 Let's start with a little quote from the man in the title of this talk, which is John Maynard Keynes. This is his magnum opus, his general theory, I've read it so that you don't have to. But he says in it, practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist. Mad men in authority who hear voices in the air are distilling their frenzy with some academic scribbler of a few years back. Now he wrote these words in his general theory in the 1930s to describe the Stalinists on one side and obviously the kind of Hayekian free market types on the other who preach the wonders of the free market and the invisible hand, Ala Adam Smith. But today I would say these very words of Keynes describe best the Keynesians themselves in the sense that they are on the left, these voices that are constantly harking back to the ideas of some defunct economist, i.e. Keynes himself. It's very fashionable in left circles to try and come up with new ideas. We're constantly told Marxism is incorrect because it's old, we need new ideas. So we get all sorts of weird and wonderful ideas put forward by these kind of economic advisors around the movement, around the Corbyn movement in particular. We see sound bites and slogans, people talking about the Preston model, municipal socialism. We get demands from think tanks and academics for 21st century public ownership and the idea of inclusive ownership funds. And of course as we'll discuss later today there's the demand, the zeitgeist demand for a green new deal which we're told by the proponents of modern monetary theory we can afford quite easily by creating more money and spending, spending, spending. Now in reality I'd say there's nothing new about any of these ideas. All of them really are actually very old ideas. Modern monetary theory even itself is very much a misnomer in that it's not very modern and it's not really a theory. And as I said all of these ideas, all of these demands in reality are resurrecting the ideas of some defunct economist which is John Maynard Keynes as I'll discuss in the talk today. Now the main thrust, the main premise really of all of these kind of ideas is that austerity is ideological, that it's not something flowing from the system, that it's something that just comes about because of a lack of political will. And in reality what this really boils down to is the idea that we can reform capitalism, that somehow we can make capitalism nice and responsible and these days obviously green as well, a nice green capitalism. In other words we can try and patch up the system rather than overthrowing it. And again far from offering any new ideas I'd say this is actually the oldest idea itself. The idea that you can reform capitalism is as old as capitalism itself. And the real failure, the key proof really of the failure of this idea, of reforming capitalism comes when we look at what happens when these kind of reformist ideas get put into practice in power. As Lenin said, politics is concentrated economics and it's the failure of reformist political leaders that really highlights the failure of the reformist economic program. We see that nowhere else better than in Greece right now where just this year the reformist government, the left reformist supposed to be a radical left government of Syriza when it came to power promising to end austerity. In the last few months it's been unceremoniously booted out of power. Why? Because they didn't end austerity, in fact they carried on austerity and in fact made worse austerity, enacted worse austerity than the kind of Greek Tories that came before them. But this general idea is very prevalent I'd say in the British Labour movement as well. Fundamentally we hear it every day, what do we need? We just need to get rid of the nasty Tories, that's all we need. If we get rid of the nasty Tories, everything will go back to the nice good old days of the past. Yes, I think the Tories are nasty. I think they're very nasty people. I'm sure they are very overjoyed as representatives of the capitalist class, although normally they're representatives of the capitalist class. Boris Johnson famously said, pardon my French fuck business recently in relation to Brexit. But in general, yeah, these people they do, you know, desire to attack the working class. They do take a certain pride in private ownership in the free market. But the point is the ruling class doesn't like austerity. They would like, if they could, to carry on with their system without having to attack the working class because that generates social and political instability that they could certainly do without. The point is they have no other way out of this crisis other than to cut. And that is something we have to make very clear. It's a message we have to take into the Corbyn movement, into the Labour movement, that when come to power, a Corbyn movement is also, if it doesn't break with capitalism, going to have to carry out these cuts also. So what we see on the left in general is instead of austerity, what we're told we need growth, you know, no nasty austerity, we need nice growth instead. Again, a bit of a strange idea as though the capitalists don't also like growth. It's not like the capitalists like stagnation, like depression, again, with all the competition and the cuts that comes with it. The point is growth isn't something you can just turn on and off like a tap. The question we have to ask really, and what the Keynesians never really explain, is why have we got no growth today? Why has