Wednesday, 20 August 2014

The Functional Finance of Abba Lerner

= Functional finance is an economic theory proposed by Abba P. Lerner, based on effective demand principle and chartalism. It states that government should finance itself to meet explicit goals, such as taming the business cycle, achieving full employment, ensuring growth and low inflation. [1]

Data Source P2P Foundation. Blogger Ref Link




"Functional Finance is an economic theory based on the following principles:
  • The government is an entity created by the people and for the people. It exists to further the prosperity of the private sector – NOT to benefit at its expense. If this entity is allowed to exist for its own benefit or becomes corrupted by a concentration of power, it will become susceptible to dissolution via the populace’s rejection of that government.

  • Governments should be actively involved in regulating and helping build the infrastructure within which the private sector can generate economic growth. The economy is a complex dynamical system with irrational participants. It cannot be expected to regulate itself or behave rationally at all times. Therefore, some level of government intervention and involvement is not only beneficial, but necessary. But ultimately, it must be the private sector that is the driver of economic growth. While government can aid in this process it cannot be expected to be the primary driver of innovation, productivity and growth.

  • Money is always created by the state and must therefore be regulated by the state; however, ultimately the private sector must accept this legal tender as the currency unit. Therefore, the private and public sectors should best be thought of as being in partnership with one another and not opposing forces. Government by the people and for the people is not the antagonist in this story, but rather an entity that should be best utilized to maximize private sector prosperity.

  • Government deficit spending and tax collection should be maintained at a rate that does not impose financial hardship on the private sector. Because the Federal government is not a state or household it should not manage its balance sheet for its own benefit. Rather, taxes and government spending should be managed in a way that most benefits the private sector and encourages private sector prosperity, productivity, innovation and growth."


Difference with Modern Monetary Theory

Tadit Anderson:
"The difference is more a matter of history and focus, because generally speaking they are integrated. MMT is derived from J. M. Keynes's later work related to money as an institution and as related to his advocacy of macro-economics. Functional Finance is based upon work of Abba Lerner (the New School for Social research through the 1960s and 1970s plus) others. It is based upon the experience with deficit based government spending during the "Great Depression/FDR's New Deal and into the transition after US Pres Nixon "closed" the Gold "window" on the redemption of US Dollars into gold in 1971. It is functional in the sense of how monetary and fiscal policy works relative to its outcomes. MMT includes substantial historical research into the history of the origin and issuance of money. Functional finance is more about the effects of the macroeconomics of Keynes and related people."

The Private/Public Distinction in FF

Tadit Anderson:
"It would be useful to make a distinction between public and private differently. I tend to break down the word "economics" ( oikos-nomia ) using oikos/eco- as community or place where we live, or even "commons," appended with nomia as management. The "economics" we have now as the convention (neo-classical) is generally dismissive of this sort of perspective, and as you full well know it tends to be oligarchic/plutocratic at its root. This comparison requires, I believe, the additional distinction between consumption and participation for common subsistence and personal consumption, and contrasted with the abuse of the commons to extract wealth either directly or indirectly well beyond the personal and communal pursuit of well being and health. Fiscal policies that favor private income for general personal needs of shelter, food, transportation, health, and such is a positive process. Favoring wealth accumulation well beyond those personal and private need to advance private wealth accumulation should be liminted when it is at the expense of public support of personal needs ends up being a variety of exploitations. To leave the distinction as only between public and private seems to import a slice of the neo-classical model, which support a variety of class prejudice against the interests of citizens in the economy as a public commons. By intent the public sphere under the FF model would be the means of stewarding public interests, including the basic needs, and also physical and social infrastructure. By way of supporting infra-structure and ongoing innovations, governance could also serve to be a locus for innovation/R and D as it has been supported in many sovereign contexts."

