificial scarcity is a way to get, is a way to force people to buy, and a lot of times you're doing that through legal means, which means you're involving the state as an enforcer, which means it's basically a rent.

C. Derick Varn: 1:00:33

But yeah, I was looking at a lot of research that strange matters magazine Also ran a bunch of stuff on this where you had key areas of price hiking. You had some real Supply chain breakdowns that were that were real and they did lead to some price increases. But what you saw immediately was like systemic, like, oh, we're going to protect ourselves by raising prices dramatically, even though we don't have the actual cost increase from the supply chain breakdown, our supply chains working just fine, but since everybody's, everybody's is breaking down, we can get away with raising our profit margin this way, at least for a little while, and a lot of these people were bragging about that at their shareholder quarterly meetings.

C. Derick Varn: 1:01:24

Absolutely. And then there's other perverse incentives, and some of these are kind of unique to corporate capitalism, not even like just a capitalism thing, like the first round of tech layoffs, for example, about a year ago. I saw them called, called, oh, it's just social contagion. And I was like, no, it's not. But you're right, did it's actually more expensive for these companies to lay them off? Oh, in the long run it actually can start a desk file for the company, but it spikes shareholder prices, right, and it's a way to temporary inflate your stock is to do layoffs. And you know, I mean yeah, yes, you know some of these tech, particularly in social media, were hemorrhaging money because a lot of their, a lot of their business model was based off leveraging the cost of debt versus the Versus the very small profits in advertising. But it still costs them more.

C. Derick Varn: 1:02:29

They do the layoffs, particularly what they were just doing, like in the very beginning they were just doing mass layoffs and having to rehire people and like Rehire people sometimes for more money. It was just, it was just Absurd. And I was like it's not just social contagion, right, because that's the whole, like, oh, it's just ideology. And I'm like no, there's got to be a reason and I was like, oh, it's like stop, it's like stop prices.

Jonathan Kadmon: 1:02:52

Yeah, and I think I put that in my emperors new commodities article too. There was a. You know things like, for instance, with oil and natural gas production you know there was. I think I linked to an article and I'd heard elsewhere as well. You know, I found some other things that said that it absolutely and very clearly would have been profitable for these companies to build more infrastructure to to, you know, to process, to Extract and to increase the quantity of this stuff. But what the shareholders wanted, in order to maximize value, was to to shed those kinds of assets and to focus on you know, quote-unquote core competencies and, you know, outsource those things to other people. And you know that Basically boosted the, the stock equity, and that's what they go with every time. And there's all of these, these perverse incentives to cannibalize real assets and real production in favor of, you know this, this kind of of Finance capital. And, yeah, go ahead.

C. Derick Varn: 1:04:06

No, no, I just want to back you up. If you want to see the ultimate results of this, look at Britain right now. It's, it's economy is quitskling, becoming like that of Argentina, but it's probably even more than war-torn areas, probably likely to lose more of its. It's a it's GDP growth then then Russia under sanctions regimes, or even maybe Ukraine, and why? It's because it's all tied into this parasitic capital and, unlike the United States, britain hat Britain.

C. Derick Varn: 1:04:46

The United States produces stuff. It it's largely in finishing and it's it like doesn't employ a lot of people, unfortunately, but it does produce stuff Britain doesn't like. The big producer powerhouse in Europe is Germany, and my, my big fear right now and to talk about like a cap, like the capital order getting so stupid it might destroy itself is the GOP destroying Dodger, a dollar hedge of money to own the lives by pulling the debt ceiling canard, like that's a real possibility. And I don't think people I mean people know it's bad, but I'm like, I don't think you quite know how bad it is, like you know it would, ironically, actually the, the, the GOP, the dumbest accidental anti-imperialist that maybe ever existed on earth. But yeah, it's truly frightening.

