Money, Music & Method with Alex Williams

Economist, musician & Money on the Left audio engineer, Alex Williams, joins the podcast to discuss money, music and method in light of Modern Monetary Theory and heterodox economics. At the outset, we chat about methodology and the riddles of “administrative capacity” that drive so much of Williams’ work. Next, Williams guides us through his proposal for arts and culture provisioning under a federal Job Guarantee by way of a critique of the anti-money, laissez-faire DIY music scene in which he came up. Finally, we turn to Williams’ much-touted master’s thesis & recent popular work on stabilizing state and municipal balance sheets during crises like the coronavirus health emergency. 

Check out some of Williams’ important work: 

The Job Guarantee and Cultural Equity: Gatekeeping and Popularization,” Global Institute for Sustainable Prosperity, Working Paper 127, 2020.

Intragovernmental Autonomous Stabilizers, Master’s Thesis, Bard College, 2020.

Structuring Federal Aid To States As An Automatic (and Autonomous) Stabilizer,” Employ America, 2020.

Find Alex on Twitter: @tragicbios

Theme music by Hillbilly Motobike.


The following was transcribed by Richard Farrell and has been lightly edited for clarity.

William Saas: Alex Williams, welcome to Money on the Left.

Alex Williams: Hey, how’s it going?

William Saas: We’re super excited to have you. As the listeners probably are already aware, you are our audio engineer and producer, but also you just finished up your program at the Levy Institute at Bard. We met you a few years ago at the first MMT conference, and so, we wanted to start off, as we normally do, by asking you to tell us a little bit about your history and how you came to be and do what you’re doing.

Alex Williams: Sure. So I’m from New Jersey originally. I did my undergrad at McGill in Montreal, Canada because it was cheaper to rent an apartment and go to school in Canada than to stay in state and live with my parents. At the same time, I knew that Montreal was a city with a good music scene. There’s been generations of notable artists. It was The Unicorns and Godspeed back then, and then there was Grimes and people like Mac DeMarco. So I was there during that. I was also there for the student strike in 2011 and 2012. I don’t know how much coverage you got in the US but the province was basically going to raise tuition by a couple of percentage points and there was a huge reaction against it. And so, people did sort of Occupy-style organizing and there was an Occupy-style political mood. People were out in the streets banging pots and pans, making themselves heard, and doing the whole spontaneous order approach to political action. At the end of it, they canceled the tuition raise, they didn’t bring the money in from anywhere else, and the Parti Québécois won the following election running on the charter of values, which basically says that you can’t wear a hijab on the metro. It was a big sharp shock in terms of whether this approach to organizing actually does stuff that matches up with its kind of political rhetoric.

That’s how I got interested in econ generally. I participated in that and felt there needs to be more happening here. And I was doing an econ degree because that’s the sort of the thing you do if you want to make sure that you can get a job regardless of what that job actually does. Because I was up there to play rock and roll. I’d been a studio rat the whole time. But in my third year, after all that stuff had boiled over and then faded out, instead of going to class, I would just walk around the library and pull books out in the econ section on the third floor. At one point, I got ahold of Capitalism, Socialism and Democracy by Joseph Schumpeter, which I read and was like, “Wow, you can actually make interesting arguments in economics.” You can actually say something. This isn’t all just Lagrangians that are attached to abstract abstractions. You can make a concrete argument and you can even come to actual unexpected arguments as opposed to the faux-unexpected, sort of Slate Magazine type arguments where it’s actually safe if you ride your bike without a helmet kind of thing. [Schumpeter] saying “Socialism will win but that will be bad because it will be bad for productivity, but at the end of the day, it’ll be good,” I was like, this is actually an interesting argument. That was pretty cool.

So, I finished the degree and had wanted to be a musician and had spent the whole time in the DIY scene playing guitar in a whole bunch of bands. I added it up at one point and played something like 110-120 shows in that four years. I also teched on a bunch of albums because I don’t really know how to play an instrument. The thing that I’m good at is sitting behind the desk as people can attest listening to the podcast. When I was done with school, I got working in the music industry for a company that I still work for–an absolutely lovely company. I work in the music industry now still, paying artists essentially. And one of the things that was difficult for me was that a lot of music and a lot of art generally likes to figure itself as a kind of revolutionary force. People like to say, this artistic expression will challenge people’s ideas down the line, with a bunch of question marks in the middle, and then political change. This is an argument that we’re all familiar with. And so, the combination of dissatisfaction with how things had gone in the student strike and dissatisfaction with how things tended to proceed rhetorically in music drove me to get progressively more and more serious about political economy type stuff. There’s that famous Vonnegut quote about all of the artists in the entire English speaking world focusing 100% of their energies on destroying the Vietnam War and it hit with the impact of a cream pie dropped from a six foot stepladder, or something like that. Which I think is true–I had all those specific energies and dissatisfactions.