More Information

Hungry Capital

A compelling analysis of how global finance is devouring the food system and gambling with our future in the process.
Blog Ref Link

Over the past thirty years, the ability of global finance to affect aspects of everyday life has been increasing at an unprecedented rate. The world of food bears vivid testimony to this tendency, through the scars opened by the 2008 world food price crisis, the iron fist of retailing giants that occupy the supply chain and the unsustainable ecological footprint left behind by global production networks.
Hungry Capital offers a rigorous analysis of the influence that financial imperatives exert on the food economy at different levels: from the direct use of edible commodities as an object of speculation to the complex food chains set up by manufacturers and supermarkets. It argues that the circular compulsion to build profits upon profits that global finance injects into the world of food restructures the basic nurturing relationship between man and nature into a streamlined process from which value has to be mined. The end result is a monstrous Leviathan that holds together while – at every step – risks to crumble.

  • Luigi Russi takes up an issue that will dominate the lives of people everywhere in the coming years: the adequacy and safety of our food. He brings insights from the worlds of finance, legal sociology and political economy to link processes of global capitalism with the appalling persistence and increase of hunger and malnutrition. A must read. ~ Jayati Ghosh, Professor of Economics, Jawaharlal Nehru University
  • This is a thought-provoking book on the food industries and how these are entangled with the world of finance. It is theoretically well grounded, original and rich in empirical detail. It is an important contribution to the international debate on the future of agriculture. ~ Jan Douwe van der Ploeg, Professor in Transition Studies, Wageningen University
  • Russi issues a stark warning, as he identifies how the drive for profits and the deregulation of commodity trading are re-shaping the business strategies of the large corporations who procure, broker and reassemble our food. The result is the acceleration of the ecological crises facing the food supply. ~ David Barling, Reader in Food Policy, City University London and co-author of Food Policy: Integrating Health, Environment and Society
  • At a time when finance and food are the epicentre of global crises, Luigi Russi's study provides a unique insight into the dynamics driving these complex but critical chains of human economic interaction. A must read for anyone analysing complex socio-economic processes and the potential for social progress. ~ Anastasia Nesvetailova, Reader in International Political Economy, City University London and author of Financial Alchemy in Crisis: The Great Liquidity Illusion
  • Luigi Russi has made a significant contribution to the unpicking of the relationship between finance and food by opening up for scrutiny the powerful and uncontrolled forces operating in this obscure and complex trading system, which has only just been recognised as giving rise to a crisis which is as potentially damaging as the failure to maintain control of the world's banking industry. ~ Peter Robbins, Author of Stolen Fruit: The Tropical Commodities Disaster
  • Hungry Capital provides a timely and novel analysis of the new frontier of financial capitalism. ~ Ole Bjerg, Associate Professor, Department of Management, Politics and Philosophy, Copenhagen Business School

