Introduction to Heterodox Macroeconomics

Sundays at 11 AM PST / 12 AM MST / 1 PM CST / 2 PM EST

To register, sign up for the group’s mailing list here. This reading group is open to the public.


Pressing economic concerns face everyone at present and give rise to social and political problems that define our times. Many on the left neglect economic theory in favor of social, political and cultural questions, while nevertheless espousing policies associated with certain economic theories (e.g. the Green New Deal, a federal Jobs Guarantee, economic stimulus: MMT). Should we leave the task of understanding the modern economy to others? Can we change capitalist society without understanding it first?[1] Clearly not. A firm stance on economy distinguishes Marxian or materialist socialism from utopian socialism or radical liberalism. And so, the purpose of this study group is to develop an understanding of macroeconomics and the contemporary economy as a totality from a realistic, non-dogmatic, and critical perspective.

Starting from the basics, we will discuss labor, currency, finance, capital, policy, and many other topics. But we will also pay special attention to the difference between the perspective of mainstream, orthodox economics—the ‘neoclassical school’—and more realistic or critical, heterodox perspectives—institutionalism, post-Keynesianism and Marxism. Consider, for example, the following very different definitions of what economics is, seen from these two different perspectives. The mainstream view defines economics as “the study of the allocation of scarce resources among unlimited wants”. The heterodox view defines economics as “the study of social creation and social distribution of society’s resources” (Mitchell, Wray, Watts, 2019, 5 & 7). We will try to not only understand the economy as a totality, but also the conflict between perspectives on it, which inform the political conflicts that arise from it.

We will meet weekly to discuss two chapters of introductory material per session. Our aim is simply to understand macroeconomic theory and the broader extent of its implications for contemporary purposes. In order to facilitate discussion, members will take turns adopting the responsibility of summarizing and presenting the core of the readings under consideration in a given week’s meeting.

All readings will be provided as PDFs. Required and recommended (not-required) readings will be marked accordingly.

Texts

  • REQUIRED: William Mitchell, L. Randall Wray, Martin Watts, Macroeconomics (London: Red Globe Press, 2019)
  • RECOMMENDED: Mariana Mazzucato, The Value of Everything (New York: Public Affairs, 2018)

Reading Schedule:

First Session: Introduction

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 1: Introduction (pp. 2-17)

Second Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 2: How to Think and Do Macroeconomics (pp. 18-37)
    • Chapter 3: A Brief Overview of Economic History and the Rise of Capitalism (pp. 38-49)

Third Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 4: The System of National Income and Product Accounts (pp. 50-65)
    • Chapter 5: Labour Market Concepts and Measurement (pp. 66-82)

Fourth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 6: Sectoral Accounting and the Flow of Funds (pp. 83-103)
    • Chapter 7: Methods, Tools and Techniques (pp. 104-117)

Fifth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 8: The Use of Framing and Language in Macroeconomics (pp. 118-132)
    • Chapter 9: Introduction to Sovereign Currency: The Government and its Money (pp. 134-146)

Sixth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 10: Money and Banking (pp. 147-167)
    • Chapter 11: The Classical System (pp. 164-178)

Seventh Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 12: Mr. Keynes and the ‘Classics’ (pp. 180-192)
    • Chapter 13: The Theory of Effective Demand (pp. 193-203)

Eighth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 14: The Macroeconomic Demand for Labour (pp. 204-215)
    • Chapter 15: The Aggregate Expenditure Model (pp. 216-238)

Ninth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 16: Aggregate Supply (pp. 239-252)
    • Chapter 17: Unemployment and Inflation (pp. 254-267)

Tenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 18: The Phillips Curve and Beyond (pp. 268-288)
    • Chapter 19: Full Employment Policy (pp. 290-311)

Eleventh Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 20: Introduction to Monetary and Fiscal Policy Options (pp. 314-329)
    • Chapter 21: Fiscal Policy in Sovereign Nations (pp. 332-347)

Twelfth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 22: Fiscal Space and Fiscal Sustainability (pp. 349-359)
    • Chapter 23: Monetary Policy in Sovereign Nations (pp. 360-372)

Thirteenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 24: Policy in an Open Economy: Exchange Rates, Balance of Payments and Competitiveness (pp. 374-391)
    • Chapter 25: The Role of Investment in Profit Generation (pp. 394-429)

Fourteenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 26: Stabilising the Unstable Economy (pp. 419-429)
    • Chapter 27: Overview of the History of Economic Thought (pp. 432-442)

Fifteenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 28: The IS-LM Framework (pp. 444-468)
    • Chapter 29: Modern Schools of Economic Thought (pp. 469-485)

Sixteenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 30: The New Monetary Consensus in Macroeconomics (pp. 487-496)
    • Chapter 31: Recent Policy Debates (pp. 498-522)

Seventeenth Session

  • Mitchell, Wray, Watts,Macroeconomics.
    • Chapter 32: Macroeconomics in the light of the Global Financial Crisis (pp. 535-549)
    • Chapter 33: Macroeconomics for the Future (pp. 551-560)

[1] The young Marx, before the failure of the 1848 revolutions, famously wrote: “Philosophers [like Feuerbach] have only interpreted the world; the point is to change it”. The mature Marx later wrote of passionate critics of capitalism: “Sismondi… forcefully criticizes the contradictions of bourgeois production but does not understand them, and consequently does not understand the process whereby they can be resolved”.