Ep49 [1/5]: Mat Forstater: On Mat Forstater and the challenges of being heterodox.

Welcome to episode 49 of Activist #MMT. Today I talk with one of the original developers of MMT, Mathew Forstater (Twitter/@mattybram). Mat is a professor of economics at the University of Missouri Kansas City, or UMKC which, according to Sam Levey, who was my first-ever guest and is also a UMKC economics PhD. student, is where MMT was born. Mat is also research director for the Global Institute for Sustainable Prosperity and research associate for the Levy Economics Institute at Bard College. In this first of a five-part episode, Mat and I first talk about how he grew up in Philadelphia, where I also grew up and still live near. He attended Temple University in North Philly and earned a bachelor's degree in what was originally called Pan African Studies but came to be known as African-American studies. According to Mat, quote, "everything seemed to keep coming back to economics." He says he also decided on economics because economists and their theories "affects peoples lives” in a more immediate sense than other subjects. Although all subjects are important in their own way, there is a reason, he says, that every countries' leaders have economic advisers. Mat then talks about his long career as a heterodox economist and professor, and the difficulties he experienced and witnessed among the heterodox community, substantially due to the lack of support from (and benefit to) those in power. The infighting and factionalism he describes is similar to the concepts in his 1999 paper regarding Abba Lerner, called "Functional Finance and Full Employment." In it, he talks about how the artificial scarcity of jobs and funding imposed by the central government and currency issuer, causes bad behavior and decisions by workers and unions, in an effort to protect their artificially limited jobs at all costs. This understandably results in discrimination against the most disadvantaged. As Stephanie Kelton describes it, it is a cruel game of musical chairs. Mat calls Fred Lee an important figure in promoting and supporting a "big tent" for Post-Keynesians, in order to address some of these concerns. (This interview was partially inspired by Fred Lee's book, A History of Heterodox Economics.) One of the primary examples Mat gives of discrimination by neoclassicals is how heterodox economists were told that if a concept could not be modeled or expressed in math, then it wasn't really economics. I see this as a tool to make economics inaccessible to the general public, and also as a way to take the real world, which is complicated, difficult, and beautiful, and reduce it to meaningless numbers and formulas. This is not unlike focusing on a child's report card or standardized testing grades and ignoring the child himself. This intentionally myopic view of the world obviously ignores real world suffering and also makes it very easy to justify not alleviating it. Resources Cambridge debates (Paul Davidson) 2004 book by Virgil Henry Storr, Enterprising Slaves & Master Pirates: Understanding Economic Life in the Bahamas 2015 by New School's Mike Isaacson, "Braaaaaaaains! The Undead Humbug Production Function: Now With Human Capital" 2011 paper by Mat Forstater, regarding Byard Rustin, called "The Freedom Budget at 45: Functional Finance and Full Employment" (The latter half of the title is indeed the same as the below Lerner paper.) Papers written by Mat (unless otherwise stated) that I read in preparation for this interview: 1999: Functional Finance and Full Employment Lessons from Lerner for Today?: Some excellent insights from Abba Lerner, as it relates to the MMT-designed job guarantee (which is MMT proposed solution to Lerner's goal of always balancing full employment while avoiding inflation). 1999: Public Employment and Economic Flexibility: The Job Opportunity Approach to Full Employment (highlights): The many reasons why the private sector cannot achieve (or maintain) full employment, and why only the public sector can (and must). 1999: Savings-Recycling Public Employment: An Assets-based Approach to Full Employment and Price Stability (here is the same paper, but with ERRATA from the author): The only thing that can cause people to spend more (recycle their savings) is an injection of new money by the federal government – that is, deficit spending. 1999, with Warren Mosler: A General Framework for the Analysis of Currency and Commodities 2002: Full employment policies must consider effective demand and structural and technological change: a prime point of Pasinetti's political economy: A more technical look at the unique advantages the federal government has over the private sector, regarding achieving and maintaining full employment. 2005: TAXATION AND PRIMITIVE ACCUMULATION: THE CASE OF COLONIAL AFRICA 2005 with Warren Mosler: The Natural Rate of Interest Is Zero (One of the first papers I recommend to those interested in learning more about MMT.) 2012: Unemployment and Underemployment, a chapter from the Encyclopedia of race and racism: The depth of how many, and especially disadvantaged populations, are disappeared from unemployment statistics. 2017 by Flavia DantasL. Randall Wray: Full Employment: Are We There Yet?: A look at the state of current unemployment statistics, and the differences between the official, "top line" U-3, U-6, and Augmented Unemployment (and those not captured by even the latter). #LearnMMT For an overview of Modern Monetary Theory (MMT) with many reliable sources to learn more, here is a good place to start: My large set of resources containing many expert sources, layperson tutorials, and people and places to follow. On Facebook, the pinned post on Modern Monetary for Real Progressives contains a wealth of information. Please become a monthly patron of Activist #MMT We shouldn't have to beg, but we do have to beg. So it's not *that* we beg, but *who* we beg. I am choosing to beg you, my listeners, to financially support this show. For even a dollar a month, you'll get exclusive patron-only content and updates, highlighted by around four-days access to every episode, before they're released to the public. 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