Jonathan Kadmon: 1:05:49

Well, the other frightening part is that there is an obvious solution we were talking about earlier mint the coin. Okay, that you know again. You know, since we already discussed like the creation of money itself, especially money that never leaves the central bank, is just there to clear payments, obviously has no Connection to inflation or the value of money or anything like that. But yet the people on the other side of the equation, the Democrats, are so terrified of the consequences, whether they know them, the way the, the people in the in the business plot did, or whether they just believe the, the Kool-Aid they've been feeding to other people. They are terrified of indulging in such a move and would rather let everything grind to a screeching halt and implode, then Just go ahead and do you know something that would basically solve that particular problem forever? I'm sure the GOP would find something else to to leverage, to hang over people's head, but it's you know I.

C. Derick Varn: 1:06:59

Mean. It is kind of stunning that that the buy it's not the Biden administration, it's basically treasury tricks, which is sort of the Biden administration, but they don't seem to have that much input into that. That stopped it from already kicking in. And and it's also based off projected tax receipts which are slightly down right now. And I'm just, I'm just baffled by it because I'm like, okay, so you guys are either gonna accept it's probably the biggest austerity that's been done since Clinton and you still control one of the branches of Congress, or You're going to, yeah, pull the trigger on dollar hegemony, because that's the other thing.

C. Derick Varn: 1:07:48

It takes two to tango on this kind of idiot dance. And this is an idiot dance and, like you, I actually have no idea if these people Are guileless and Stupid, are evil. Now, I suspect a little bit of evil, because what we've seen over the past two decades, particularly after the Obama administration, kind of finalized and solidified, you know, clintonism ironically is that a whole lot of capital outside of like heavily extractive industry now is effectively aligned with the Democrats and the base of the GOP's donors is like a couple of rich reactionaries who are even even they're getting a little bit freaked out, and petty bourgeois people who make over a hundred K but less than but but less than 250 K, like so well off but not rich. And it has led to the GOP may be actually being this stupid, because in the past this was a we all kind of knew they might let it go on for a couple weeks, but they're not actually gonna do it. I Don't know that. We know that anymore.

C. Derick Varn: 1:09:16

And and the austerity they're suggesting To avoid it is also severe. I mean, it's it. I don't think people realize it's a pretty thorough it's. It's undoing everything that was done in the first two years of the Democratic administration. It is gutting food stamps. It's gutting Medicaid. It might actually go after Medicare more. You've even heard them starting to talk about going after Social Security again, which largely Not to to give Trump any credit, but largely during the Trump period. Trump is a political Reptile enough to know you don't do that. Yes, stop that shit.

Jonathan Kadmon: 1:10:03

It is one of the things I had to respect about the guy. He put out An ad recently that I think may have killed the Santa's dead, but it was attacking the pudding ad. Yeah, I love that. It was the funniest thing I've seen in ages. I hate Trump as much as the next guy, but I've got to doff my hat for that one. That ad was hilarious. It was on point. It was just a work of art.

C. Derick Varn: 1:10:28

It was also. It's also clear to me and I think I think Democrats don't know how to deal with this when they've called them a fascist for For four years. And look, I think elements of Trumpism are fascistic before people come at me. But when, when you guys are like, on one hand, talking about how the Santas will be better and then the other hand, trump is like actively Moving to the center from him on war, on abortion, on on Social Security, on Medicare, it's gonna be real hard to To paint that again. I mean, last time I saw it, trump, particularly now after the the Indictment, pulls better in Florida than the Santas does.

Jonathan Kadmon: 1:11:20

So yeah, and you know I've been kind of arguing with some History people on on Twitter about that, like I feel like they're even people that are otherwise, you know, in their specific areas, good historians like Rick Perlstein wrote that book. Reagan land did a really detailed history of the rise of Reagan Republicanism, you know, but his understanding of fascism and that that part of history is impossibly pedestrian, and that is actually one of those areas where a lot of the the more Marxist leaning historians have have been invaluable to my education because they know to go looking for the kinds of details that it doesn't occur to a lot of these, these other people, to even challenge. And You're finding like there's a lot of important undercurrents in there that you really need to understand, to understand what fascism is, how it works, and you know, for example, why Claremont a's work was so important. You know the economic aspects of it in particular and you know the, the, the core aspect of crushing labor, also, the fact that you know the populism inherent in it is always, always, always astroturfed.

