A Quick Point about Bill Mitchell’s Views on Speculative Capital Movements

Bill Mitchell sketches his views on international speculative capital movements here:

“… I do not think that the imposition of country-by-country capital controls is the best way to eliminate the destructive macroeconomic impacts of rapid inflows or withdrawals of financial capital.

If we consider that the only productive role of the financial markets is to advance the social welfare of the citizens – that is, advancing public purpose – then it is likely that a whole range of financial transactions, which drive cross-border capital flows, should be made illegal.

Capital inflows that manifest as FDI in productive infrastructure are relatively unproblematic. They create employment and physical augmentation of productive capacity which becomes geographically immobile.

However, financial flows that are speculative (especially short-term flows) and not connected with the real economy are unproductive and should be declared illegal. You may consider this is an extreme direct control. However the policy should be introduced on a multi-lateral basis spanning all nations rather than being imposed on a country-by-country basis. The large first-world nations should take the lead. I don’t see that leadership being forthcoming.”
Bill Mitchell, “Are Capital Controls the Answer?,” Billy Blog, April 28, 2010.

It seems to me that this would impose a serious problem for the Third World as follows:

(1) with a large volume of speculative capital movements banned, this will reduce capital account surpluses, and probably cause balance of payments crises in the Third World as trade deficits cannot be financed, and

(2) this will mean MMT-style fiscal policies will not be able to be pursued in the Third World, and there will also be a serious crisis of development in the Third World, and some new mechanisms will have to be designed to provide foreign exchange for economic Third World development.

That would require a total reform of the international payments system, including the World Bank and IMF, which would have to provide such foreign exchange for countries that need it.

Bill Mitchell on Brexit

Very nice analysis from Bill Mitchell here:

Bill Mitchell, “Why the Leave Victory is a Great Outcome,” Billy Blog, June 27, 2016.

Bill recounts his experiences after strongly supporting the Brexit vote:

“On Friday morning (Australian time), as it became obvious that the Leave vote would win, I tweeted that it ‘Looks like it will be a great result for UK. Now British labour has to abandon its neoliberalism & provide people with a progressive future’.

I was met with immediate hostility by so-called progressives tweeting that I was ‘delusional’ and that ‘you don’t know the UK very well, do you?’ and that I was a ‘billy goat’ (meaning stupid).

More nasty E-mails followed as the ‘progressive liberal elites’ interrupted their consumption of their cafe lattes and croissants to tell me that the hoi polloi outside of London didn’t have sufficient education to understand what they were doing or they were just mindless racists.

The Remain progressives, were by implication, full of knowledge and wisdom and non-racist.

I wonder how many of these ‘liberal elite’ types with good incomes and stable jobs had opened their well-appointed London homes to the migrants!

But, at any rate, I was told, categorically, in non-elite language, it seems, that anyone who feared for their jobs and opposed a flood of non-unionised workers who would work below minimum wages coming into their local labour markets, were despicable racists who should not be able to vote on these important issues.

Ok! Then who should vote? Certainly not the hoi polloi, it seems.”
Bill Mitchell, “Why the Leave Victory is a Great Outcome,” Billy Blog, June 27, 2016.

You’re lucky you weren’t called even worse names, Bill.

The Left’s ability to calmly and rationally discuss important subjects like this is at a low point, and truly disgusting to have to watch.

The mentality of a lot of university-educated, middle class, left-wing young people now has become this:

Update
Steve Keen talks post-Brexit here:

Steve Keen, “What Next After Brexit?,” Forbes, 27 June, 2016.

Bill Mitchell on the Euro, Austerity and MMT

Nice, short interviews.

Bill Mitchell on the Dystopian Eurozone

Bill Mitchell was recently in Spain and gave this talk below on the Eurozone catastrophe. More details here.

Start the video at the 25.00 mark to skip the Spanish introduction.

Bill Mitchell on how “Democracy in Europe requires Eurozone Breakup”

Bill Mitchell has written a great post here about the Eurozone’s threat to democracy:

Bill Mitchell, “Democracy in Europe requires Eurozone Breakup” Billy Blog, January 6, 2016.

It is a pity that more professional Post Keynesian economists do not take this view, for it is so obviously true.

Bill Mitchell on the Euro Crisis and Austerity

This is a lecture by Bill Mitchell given at the University of Helsinki on Friday, October 9, 2015. He discusses the Eurozone crisis and austerity. Some more background is here.

Bill Mitchell on Reframing the Progressive Agenda

Bill Mitchell speaks here on MMT as part of reframing the progressive agenda, presented in London on August 27, 2015.

Bill Mitchell on Greece versus the Troika and Eurozone

Bill Mitchell has a great post here analysing the recent events in Greece’s confrontation with the Troika and Eurozone:

Bill Mitchell, “Don’t mention the war! er the Troika …,” Billyblog, February 26, 2015
http://bilbo.economicoutlook.net/blog/?p=30293

Bill Mitchell’s scathing assessment of recent events is rather difficult to disagree with, despite the brave face put on the agreement by many left-wing people. Yes, Greece may have “bought time” but, as Bill Mitchell says, if the Germans are unwilling to allow any substantive changes in economic policy in Greece now, why would they concede anything important four months from now?

UPDATE
I cannot resist adding my additional thoughts on this. James Galbraith’s essay defends Syriza here.

