Interview with Tom: MMT-Filled Doughnut Economics

By Katy Swain , 6 July 2026
Object
RadioMMT
EcoProsper Consulting
Status
Active
Category
Task
Agent
Katy Swain
Participant
Tom Foster

Background

Talking Points

MMT 101

  • Government pre-dates property rights, money, and markets (Core MMT, State Theory of Money)
  • Small "g" government pre-dates homo sapiens. (Katy)
  • Money emerged from accounting, not barter.
    • Money is Credit (Mitchell-Innes)
    • Cash is a loose leaf accounting record (Wray - I think)
    • The earliest writings in existence are accounting records. (Wray, Tom)
    • "The actual sequence is credit → money → barter (opposite of orthodox economics)" (Tom)
    • You don't get markets without money to settle accounts (Dunbar's number, distributed ledger).
    • You don't get money with which to settle account unless the government is running sizeable deficits.
    • Money circuit does not apply
  • "Money is infinite (with caveats)" (Tom)
    • Credit is "elastic", or indefinitely extensible (Bob Hockett, Saule Omarova, Katy)
  • The fiscal constraint is…? (pick one):
    • Where's the money going to come from? ("Money grows on rich people")
    • Inflation
    • Resource limits
  • "Anything we can actually do, we can afford." - Keynes
  • Public spending creates money; taxation destroys it by marking down accounts (Core MMT, Tom)
  • Bond issuance is temporary taxation (in the first instance) (Katy, Tom)
  • Bond issuance is an asset swap; one kind of public credit for another. (Katy, & I think Bill Mitchell)
  • Public money is the (or a) government's tool for managing the economy (i.e. the real resources and outcomes we care about)
  • Public money ought not be an instrument of the wealthy for managing democracy. (Tom, paraphrased by Katy)
  • What we have is an administered/managed economy (Tom). It's fundamentally a command economy (Warren, Katy), but command has been outsourced to firms in key industries. The objectives have been reoriented from meeting needs to producing billionaires.
  • Banks are agents of the government. (Tom, Hockett/Omarova)
  • Public fiscal surpluses are private fiscal deficits. In all but exceptional times, these are recessionary, and a bad thing. Refusing to spend on worthwhile objectives is also a bad thing. Doing the latter in order to achieve the former is a doubly bad thing.

Where/Why do you find resistance to MMT?

  • Natural law: key economic institutions evolved out of negotiations between free, independent individuals rather than designed by governments.
    • Tendency toward equilibrium/optimisation.
  • "Tax the rich" progressive neoclassicals?
  • Professional defensiveness?

Doughnut Economics

  • Ecological ceilings (planetary boundaries)
  • Social Foundations
  • 7 ways
    • First, change the goal. (!=GDP)
    • Second, see the big picture. (!=Circular Flow)
    • Third, nurture human nature. (!=Homo economicus)
    • Fourth, get savvy with systems.(!=Equilibrium)
    • Fifth, design to distribute.
    • Sixth, create to regenerate.
    • Seventh, be agnostic about growth.
  • Degrowth: Efficiency of production vs. efficiency of consumption.
  • Are these lists normative or suggestions?

Monetary Sovereignty

  • Paraphrasing Fadhel Kaboub, a financially  sovereign  country:
    • Issues its own currency;
    • collects taxes, fines, and duties in its own currency;
    • only  issues  bonds  denominated  in  its  own  currency; and
    • operates  under  a  flexible  exchange  rate  regime.
  • Monetary power?
  • IMF and structural reforms: austerity, export-oriented development, etc.

MMT-Filled Doughnut

  • The social foundations/ecological ceiling are not competing for a limited pool of "tax dollars"
    • Indeed there are countless co-benefits ("win-wins")
  • Credit allocation is ultimately a matter of public policy.
  • Capitalism is a public sector driven initiative. We can drastically downsize it, or just switch it off.
  • Billionaires are a policy outcome. So are the poor.

Prospects

  • "The majority will not lead this shift."
    • "Make the oldies uncomfortable." (Steady on, Tom!)
  • MMT turns competing social/environmental interests into collaborators.
  • From Susan's article: "it is extremely likely that, in a modern redesign, some public commitments will not be optional. They may be structural. They may be load-bearing. Moreover, they may only work interdependently, as a system. Remove one, and the whole apparatus may not just perform poorly; it may be doomed to fail."

Technical stuff

The plan (untested) is to use Jitsi running on my server to for the chat. I'll be using the studio mic running through the panel as an input to my laptop to talk to Tom. The audio output from my laptop (i.e. Tom's voice) will be an input to the panel. So I'll have both my mic and the laptop audio captured on my USB hard drive separately (hopefully). In case the hard drive recording fails, I'll also have a second laptop, completely independent from the other hardware, logged into the chat and recording both video and audio via OBS Studio, so there will be a failsafe recording. Provided Tom and I can hear each other throughout, it's unlikely that both the hard drive recording from the panel or the video from my second laptop will fail, and I'm sure we'll be fine.

She says.