Around that point, I found Naked Capitalism, which Yves Smith runs, and through that found Randy Wray’s book. This was Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. I read this and it was totally baffling because I had done an econ degree. I hadn’t done any accounting. I hadn’t done any political economy. I hadn’t done any of this stuff. But I fought my way through it. This was the original version, not the second edition–the one with the gray cover, not the white cover. And at the end of it was like, “Oh my God, if this is the case, and there’s a really good argument in here that this is the case, then a lot of things are not what they seem and a lot of things need to change, but also there is a lot more room for those things to change without changing other things that people usually assume.” There were even points in the Occupy movement where they were like, “We have to reinstate Glass Steagall.” But if you actually dig into it, Jan Kregel, for instance has a fantastic paper about why we can never go back, and how it’s really regulation Q and arbitrage on interest bearing deposits that led to the end of Glass Steagall rather than its repeal bringing forth daily speculation and this, that, and the other thing.

Anyway, this is getting a little bit far afield, but I read Randy’s book, moved down to Texas, and then went to the MMT conference at Kansas City in 2017. It was interesting because I basically came up through online MMT and had only heard about it because of online MMT stuff. From what I understand, it had previously been the PK conference, and this was the first year that they were doing it as the MMT conference.

Scott Ferguson: Yeah, and just for our listeners, that’s the Post-Keynesian conference.

Alex Williams: Right. It’s a long running thing that goes back to Rutgers and East Tennessee with Paul Davidson and Jan Kregel and all those guys. But they ran this one explicitly like, if you’re from the Internet, you’re welcome to come here and hang out. And I was like, “I’m from online. This is only an eight hour drive or whatever.” And so, I drove up and stayed in an Extended Stay America that didn’t have any towels. The next time I went to Kansas City my car got broken into–every time I go there there’s always something.

Scott Ferguson: I got rear-ended there, actually. It’s funny that you say that.

William Saas: I had a lovely time.

Maxximilian Seijo: Yeah, it was great.

Alex Williams: Well, yeah this is the next year when I got my car broken into. I just don’t get it. They have really good ribs though. There’s Joe’s that’s like at a gas station or whatever. But anyway, that’s also far afield. So, that’s how I met you guys. It was at that conference. After meeting you guys and meeting Tankus and everything, I realized that there was something to do in this field and that there was a reason to put energy into this and pursue it. Then, I did a reading group with Tankus where we read the The General Theory of Employment, Interest, and Money, and I got a whole bunch of other reading recs out of him–frequent Money on the Left guest, an absolute genius, runs a Substack now: Nathan Tankus.

From there, having stayed in this horrible Extended Stay America and gotten my car broken into, and not wanting to commit to a PhD, I ended up going to the Levy Institute at Bard College where Randy Wray was teaching rather than the University of Missouri at Kansas City, the other big MMT hub. That’s how I got to the master’s degree. One of the other things that has happened since the master’s degree is that there’s just a lovely community of people on Twitter. Like it’s not just online MMT but there’s also the weirder finance Twitter out there that has been very instrumental in helping me to understand how all of these big macro ideas ramified down through individual things and why all these conversations that seem serious to mainstream economists and that initially seem not serious to heterodox economists actually do attach to other stuff–there’s actually thoughts here and there. That stuff is how I eventually wound up where I’m at now, which is wanting to ask new sorts of questions.

The joke I have running right now is that my project is about material history, market microstructure, and ontology–I guess it’s not really a joke, we can take that out. Those are the three things that are broadly of interest in the imaginary program in my head. These are the things that I want to ask questions about. Because if you think of monetary theory of production in the Keynesian sense or production for profit and not for use in the Marxian sense, looking at either of those requires that you go and look into the granular mechanisms by which profit exists, which then takes you into market microstructure in lots of really gnarly ways. So yeah, that’s how I got here.

Scott Ferguson: That’s great. To take it back a little bit, when we first met in person, I believe it was when you were in the audience of our panel on “MMT and the Humanities,” and you raised your hand from the back and asked me a question I wasn’t prepared to answer about John Dewey. It was great. I was really nervous that day and wasn’t really sure what to say in response to it. But that opened up a window for me into Alex, who is so capacious and will one moment talk to you about the inner details of Deleuze and Guattari’s theoretical framework and then just wonk out on some crazy, technically detailed policy proposal. I was wondering if you can just give our listeners maybe a taste of–I mean, you’ve already mentioned Schumpeter and a few folks along the way that have been important to you–but some of the thinkers, some of the writing, and some of the schools of thought that you find really influential thus far in your career.

Alex Williams: Yeah, I actually was thinking about this the other day when I was thinking about how would one teach economics just generally. And I think this is one of the things that Fred Lee does extremely well in his textbook, which is Microeconomic Theory: A Heterodox Approach. In this book he basically starts out with ontology, or what is there, and then epistemology, or how can we know about what’s there, and then offers models as a way of dealing with epistemological and ontological questions. How can we represent what is there in a way that we can make knowable claims about it? From there begins economics. In a lot of places, that stuff gets swept under the rug or it gets pushed into philosophy of science or it gets dumped in a lot of different ways. But the thing is, having a handle on the conditions of possibility for doing economics, I think, is really helpful for doing it. Because it lets you cut through a lot of stuff when people are making abstractions, or even worse, making aggregations and then changing the definitions of those aggregations. Being able to pin that stuff down at a very molecular level almost makes it way easier to figure out what kinds of models and arguments are good. But the problem is, all of that stuff can be well and good. There are all kinds of platitudes when making models. But to actually do that and to do that in a way that you feel like you can defend, you do kind of have to take a tour through the history of philosophy in a way.