private investment, business investment, now dried up? And this is obviously where the ideas of Marx come in. Marx explained that real growth comes from a development of the productive forces, from the capitalists reinvesting their surplus into new means of production, into new productive forces. And under capitalism that is driven by profits. Capitalism is a system where all of this only takes place in order for the capitalists to make a profit. In normal times, the capitalists will get their profits, reinvest, because of competition, they're trying to seek out new technologies, new machinery that will lower their cost of production below that of their competitors and in doing so allow them to make a super profit. But the point is that in this process, you have the seeds of its own destruction where that competition drives down conditions and the productive forces expand and expand until they come up against the limits of the market. And that is what Marx called overproduction. He said you get these crises of overproduction where the productive forces go beyond the limits of the market. Now Keynesians, by contrast, don't talk about overproduction in terms of the crisis of capitalism, but what they call underconsumption, what Marx referred to as underconsumption again, an idea that predates Keynes. There was under other economic theorists before Keynes who had a similar idea of where crisis came from, people like Malthus and others. Now, in essence, what this boils down to is the idea that crisis is not due to the productive forces expanding beyond the limits, but rather that you just have a lack of what Keynes called effective demand. In other words, there's no demand on the one hand for capital goods in terms of investment from capitalists, but on the other side consumer goods in terms of the purchasing power of households. Now, Keynes correctly identified something that Marx had already identified, which is this vicious circle that you get into in capitalism, of a slump that generates an even deeper slump. In other words, where you have a lack of demand due to unemployment, you'll then have a lack of investment due to the lack of demand, and then you'll have a lack of jobs because of the lack of investment. And this is a downward spiral that is impossible really for capitalism to get out of. And such a vicious circle was what we saw in the times of the Great Depression that Keynes obviously lived through. It's what prompted him to write his general theory. He was obviously profoundly affected by this historical period, the deepest crisis of capitalism that he saw around him. And the question Keynes sought to answer was how do you get out of that crisis? How could the capitalists get out of that crisis? And that's something very key. It's how could the capitalists get out of this crisis? Because Keynes was not a left, you know? And this is something we have to really emphasise when people quote Keynes in the Labour movement today and look towards Keynesian ideas, Keynes was not a left. He was a liberal. He was, in fact, a member of the Liberal Party. The Liberal Party even wanted him to stand as Prime Minister, but he had the foresight to see that people don't like politicians and it's better to just be an economist in the background. But he said quite openly that he was not in favour of communism. He denounced communism. He distanced himself from the Labour movement and he even said, and I quote, the class war will find me on the side of the educated bourgeoisie. And that was how he saw himself, this Cambridge academic who was on the side of the educated bourgeoisie. He saw his role of basically trying to save capitalism, save the system from itself. Now, Marx had said that really economic theory reached a high point from the classical days with people like Adam Smith and David Ricardo. After that, the people who came after had to actually go backwards in terms of economics. They stopped treating economics like a science because the only way forwards with economics after Adam Smith and Ricardo was the ideas of Marxism, which obviously showed the inherent contradictions within capitalism. And so all the subsequent economists had to go backwards and deny the kind of material aspects, the scientific aspects of economics and instead resort to all sorts of idealism. And for that reason, Marx called them the vulgar economists. And Keynes also criticised some of these people who were obviously, for him, his bourgeois predecessors. He thought they had too much of a fixation with the idea of the invisible hand and the so-called efficiency of the market. He really criticised these people effectively because all they were were apologists for capitalism. They weren't trying to explain economics anymore as a science but really just trying to apologise for all the inequalities and the inefficiencies of capitalism. But the problem with the Great Depression is it posed a new task. It said now it wasn't enough to apologise for capitalism. It was clearly failing. The system was clearly failing. What was needed instead was to save the system, save capitalism. And that was the task that Keynes tried to outline with his theories. And he believed fundamentally this task fell to the state, to the capitalist state. And we've got to be very clear. The state has a class character and it is clearly a capitalist state at the moment under capitalism. And Keynes believed this capitalist state should step in and effectively try and overcome the individual interests of