Open Co-ops: Inspiration, Legal Structures and Tools

photo of Josef

18th August 2014/P2P Foundation Blog

Final co-op illustration
In 2002 I described United Diversity as “a member owned and stakeholder governed network of mutual advantage.” In truth, it was aspirational. At the time, the flexible off-the-shelf legal structures and open source tools needed to make such a network a reality simply didn’t exist. Now they do. Co-ops that combine best practices from the international co-operative movement with best practices from the open source software and hardware communities are now possible. Soon anyone will be able to set up an Open Co-op and invite all their stakeholders to help finance, govern and organise the co-op online.
Imagine transparent, democratic and decentralised organising for everyone. A society in which anyone can become a co-owner of the organisations on which they, their family and their community depend. A world where everyone can participate in all the decisions that affect them. This is the world United Diversity and the emerging network of people working on the legal structures and open source tools that enable Open Co-ops are working towards. Here I share some of the projects and ideas that have inspired us on our journey, and some of the legal structures and tools that are now available to put our vision into practice.
The Open Organisations Project
Out of a desire by the Indymedia UK London Working Group to go beyond both the formal top-down power structures found in governments and corporations and the informal ‘Tyranny of Structurelessness’ found in many voluntary and activist groups, The Open Organisations Project emerged. Their goal was “to explain how to set up and maintain transparent, accountable and truly participative communities” and they came up with a useful set of six process and eight functional rules together with some basic guidelines for how to implement them. At the time (2002), it was the clearest guide to organising openly we’d found and we still point people to it today.
A New Way to Govern and Gaian Democracies
Two books, A New Way to Govern: Organisations and Society after Enron by Shann Turnbull (2002), and Gaian Democracies: Redefining Globalisation and People-Power by John Jopling and Roy Madron (2003) were both very influential on our thinking. They introduced us to the principles behind Spain’s huge co-operative network Mondragon, and other large scale business with innovative organisational structures such VISA International and Semco in Brazil.
In A New Way to Govern Turnbull summarised the terminal flaws of command and control hierarchies: the tendency of centralised power to corrupt; the difficulty of managing complexity; and the suppression of “natural” — human —checks and balances. In their place he proposed organisations which are able to “break complexity down into manageable units, and decompose organisational decision-making into a network of independent control centres.” In short, his thesis argued that command and control hierarchies must be replaced by “network governance” and that where this includes stakeholders — not merely staff but customers, communities, suppliers or distributors — a whole new dimension of economic, social and political benefit opens up.
Viable System Model (VSM)
The chapter about network governance in Gaian Democracies explained Arthur Koestler’s term ‘holon’ (from the Greek ‘holos’ meaning ‘whole’, and the suffix ‘on’, meaning ‘particle’ or ‘part’), which he devised to describe entities that are simultaneously self-contained wholes made up of parts, and themselves a part of a larger whole. Stafford Beer used the term ‘viable system’ to describe the same thing and outlined some of their properties in the VSM. In short, the model says that in order to be viable (i.e., able to autonomously adapt and survive in response to a changing environment) a system must have the following five sub-systems:
System 1: Interacting operational units. Think organs in a body, or players in a team.
System 2: Responsible for stability and conflict resolution between operational units.
System 3: An ‘Internal Eye’ optimising and generating synergies between operational units.
System 4: An ‘External Eye’ allows strategies and plans to adapt to a changing environment.
System 5: Where ultimate authority lies and is responsible developing policy.
Bettermeans and The Open Enterprise Manifesto
In April 2010 a project called Bettermeans “formed to promote the values of openness, transparency, autonomy, contribution-based-rewards (meritocracy), democracy, integrity, and values-oriented, purpose-driven work” released The Open Enterprise Manifesto. It was a familiar story: replace “the command and control hierarchy” with “collaboration and open participation;” create organisations “more like living dynamic networks, and less like pyramids;” plus the standard mentions of Linux, Wikipedia, Mondragón and Visa to demonstrate how aspects of the model had already been shown to work at scale. Bettermeans were trying to bring these various aspects together in a single cohesive model, and they made a pretty good stab at building the necessary tools to make such a model widely available and adoptable.
Sensorica are an ‘Open Value Network’ focussed on two primary activities: creating open hardware products; and developing the Open Value Network (OVN) model. OVNs are variously described as “people creating value together, by contributing work, money and goods, and sharing the income” a “framework for many-to-many innovation” and a “model for commons-based peer production.” The basic concept is very similar to the Bettermeans “contribution-based-rewards” idea, but in OVNs contributions other than completed tasks are also accounted for. They are currently working with Bob Haugen and Lynn Foster at Mikorizal Software to develop a prototype open source value accounting platform called ValNet.
The Enspiral Network
Enspiral is made up of three parts: The Enspiral Foundation, Enspiral Services and Startup Ventures. I’d say they’re the best current example of an Open Co-op, but how they actually describe themselves is as “a virtual and physical network of companies and professionals working together to create a thriving society” and as an “experiment to create a collaborative network that helps people do meaningful work.” A core part of their strategy is to open source their model. In short, not only are they doing almost exactly what United Diversity wants to do — they’re also building the open source tools actually needed to do it!
The Enspiral Foundation is the charitable company at the heart of the Enspiral network. It’s the legal custodian of assets held collectively by the network, and the entity with which companies and individuals have a formal relationship. Decisions are made using Loomio and budgets are set using Cobudget (see below).
A network of professionals work together in teams to offer Enspiral Services, a range of business services under one roof. By default members pool 20% of their invoices into a collective bucket, 25% of which goes to the Foundation. Loomio and Cobudget are then used to decide how to spend the rest. For Startup Ventures, Enspiral works with social entrepreneurs to launch start-ups who then support the work of the Foundation, and Enspiral as a whole, through flexible revenue share agreements: ventures choose their own contribution rate, usually around 5% of revenue.
Legal Structures
In some countries there are a fixed set of legal structures that co-operatives must use. Here in the UK we’re more flexible. We do have legal structures specifically designed for co-operative and community enterprise: Co-operative Societies and Community Benefit Societies — but you don’t have to use them; off-the-shelf co-operative model rules for a wide variety of other structures are readily available. That said, pretty much all of the UK co-operative and community enterprises that most inspire us at United Diversity, i.e., those creating community-scale, community-owned renewably-powered infrastructure of all kinds, have chosen to incorporate as societies — and for good reason.
