Bully Backdowns

In a major conflict like we have in the Ukraine, and perhaps Gaza (if a genocide can be considered a “conflict”) a road to peace always has near the tail end a concession to the bullies, a way for them to save face. A wise policy. We can think of when that fails to occur and the consequences, WW-I was a failed peace due to crippling reparations imposed on Germany (which did not increase the German capacity to compensate the victors in terms of real goods!)

We can think of when a peace succeeds, as the case of Apartheid South Africa, where a Truth & Reconciliation process allowed the bullies to save face (in a proper way). By the way, the ANC+ have some reconciliation and truth the face themselves in coming years once they admit their neoliberalism has been as atrocious as apartheid policy, even worse in many respects. The silent death of millions dying in poverty and the wastes of lives of those in poverty turning to crime.

Gaza is not the conflict per se but rather one horrific event in the entire conflict. The end of the Gaza genocide will not necessarily be an end to that conflict over the Greater Israel zionist project and the people of the land, the tangata whenua (the spiritual connection, not just any legal rights). The end to apartheid Israel will, one way or another, involve a similar truth and reconciliation process.

The MMT Backdowns

Yet another way MMT becomes much more than accounting & ledgers is the role the currency plays in such peace & reconciliation.

This is because there is always rebuilding — the opposite of the WW-I fake peace.

Why did the USA not become “bankrupt” in sponsoring the Marshall Plan and helping Japan rebuild after WW-II?

It is because the US Congress cannot ever run out of their own scorepoints.

Yeah, but why was the shipping of material capital to Europe and Japan post-war not causing inflation? Why did the i𝐧f𝐥a𝐭o𝐧 𝐛o𝐨g𝐞y𝐦a𝐧 stay asleep?

The answer is because paying workers for producing things is never inflationary. Unless you decide to pay a higher than market wage. Which you can always do to attract more public sector workers. It is a policy preference. Do you prefer an upwards adjustment in the price level, or unemployment, or at least less public sector employment?

In any case, this is not inflationary. Pulling more workers out of the private sector into the public sector is inflation neutral if there is a tax offset imposed on the specific sector the workers are desired to be drawn from. If they were already unemployed then there is no inflation pressure and so no need for a tax offset. The Job Guarantee policy can always simply rely on the tax bracket creep and other automatic stabilizers which always automatically increase tax return in response to higher government net spending. Any frictional residual inflation is some other bottleneck not considered, and is normally nothing to worry about (let’s be generous and presume the country has low corruption levels).

((It’s not that I like arguing the optimistic counterfactual, but just that it must be argued, because if we admit current realpolitik constraints then we are not telling people what the true actual human capacity really is, and people aught to know! My method is to keep the realistic counterfactual case realistic, not utopian. Thus the MMT Base Case presumes only that we can overcome neoliberal agenda realpolitik, not all plutocratic unbridled power — which is a much longer struggle.${}^\dagger$))

${}^\dagger$Nevertheless, not having awareness of the full fiscal policy space of a government (that is, knowledge of MMT) is not going to help with the plutocrat infestation problems of modern civilization. And yes, it is a mighty struggle, because it means we cannot have a Capitalist system, since this is the main tendency driver towards plutocracy. But also, since a lot of plutocratic wealth gets inherited, it also tends to (unappointed or self-anointed) aristocracy. Hence K. Marx’s theoretical path to socialism is completely blocked. Little do his zealous followers know. The only proper modern Marxists are the small band at RealProgressives, and their overseas cousins like GIMMS and the Modern Money Lab (?). (Forgive me if I do not know the other MMT socialist movements by name yet.)

New Zealand Fully Funds the United Nations

At a governmental level then, which means also at the United Nations level (basket of currencies, or SDR’s) there is never an issue with “finding the money.” The issue in rebuilding after war and conflict is finding the real capital resources and labour. Don’t you kinda’ wish the people running the UN knew this? And so never worried about “getting the USD scoreponts”? I sure do.

To make the point with an extreme case:

• The UN does not need the USD, and never has.
• The UN could operate entirely with a “puny currency” like the NZD. Our government can just fully fund the UN, alone. (Extreme case ok, to make the point).
• The consequence could be some pass-through inflation into the NZ domestic economy, or a need for NZ to apply capital constraints, to prevent foreigners who now hold NZD scorepoints with our RBNZ or other G7 banks, and soon BRICS+ international clearing banks.
• NZ can always accommodate any such price pressure — sometimes mistakenly called “inflation” for the scare value — because domestic wage adjustments can always be made without question. It is only NZ government willingness to do so, not lack of capacity to do so.

The threat to New Zealand politics from fully funding the United Nations is thus purely psychological: people tend to prefer the horrors of unemployment to the fake horror of inflation, because the bourgeois middle and upper classes never really “see” the effects of unemployment. Folks, the horror of seeing price tags increase in numerical ordination is somehow more horrific than ruining someone’s life through involuntary unemployment???

The only real social cost to NZ of fully funding the United Nations operations would be the annoyance of the possibly frequent domestic price adjustment. It is annoying. But that is all it is — for a well-educated population (which has to include government, 60% of us understand MMT including 60% of members of parliament is probably the bare minimum).

This tells you NZ would not really be funding the UN!

The UN would be using the NZD scorepoints to make payments. But the real capital goods would be shipped form any UN member country, wherever they are available.

It is a damn shame no one in the NZ government understands this and offers to fully fund the UN. It is the Extreme case though, and an awful lot of public education would be needed to avoid the purely (false) psychological objections. All the pearl-clutching Tories: “But what if the foreigners invaded us on flotillas of NZD polymer notes?”

By “an awful lot of public education” I do mean an 𝕒𝕨𝕗𝕦𝕝 lot, it’d cripple my brain trying to write a curriculum and worksheets that catered to all normie minds, all ages, all political tastes. It is a task for thousands of good educators, and we do not even have more than a few hundred yet who understand MMT. No … I mean fully understand MMT, meaning they also know inflation is not a real constraint! So they’ve gone far beyond Kelton, Khaboub and Hail.

What’s the Point of All This Today?

I feel like I have used too many words and still not made the point I had in mind today.

To be a bit on-the-nose: if the Jewish people ever needed a larger homeland, they should make peace and trade with their neighbours. The whole world is their homeland, as it is mine and yours. Otherwise … ꘝꕯꕷꕷ off to Mars and the asteroid belt with your (anti-Jewish, anti-religious) fascistic land grab lebensraum fetish for domination over the working poor.

The point is — for those of keen intellect and spiritual mind — if you understand “finding the money” is never a problem in the aftermath of Truth & Reconciliation and the rebuilding, then you also understand there was no reason on the good Earth for the war of plunder and resource grabbing in the first place.