the capitalist and try and save the system and save the capitalist class as a whole rather than the individual capitalist who all just pursuing their own short-term profit-making. The state had to step in and try and save the system as its whole. And therefore he said the role of government, the role of the state should be to stimulate growth through increasing this effective demand through public investment. In other words, what you try and do is create a virtuous circle by the state stepping in, putting money into workers' pockets that they could spend on consumer goods and this would then increase the demand for capital goods and investment and you try and get some sort of positive virtuous cycle instead of a vicious one. Now Keynes believed that the best way to do this would be to spend on things that were actually socially useful, to build houses and so forth. But he was a cynic at the end of the day and he said if this isn't possible then you might as well pay people to dig holes in the ground, fill them up with little bottles of money and then to dig those holes back up again, take the money and go home and spend it. In other words, just useless labor but one that would fundamentally put money into workers' pockets. So he was very cynical about really what should be done here. He didn't care so much about filling social needs as just getting the economy going. That was the main thing. Now Engels actually argued against this idea long before Keynes was around with another under-consumptionist, a man called During who he wrote polemics against in what has become known as anti-during, which I'm sure you can find in the bookshop. But he noted basically that you can't just create demand. What you're effectively talking about here is distributing wealth from one part of the economy to another but you're not creating any new value. You can't create demand out of thin air. And this point was actually emphasized also by Ted Grunt who was founder of Socialist Appeal and he wrote back in the 60s during the post-war boom an article called Will There Be a Slump which predicted the slump of the 70s that ended the post-war boom. And in that he points out that the deficiencies of this Keynesian idea said that governments can't really just spend. They have no money of their own fundamentally. The state can employ people it can invest but this doesn't create value. Instead what the state does is it redistributes value from one part of the economy to another. It redistributes value created in the real economy. Real value is generated in the productive process by the application of labor by the labor power by the application of labor by the working class in the productive process. And this value then has to be realized on the market in the terms of exchange the exchange of commodities. The value is embodied within commodities. That labor is embodied within those commodities that value that is then exchanged and that's where the value is realized. Now again under capitalism the key point is that all of that productive process occurs because of the drive for profit and the capitalist invests in order to make a profit. So what you can see is that the government the state it can spend money but only by taking demand from elsewhere by taxing the rich for example taxing the capitalist which disincentivizes investment reduces investment that level that side of demand or you can tax the working class which just reduces their purchasing power and bites into consumption but overall the overall level of demand in the economy stays the same it's just moved around and put under government hands. Now this is where we come on to the ideas of modern monetary theory because modern monetary theory because what the state can do obviously is to print money or create money in reality doesn't so much print money anymore most of you probably paid online to be here without any cash exchanging hands but the point is obviously a government can create money it can also borrow money the central bank in particular is responsible for the money supply these days this is where modern monetary theory comes in and in effect I would say it's a kind of neo-Kanesianism it's a kind of turbocharged Kanesianism that is very popular now amongst some on the left it's been made quite prominent by left-wing politicians in the US in particular people like Alexandre Ocasio-Cortez it's also been advocated by the economic advisors to people like Bernie Sanders and also here in Britain Chris Williamson left-wing MP who's been hounded out of the Labour Party is quite a fan of modern monetary theory he was even speaking at a fringe meeting at the Labour Conference this year alongside one of the key proponents of modern monetary theory a man called Bill Mitchell on this very topic and what you see is that the modern monetary theory it's very much tied in it's pretty much in the same breath these days as the demand for a green new deal in other words how are we going to afford a green new deal modern monetary theory the two very much go hand in hand now what exactly does modern monetary theory propose well like I said you can watch whole lectures of hours long and still not really have a clue as to what's being talked about with modern monetary theories it's almost purposely designed to bamboozle you but again I've read a lot of blogs and listened to a lot of podcasts so I'll try and sum it up for you instead and I'll try and be as fair to it as possible because I don't want to attack straw men but this is