I mean, I disagree with Fred Lee and with Cambridge’s Tony Lawson and a number of other people who do the critical realist grounded theory thing. Basically, I came into econ to alter the world, which requires doing politics because the social world is as embodied as it is in politics. Politics are the juncture between thought, material action, and rhetoric. So, the first place that I ended up going through there was the postmodernists. I lucked out with an early engagement with them. They do this whole big song and dance where they’re like, “Oh, actually these metanarratives and totalizing systems aren’t real because we have to append a whole bunch of multiplicities to them and then live without this global metanarrative.” And when you’re a student, you think, “Oh, they’re taking this seriously. This is a big deal.” We had these big frameworks, and then these big frameworks had been proven not to capture sufficient detail. That all seems well and good, but then you look at what happened 60-70 years ago in the US and in pragmatism written broadly, where they’re saying, “No, all knowledge is immanent knowledge to doing something in that time and place.” Everyone is specifically embodied and different embodiments mean different things in different locations, and all these things eventually get coded as the postmodern turn.

Think about the work of Richard Wolff and Stephen Resnick at UMass, Amherst, where they argue that class is just a lens to enter into Marx as a dialectical method and is not reducible to the Marxist system. The pragmatists, by immanently defining all of this stuff and saying, “Look, everything has a local logic, everything makes sense in its little neighborhood, but those neighborhood logics don’t add up and don’t all have the same functional mapping from one neighborhood logic to another,” you have to develop knowledges that are efficacious for what you’re trying to achieve in that local neighborhood rather than having to make big broad global claims about what is known and what is knowable. So, the epistemological turn saves you from doing “I just heard about Marx” type stuff, where you hear about Marx for the first time and then you go, “Oh my God, if everybody knew about this, the world would be different because this is transcendently true. And the only reason that these proposals haven’t been enacted is because nobody’s heard about it.” Then a week and a half goes by and they say, “Oh my God, people have heard about it, but we haven’t made it sufficiently rigorous. So if we make it rigorous enough, and then they hear about it, they’ll have no choice but to accept that it’s correct and implement its policies.” And then another two weeks go by and they go, “Oh dear God, it hasn’t worked. What do we do? Epistemology has failed.” And that’s sort of the end of that line of inquiry. And people are still fighting those battles. There’s a sucker born every minute into those battles.

But if you take a broader lens, you can see pragmatism as the truth is what is warranted and assertable, or the truth is what works, or you can only adequately define knowledge relative to goals and systems and you can define an internal and an environment but that’s it–you can’t give a totality–it lets you be anti-essentialist in a way that accords much more directly with the realities of monetary production. I think the most interesting person to have outlined this is Martijn Konings, who has a book called Capital and Time that basically argues this value theory stuff, where he’s like, “First you have efficient markets, hypothesis type people who argue that value is this objective fact that’s embodied in the thing.” It is what it is and the market discovers it. We’re all familiar with this–John Quiggin’s Zombie Economics and stuff like that. So, the level one political economy argument against that, and a lot of books that came out after 2008 made this argument, is “Look, value isn’t fundamental. It’s not essential, but it is elastic. It can get stretched out in bubbles and it can get stretched and stretched and stretched to a point, but then inevitably, no matter what, it snaps back to what its fundamental value is.”

We hear a lot of Marxists make these kinds of arguments. And we hear a lot of people who have read one or two Minsky papers and take them to be the entire corpus make these arguments. It’s all elastic, but it has a fundamental that it will revert to. You even hear people on Odd Lots complaining about bearded value investors making these sorts of arguments. What Konings asks is “Well, so if we’re all very postmodern now, if we’re all very anti-essentialist now, and everything is a contingent assemblage accessing lines of flight, then why are we still being fundamentalist about value?” He outlines this third position, which is basically that value is plastic. It is what it is made into at time (t) by market participants. And he is like, “Yes, absolutely, there’s no ultimate underlying value because none of this stuff is conserved over time,” which is something that Marx admits in Capital, Volume 1, but at every time (t) there is a set of prices and they’re all correct at that time (t). But they are a function of basically the time (t)-ness of time (t). It’s almost like a Whitehead kind of framework where you don’t have objects; objects are abstracted out of specific events.

I really like that kind of anti-essentialism. I find that you can get there very quickly from pragmatism and from that model building that recognizes that these model buildings are contingent, and that everyone is outlining a local model, and that if you don’t take anyone to be outlining a total model, you can very easily make use of big ad hoc constructions. And then, these are better at explaining financial reality because that’s how people broadly approach models. There’s a great book by Donald Mackenzie called An Engine, Not a Camera that talks about how financial models are developed and then later prices behave according to those models rather than those models being inducted out of the behavior of prices. The entire thing is just an attempt at tool building. And so, what I think is important is not to reify this Marxist inevitable clash or to reify this ameliorative liberal democracy perspective of things are getting better, but as to recognize that everyone involved in the production of capitalism–forgive the endnotes-y phrase–is really only obeying local logics that they have found as tools in order to beat the folks around them in logics that they can map themselves to.