C. Derick Varn: 1:12:45

Yep, yeah, and it's. It's class-based, it's petite bourgeois and People falling into the underclass aka what we give Marxism tend to call the lumpen who are not actually part of their base and often don't even vote.

C. Derick Varn: 1:13:02

But you can, you can buy them pretty easily and Use them as paramilitary troops and actually, as I would point out to people I'm like you know, the only thing you could maybe say About Trump is there was some unofficial, quasi-paramilitary people attached to him, but they weren't his Like. They. They attached themselves to him, which is not usually the way fascism works, If you want to call him fascistic.

Jonathan Kadmon: 1:13:34

He does have some, for instance, things on domestic security that they kind of come across that way, but by and large he's not coherent enough to really Kind of qualify because you know one of the things that that fascists are after at their core is stability, and you know he in in some ways is too volatile for that particular Group of people. You know, I honestly like I think George W Bush would would definitely fit their, their bill considerably better than a Donald Trump ever did.

C. Derick Varn: 1:14:16

The thing I just like to tell people is like hey, everything doesn't have to be an analogy to World War two right.

Jonathan Kadmon: 1:14:24

One of the things that I do, the reasons I call their analysis so pedestrian is if you under, if you Adhere to their vision of what fascism is, you think if it doesn't come with jackboots and and racism and you know big red swastikas, then it's not fascism. And they fail to realize that Fascism, to at least some degree, like a watered-down version of it, has been with us the entire time and you know, in some places elsewhere in the world, at our behest, it's been the old-fashioned kind, with swastikas, with intact units of the Waffen SS Going at our behest to assist in the, the overthrow of I&A, and you know things, things like that. But I mean, but by and large here, like those core assumptions that Claremont Tate talks about, those core tenants of fascism have been with us the whole time.

C. Derick Varn: 1:15:22

Yeah Well, I mean, they're even in our iconography. We have fascist in the American seal. My, my, you know, my fundamental thing is like, fascism is Right-wing, it also flirts with socialism, but it's a capitalist, it's a capitalist response in hyper decay, like, and One of the reasons the Anglophone world has kind of avoided it, even though all parts of it have existed in American culture and British culture at times, just not together. You, we talk about the like how much the southern like.

C. Derick Varn: 1:16:08

You know, I remember one of the dumbest debates that I that I've heard, and this was I tend to agree with my friend Danny Bessner, but was about whether or not the KKK is fascist, and I'm like it's proto-fascist, fascistic, absolutely, and like the Nazis, in specific, pulled a whole lot of their stuff out of southern codes but, uh, believe it or not, the Spanish and the Italians didn't. So saying that it like, that the KKK is fascist, one makes it sound like it's not indigenous to American culture anyway, and To which it definitely is, and to actually lead you to misunderstand non-nazi forms of fascism. And and so you know, like, like I've said, like I'm okay with calling Trump fascistic Because there are some elements, but then there's some major elements that aren't there and At the end of the day, we should just like it's not really that important, except that it'll mess up your understanding of what's People might do if you think these people are one-to-one to Hitler and they're just gonna new, remember.

C. Derick Varn: 1:17:21

I mean like these are gonna be a Reichstag fire or something like and One of the things I press Democrats on on this and I press them hard these days is you told me that a lot of these Policies of Trump were fascist, but you have defended them or kept your mouth shut when they've been maintained by Biden. What do you like? How do you? How do you do that with a straight face and ever like, if we did have a real fascist threat now, who's gonna believe you if they understand that?

Jonathan Kadmon: 1:18:03

Well, that's the scary thing, and you know it's. It's kind of. The one of those things that I gathered from the studying the psychology was you know, there's this. I don't know if you're familiar with Leon Festinger's theory of cognitive dissonance Yep, I am.