Societies have a number of special attributes that make them particularly suitable for community investment. A big reason most community land trusts, community energy projects, community farms, pubs and shops and so on. register as societies is because doing a Community Share offer is the best way to finance such projects. In recent years such Community Share offers have been growing exponentially and there is now a Community Shares Unit that offers advice and guidance on how to do it.
Multi-stakeholder Co-operatives
Rather than being organised around a single class of members the way that most co-operatives are, a multi-stakeholder co-operative is any co-op that draws its membership from two or more different classes of stakeholders. After two decades of local experimentation, Italy was the first country to adopt a multi-stakeholder statute in 1991. Over 14,000 ‘social co-ops’ now exist across Italy and provide social care, health and educational services to over 5 million people. In Quebec, home to one of the most productive and vibrant co-operative development sectors in the world, multi-stakeholder co-ops are now the fastest growing type of co-op, with more than 50% of all new co-ops opting to register what they refer to as ‘solidarity co-ops.’ The movement is just getting here in the UK, but there are now over 20 multi-stakeholder co-ops who have incorporated using the Somerset Rules.
Somerset Rules
Launched in 2009, the Somerset Rules were one of the UK’s first set of model rules for a multi-stakeholder co-op, and they’re arguably still the best. Packed full of best practice gleaned from decades of co-operative development experience, they’re structured to closely follow co-op principles, written in relatively plain English, and are cleverly drafted to allow for a wide range of different configurations. You can define the percentage of overall control each stakeholder group has. They are also ‘social accounting ready’ and are designed to enable the widest range of options for financing. In 2012 they were fully revised and overhauled and a version for use as a Community Interest Company limited by guarantee was developed. In May 2014 a Community Benefit Society version was created and we’re now in the process of adopting them for the United Diversity equivalent of the Enspiral Foundation.
FairShares Model
FairShares is a new brand and model for self-governing social enterprises operating under either Company or Co?operative Law. It offers a unique approach to enterprise ownership, governance and management through its recognition and integration of founders, producers, employees, customers, service users and investors. At the heart of the FairShares model is a definition of social enterprise based on: Specifying the social purpose(s) and evaluating the social impact(s) of trading activities; conducting ethical reviews of product/service choices and production/consumption practices; and promoting socialised and democratic ownership, governance and management by primary stakeholders. In addition, all intellectual property created by FairShares Enterprises and their members are managed as an Intellectual Commons using Creative Commons licences. This all sounds perfect for Open Co-ops and so we’re really looking to learning more at Inaugural FairShares Conference in Sheffield on July 1st.
Microgenius (and other funding tools)
Originally started by Cambridge-based entrepreneur Emily Mackay, Microgenius is the UK’s first platform for community share offers and is now part of the Community Shares Unit. Societies can also sell shares via Crowdfunder and BuzzBnk, and can advertise share issues on Ethex, the Trillion Fund, and on — where the widest range of live Community Share Offers in the UK are listed. Co-operative Companies Limited by Shares can do equity crowdfunding on Crowdcube (which also powers Microgenius) and Seedrs.  Open source platforms specifically created to help open and/or co-operative projects include: Goteo for crowdfunding the commons; Open Funding and Bountysource for cofunding free software; Gittip for giving small weekly cash gifts to people you love and are inspired by; Snowdrift, a monthly matched patronage system; and, a wordpress powered crowdfunding platform for co-ops in Spain (we’ve got plans for something similar in the UK). Catarse, Selfstarter and tilt are other open source options, and there are numerous bitcoin powered platforms out there, too (e.g. Swarm).
One Click Co-op
One Clicks Orgs, a social enterprise whose strapline is “Legal Structures and Group Voting Made Easy,” created the One Click Co-op in partnership with Co-operatives UK and NESTA. Launched in June 2013 and approved by UK regulators it is the first fully-online co-operative structure in the world. The open source platform permits members to contribute agenda items, browse archived minutes and participate in votes electronically. It’s pretty awesome, but having been built on a relative shoestring also pretty basic. Only Co-operatives UK’s multi-stakeholder co-operative rules are supported and you can’t, for example, the balance the interests of stakeholder groups by giving them different proportions of overall control (like you can with the Somerset Rules).
Loomio — a free and open source tool for collaborative decision-making — is what happened when Enspiral met Occupy. Enspiral were committed to being a flat organisation, empowering employees to be autonomous and involved in leadership and decision making. But without the right platform, the overheads of engaging lots of people made it hard to deliver on this grand vision. In practice, only a few people were making most of the important decisions. Similarly, Occupy activists were finding it hard to make consensus decisions with large groups of people. Loud voices dominated and people with less time to commit to the process were being marginalised. They were missing out on the power of including a truly diverse range of perspectives. Together they developed Loomio.
Cobudget is another open source app being developed by Enspiral. It works like this: each month contributions to collective funds are published. Everyone can see who contributed what and how much money is in the budget. Basic core expenses (previously collectively agreed on Loomio) are subtracted and what’s left is the discretionary budget. Each person or company retains the right to allocate their part of discretionary funds and anyone in the network can start a “bucket” ­— a proposal to do work that requires funding. They write up a proposal making their case for why the work they want to do will benefit everyone and why they are the right person to deliver the project. Everyone then considers the buckets and decides which ones to “fill” with their portion of the discretionary budget. If people collectively feel like a project is a good use of resources, it will get funded. If there are critical budgeting priorities taking precedence, “nice to have” projects won’t get any funds that round. Funders can split up their allocations as they like, or put it all in one bucket. In aggregate, the result is a budget that reflects the collective priorities of the group, determined in proportion to real stakeholding and in the context of the big picture goals. The entire process takes place transparently.
The Open App Ecosystem
Building on the work of Loomio and Cobudget the Open App Ecosystem is an Enspiral project to develop suite of integrated and open sourced apps which support transparent, democratic and decentralised organising. The aim is for the software to act as a delivery mechanism for cultural viruses which decentralise money, information and control and promote happiness, empowerment and wellbeing throughout an organisation. They also have the side effect of helping organisations become more efficient, resilient and adaptable. Bring it on.
Josef Davies-Coates helps people discover, contribute to and replicate intelligent responses to climate, energy and economic uncertainty. He is the founder of United Diversity | @jdaviescoates