He says:

“There is no money in Greece; the government is bankrupt. Large-scale Keynesian policies were never on the table as they would necessarily imply exit – an expansionary policy in a new currency, with all the usual dangers.”
http://www.socialeurope.eu/2015/02/greek-deal/

If that was so, then shouldn’t Syriza have been honest with the Greek public? Should they not have said: “there is no way to deliver on substantive promises to end austerity in Greece unless the Greek public is willing to accept the short-term pain of withdrawing from the Eurozone.”

Galbraith also tells us that now there is a new “spirit and dignity in Athens.” Well, that sounds nice, but I suspect it will not last very long without real action. Critics see the obvious here: the current agreement appears to mean nothing but more “austerity with a human face” for the Greeks. What substantive measures can Greece take to end the misery? What has been agreed seems to mean a weak or feeble recovery at best and at worst means more destruction of Greek businesses and, even worse, more grotesque destruction of the fabric of society. More women robbed of human dignity and forced to prostitute themselves to survive or support their families.

If Syriza basically allows all this to continue, how long before voters desert the left in Greece and move to the socially conservative, but economically interventionist right, perhaps even the ugly right?

Frankly, it may be that this bizarre, utopian commitment to the Eurozone amongst the mainstream European left will be the undoing of Europe. When the extremely ugly, vicious right or far right start winning in the polls, the left will have only itself to blame for the bloody mess.

Bill Mitchell on Henry George and Georgism

Bill Mitchell subjects the economics of Henry George (1839–1897), author of Progress and Poverty (1879) and founder of Georgism, to an MMT critique here:

Bill Mitchell, “Henry George and MMT,” Billy Blog, February 17, 2015
http://bilbo.economicoutlook.net/blog/?p=30215

The criticisms outlined here seem pretty convincing to me, particularly the way in which Henry George’s thinking was based on a gold standard mentality and how he came to be influenced by an absurd anti-government, libertarian ideology.

Marshall Auerback Interviews Bill Mitchell on Modern Monetary Theory

A very nice interview here with Professor Bill Mitchell by Marshall Auerback on Modern Monetary Theory (MMT), which was done at an Institute for New Economic Thinking (iNET) conference in April 2014 in Toronto, Canada. More details here.

Bill Mitchell on the Germany’s Kreditanstalt für Wiederaufbau

In the fascinating post below Bill Mitchell analyses the role of Germany’s Kreditanstalt für Wiederaufbau (Reconstruction Credit Institute), a state owned bank:

Bill Mitchell, “The Fiscal Role of the KfW – Part 1,” Billyblog, December 3, 2013.

As he argues, this bank is effectively an instrument of government fiscal policy that has allowed the German government to have lower deficits and lower public debt ratios since 2008.

This bank looks like an instrument of industrial policy too. The rise of Germany as an advanced industrial nation from the 19th century onwards had much to do with state intervention and industrial policy, which arguably continues to this day.

Bill Mitchell on the British IMF Loan of 1976

Bill Mitchell has two posts here examining the background to the UK’s government IMF loan of 1976:

Bill Mitchell, “Case Study – British IMF loan 1976 – Part 1,” Billy Blog, June 7, 2013.

Bill Mitchell, “Case Study – British IMF loan 1976 – Part 2,” Billy Blog, June 14, 2013.

His series of posts is not yet complete, however.

As Mitchell notes, this was the “defining moment in the struggle between the existing Keynesian macroeconomic orthodoxy and the emerging Monetarist rival.”

But it is misunderstood and there are myths about it. Required reading.

Bill Mitchell on the Need for Full Employment

A nice video here of Professor Bill Mitchell (an Australian Modern Monetary Theory economist) of Billyblog discussing the arguments for full employment focusing on the issue of discrimination, part of a University of Western Sydney Open Forum, held on January 16, 2012.

Also, there is a good post over at his blog on the anti-democratic nature of neoliberalism.

Bill Mitchell on the Eurocrisis

I post below the audio of a talk by Bill Mitchell given in Melbourne (May 1, 2012) at “Can the Eurozone survive its Crisis?” (at the Monash University European Union Centre). A great talk.

Bill Mitchell on Youth Unemployment

Bill Mitchell has an excellent post here on the disaster of youth unemployment and the social and economic consequences of this:

Bill Mitchell, “Societies that Exclude their Youth will Rue the Day,” Billy Blog, March 1, 2012.

Bill Mitchell on MMT

Professor Bill Mitchell has been interviewed by the Harvard International Review in an online interview here:

Winston Gee, “Debt, Deficits, and Modern Monetary Theory, An Interview with Bill Mitchell,” October 16, 2011.

Required reading!

Bill Mitchell on Full Employment

There are quite a few good videos about at the moment.

This is a wonderful but short lecture by Professor Bill Mitchell giving a keynote address at the National Skills Conference in Melbourne (Australia) on June 29, 2011, on full employment from the perspective of Modern Monetary Theory (MMT). What is notable is that the attack on full employment in Australia began in 1975, under the Liberal Prime Minister Malcolm Fraser (1975-1983), and this continued with reduction of public sector employment in the late 1970s.

A better measure of unemployment measures broad labour underemployment, which at the moment in Australia is about 12.2%.

Bill Mitchell and Randy Wray on Modern Monetary Theory 2

These are the final 4 videos of the interview.

Bill Mitchell and Randy Wray on Modern Monetary Theory 1

This is a really informative and extended interview of Professors Bill Mitchell and Randy Wray on Modern Monetary Theory (MMT). These are the first 5 videos below. I’ll link to the next 4 in the following post.