Jonathan Kadmon: 1:18:17

But the degree to which you, you see its power, the ability of people to believe wildly contradictory things and keep those things compartmentalized and defend that compartmentalization, you know to the point of occasionally getting, you know violent and unhinged, is Impressive and you realize how easy it would be for these people to fall into something. You know something like a modern iteration of fascism, like proper fascism. You know full-blown authoritarian, militaristic. You know that sort of thing and still be, you know, going out there Bleeding about. You know, freedom, democracy, where the freest country in the world, blah, blah, blah. They all thought they were free. I think that was the title of a book that a journalist wrote Going through Germany after World War two. The title was they thought they were free. And Anytime you go to a place like that, where these horrible things have happened and it's obvious authoritarianism has happened, a Huge chunk of the populace was like we're free.

C. Derick Varn: 1:19:35

No, yeah, it's absolutely, because it doesn't like. That's how authoritarian tends to work, is it's their sovereign exception, and that sovereign exception is attached to one part of the population so that they Don't care, or they don't care until it's too late. And you know, I can definitely see that. But what I would? You know, one of the things I've told people about this is my, my Marxist heart is I'm like, okay, fascism is capitalism. Okay, but capitalism, the K, has many forms, almost all of whom are bonapartist. But and by that we just mean usually we invest, we over invest, in an authoritarian figure To to get us out.

C. Derick Varn: 1:20:17

And I'm like, I think my personal opinion about American politics right now is that it's so, it's, it's a, it's a by-partisanship. Lee Bovener part is we all over invest in the executive branch to the point that we've kind of missed that we it was actually the progressives that started this Made the Supreme Court the primary rulers of the country, because they can interpret law. No one will challenge them anymore, nobody, which is not historically true until the 1950s, like prior to that, people show down with the Supreme Court all the time and they usually at least got concessions, if not win. So it's, it's. It's kind of wild to me. And this has led to this ability to where Congress doesn't really do anything except like the restrict act, security bills, austerity and bailing out banks, which admittedly it has to do for capitalism function, but still that's what like, like you can get.

C. Derick Varn: 1:21:26

You Can get by-partisanship done real fast if involves those and military budgets, if it involves those four things, and then nothing else Like increasingly, we, we formed that out to the executive, which can be undone by the Supreme Court at a whim, because this is how, kid of Kent, really it's not supposed to legislate. So you know, I see this as a tendency in American culture and if you, if you want to call that fascistic, then I think you have to admit that like well, there's fascistic tendencies right now in the entire spectrum of the American political Apparatus that has any power and nobody likes hearing that right, like, oh, it's just like. It's like yeah, no, you know, yeah, trump's, trump's awful, biden's pretty bad though, and you guys really made it seem like it was a life-or-death thing to To fight for him, and we needed to.

Jonathan Kadmon: 1:22:25

You know, we'd have a labor president and infrastructure again and Josh, yeah, it's gosh fascism versus friendly fascism is basically what our options seemed to be and you know, I kind of saw that coming, just you know, having a little knowledge of Joe Biden's background, who he was, what he was about. But it's, I think it's it's turning out as bad as I would have thought it was, maybe even a little bit worse in some cases.

C. Derick Varn: 1:22:57

So yeah, the immigration stuff was one of the things where I was like, well, you know he's not gonna do enough, but he'll do something and I. Well, he did something for a month and then immediately we were in the focus, yeah. And I'm like dude, they're gonna call you Softened immigration, no matter what, so like it's not, like you're gonna get anything for this. But then then you realize there must be forces larger than just partisanship, this driving some of the stuff.

Jonathan Kadmon: 1:23:28

Yeah, the partisanship is just Kabuki theater.

C. Derick Varn: 1:23:30

Basically, for you know, bigger forces pulling the strings now I mean we, I another place where you see this is like Everyone was concerned about Trump making things hostile with China till Biden came in, and it's more hostile, like so it's like okay, like you know, no one was talking about moving, moving ships to the Strait of Taiwan directly. Even that, even though you know I remember liberals raising hell about Trump taking the call of the president of Taiwan. And now I'm like you guys are shutting up on this to you, like what do you believe in? You know, this is not even getting into stuff like Medicare for all and all that like it's just. What do you believe in? Guys like, but anyway, and so I do think we're kind of in dire straits right now and it's been, it's been nice. How do I say this politely?