So, you have all of these isolated knowledges, none of which is capital K Knowledge. And when you come to doing economics, you come with that framework in mind so then you don’t get bogged down in either pretending all of these abstractions, like the natural rate of interest or NAIRU (non-accelerating inflation rate of unemployment), that people use to justify policy and presented as though they are total facts, you can get away from pretending that they’re real. But then you can also get away from putting a lot of energy into debunking them so as to convince people that they’re not real. And you can just kind of take them as the local logic for those actors in that space, and then accept or deny it based on whether it’s useful for you in describing local actors in the space you’re interested in. I think that that’s just a healthier way to theorize.

Maxximilian Seijo: From this epistemological or methodological perspective that you’ve outlined, this non-essentialist perspective, I think you once said to us on a call that your work proceeds from the assumption that MMT is trivially true in some sense. And then, you go onward from there with your central problematic, especially recently, which has been what you’ve called the problem of administrative capacity. And so, perhaps for our listeners, could you define exactly what administrative capacity is for you as well as why it’s important for a broader Left project aimed at radically transforming money?

Alex Williams: I was thinking about this earlier today because a buddy of mine was sending me his live running commentary on Schopenhauer’s reaction to Spinoza and its relationship to the fourfold root of the principle of sufficient reason. What I was thinking is that administrative capacity is basically capacity to affect. It’s the capacity to change material facts on the ground, but in a material sense, rather than in an ideological or intellectual sense. It’s to move things around, essentially, or to change the state of the world in a way that is what was agreed upon by the thing doing the administration. So administrative capacity is basically how capable you are of altering the world such that it is in the state that you want it to be in as an entity. And so, these are big things. You could describe geopolitics in that way. You could say, “Oh, Kissinger was doing XY and Z in order to do this and he has a certain degree of ability to do that because of the different capacities of bombers in Cambodia and such.”

But you could also say that about a company that is seeking to govern the prices for the space of particular petroleum distillates when there’s only five or so firms that have the capacity to intervene in that market. And so, you have this administrative capacity as a way of these firms determining the facts on the ground about those markets. Things like how much capacity there is when moment to moment pricing is also downstream of their agreements with one another not to compete on price and to have X, Y, and Z people have X, Y, and Z market share and A, B, and C geographical markets. But basically, it’s the capacity to affect. And it’s important for the broader Left project because you need to actually–I hate to sound like a Hobbesian or something like that–but you need to actually be able to implement the rights that you verbally guarantee to people. And you need to have a system for doing that.

So, it’s a hard thing to pin down exactly because I tend to think of it as coming from Herbert Simon’s administrative behavior perspective, where he’s like looking at how decisions actually get made in businesses. Because all of this stuff ultimately boils down to, regardless of who owns it and regardless of what the goals of running them are, all of these questions are a version of the question, “how should we operate the factory?” The Left project broadly requires a particular answer to the question of how we should operate the factory. What is it a factory of? That’s part of operating the factory. Who are the things being distributed to? That’s part of operating the factory. How are we coming up with decision mechanisms for these things? That’s another part of operating the factory.

Maxximilian Seijo: Can you spell out then how MMT and the assumptions of MMT fits into that schema for you?

Alex Williams: Right, so maybe this is more comfortable. There’s a quote that is not actually from Fred Lee, but I’ve attributed to him in my head enough times that I think it is and I tend to just cite him for it because I hate to take credit for things. But the idea is that administrative capacity as I’m thinking about it basically arises from the idea that markets are sites of market governance. They’re not things, they’re locations where markets are governed by these different participants. The Austrians and the neoclassical market socialists will tell you there are prices that are governing the market, and then everybody is showing up and engaging with these prices, and then making production decisions and this, that, and the other thing.

But if you take the administered prices literature seriously, which says that the overwhelming majority of firms who do not produce things that are simple commodities have the ability to set prices, whether this is explicitly like the McKinsey bread price fixing scandal with Mayor Pete and all that, or implicitly in terms of everybody knows how much capacity is being built at this, that, and the other place in different industries. The prices end up being products of administration, between companies, between governments, and between other actors rather than things that are determined by the market as an autonomous information processing entity. The market is just a location that the actors in the market come to to transact with one another or to ratify one another’s decisions and to not contest them. But these prices fall out of these governing mechanisms rather than coming out of the “market” market. All of the administrative capacity there is in these firms that get built up who decide what the things in the market are.

But the reason that MMT comes into this is because you have all these private actors who are doing all of this private administration of production, where they are choosing what gets produced and they are choosing how it gets produced in terms of the labor process. And what Keynes recognizes, and this is what of Keynes ratifies down into MMT stuff, is that the amount of private administrative capacity for administering production is driven by the amount of demand in the system. What MMT basically says, as it takes this functional finance approach, is “Well, we should run the economy such that all of the possible private administrative capacity for administering production is taken up.” And in its actual proponents writings, it’s very agnostic about what actually ends up getting done with that because it says you have the job guarantee as a way to guarantee people jobs, but also as a way to guarantee that sufficient cash enters the economy such that all of this administrative capacity is taken up. And whatever the private market doesn’t feel like taking up, the government will.