From (inter)objective Big Data to (inter)subjective Deep Data

Big Data can have relevance to economics, and society. Blog Ref

photo of Michel Bauwens
Michel Bauwens/ P2P Foundation Blog

16th August 2014

The real problem of big data is that we are increasingly outsourcing our capacity to sense and think to algorithms programmed into machines. While this seems very convenient and cool at first and offers access to services that many of us want, it also raises a question about who actually owns big data, about the rights of individuals and citizens to own their personal data and to exercise choices regarding its use.

Excerpted from Otto Scharmer:

“While big data has certainly opened up a whole new range of possibilities, I would like to suggest a distinction between surface big data and deep data. Surface data is just data about others: what others do and say. That is what almost all current big data is composed of.
Deep data is used to make people and communities see themselves. Deep data functions like a mirror: it makes you see yourself–both as an individual and as a community. Over the past twenty years of my professional life I have been helping teams and organizations go through processes of profound innovation and transformative change across sectors and cultures. The one thing that I have learned from all these projects is that the key to transformative change is to make the system see itself. That’s why deep data matters. It matters to the future of our institutions, our societies, and our planet.
But what happens today with big data often is the opposite: big data is used to manipulate our behavior, to bombard us with commercials that we never asked for. Surface big data is used to outsource human thinking to algorithms, to reduce our level of awareness inside old patterns of habitual thought. Deep data, if developed and cultivated in the right way, could help us to enhance the level of awareness and consciousness and to change the system by shifting the consciousness of stakeholders in that system from ego-system awareness(awareness of my own silo) to eco-system awareness (awareness of the whole).