C. Derick Varn: 1:24:38

The current, this current crisis has been, I think, pushed a lot of MMT years out of their cognitive dissonance or they've had to double down, and so you've seen, like there's a lot more MMT years now willing to talk to me on a friendly or, at least you know, amicable basis, where I was debating you guys four years ago, and I think that's good, because Up into 2020, I think Some people got a false sense that, like the, the powers that be, we're just gonna like, oh, you'll get to implement an MMT Program without that much political struggle. And I remember, I remember like thinking, is that gonna happen? Myself, because, like people who were normally not get the time of day were getting we're getting, you know interviewed on economics podcast that normally would not talk to any heterodox economists, regardless of what they were, and they turned on y'all so fast Like it was.

Jonathan Kadmon: 1:25:49

I was kind of shocked, like well, one of the things is they think MMT is something you do, rather than kind of a lens of analysis, and you know, by and large it's, it's supposed to be, kind of you know, a way that you decide what your options are, but not something that has that is like something you implement. And so, basically, when they started, this was a way that I think a lot of these kinds of you know, neoliberal, neoclassical type people were deflecting from their their own Mismanagement or failure to act in a lot of ways and say, oh, all this inflation came because we deficit spent, we did MMT. They're equating the two and Basically made MMT the scapegoat.

C. Derick Varn: 1:26:46

Which they know, which I remember because I started. That's when I was started defending MMT years a little bit, because I was like that's bullshit, y'all. Like like one, like in so much that they're MMT years with normative political programs and there are like, but we do need to separate that out from the description of how fiat currency works. We said that right here. It's true that I Think Unfortunately Even though I will also say the people who were involved in this didn't did say this, but I don't think they said it loud enough that the descriptive part in the normative part actually are separate, like because you can be an MMT year and be a totally right-wing ship back, oh yeah, like like it's not, it's not even that hard, actually. So but but you know, when Kelton and stuff, that I think they really thought they could get the Democrats to implement, implement some of the policies based off of their analysis. And I felt like I'm not meaning to sound conspiratorial, but I felt like certain sectors of finance, capital was fine as long as you didn't, as long as they were like, well, you're saying we can print more money and dump it in the assets and do as QE as much as we want and bait, you know. And then as soon as there's any inflation for any reason, we're gonna throw you under the bus right like. Which is what they did like, and I was like man. I just remember thinking when that was happening like they played some of y'all they really did. But in some ways it's good, because on one hand, I know more and more markets and sewer real estate.

C. Derick Varn: 1:28:39

You know what MMT at least has something meaningful to say about fiat currency, and we live in a fiat currency system like. We just have to admit that. And you know, if you want to insist that somehow this is still a commodity back money somewhere, you're gonna have to like figure out what commodities actually backing it. And even oil doesn't work like. So you know, there there is no ultimate singular commodity backing any of this. It's the production of the entire system and it's in its national trades that are that are backing it and its tax receipts that make it, make it a currency that we use like they're. You know, there you go. And I will also say, like Professor Kattub, for example, there was more and more serious analysis of international systems in the M&P world, because early on that was my big critique it's like you guys aren't looking at you guys just say they don't have currencies to serve.

C. Derick Varn: 1:29:45

Oh right for talk, yeah, yeah, and you get you. You know, and and that was my big disagreement early on I lived in Egypt when the currency collapsed, when they free floated on the, on the, on the suggestion of the World Bank, and also China was us human, do it too. And like it was nominally good for me because I got paid Peggy USD and all of a sudden, I made a ton of money. But it was terrible for Egyptians. Like it was the nightmare.

C. Derick Varn: 1:30:19

And and when MMT years would talk to me about it in 2015, 2016, 2017, except for for talk, a boob, we would get like, well, it's an ideological choice. And I'm like I Would just stare at them like no, no, they were forced to pay stuff in dollars. They don't have a choice. Like it's not. Like even a place like Venezuela has a hard time not paying stuff in dollars. Come on, it's not. They're not pegging their money to the dollar out of an ideological commitment to the United States World Order dude.

