Modern Monetary Theory:
The Sixteenth Century Challenge

Instructor: Colin Drumm Date & Time: Saturdays, April 4, 18, 25, May 9 2 - 4:30 PM ET

DESCRIPTION: The aim of this Seminar is to present a sixteenth century challenge to Modern Monetary Theory or MMT. The central idea of MMT is that a United States Treasury Bond (public debt) and a Federal Reserve Note (paper money) are both the accounting liabilities of the state, and that therefore what happens when the state pays its debt is that it is simply swapping one form of liability for another. The MMT theorists draw the conclusion that a state which 1) issues its own currency, 2) taxes in its own currency, 3) denominates its debt in its own currency, and 4) is not tied to a pledge to back the currency with a commodity is a “monetary sovereign” which can never be forced to default on its obligations and whose ability to run a fiscal deficit, aka its fiscal policy, is constrained only by inflation and not by monetary scarcity. In other words, the state can never “run out of money.” Therefore, MMT is an important intervention into austerity politics which dominates almost all of our public discourse about the limitations of government expenditure. The Seminar’s approach is both literary and historical. In our search for MMT’s sovereign we will examine the reign James I Stewart of England, the first European monarch to run a permanent peacetime deficit. James I’s reign also coincides with career trajectory of William Shakespeare. In studying Shakespeare’s Second Tetralogy beginning with Richard II, we draw also on a secondary historical literature: Private Money and Public Currencies: The Sixteenth Century Challenge by Boyer-Xambeau et al. which suggests that the late sixteenth century witnessed a “crisis in the European monetary system. We will read the four most directly political plays of Shakespeare, which are deeply concerned with questions of debt, money, and witness the structural transformations in money and the state which ushered in the “modern monetary regime,” in the hopes that they might have something important to teach us something about the concept of monetary sovereignty.

Image: Washington, D.C., 1914. “Treasury Department — Ofc. of U.S. Treasury — second step in destruction of paper money. Machine cutting bills in halves.” National Photo Company Collection glass negative.

To see The New Centre Refund Policy CLICK HERE.