On a societal level, what types of deep data infrastructures might facilitate this bending of the beam of observation back onto the observer on the level of entire eco-systems?
For example, today we use GDP to measure economic progress. GDP is an excellent measure of surface data. But what would the equivalent deep data tool be for measuring real economic progress in a community? I believe that it would include a new indicator system that is grounded in real outcomes (like life expectancy), and in the wellbeing of individuals and their communities (like quality of life). Last year we–the Presencing Institute, with the GIZ Global Leadership Academy (German Ministry for Development Cooperation) and the Gross National Happiness Centre in Bhutan– launched the Global Wellbeing Lab, The lab links leaders from government, business, and civil society around the world who are working to pioneer new indicators and deep data tools that help communities and eco-systems begin to see themselves.
Where are you seeing the seeds of such new indicactor systems or deep data tools today? What can be learned from these first living examples? What would deep data mean for your self? What are the sources of well-being and happiness in your own life and work and what metrics could help you to see yourself in a more meaningful way? How can we co-pioneer theshift from big data to deep data in society today?”

The 7 Deadly Innocent Frauds of Economics Policy

Blogger Ref Link

Seven Deadly Innocent Frauds of Economic Policy (Basic List)

1. The government must raise funds through taxation or
borrowing in order to spend. In other words, government
spending is limited by its ability to tax or borrow.
2. With government deficits, we are leaving our debt burden
to our children.
3. Government budget deficits take away savings.
4. Social Security is broken.
5. The trade deficit is an unsustainable imbalance that takes
away jobs and output.
6. We need savings to provide the funds for investment.
7. It’s a bad thing that higher deficits today mean higher
taxes tomorrow.

Warren Mosler (author of the above book)

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Warren Mosler
Warren Mosler.jpg
Warren Mosler speaking at War and Poverty, Peace and Prosperity Conference at the Levy Economics Institute
Born(1949-09-18) September 18, 1949 (age 64)
NationalityUnited States
FieldModern Monetary Theory, Macroeconomics, Monetary policy
School/traditionPost-Keynesian economics
Alma materUniversity of Connecticut (B.A.)
AwardsDoctor Honoris Causa,
Franklin University Switzerland
Warren Mosler (born September 18, 1949) is an American economist and theorist, president and founder of Mosler Automotive, and co-founder of the Center for Full Employment And Price Stability at the University of Missouri-Kansas City. He briefly ran for President of the United States as a member of the Democratic Party in the 2012 election before dropping out to run for U.S. Senate.

Early Life[edit]

Mosler attended the University of Connecticut where he majored in Economics.
After graduating from college, he initially went on to work at the Savings Bank of Manchester in Manchester, Connecticut in 1973. Next he went on to work in Hartford before moving to New York City. From there he would go on to work on Wall Street, specifically Bache and Co., Banker's Trust NYC, and William Blair.[1]

Hedge Fund work[edit]

In 1982 he founded his hedge fund, Illinois Income Investors (III), where he was made president and was responsible for several strategies utilizing government securities, mortgage backed securities, LIBOR swaps and LIBOR caps, and financial futures markets. Here he made several profitable investments, particularly betting successfully on government securities. By the mid 1990s, most of the firm had been largely turned over to his partners, as he had disagreements on the direction of some of its investments.[2][1]
Later, he relocated to the U.S. Virgin Islands to participate in a government-sponsored economic growth initiative.[3]

Economic Views[edit]

Mosler is a champion of Modern Monetary Theory.[4] His unorthodox views have gained a substantial following among the Internet and academia.[4]

Mosler's Law[edit]