C. Derick Varn: 1:31:04

Like but Kaboob really has done some great work on how you could mitigate for that and I was like, okay, but finally someone serious about this. So so it's the, the period that I'm kind of being hard on you about it's also appeared. I think we actually saw some good research also come out of it, particularly because no one wanted like fiasco, like what happened with Grexit again or didn't happen with Grexit or what what possibly could have happened with Grexit like we didn't want any more Yana's verifocuses in the world Um, sorry, yana's. So and I think that that's been Really important.

Jonathan Kadmon: 1:31:55

And the other thing I'll tell you is, like Marxists are usually so busy arguing about value theory we don't usually like it's amazing how little work we've done on money yeah, I've been noticing that too, and you know I did watch your, your two-hour live stream on the history of Trotskyism and basically you just got through kind of the introductory part of it, basically just just talking about all the splitting and all the arguing, yeah.

C. Derick Varn: 1:32:24

Here's the funny thing during that you think things are bad now. During that time period the Trotskyist, the, the Marxist Leninist and the Marxist Leninist Maoist so from like the 50s to the 80s, marxist weirdly did not actually in general have economic programs of any substance. It was mostly purely political programs, which is crazy. Like it's just like to me. I'm like, wait, that's, that's our strength, like we do economics and sociology, that's what we do. We kind of invented the field, like that's marks, that's dialectical materialism.

Jonathan Kadmon: 1:33:03

That's that's what I found appealing in it and why I think those, those kind of two lenses of analysis, sort of need each other to be any good to anyone.

C. Derick Varn: 1:33:14

Yeah, and yeah, you're right, when we get, we get into like the history of Trotsky's. And the one thing I will tell you is and we I think we did say it in there, but it's only like a minute like none of these groups have real strong economic analysis at all. They are, or they assumed, that the declining rates of profit was just gonna immediately hit and wipe out all the capitalism and, you know, then they could fight for power and that was gonna be it.

Jonathan Kadmon: 1:33:38

I believe you said, trotsky himself was particularly crappy as an economist.

C. Derick Varn: 1:33:42

Oh, yeah, he's bad. I told you he believed in the gold standard. He thought that capitalism is gonna collapse in the 1950s. Bad, but Unfortunately, in general, marxist. Ironically, during the period of the upcoming of Marxism, marxist economics actually wasn't particularly developed in that period and specific so it's. It's actually kind of ironic because, like when you have societies that are trying to implement this revolution, you have a lot of economic writing in the beginning, but in the development of the USSR and the development of China, basically, particularly after the collectivization of agriculture until Until liberalization, there isn't actually that much Economic analysis going on outside of, say, gas plan or trying to just run the internal economy, which is which was really complicated, and they were using all their resources on that, which actually opened them up on the international front. They started taking loans and then get pulled into the international capital system and well, we all know where that went. So you know, it's actually kind of a major tragedy that that was the case.

C. Derick Varn: 1:35:08

And In Western Marxism and I'm not just talking about, like Trotskyism or Western Maoism here, I'm even talking about like the, the economic thinkers there was either a tendency to try to hybridize with Keynesianism, which I think is a terrible mistake, or to Declare that basically the law of value have been solved by monopoly capital and like thus we didn't really need to do any of that anymore Because the predicted mega crash of the 50s never happened. There was like, well, it must be done. And yeah, yeah, that's a mistake too. And I have come around to the idea that part of this is because Marxist Don't and did not entirely think money was that important to how power operated, that they saw it as like part of the MCM circuit and like important that way, but that they basically took the Adam Smith view of money at face value and and thus when monetary stuff was done to Regulate the business cycle to some degree, they were blindsided by it and then thought the capitalism was over. So I mean, it's, there were.

C. Derick Varn: 1:36:30

There were exceptions Polematics one of them, a hundred, grossman's another, some of the administrative dates, theorists like a Frigid Pollock, but in general that's where they went and and it's a, it's a, it's a historic tragedy, but during the same time period.