fundamentally what is being proposed what MMT advocates say is it's not even really so much a theory they say themselves so much as a lens what they say it's a lens, a perspective for how we can look at the economy in a radical new way a radical perspective to see how the economy really works now I would say that is a theory actually I think that's precisely the point of theory is to try and look at stuff and analyse how it really works but that point aside what does MMT say well it has a few key assertions the first of all is they say that governments that are in control of their own currencies what they call sovereign countries that have an independent kind of monetary policy in other words you're not pegged to the dollar you're not in a single currency like the euro or you don't have lots of debts to an imperialist power that already rules out quite a lot of countries we should say we're talking basically about the US Britain Australia Canada which no coincidence happens to be most where most MMT advocates come from anyway let's put aside to that point again I don't want to tax your own men they say those governments where they're in control of their monetary supply they can never run out of money because you can always create more money to pay for debts you can always afford to pay for stuff as long as you have control of the money tap now the second point they say is you don't have to worry about inflation as well which is another kind of break with orthodoxy and they in particular say you don't have to worry about inflation as long as what they there's what they call excess capacity in the system in other words there's spare resources you've got unemployed workers you've got the unused factories you've got in other words the conditions we find today which is true there's a lot of excess capacity in the system there's a lot of productive forces as we would call them unused because capitalism cannot utilize them and as long as that's the case then you can keep the government will keep spending and it can use these resources and you won't get inflation they say that's fine and so in that words in other words budget deficits are also not a problem which is something you see MMT advocates advocate they say you know it's quite fine for a government to run a budget deficit and in fact this is the third point governments don't need to tax in order to spend but what you see apparently is that governments spend they pay for military and NHS and all these things and then they collect the taxes later basically to manage the economy so taxes are away kind of like the nuclear rods if anyone's seen Chernobyl it's kind of like that that's where it all goes wrong that's where you get your inflation when your control rods aren't working but taxes are like your control rods they suck the energy out of the system stop it overheating and that effectively is what inflation is it's overheating of the economy according to them and the taxes are like your control rods now that is basically the main assertions of MMT now they say there's no policy proposals that flow from this it's just this lens you know we're not advocating policy just so happens however that there are across the board universal kind of conclusions drawn from MMT which is basically this that governments shouldn't respond to crisis with austerity but with public spending and that you don't need to borrow in order to do this but you can print money or in reality create money by adding some zeros with a keyboard that's how most money is made these days it's not printed at the printing presses put into people's pockets through their bank accounts through loans and credit cards and so forth now in this respect we can clearly see that MMT is a response to the crisis of capitalism the fact that for the last 10 years governments across the board have responded to the crisis with austerity and that has failed we are still in a crisis today we are no better off today in fact real wages have stagnated completely for the last 10 years there's been no rise in investment the economy is stalled basically and has been for the last 10 years with no perspective in sight that is all true but the problem is two wrongs don't make a right it's not enough to say that austerity doesn't work therefore we turn on the money taps we need a correct understanding of what's actually going on with the crisis what's going on with capitalism and we need correct ideas and I would say the key problem with MMT is it flows from its misunderstanding what it claims is its understanding of money but is in fact a misunderstanding of money MMT says that money is imposed by states fundamentally that the origins of money is the state coming along and saying you need to pay us taxes and in order to do that you need to obviously pay us in a certain currency and you'd create the demand for a currency by imposing taxes on a population it's kind of almost like an anarchist theory that puts all this emphasis on the question of the state as being fundamentally the evil in society now this originates with an idea called the state theory of money or chartilism as it's also known which was invented by a 19th century German economist called George Knapp now I would say I don't know if I pronounce it correctly Knapp Knapp anyway George Knapp 19th century German economist I would say we need the ideas of another German 19th century economist to explain what really goes on with money and you know who I'm talking about it's Karl Marx now Marx explained