He is attributed with creating Mosler's law dealing with fiscal policy of a nation during a recession. Specifically, Mosler's law states there “…is no financial crisis so deep that a sufficiently large increase in public spending cannot deal with it.”[5] He stated that the recent recession could have been alleviated much quicker from massive government spending increases until unemployment fell.[4] He opposes high taxes since they discourage consumption within an economy but does agree a certain tax level is needed to guarantee citizens use the dollar as a currency.[4][2] He is confident that inflation is a non-factor in this theory since the government has the complete ability to constantly expand the money supply and guarantee consumption and growth.[4] He supports extending FDIC insurance to private deposits of up to $10 million, as well as unlimited FDIC insurance to US banks.[6]
He stresses that federal spending is in no way constrained by tax revenues, therefore the government will always be able to make payments in its own currency, regardless of solvency, stating “Federal Government checks don't bounce”.[7] He goes on to state that any and all debt passed on to future generations will never be burdensome, since they will undoubtedly consume whatever is produced.[7]
He developed much of his belief from his time as a hedge fund manager when many investors predicted the US government defaulting on bonds, whereas he predicted, correctly, that US government would not default and thus made considerable returns.[4]


Mosler supports government funding for full-time employment with full health care coverage for employees and dependents, thus triggering all firms providing health care to remain competitive. He states health cannot be viewed as a production cost, therefore the government should fund for at least 90% of the cost paid by the firms. Finally he supports issuing medical debit cards to all citizens, for a fixed amount. This covers any medical costs and any amount above this will be covered by "catastrophe insurance". At the end of every year, citizens would receive a portion of their unused medical debit card.[8]


In a brief proposal, Mosler stated the energy crisis could be solved by lowering the speed limit nationally to 30 mph. According to Mosler, this would cut gasoline consumption and pollution since automobiles run more efficiently at slower speeds, while also greatly increase the demand for public transportation.[9] He states that such an initiative would eventually lead to a supply shock forcing prices down, and improve real terms of trade.[9]


Mosler supports government purchases of houses in the foreclosure process from the bank at the lower of the fair market value or remaining mortgage balance. The government then would rent the house back to the original owner and after two years the house is put on the market with the original owner having the first rights of purchase.[10]


Mosler supports eliminating the income tax and replacing it with a real estate tax to "anchor the currency".[11] He also supports eliminating tax advantages for any savings accounts, since he states savings do not increase investments necessarily.[11] He supports luxury taxes being used to limit the consumption of outside goods.[11]

Academic work[edit]

Academically, he is known for his writings on Modern Monetary Theory, an economic theory that describes the way fiat money is created and used in modern economies.
In 2010 he published Seven Deadly Innocent Frauds of Economic Policy outlining errors that can be made in the development of policy and explains what he deems "true" as proper alternatives.[1]
In recognition that his "leadership in the field of economics is notable" Mosler was awarded an honorary doctorate from Franklin University Switzerland in 2014,[12] after that in 2013 the Mosler Economic Policy Center (a center founded by him and aimed at encouraging education and research in new concepts and methods of economic policy analysis)[13] promoted a lecture about functional finance at Franklin.[14]
In 2014 he became visiting professor at the University of Bergamo.[15]

Selected publications[edit]

  • “Critique of John B. Taylor’s ‘Expectations, Open Market Operations, and Changes in the Federal Funds Rate’,” Journal of Post Keynesian Economics, forthcoming.
  • “The Natural Rate of Interest Is Zero,” with Mathew Forstater, JOURNAL OF ECONOMIC ISSUES, Vol. XXXIX No. 2, 2005
  • “Public Sector Employment, Foreign Exchange and Trade, Achieving Full Employment,” edited by Ellen Carlson and William F. Mitchell, pp. 62–71, vol. 12, ELRR: Sydney, 2001.
  • “Unemployment and Fiscal Policy, Unemployment: The Tip of the Iceberg,” William Mitchell and Ellen Carlson (eds.), pp. 219–231, CAER: Sydney, 2001.
  • “Building a Palestinian Economy,” Middle East Insight, pp. 57–59, Washington DC, June–July 2001.
  • “Comment on ‘In the Interests of Safety,’ by Martin Mayer,” in The Management of Global Financial Markets, edited by Jan Joost Teunissen, pp. 94–101, FONDAD: The Hague, 2000.
  • “Exchange Rate Policy and Full Employment,” The Path to Full Employment, Ellen Carlson and William F. Mitchell (eds.), pp. 12–22, vol. 11, ELRR: Sydney, 2000.
  • “A General Framework for the Analysis of Currencies and Commodities”, in Full Employment and Price Stability in a Global Economy, edited by Paul Davidson and Jan Kregel, pp. 166-177, Northampton: Edward Elgar Publishing, Inc, 1999.
  • “Full Employment and Price Stability,” Journal of Post Keynesian Economics, Vol. 20, No. 2, Winter 1997–98.[1]