So, you get these administrative structures because you need to have cash in order to buy food to survive and the administrative structures administrate production in exchange for cash. Demand just affects the amount of administration rather than its direction and what kind of production is being administered. And this is something that comes up in Kalecki’s political aspects of full employment, where he talks about from a full employment alone sense, there’s not really a difference between a fascist war economy that is just dumping out armaments and a democratic economy looking to human flourishing. Both of them accomplish the demand side goal of putting enough units of administration, units of social energy as cash into the economy to ensure that all of the administrating apparatuses are administrating at their fullest capacity.

Maxximilian Seijo: In that sense, then, MMT sort of functions as the kind of infinite endowment of the capability to administer in the first place, or to affect the objects and use your analogy before?

Alex Williams: Yeah, or to ensure that the system has sufficient energy that things are running at capacity. The big point of all of the old neoclassical stuff is that unemployment never crops up because the wages just adjust and then the prices just adjust and then everybody moves to a new nominal price level where everyone is able to be employed, which was really aggressively and empirically disconfirmed in the 20th century. Now we know the way that you ensure everyone is employed is by making sure that there is enough spending happening in the economy and MMT explains why the federal government can be the guarantor of that domestically. And it explains why an economy that is not wildly balance of payments constrained will be able to ensure the full uptake of its resources. This is almost like an old Galbraith point where he talks about the loss from unemployment versus the debt incurred–and this is in the affluent society–but if we if we take seriously that one man being unemployed is one man’s worth of whatever, then anything less than that of government spending, net net, is going to get closer to the actual production frontier instead of just assuming we’re there.

Scott Ferguson: I want to shift gears and start introducing our audience to some of your specific papers and projects. And I want to begin with one from a few years ago that I think you first presented at the very first Money on the Left conference, which happened at the University of South Florida where I work. You were trying to think about a job guarantee, a full employment project, but in the realm of cultural production and aesthetic production, and taking up essentially what Gramsci would say from an “organic intellectual” perspective, some questions that had arisen for you in the course of coming up in the DIY music scene. I was wondering if you could introduce our audience to the problems that you were seeing and what you’re suggesting as a solution. I also just want to flag for people that this paper would later come out as a working paper for the Global Institute for Sustainable Prosperity that went under the title, “The Job Guarantee and Cultural Equity: Gatekeeping and Popularization.” 

Alex Williams: Everybody has a buddy who is a musician that has made to them at one point or another the argument in favor of a UBI, Universal Basic Income, that is a kind of Marcel Mauss via the Marx quote in Carlyle about the cash nexus. The argument often boils down to “Look, if we had UBI then a lot more people could just sit around playing guitar. And it would be fine. And like because of that, we’d get some sick records. And it would all work out because I’m just delivering pieces right now. What does anybody need that for?” Which is emotionally legit, but this is also a frame of analysis that we’ve all seen before.

William Saas: “The Beatles were on the dole,” I think Graeber talks about that.

Alex Williams: Yeah, exactly. This is the roommate who voted for Andrew Yang sort of argument. A lot of people in DIY land have a version of this argument. And there is something there in so far as the more cash people have, the less labor discipline they’re subject to and the more subjective freedom they have to take risks and this, that, and whatever. I mean, people even talk about this in the form of the relationship between student loan debt in millennials and new business formation. We do know that if people are better off, they will do more and more riskier things. But the thing is, people tend to pitch this as a way of (1) solving the problems of the music industry in particular, and also (2) ensuring that the art is authentic by isolating it from what they understand as the cash motive or the profit motive or money generally. There’s a very old romantic notion that there’s this constitutive opposition between the realm of art and the realm of the marketplace. And that marketplaces are interchangeable, callous, nonspecific to the individual, and playing a Keynesian beauty contest with people’s expected emotions kind of thing. And then at the same time, you have the romantic individual who has this unrepeatable experience that is valuable by virtue of its singularity that if it encounters the market it is corrupted by virtue of that encounter.

So, there’s the combination of those two things. There’s the “I’d be able to have more time to work on my record, if I didn’t have to worry about money” side, which is contingently valid. And there is the “No one can possibly make authentic music while also worrying about money, or targeting money, or encountering money generally” angle. This is an old two prong thing. And so, the way that you resolve these two prongs is you say, “Oh, UBI.” Because that way it’s unrelated to the artistic expression but it also ensures that more people can do the artistic expression. So this is cool because as it stands right now, DIY especially, just as much as regular music, is people from money or people who are already tied into pre-existing networks for this stuff. Taylor Swift’s dad has a Merrill Lynch desk. Frankie Cosmos is Kevin Klein’s daughter. A lot of the people that anyone ends up hearing about from DIY are people who are able to use DIY as a kind of clothing to launder a more obvious origin story.

The problem with UBI as a solution to this is twofold. The problem is, on the one hand, what this ends up doing is reifying these unspoken hierarchies for people who have the time and energy and willingness to dedicate that time and energy to doing DIY. Joe Freeman had a classic paper called, “The Tyranny of Structurelessness,” that was about the difficulty in accomplishing anything within the women’s liberation movement without having something explicit, like an org chart with accountability and contestability. It basically just ends up being groups of friends who hype their friends, and in the event that there’s conflict or equity concerns or any of this stuff, people just shrug and say, “Well, we’re just doing this here. It’s whatever if you want to do your own thing.” This is often the response to it because all of the hierarchies are either vague or totally unaccountable. And so, if you do UBI as a response to that, you draw people in more volunteeristically into those systems and you still have all the problems that those systems have now.