that money and the state actually both have common origins in the development of class society and the development of money rises with the development of commodity production and exchange the division of society into classes the division of labor and the production of things not for individual consumption or for societal consumption but for exchange for a market that's what a commodity is something produced for exchange on a market and this goes all the way back to class society it's not new under capitalism and that's something we should also point out this goes all the way back money rises out of this system as like a yardstick a representation of value it's like a universal equivalent Marx said basically that allows the act of exchange to be broken up into a purchase on one side and a sale another in other words it facilitates trade it facilitates exchange money plays other roles as well it's a store of value it's a unit of account and if you really want to know a lot more you can watch my talk from last year's revolution festival on what is money but fundamentally this is the point of money is a representation of value and this value as we'll also discuss later in the economic session this afternoon value is socially necessary labor time Marx said it's the labor time needed for the production of commodities on average it's embedded within a commodity and the value then as I say is realized through the act of exchange we work out what the socially necessary labor time is by exchanging with other people and we find it presented as an objective value on the market in the form of a market price see average time needed to produce a given commodity in the certain social historical technological conditions money in other words has no intrinsic value it doesn't you know money is not worth something you know the paper today we have with you know money is obviously you know the paper itself is worth nothing the money yet has a value because of its representation of value and you see that even more clearly obviously with the idea of digital money today there's obviously nothing valuable about some numbers on a screen but it is a symbol of value however just because money has a symbolic value it doesn't mean it's arbitrary or subjective it still has a basis in objective conditions in other words you can't print money without limits there's no free lunch under capitalism that is a very important point we have to emphasize the money that's in circulation has to be tied to something real it has to be tied to the value of the commodities that are also in circulation that that money is fundamentally representing so in other words if you print more money you create more money you increase the money supply that has to match an increase in the commodities that are in circulation also if not then you do get inflation a general increase in prices because you have more money chasing the same amount of goods in other words if you print more money you create more money but you've got the same amount of commodities then all of that money just basically is going to increase in terms of price because it's still representing the same number of commodities now under capitalism there's a kind of feedback mechanism where generally the money supply remains stable because actually it's not governments that really decide the money supply but rather it's the private sector you have private banks creating loans and credit cards increasing the money supply 97% of the money supply is actually dictated by money created by private banks in response to demand people come looking for mortgages businesses come looking for loans to invest and that demand on one side creates a demand for money and you get an increase in the money supply and so therefore there's a kind of balancing out and that's the kind of stabilizing mechanism under capitalism so what you see really is that governments they can create money but they can't determine what that money is worth and really what you see then a government or other central bank really at the moment which is supposed to be independent although I don't really believe that under capitalism they're very much tools of the capitalist class obviously but they can print money but they can't print teachers and doctors they can't print schools and hospitals and MMT kind of recognizes this it says that the real limit to what a state can spend is the resources in society similar to what we'd say in the sense of the real limit to any economy is the development of the productive forces you can't just spend money to try and employ more doctors if there's a limited number of doctors out there there is obviously a limit on the supply side as they say but this then really begs the question which is what I think MMT and Keynes also never really identified never really explained is if you've got all of these resources out there that aren't being utilized currently well why you know why is it that under capitalism these essentials of life like doctors and hospitals like schools and teachers are not being utilized why are they not being provided why is there such a lack of these things why in other words does the state have to step in in the first place in fact what we find under capitalism is not that there's a lack of resources and therefore inflation is a problem at the moment they're worried about deflation they're worried about in other words too much there's not enough demand in the economy there's a general lack of demand a massive amount of supply there's