MMT101 - Modern Monetary Theory (MMT) – Why, What & How

Explore the postwar UK boom (1945–1973) with 3% GDP growth, unemployment under 2%, rising real wages, and welfare state expansion including NHS and education.

Fueled by optimism, innovation, and booming trade, the postwar boom emerged aided by Keynesian economics. Boosting the economy, government spending funded the welfare state, the NHS, and nationalized industries.

Trace the rise of neoliberalism as a response to the 1970s slump, oil shocks, and rising unemployment, noting Reagan and Thatcher and policy missteps like rate hikes and spending cuts.

Explore how neoliberal policies—deregulation, privatization, free market capitalism, and cuts in government spending—have led to rising inequality, deteriorating public services, job insecurity, housing crises, and regional disparities.

Analyze fifty years of neoliberal economics through UK statistics on poverty, inequality, and austerity. Examine rising homelessness, food bank use, stagnant social mobility, and underfunding in health and education.

Dr Steve Keen analyzes long-term growth from the 1800s to today, showing neoclassicals slow growth and credit-driven asset bubbles; he calls for a paradigm shift in economics.

Orthodox neoliberal economics presumes finite resources and infinite growth, blocking climate action; governments fail to borrow enough due to fiscal rules, undermining net-zero targets.

Apply modern monetary theory to mobilize government and private sector action against climate damage, using regulation and incentives to curb emissions from the top polluting firms.

Unregulated buy now, pay later debt rises in the UK, with spending around 1.7 billion a month and a projection of 30 billion this year, prompting calls for regulation.

Compare orthodox economics and MMT through four core differences: abstraction versus observation, money from central authorities versus the people, markets versus money mechanics, and one path versus many schools.

Define methodology in economics by asking what counts as evidence and what is knowable. Contrast reverse engineering with historical-document approaches to show how real-world institutions shape interpretation.

Contrast orthodox economics' abstract deduction with MMT's money as an owner's manual. The lecture explains key assumptions and how policies, inflation, and interest rates relate.

Explore how neoliberal and neoclassical economics embed values and biases, examine methodological critiques, and argue for explicit contending perspectives to foster critical economic thinking.

Orthodox economics emphasizes markets, supply and demand, and model-based predictions, while MMT focuses on the monetary system, money creation, and sectoral balances through double-entry bookkeeping.

MMT looks under the hood to show how money is created, circulated, and managed by government, central bank, and banks, and how policies affect inflation and inequality.

Contrast neoclassical economics with a pluralist, MMT approach that draws on Keynes, Knapp, Godley, and Minsky to explain money, sectoral balances, and functional finance. Prioritizes full employment and government intervention.

MMT distinguishes currency issuers from currency users, with US, UK, and Japan as issuers and eurozone nations as users, under monetary sovereignty that issues and retires currency as legal tender.

Monetary sovereignty exists on a spectrum; currency issuance alone is not enough. Full sovereignty requires financial sovereignty plus food, energy, and knowledge sovereignty.

Explore financial sovereignty and monetary sovereignty as a spectrum, comparing how the United States, Argentina, and Ecuador issue currencies, borrow, and peg, shaping policy space and crisis response.

Monetary sovereigns should avoid borrowing in foreign currency; foreign debt raises costs and inflation, undermining financial sovereignty. The Turkey case shows how depreciation and external debt amplify inflation.

MMT promotes a flexible exchange rate to maximize policy space, while currency pegs erode sovereignty, demand foreign reserves, and can trigger crisis, as in Thailand 1997.

Explore monetary sovereignty and how food sovereignty differs from food security, using Scotland as a case study to examine land ownership, distribution, and the role of major supermarket chains.

Warren Mosler explains modern monetary theory through stories and analogies, showing money creation by banks and government spending, and how taxation creates unemployment to fund public services.

Steve Keen critiques neoliberal economics and explains modern monetary theory and government money creation. He links debt and debt deflation to crises, showing government spending as an automatic stabilizer.

Clarify methodology as what we respect as evidence and how we know what is knowable. Contrast reverse-engineering with historical documents to show how real-world institutions shape MMT evidence.

Phil Armstrong presents MMT as a world‑driven, mechanism‑based explanation of economies, showing that currency issuing governments spend into existence while taxes regulate demand to support full employment.

Explore how modern monetary theory reframes deficits, taxes, and central bank reserves, showing government spending creates money before tax collection and how deficits can boost the non-government sector.

Rate and comment on the course's usefulness while exploring what Modern Monetary Theory (MMT) is, why it matters, and how it applies.