The other problem is if we’re targeting anything like equity in what people hear–equity in what is considered the broad cultural landscape–this won’t do that. Because the problem used to be that record labels control who is able to record. Recording studios were big and expensive and you couldn’t use one without a record contract. And when you used one, you only got it for like a day and you had to play your songs and get in and get out. And they’d press them and sell them but a lot of the records would go nowhere and nobody would ever hear about it ever again. You’d see it in the bin at the thrift store eventually. The record labels used to control who could record and then would control to a certain extent the work that played on the radio. And so, now recording is free, which is something people make a big fuss about. And it’s a good thing to make a big fuss about because it’s great. But the thing is, in response to that, you have these same broadly capitalist selection forces re-entrench themselves downstream. Rather than it being choosing who gets to make records, it winds up being whose records get heard about and who gets a career doing anything, as opposed to just sort of dumping records onto bandcamp and walking away.

There’s exceptions here and there, obviously, because there’s exceptions to everything, but the flip side of this is that they are controlling who the audience hears about. And we’ve known from the entire history of the American press that it is broadly racist and uninterested in women, and that it is always looking to give credit for innovation to white men who have found out about something that other people were doing rather than the people who were doing it initially. And so, there’s no reason to assume that that stuff will change if the composition of people who have the financial means to be doing music and stuff changes. So what has to happen instead of a UBI broadly is a job guarantee approach that looks at the production of culture holistically. It looks at the production of culture as being not just there is an artist who produces a unit of culture, and then we wash our hands of it and who knows what happens afterwards. The idea is that you have a job guarantee that has a publication and distribution apparatus in addition to paying cultural workers.

What this ends up amounting to is a kind of public option for culture. You could take a less radical view of this and say this is the BBC and “Oh, you had John Peel,” which is a kind of state backed eclecticism in which he would have Pavement on in 1991 before anybody had heard of them. And they’d say, “This has already been done,” and that’s true but that’s not really an argument against what this paper is arguing. It’s saying that UBI is not the way forward towards a more equitable cultural landscape because it just ends up reifying power structures in slightly different places. It becomes who we hear about rather than who gets to make music. And so, this ties back to administrative capacity. Because the idea behind the UBI is you’re just dumping cash into the system and saying, “The people, private entities, and firms that are administering this, we’re sure they have everyone’s best interests at heart. So we’re just going to let them make the decisions about content and stuff like that. We’re just going to ensure that everybody is capable of getting into the front door of this process.”

Whereas a job guarantee program that wants to develop more state administrative capacity in terms of generating culture, that targets goals that we actually have, like equity and equal representation and things like that, you have to say, “Look, we know that with respect to these goals, these existing firms are basically bad actors.” I mean, we’re not really that many years from Elvis, ultimately. And so, because we recognize that these are bad actors, if you want to be a Lefty and you want to take seriously how to do this stuff, and how to get cultural engagement that is actually interesting and worthwhile and adds its rewards to the people who actually are doing the stuff as opposed to the first white guy to hear about it, you need to develop administrative capacity within that program specifically. And that’s something that the job guarantee allows you to tailor and target, which a universal basic income doesn’t.

Scott Ferguson: Right. And there’s a creativity to that too and an argument for a strong civil service that is about building that creative administrative capacity for the artists–the artists behind the artists.

Alex Williams: Right, exactly. And also because it positions it as being accountable. I mean, Spin Magazine is not really accountable to anyone–shareholders maybe. Conde Nast is not really accountable to anyone. And so, the extent to which you introduce local democratic accountability into these frames, you can get the outcomes you want.

Scott Ferguson: Can you talk about some specific institutions or just get down into some particulars? Like in your talk, you mentioned some. You’re talking about distribution and exhibition? Are we talking about venues?

Alex Williams: The idea is that you have artists who are on the job guarantee payroll, and then you have newspapers and radio stations that are a public option that can be mainly talking about these artists from this job guarantee framework. Like if you’re trying to go maximalist and have this be a genuine public option for a culture that has the capacity to be equitable, you need to have the papers, you need to have the websites, you need to have the venues, you need to have the people who manage the tours; you basically need to insulate all of this stuff from its ability to be recaptured by private entities like Live Nation and Disney. And to do that also requires taking a serious approach to what copyright law means. And to the extent that you’re working for the government, you’re given a pension or whatever, as opposed to this goofy roulette wheel of royalties that then leads to people who make a lot of money affecting the copyright regimes so that they can continue to do that. Rohan Grey has a chapter about this on who owns the fruits of the intellectual job guarantee or something like that. But basically, there needs to be a public option, all the way down in that sort of stuff. If you were to take equity seriously as a consideration in doing this, you would need to have venues, you would need to have radio stations and magazines, you would need to have the entirety of the apparatus of artistic production, which is always more complicated and more involved than people ever really want to think about or deal with.