all these resources lying idle in other words what you have under capitalism is what Marx explained poverty amidst plenty you have a housing crisis amidst empty houses around here in particular these things being used as assets rather than homes you have millions of people unemployed and yet clearly there is a need for people to be building things for us to create a lot more so how do you explain all of these contradictions and I think here we see how MMT and Keynesianism really arrive at the same place these theories offer solutions so-called solutions to get out of a crisis in you know through government spending through printing money so to speak but they never really explain why there's a crisis in the first place why is there a lack of effective demand why is there an abundance of excess capacity to begin with neither Keynesianism nor MMT in other words really offer a theory of crisis they really only offer a suggestion of how the capitalist can try to get out of a crisis once it has already occurred and in this sense as I said Keynesianism at root is not a theory of crisis it's not an economic theory at all really it's a program for the capitalist it's a bourgeois intellectual telling the capitalist how they can temporarily save themselves and their system and this is where obviously the Keynesians and their MMT acolytes today suggest you know things like public investment and spending but they don't say why is there a lack of business investment and hence no growth in the first place why is investment now at an all-time low and there's really no need in fact to be printing money at all what we see is there's clearly no lack of money in fact there's been plenty of studies showing that big business today sits on piles of cash in the UK I think it's something like 700 billion of money that could basically be spent tomorrow if there was a profitable use for it in the US something like two trillion dollars I think in the euro zone it's about the same two trillion euros Apple alone I believe sits on something like 250 billion dollars that it doesn't spend you know it could spend if it wanted to but it has no use for this money and the failure of quantitative easing shows a similar thing which is that you can't solve the crisis with just increasing the money supply alone they've been massively increasing the money supply with quantitative easing which I won't go in again to describing exactly what that is but take my word for it it's basically increasing the money supply but one commentator summed it up very well when they said it's like pushing on a piece of string you can't do it you know if there's nothing tugging on the other side then it's just a load of slack and as I said the main problem the bourgeois talk about now is not actually inflation but deflation because there's no demand in the economy there's this general stagnation and this was summed up quite well in the Guardian where the economics editor Larry Elliott I believe his name is he said he described MMT as like being akin to pumping up a flat tire but we've got to ask the question why was there a puncture in the first place and that's something none of them have ever explained why is there this downward spiral of depression and slump and the reason for this obviously lies in understanding capitalism's crisis which are not crises of underconsumption but of overproduction of a saturated market of yes enormous excess capacity in all and all countries exists on a world scale and again going back to what Engel said he pointed out in anti-during that this idea of underconsumption is fundamentally flawed there is in fact a restricted consumption of the masses throughout history throughout class society and particularly undercapitalism it's a permanent feature the poverty of the masses this underconsumption as they say what we have instead undercapitalism is overproduction not people starving and famine because there's too little but because there's too much and this is an intrinsic flaw an intrinsic contradiction within capitalism due to the way in which profits come about the origins of profits of surplus value lie in the fact that the working class does not receive back the full value of its labor workers are paid for their labor power in the form of wages but they produce far more in the course of the day than what they're paid back they only receive a fraction and therefore the working class undercapitalism can never afford to buy back all that it produces the capitalist will always have this excess capacity because capitalism produces for a profit and ultimately because they produce for a profit if they can't sell their commodities because of this overproduction then that means they will stop producing and the economy grinds to a halt people starve and are made unemployed Mark says in the communist manifesto not because there's too little but because there's too much industry too much commerce too much means of subsistence he says and no amount of clever tricks can circumvent these contradictions of capitalism you can't have capitalism without its contradictions this is the key point we have to say to those who want to try and reform capitalism particularly along Keynesian or MMT lines now the real question we should also answer is why is there not a permanent crisis under capitalism might seem like there is today we haven't had anything but crisis for the last 10 years but obviously a lot of the so-called normal times you don't have a crisis how do the capitalists get out of