Randy Wray was one of the finalists for our #NotTheNobel prize in October and is one of the world’s leading advocates of Modern Monetary Theory (MMT). It might sound like an obscure bit of economic theory but MMT grabbed attention when US Democrat Congresswoman, Alexandra Ocasio-Cortez, started talking about it.
So we decided to talk to Wray to understand better what exactly MMT is, and why it has gained such recent prominence. It turns out it may be key to avoiding climate breakdown. But for MMT to be adopted, it would also mean lots of important people admitting that they had previously been wrong. So how is that going to turn out?
From this interview, there appears to be no serious difference between what J.MJ. Keynes claimed and the new MMT ideas. In other words the reason for this new name is simply to avoid the stigma and politics associated with the Keynesiam of the past. So what else is new Doc?
As far as I know, the “modern” is something of an inside joke. It is not the theory they claim to be modern or new; indeed Randall Wray has said the MMT contains only one truly novel idea. Otherwise it is a combination of ideas from J.M. Keynes (NOT Keynesians), Hyman Minsky, Abba Lerner and many more.
“Modern” refers to modern money, i.e. MMT is about monetary systems that exist now and have existed during the last 5000 years.