C. Derick Varn: 1:36:49

I mean, you know, one of the one of the weird ironies of the German historical school, which neo-chartelism is sort of an English descendant of Fuck, a Frigid knap was was a chartelist, but he was also a German historical dual economist of the second generation, art, she's kind of in between generations and the German historical school didn't really pick him up.

C. Derick Varn: 1:37:17

He gets picked up, he gets translated at the at the behest of Keynes, and then like no one really does anything rhythm other than Innis and Charles Michelle Innis, until Minsky really, and then you know Mosler and people finding him again. And that's really interesting to me because you know, during the 50s, where all this is really beginning, like okay, all the stuff that we think of the pre, the conditions of Fiat currency is really happening from the 20s to this, to the 60, 70s setting is all up, but in that period actually is the time period no one's actually doing that kind of economics. So there's just, on both scales, there's just lost time. You know like yeah, it's, and and during that time period, that's when the Keynesians get all Bad. I Mean they were never great, I'm, you know my opinion about that, but you really see what, what, what is good in Keynes they take out of it in the 50s, 60, 70s, oh yeah that was.

Jonathan Kadmon: 1:38:29

That was Samuel. Soon was a leader of Sanitizing. You know what little was good in there, but I read that in the long run we're all dead and you know I have no, no argument with with any of that, like that's all spot on analysis that you know, at the core, this is, you know, this defense of the current order and this belief that you know the capital order is what stands between, you know, civilization and utter barbarian, chaos, and it that's their, their driving force, at the end of the day.

C. Derick Varn: 1:39:06

Yeah, absolutely. I mean I think I told you it was an offhand comment I made on on macro and cheese, where I was like the reason why we didn't get full fascism in the Americas was Kasey and it's up, did some of the same things and and it was less violent. So, and you know, you were shot to me like, yeah, claremont a agrees with you. And I was like, well, good, she's right.

Jonathan Kadmon: 1:39:37

Oh, I think that's her next book project. Is is basically, you know, keynes and the post-work consensus she does touch on it in the first book as well and he was definitely part of this. You know kind of the liberal track of this. You know you kind of missed a capital order. You know, you know these, this Basically they're their whole agenda. So there was like the liberal track and the fascist track, but they were basically trying to achieve the same things and and it was. It was a difference of degree rather than type and the Keynes was definitely within the same consensus.

C. Derick Varn: 1:40:20

Yeah, totally so. As we wrap this down, I'm going to summarize all the books we brought up, because one of the things I will also tell you Mememeteers and Marxists tend to be avid readers, but we don't tend to read the same things, and so when we we should share book lists more often, um, so we've mentioned Claremont a's capital order. We've mentioned, um, in the long run we're all dead, and that is uh by I'm trying to remember, I have it, uh, chef man. Um, we mentioned the Nobel factor.

Jonathan Kadmon: 1:40:57

By soda bergen and um soda bergen offer.

C. Derick Varn: 1:41:02

Yeah, um. Is there anything else we mentioned um?

Jonathan Kadmon: 1:41:07

I think morowski was involved in the first three chapters but then ditched the project.

C. Derick Varn: 1:41:11

Oh yeah, I would also say read all the morowski books. I'm neoliberalism, oh my god, I love those.

Jonathan Kadmon: 1:41:17

Those were some of the first things that got me into it.

C. Derick Varn: 1:41:20

Um, I read the david harvey which you know, the marxist book on neoliberalism and, as a marxist, I was like crap, um. And then I read the morowski books and even though he's he's not a marxist at all Um, I was like, oh no, this explains so much to me about what this is actually doing, um, and why it's sneaky, how it develops out of fortism, because everyone thinks that, like neoliberalism, it's this clear negation of fortism and it isn't. Um, like it's it that those books are brilliant. So, yeah, more light than heat and never let a good crisis go to rate by Philip marowsky are also excellent. Uh, actually, when I went independent as a podcaster went rogue in 2014. He was my first interview with philip morowski. So, um, unfortunately, I think it is still available on the internet somewhere. Um, I'm gonna look for that.