that well Mark's obviously highlights that says the capitalists can always temporarily overcome the overproduction through investment through wars through the expansion of credit in other words creating new means of production by investing their surplus back into new productive forces searching for new markets in the form of colonies and imperialism obviously and the artificial expansion of the market through credits through loans credit cards and mortgages and so forth but the thing is all of these methods have been tried and they've pushed capitalism to its limits and in fact gone beyond its limits over the last 100 years in fact I think just two days ago was the 90th anniversary of the Wall Street crash which marked the beginning of the Great Depression at the time the biggest crisis of capitalism and now obviously we're over a decade beyond the financial crisis that hit in 2008 that is what is responsible for the continued crisis today that has not ended and you can see how the the ways in which the capitalists got out of these crisis including with Keynesian methods in the past only ever paid the way paid the way for much bigger crises like the one we're seeing today and we can see that clearly with actually the historic failure of where Keynesianism has been tried in practice in particular the new deal which was what it was a an implementation of the very ideas Keynes outlined in his general theory the idea of mass government spending you know the Hoover administration and FDR sorry Hoover Dam I was thinking of FDR and building of these kind of these giant infrastructure projects these sort of things were done to try and stimulate economy and mop up unemployment and obviously the inspiration behind things like the Green New Deal today the clue is in the name obviously this model that was used in the past but in reality the new deal under FDR in America fundamentally failed actually unemployment went up after the Green New Deal sorry was implemented and in fact the only thing that really stopped the Great Depression was the enormous destruction of the Second World War which mopped up all the unemployed into armies and utilized the productive forces to try and basically destroy other productive forces elsewhere which just shows you what a barbaric contradiction capitalism generates you know we destroy the means of living in order to live which seems quite bizarre but Keynes himself on looking back on the New Deal and the failure of it and the Second World War was even forced to admit he said it seems it is it seems politically impossible for a capitalistic democracy to organize expenditure on the scale necessary to make the grand experiments which would prove my case except in war conditions and otherwise he's saying the only way in which Keynesianism is relevant is when we destroy each other in these giant imperialist you know carnages and I think that equally implies today applies today when we look at the question of fighting a war against climate change the you know even today we see how no amount of managing or trying to regulate capitalism is going to solve the climate crisis which is fundamentally as we'll discuss in the other session this afternoon fundamentally due to capitalism and its sensational drive for profits now an even bigger demonstration of the failure of Keynesianism is seen in China today actually where you've had the largest Keynesian program in history where in the wake of the slumber 2008 the Chinese government tried to maintain growth which had been reliant on exports by trying to just invest and invest in public projects and this resulted in enormous crises across the board you've had a huge build-up of government debt in China enormous credit bubbles investment into roads that go nowhere into houses that lie empty and most importantly what you've seen is where they've stimulated industry through protectionism and so forth it's led to an enormous excess capacity enormous increase in overproduction on a world scale and you've seen how now in Britain steel plants closing down because there's this glut of steel from China that is a symptom of this Keynesian effort to get out the crisis in China which has had exacerbating effects across the whole world an increasing crisis an exporting crisis fundamentally elsewhere and what we see in Britain obviously is people looking kind of nostalgically back to the times of the post-war boom you know the so-called Spirited 45 back then we had Keynesian investment we had building of council houses the NHS and we did it all at a time when GDP to debt ratios debt to GDP ratios were 200 or 250 percent but that was fundamentally a different epoch the background then was one of unprecedented economic growth stability expansion of world trade and fundamentally that was underpinned by the kind of dominance of US imperialism this hegemonic power that broke down trade barriers for its own benefit and Ted Grant explained that again in his article will there be a slump he said the post-war boom was due to a number of factors things like the destruction of World War II the fact that you had martial aid flooding in and rebuilding economies you had new technologies because of state expenditure not because of the capitalists and you had an expansion of world trade as I said underpinned by US imperialism but none of that really is the perspective today even not only for us but for the serious bourgeois themselves none of these factors exist what have we got instead we've got a shrinking world