William Saas: So in our January episode where we talked with Alexandra Skaggs, financial journalist, I think we ended by asking her what areas of research she would like to see MMT scholars go and where does MMT need to do more? And she talked about the state and municipal levels–what does MMT mean in states and cities. And that seemed a pressing question in January of 2020. It’s definitely all the more a pressing thing in July of 2020. In the interim, your thesis project was finished at the Levy Institute and now you’ve shared and found yourself being called upon to share more about that thesis project. Could you spell out the municipal and state level finance questions, problems, and things that surround that?

Alex Williams: So, yeah, there’s probably a big way to do this and there’s a little way to do this. 

William Saas: Let’s go the medium way.

Alex Williams: I meant in terms of what the proposal is, because the real serious proposal is that all of this stuff, funding wise, should be federalized. There’s no good reason to tie school quality to local wealth. There’s no good reason to tie infrastructure quality to local wealth. That whole structure exists just to replicate inequalities. There’s like no other reason for it, which is one of those things that MMT makes very obvious. Prior to thinking through MMT, you go, “Oh, no, these have to be tied to that because where are they going to get the money to pay for it?” If you take the MMT lens, then you go, “Oh, obviously these just need to be federalized.” It’s always already federalized after a fashion. It’s just that it’s being done so using a metric for calculating it that intentionally reinforces these inequities. So the big way is this stuff should all be federalized. States are basically outdated, illegitimate forms at this point. Maybe they should exist as administrative arms that don’t decide what the funding is.

The smaller way of thinking about this is that you need to insulate states and locals from the business cycle, because they have no real ability to impact it. But it has a huge ability to impact them. And they have no ability to defend themselves from that impact. And so, the thesis project that I did was basically like, how do we provide intra-governmental stabilizers? Because there’s always been a lot of work on automatic stabilizers, generally. Things like, if unemployment goes up, there’s less spending, but then also, the government spends more on paying unemployment benefits so they kind of net out. Or like, “Oh, if income goes down, the amount of taxes taken out goes down also so the total net amount of income that leaves the economy is smaller because they automatically stabilize one another.” They ensure that the amount of demand is kept within a given band rather than allowed to vary freely. That happens for the economy as a whole, but given that states are unable to basically set up big fancy capital structures that make it so that their revenues and expenditures are correlated to one another, they need to be externally protected from the business cycle. And so, I was like, “Okay, so how do we do that?” Because, if you think about this as a condensed government balance sheet…let me take a step back here. So say there’s a recession, right? We all know that in a recession, the role of the government is to spend more money.

Scott Ferguson: I’m not sure Congress knows that.

Alex Williams: Haha yeah, although I bet Michael Bennett’s office knows this. Jerome Powell may know this. But the goal of the government as a consolidated entity–so state, municipal, and federal–is to spend more as a consolidated entity when the economy gets worse. This is easy at the federal level because of all these automatic stabilizers we were talking about. At the federal level, they can just spend. We’re in MMT land, we don’t have to provide justification for this. The problem is that as they’re doing that states and locals, because of their unique administrative status and unique legislative history and unique political orientations, are forced into doing the opposite of what should be done. In a recession, they cut spending and raise taxes because a lot of them have balanced budget amendments and a lot of them have statutory balanced budget requirements.

But what’s interesting about it is that they are done locally. Each state has one in its constitution, as opposed to the eurozone, where there is a central authority that is saying you guys can’t go above X/Y debt and deficit relative to income. The states all individually are putting this on themselves and saying they vow not to do this because of a previous era where they are trying to do a confidence play to attract investment. They say “We’re not going to go bust as a state that looks…” It’s very Deadwood era. It’s very wild west. Everybody thinks that the government is just another kind of company. We need to prove that we’re not going to go bust so we’re going to have these balanced budget amendments. Last time there was a state that was actually bailed out was in the 1840s. The problem is basically that states can’t run deficits and have a tax base that is basically on flows and have a spending base that is basically on flows. So, their tax base is all things that change as flow rate variables–their income taxes, their corporate taxes, their sales taxes. When unemployment goes up, those tax revenues go down. And when unemployment goes down, those tax revenues go up. The problem is that when their tax revenues go down, their spending requirements go up–things like Medicaid, things like state level unemployment rolls. Spending goes up. And so, they are forced into a position where they either have to raise taxes to cover the additional spending, or cut spending on unrelated projects in order to not run a budget deficit.

Municipalities are in the same scrap basically, except they are allowed to issue debt, but they’re subject to very stringent market discipline. Municipal bond yields spiked in 2008 and spiked in 2020. And we’re at a position where, if everybody suddenly gets worried, then they can no longer issue previously democratically approved bonds in order to build this, that, or the other thing. So this big systemic weakness is that everything below the federal level is mechanically procyclical. And this is the basic problem that the thesis is seeking to address. What can we implement so that is no longer the case? And the answer is we just have the federal government develop a mechanism for identifying when there is a recession, and then use that as a trigger to disperse money to states because they know that when unemployment moves, state tax revenues move. And so, we can balance those things out on net using econometric tools at our disposal and using the very safe assumption that it does not matter what size deficit the federal government runs. So that’s basically what the thesis is. And what a lot of the work since then has been is how exactly would you calculate the amount of money? How administratively would you set up the departments that would allocate that money? How should that money be allocated? How long should it go? Is there any legislative precedent? Yes, there is. There was an office of revenue sharing under the Treasury in the 1970s.