C. Derick Varn: 1:42:18

Um, so, yeah, um. So any other things you're gonna suggest, like I said you're are. I'm gonna list the three articles we brought up in the show notes Um, guys, go check out well, progressives, um, there's. You guys are doing a lot more overlap with marxist and marxist thinkers and geopolitical thinkers, he says, and I think that's good, because a lot of mmt years need to hear it. Um, conversely, a lot of marxists need to think a lot more hard about money.

C. Derick Varn: 1:42:50

Even if we don't always come to the same conclusions, and as all the m and t years on policy or on how society might work, um, we do have to deal with the fact we live in a fiat currency system and, frankly, what, what did win me over to you guys having a point was that, uh, uh, your stuff is more predictive, frankly, um, uh, I. I will, however, say my, my critique still remains that we still have to work out what's going on internationally, because I don't think there's a singular theory. That's really great on that. Yet, right, um, um, and particularly as the monetary, the world monetary system is shifting, it's going to be important to figure that out. Um, so, hopefully, people pick up that charge. Maybe one of you listeners will Go in and take. Take one for us all and get a degree in economics. Unlearn everything that you learn and then do research on this. God, did you ever take a neo neo classical economics class ever?

Jonathan Kadmon: 1:43:58

Uh, intro level like 100, 200. Yeah. But uh, I took some international development courses and like they were teaching me things that I was like I know for a fact, this is wrong. Like I know for a fact, this is wrong. Like I can, I can cite examples of countries Like I think they were. They were saying things like oh, this, uh industrial policy doesn't work and it's counterproductive, and yeah blah, blah blah. I'm like I know for a fact, like I can name you know south korea, Uh, you know israel, Uh, you know.

C. Derick Varn: 1:44:27

I can't think of a successful country, including the united states, that does what neo classical suggests they should do.

Jonathan Kadmon: 1:44:33

Yeah, I think um michael hudson wrote a whole book on it. America's protectionist takeoff, which is, also, uh, recommended reading, uh, you know kind of goes into the forgotten 19th century american school of protectionist economists and you know it's everybody who's ever grown from a, an undeveloped backwater, to um, to an industrial. You know, modern industrial, uh, powerhouse has has basically done some measure of industrial policy and planning.

C. Derick Varn: 1:45:07

Yeah, you know who got me on this. This was before I was even on marxus. It was, uh, it was, uh, I'm marked a sin comparing india to china, and I was like, hmm, like you know, that's enough to get you to realize, like, oh no, that that that neo classical neoliberal stuff will destroy a country. If they do it. It just puts them at, oh, it opens them up to labor arbitrage, it opens them up to, like, capital flight. It's a bad idea, um, and. And then you just look at history, the cesspool. Capitalist countries didn't do it, um, so it's, it's like you know.

Jonathan Kadmon: 1:45:44

It's like you're swimming in the ocean and you know there's this Little thing that's just keeping the, you know, the, the dangerous stuff away, or maybe I should say the river, because piranhas live in a river, but you're you're opening up the gate and letting the piranhas in to feed On you like why, yeah, don't do it.

C. Derick Varn: 1:46:02

Um, so yeah, we'll add those books, let's. There's so many books to read, but, um, I think that's great. Uh, so people should check out macro and cheese. Is there anything out you like to plug?

Jonathan Kadmon: 1:46:15

Uh, nothing I can think of at the moment, but I'm sure after I get off I'll think of three things. But it's uh, in the meantime, like I would second the recommendation for for overlapping reading lists and I'm grateful to you for your suggestions already.

C. Derick Varn: 1:46:28

Yeah, thank you. I you, I will say you're you're. Uh, claire met mate, I found from you guys and that was funny because she's marxist. Yeah, I was like, wait, why aren't we talking about this book in marx circles?

Jonathan Kadmon: 1:46:45

Um connected tissue. I love it.

C. Derick Varn: 1:46:48

Um, so yeah, and and, uh, yeah, I would definitely suggest that Uh, check out real progressives. Like I said, I'll link your articles in the show. Thank you so much for coming on and, um, I hope that our circles continue to overlap. Continue to overlap me too, thank you.