market or at least a slowing down in world trade you've got a rise of protectionism between US and China the two big imperialist powers you've got a deep world slump and talk of another deep world slump in the next year you've got what they call secular stagnation rather than unprecedented economic growth and really I would say it's a damning indictment of the so-called lefts in the labor movement today these economic advisors it's a damning indictment of them that they call upon the ideas of Keynes to try and get us out of this because as I said Keynes wasn't on the side of the working class and they really these people I would say have no faith in the working class themselves Keynes did as I say criticize his bourgeois predecessors for their zealous belief in the free market and the idea of long-term equilibrium said in the long run we're all dead which is very true we need to solve problems right now and he criticized the Hayekian types but his criticisms were very one-sided he went to the opposite extreme aggregated the economy into one big lump and treated it like some sort of macroeconomic equation when in fact the economy is not an equation on a whiteboard it is living people trying to go about their lives it is fundamentally class struggle over the surplus in society as Marx pointed out now Keynes' criticisms that he did make obviously that now what the labor movement left kind of call upon yeah he criticized the free market and the invisible hand called for the state to step in but as I said his criticisms and his advice came because he wanted to save capitalism practically he was a pragmatist in his own view and that obviously appeals to the so-called pragmatists around us today that we find at the tops of the labor movement these people who tell us that we're utopians for believing in socialism I would say after a decade of crisis and with no end in sight to the crisis things have turned into their opposite actually it's the pragmatists now who want to reform capitalism who are the real utopians and it's us the revolutionaries who talk about overthrowing capitalism who are the only realists we're the only ones offering an actual real way out of this crisis the Keynesians obviously want the governments to stimulate the economy and the MMT is obviously effectively say the same thing they want effectively the state to step in and manage capitalism in their own words by taking over the means of not of the means of production but the means of production of money that's a quote from the the erstwhile Bill Mitchell who I talked about earlier now I would say despite the idea that this is transformative politics offered up by you know again this is a phrase the MMT has used to describe that through this offers up transformative politics I'd say there's nothing radical in any of these ideas really private property and the profit system are left completely unchallenged the market remains untouched real power lies in the hands of the capitalist class and according to these theories it will remain in the hands of the capitalist class because they will remain in control of the means of production and that's the key to the power it's the economic ownership of the production that is in the hands of the capitalist class the invisible hands so to speak that is ultimately the source of their power and all of these theories rather than trying to you know overthrow the system attempt fundamentally to try and patch it up I would say rather than printing money or creating money we need to rationally plan production and the point is you can't plan what you don't control and you don't control what you don't own so our demand is not for the state to step in and to print money the capitalist state in particular obviously should not be stepping in to print money to just spend left right and centre our demand should be for the nationalisation of the banks of the big monopolies that dominate the economy and thus dominate our lives and these need to be placed under democratic workers control and management so that we can take production out of the market stop commodity production exchange and plan the economy under a socialist plan of production in a democratic and rational way not printing money but doing away with the money system itself by putting things under a rational plan of production and having an economy based on needs not profits that's the way that we can begin to use all these resources that are lying idle at the moment use these to address the problems we face as a society this is really the only way to genuinely liberate humanity not with any clever tricks and not with these ideas that at best are basically a palliative medicine and at worst are quack remedy I would say this is snake oil that's being sold to us here and we have to say that very openly the only thing that's going to liberate us is providing a genuine scientific analysis of the problems confronting us and understanding the economic laws of play so that we can what not try and reform those laws but fundamentally change them and replace them with a new set of laws based on democratic socialist planning and workers control that is the task that Mark set himself with his economic writings in particular things like capital his great work and that is the task that lies before us now to understand the world in order to change it and I'll end by paraphrasing a famous quote by Marks I'd say the economists up till now have only interpreted capitalism in various ways the point is to overthrow it