So that’s how MMT ramifies down to the state and local level. The federal level can basically insulate the state and local level from any shocks if it so desires. Ideally, it would replace them entirely in terms of funding and would be just funding allocations from a single source. But that’s a much bigger haul than introducing new intra-governmental stabilizers.

Maxximilian Sejio: Speaking of these stabilizers then in relation to the state and local problematic you sketched out for us, some of our listeners might be familiar with the common MMT macro refrain of automatic stabilizers. However, in your work, you talk about autonomous stabilizers, which will function specifically for this state and local problem. We were wondering if you could chart perhaps the differences conceptually and say why you come down on autonomy instead of this more automatic framing for these stabilizations?

Alex Williams: Ultimately, because the stabilization isn’t automatic. There’s an administrative entity interposed between the trigger being hit and the money going out. The idea behind automatic stabilizers comes out of discussions with Nathan Tankus and with the desire to come up with an exact and explicit term for trigger based fiscal policy that is not as ugly as the phrase rules based fiscal policy. And so, the idea behind an automatic stabilizer is that you have your input variable, which is income. And then it goes through a fixed transform, which is your tax system. And then it comes out to the person who’s filing their income taxes as their income minus taxes. At no point is there any specific changes made to programs, or granting allocations, or spending allocations, or anything throughout that entire process–it’s totally automatic. It’s just like a linear transform.

An autonomous stabilizer basically takes that and says, “Well, sometimes rather than constructing a linear transform that solves all these problems, some of the problems can’t be solved this way, so what we need to do is an if-then framework, which is what this basically amounts to. If an unemployment rate goes above the trigger for dispersing benefits, then the benefits get dispersed. And those benefits that get dispersed have to take place through administrative agencies that sign off on funding, that sign off on grants, that sign off on this, that, and the other thing. There is no pre-existing channel where all of these things are happening and just go through a single transform. It’s autonomous because it’s not discretionary fiscal policy in that the rules are set beforehand and totally locked in and no one has to argue about them at the time. But it’s not fully automatic because it still requires that there be administrative, so non-legislative, agencies that ensure that the things triggered by the different autonomous proposals actually go out and happen. It’s a really “angels on the head of a pin” kind of distinction. But it captures a really useful new methodology for thinking about how to go about stabilizing the economy. And I really have Claudia Sahm of the Federal Reserve and equitable growth and her work to thank for this kind of stuff. Her work on the Sahm rule as a way of detecting when recessions begin is fantastic.

Scott Ferguson: I think it also helps to move political economy and the MMT project further down the path of thinking in terms of governance and administration that can be structured out in a number of ways, instead of going down the mechanistic pump priming, there’s an economy out there and we can push cash out into it to make it hum along. This is really taking on the problem of the whole consolidated economy and the way that credit structures that economy and saying, “Well, how can we make it more just, more healthy, more robust, etc.”

Alex Williams: Yeah, definitely.

Maxximilian Seijo: Also the bathtub metaphor is sort of left behind here. We’re not just filling up a bathtub with money when a recession hits.

Scott Ferguson: Right, through congressional spending and then taxing it out. I mean, that can work sometimes. But this is related, obviously, to some of the work that our colleagues have done about an MMT approach to inflation management or control. It’s not just about taxing and spending and waiting for Congress to get off their butts and doing something. It’s about designing a system that can, in the moment, react and adjust to needs and demand.

Alex Williams: It’s very funny because, in a way, it’s very old school cybernetics. Right, because you’re introducing if-then’s with feedback loops. I mean, that’s sort of Norbert Wiener early stuff.

Scott Ferguson: Is there an equivalent of the federal government in a Wiener kind of way?

Alex Williams: Oh, I just mean formally. It’s sort of alt-Cybersyn in a way–a Keynesian Cybersyn project. You know, like the storied Chilean attempt to have a socialist computer in the 70s–always a fun Google.

Scott Ferguson: Cool. Well, can you tell our audience perhaps where we can all find you on the interwebs and elsewhere?

Alex Williams: Yeah, so I’m gonna have a website at some point. I’m getting there very slowly. Right now, I am basically just @tragicbios on Twitter. It’s very funny that this account has wound up being serious econ stuff. It’s an old song by a band called Blanche Blanche Blanche, who are a tremendous band and we will have to have as one of the interludes here. And I also have a thesis. I have stuff at the Levy Institute’s website. I have stuff at Phenomenal World, the Jain Family Institute’s publication. And I have a piece out through Employ America. I’m sure we can add links. Yeah, there are lots of explanations and lots of explorations of overlapping problematics and sets of interests.

William Saas: Alex, thank you so much. And we would be absolutely remiss if we didn’t bring up that you are one half of Hillbilly Motobike who has produced not just one but song that we’ve used for a theme song on this podcast. Where can people go to listen to more Hillbilly Motobike?

Alex Williams: So it’s the Stereolab song title. It is at

William Saas: Great music to think and write to.

Alex Williams: We try.

William Saas: Thanks, Alex.

Scott Ferguson: Thanks for coming on.

Alex Williams: Happy to do it.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).