Change of Mind About MMT

All I can say is that if this is what they are calling MMT, it is certainly something that would have made old Peter Cooper happy. I was not offended by being identified as an MMTer, but I prefer greenbacks because I believed money should be issued directly by the productive state itself, at zero interest, for public provisioning, without relying on bank-created credit or bond markets. MMT, in my view, still left too much power in the hands of bankers, bond dealers, and the financial class—the very actors I think have derailed American industrial civilization.

MMT could be one of those "half-vast" workarounds England used to specialize in. Noticed (but not named) by a troika of writers (Bagehot-Dicey-Burke) who were as annoyingly taciturn as Anglos in general. It's why the appeasers sneaked around so well.

It was Alexis de Tocqueville who described English dynamism like a pressure valve. DEI is the form without the substance, alas. "We can't find the money" because they surrendered governance to bond vigilantes. This is illegitimate rule.

Enough sneaking. I favor greenbackism because it is a producer‑centric, state‑credit model rooted in the 19th‑century Populist tradition. I see MMT as too financialized, too dependent on Wall Street operations, and too tolerant of rentier institutions. Greenbacks are the moral and institutional antithesis of the “money‑crazy” society I love to hate.

Greenbacks = sovereign industrial credit. Civil War–era fiat issued by the Treasury was designed to:

❶ fund infrastructure, railroads, canals, farms, factories;

❷ bypass private banks entirely;

❸ eliminate interest burdens on the public;

❹ tie money creation directly to real production.

I admire this because I believe the original American system was built by engineers, farmers, machinists, and builders, not financiers. Greenbacks were the monetary expression of that ethos. It was described by American School Economist Henry C. Carey as the American System. Less eloquent than he, I call it "half-vast" dirigisme. The Yankees had picked up a little something from them English prior to their fusion into the Anglo-American Establishment.

MMT, by contrast, accepts:

❶ Treasury bonds;

❷ central bank operations;

❸ bank-created credit;

❹ interest-bearing government liabilities.

MMT reinterprets these things, but now I see them as structural concessions to the rentier class. This is the reason for my snarky comments on the X posts by Kelton and Mosler, whom I usually adore. But I've put up with this burr under my saddle long enough.

The MMT framework:

❶ normalizes the dominance of private banks;

❷ legitimizes interest-bearing public debt;

❸ tolerates speculative finance;

❹ leaves the power of money in the hands of Wall Street.

Greenbackism, in contrast, abolishes the dependence on private credit creation.

Our Real, Original Populist inheritance = money as a public utility. The original Populists (whom I revere) believed:

𝗠𝗼𝗻𝗲𝘆 𝘀𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 𝗶𝘀𝘀𝘂𝗲𝗱 𝗯𝘆 𝘁𝗵𝗲 𝘀𝗼𝘃𝗲𝗿𝗲𝗶𝗴𝗻 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝗼𝗻𝘄𝗲𝗮𝗹𝘁𝗵, 𝗻𝗼𝘁 𝗿𝗲𝗻𝘁𝗲𝗱 𝗳𝗿𝗼𝗺 𝗯𝗮𝗻𝗸𝗲𝗿𝘀.

This is the core of the Greenbacker and Social Credit traditions.

MMT says something different:

𝗠𝗼𝗻𝗲𝘆 𝗶𝘀 𝗶𝘀𝘀𝘂𝗲𝗱 𝗯𝘆 𝘁𝗵𝗲 𝘀𝗼𝘃𝗲𝗿𝗲𝗶𝗴𝗻 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗲𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝗶𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹 𝗺𝗮𝗰𝗵𝗶𝗻𝗲𝗿𝘆—𝗧𝗿𝗲𝗮𝘀𝘂𝗿𝘆 + 𝗰𝗲𝗻𝘁𝗿𝗮𝗹 𝗯𝗮𝗻𝗸 + 𝗯𝗼𝗻𝗱 𝗺𝗮𝗿𝗸𝗲𝘁𝘀.

This is one or two steps closer to the Grotio-Westphalian nation-state definition of sovereignty. In spite of being half-vast, it is NOT Yankee-approved. Neither axiom is.

This is not a restoration of the Populist monetary vision.

It is a reinterpretation that left the financial superstructure intact. As far as I'm concerned, this leaves too much ceremonial inefficiency intact. How typically mealy-mouthed. Even this is too much for the entrenched interests now.

What is now too much for me is how MMT's political mechanism tries to control inflation. MMT proposes:

❶ discretionary taxes:

❷ job guarantees;

❸ fiscal steering of aggregate demand.

"Whut Ah bleeb":

❶ Congress is captured by financial interests;

❷ discretionary taxation is politically impossible;

❸ inflation control must be automatic, not political;

❹ money issuance should be tied to physical production, not macroeconomic theory.

Greenbacks are self-regulating because they are issued for real projects rather than abstract “aggregate demand management.”

After millions of years of sad and costly experience on Xitter, where conclavery has reached the limit of Nicenity, MMT looks too abstract, too academic, too detached from engineering reality. My worldview is grounded in:

❶ industrialism;

❷ physical production;

❸ energy flows;

❹ engineering constraints;

❺ real capital goods.

MMT is grounded in:

❶ balance sheets;

❷ accounting identities;

❸ macro aggregates;

❹ financial operations.

MMT is correct about solvency, but wrong about civilization. It's trying to solve the wrong problem.

Now that we're living in "Interesting Times" again, Anglo-America is striving to bypass them. Toynbee understood what was happening. He saw Hitler and Hirohito as extensifiers—leaders who tried to escape internal deadlock by conquest rather than reform. Hitler and Hirohito were not aberrations; they were predictable outcomes of civilizational breakdown. Extensification (a.k.a. imperialism) is the desperate outward‑thrust of a civilization that has lost the ability to solve its internal contradictions.Toynbee believed that once a society enters stasis—locked in elite conflict, unable to reform—its leaders will almost always choose expansion over internal restructuring.

Finding no Solon equal to the task of inaugurating intensive development, Toynbee escaped into religion. This often happens in one of his Times of Troubles. Despite resisting his wife's insistence that he join the Catholic Church, he celebrated the Church as being the chrysalis of the West. But that was then.

Since the New Deal was only a partial solution to the real problem, the West is moiling around in a cold, unceclared Third Hundred Years' War. (How veddy British.) This emergency condition is reason enough to highlight the philosophical divide: producerism vs. financial sovereignty. Greenbackism: Money is a tool of production issued by the state to build the nation. MMT: Money is a unit of account issued by the state to mobilize resources through fiscal policy.

The former is civilizational, the latter merely administrative.

The moral dimension: I hate rentierism. My deepest complaint about neoliberalism is that bankers try to “get it cheap” instead of making generous investments in the future. MMT does not abolish rentierism. It merely reframes it.

Greenbacks abolish rentierism by eliminating interest-bearing public debt.

This moral distinction matters enormously. We must rebuild the nation on a renewable basis. The whole world does.