A Response to Rebecca Spang's "MMT and Why Historians Need to Reclaim Studying Money"

Historian Rebecca Spang’s latest History News Network piece on MMT and history is both timely and thought-provoking. In addition to its biting critique of economic orthodoxy and other valuable insights, the essay sets into relief a productive ontological debate about money and its historical manifestations. Part of the present breakdown of the neoliberal consensus, the insurgent popularity of MMT in contemporary discourse has enlivened conservations about the nature of money and its role in shaping social life. As Spang rightly claims, this discourse requires historical context. As such, I welcome and applaud Spang’s intervention. However, I also wish to underscore some crucial differences between Spang's vital work (particularly on the French Revolution and the rhetoric of inflation) and the historical work being done within the MMT movement. 

In her concluding paragraph, Spang spells out how in her opinion, history proves the relevance of MMT to today’s politics. She writes: “MMT, along with the euro crisis and awareness of austerity’s social effects, has done much to open monetary and fiscal debates to wider audiences. Simply recognizing that money is political and historical (central, as Harvard Law Professor Christine Desan likes to say, to how a polity constitutes itself) is a difficult breakthrough for most people. On the other hand, seeing money in this way doesn’t—in a fractured polity characterized by demagoguery and high levels of inequality—make policy any easier to write or implement.” The opening of this paragraph is spot on, especially as Spang connects MMT with Desan’s constitutional history of money, a history that insists upon a legal foundation for monetary relations. 

(Shameless plug: we at the Modern Money Network (MMN) created an awesome episode for the Money on the Left podcast with Desan last year.)

Her concluding paragraph, however, also reveals a difference between her and many MMTers. More specifically, many following MMT’s insurgence in D.C. disagree with her conclusion that MMT doesn’t make policy “any easier to write or implement,” given the fractured, unequal and demagogic nature of this political moment. This is the case for a few reasons. One is that a central theme of MMT’s political and financial project is the introduction of a non-zero-sum rhetorical framework for legislative and social finance. As noted MMT economist Stephanie Kelton has repeatedly argued, MMT frees the Left from a relying on rich people’s money. Instead, she argues that the left should mount its case for confiscatory taxation on moral, rather than budgetary grounds. As well, MMT can change the perception that “taxpayer money” (often code for white people’s money) is what funds welfare and jobs programs for the disenfranchised, as MMT lawyer and legal scholar Raúl Carrillo has written. In insisting that fiscal allocations be labeled as “public money,” Carrillo and others challenge flawed neoliberal notions of money as not only private and scarce but also inherently white. All in all, this makes policy easier to imagine and implement because we can focus on what needs to be done rather than how it would be funded and who would oppose it. Instead of the zero-sum contests that presume “there’s no free lunch,” MMT says free lunches for everyone, as long as the food is producible! 

Perhaps more important, Spang’s argument about the current political fracture in America betrays tacit assumptions that MMT's understanding of money seeks to problematize. In her excellent book, she argues that money represents a sort of performance of our ongoing social bonds. À la Judith Butler, Spang writes that money is “not fixed or made once and for all but something that exists thanks only to its repeated enactment (not one interpellation but a whole series of them).” Furthermore, she claims that “monetary transactions are therefore characterized by what we might call ‘involuntary trust’—a trust itself resulting from involuntary, even unconscious, memory.” (6) Putting a Butlerian twist on Enlightenment social contract theory, Spang defines money as a process of ongoing consent between issuers and users, as well as buyers and sellers, one which is malleable and contestable. 

I take a different approach and think some other MMTers do too. From an MMT perspective, money is an asymmetrical and ongoing legal obligation between government and society and not “involuntary trust” among creditors and debtors. Take, for example, Scott Ferguson’s 2018 book Declarations of Dependence: Money, Aesthetics, and the Politics of Care (Ferguson, along with Carrillo, are on the board of the Modern Money Network). In the book, he argues for money’s inalienable public nature. “A political relationship between centralized governments and people, money, according to MMT,” Ferguson writes, “is an inalienable utility ever capable of expansion and reconstruction. Money obliges the public to a political center, socializing productive and distributive processes rather than organizing them locally and privately.” (184) Rather than being an ongoing form of trust in a credit relation, as Spang argues, Ferguson claims that money is always a centralized political mechanism for provisioning asymmetrical and reciprocal public obligations. In other words, money actualizes the polity’s indebtedness to its governing authorities as well as those authorities’ indebtedness to their polity. 

Instead of imagining a polity as always-already connected in its participation in the public money relationship, Spang’s conception of money as ongoing consent leaves politics attempting to unite, through consent, a polity imagined as unrelated or fractured. Throughout history, such projects sadly often take the form of imagining some other universal, like culture, race, nationality, or sometimes (if we are lucky) liberal consensus, under which those who are fractured can become one again. As Spang’s book argues about the rise of Napoleon, that sort of social wrangling often takes on an authoritarian color.

However, when one brings together these two seemingly opposed ontologies of money, one begins to see a new place for consent in money. Spang’s work traces the crises of political contestation and authority during the French Revolution among both a government and a polity sharing in economic and legal obligations. It is for precisely this reason that her documentation of the rise and fall of the Assignats (the revolutionary paper currency) demonstrates the problem with her own Liberal assertion of consent as the initial basis of money. Instead of the crises being caused by political fracture, they were caused by the assumption that consent would be enough to cement the revolution. Therefore, in not recognizing the tax obligation as a prime factor in the maintenance of money’s social role, revolutionary France created precisely the fracture Spang laments today. 

This insight allows us to bring together these two ontologies of money to color the contemporary rise of MMT in a particularly interesting light. MMT introduces democracy (public consent) into the budgetary process. Rather than rely on economists that used to tell us that we can’t afford to care of people, MMT gives us the precise tools to do so. Therefore, our initial relation through money allows us to mobilize our consent for progressive or leftist ends.

For these reasons, I laud Spang’s call to develop and complicate MMT’s approach to history. Still, I argue that it is equally important to problematize historians’ unquestioned ontological assumptions about money and legal mediation through the MMT framework. If historians take this up in earnest, we might finally be able to overcome our austere imagination of money’s role in history.