  • Soft Currency Economics II, ADS Incorporate, Kindle edition: 2012. Paper edition: 2013
  • In alto il deficit! (Up with the deficit!, book written in Italian), foreword by Paolo Barnard, Edizioni Sì, 2012
  • Seven Deadly Innocent Frauds of Economic Policy, foreword by James K. Galbraith, Valance, 2010
  • Soft Currency Economics,, 1993. Paper edition: AVM, 1995

Political campaigns[edit]

In February 2009, Mosler declared his candidacy with the Federal Elections Commission to run for the office of President of The United States as an independent.[16] In April 2010, he withdrew[17] to run in the United States Senate election in Connecticut, 2010,[3] briefly as a Democrat, but ultimately as an independent. In the final tally he received 0.98% of the vote.

Other Professional Activities[edit]

Mosler developed his own automobile line, Mosler Automotive, and designed several luxury sports cars and supercars that were briefly marketed starting in 1985.[2] His designs were marked by excellent performance and high-speeds.[18]
Mosler was so confident of one of his models, the Consulier GTP, that he offered a bounty to anyone who could beat it in a race. Car and Driver took up the gauntlet and defeated his car. However Mosler argued that the model used in the race was a worn out Consulier and thus offered the challenge once more for a higher bounty.[2]
In the 90s he developed environmentally friendly vehicles including both electric cars and composite-bodied automobiles.[2]


The company was sold off in June of 2013.[18]
He also designed his own catamaran that he prides on being much lighter, faster, and more fuel-efficient than other models.[2]

Personal life[edit]

Warren Mosler lives in St. Croix in the United States Virgin Islands where he resides full-time with Elizabeth O'Toole.[1]


  1. ^ Jump up to: a b c d e "About". Center of the Universe. 
  2. ^ Jump up to: a b c d e f "Warren Mosler". Car & Driver Report. 
  3. ^ Jump up to: a b Altimari, Daniela (February 25, 2010). "Another hat in the ring? Financial analyst Warren Mosler considers U.S. Senate run". Courant. Retrieved 28 May 2011. 
  4. ^ Jump up to: a b c d e f Lowery, Annie (July 4, 2013). "Warren Mosler, a Deficit Lover With a Following". New York Times. 
  5. Jump up ^ "Mosler's Law". Kenne Turner. Feb 20, 2009. 
  6. Jump up ^ Mosler, Sada (May 20, 2008). "Alternative Bank Liquidity Proposal". Center of the Universe. 
  7. ^ Jump up to: a b Mosler, Warren. "The Seven Deadly Innocent Frauds". Center of the Universe. 
  8. Jump up ^ Mosler, Warren (Mar 2, 2009). "Mosler Healthcare Proposal". The Center of the Universe. 
  9. ^ Jump up to: a b Mosler, Warren (May 22, 2008). "Energy Crisis Solution". Center of the Universe. 
  10. Jump up ^ Mosler, Warren (Feb 18, 2009). "Mosler housing proposal". Center of the Universe. 
  11. ^ Jump up to: a b c Mosler, Warren (Apr 26, 2009). "Current Proposals". Center of the Universe. 
  12. Jump up ^ Retrieved 28 January 2014.
  13. Jump up ^
  14. Jump up ^
  15. Jump up ^ Warren Mosler, visiting professor at University of Bergamo, DAEMQ Department, Lectures of International Monetary Economics, ME/MMT: The Currency as a Public Monopoly
  16. Jump up ^ "Warren Mosler". Federal Elections Commission. Retrieved 28 May 2011. 
  17. Jump up ^ "Warren Bruce Mosler Termination Report". Federal Election Commission. Retrieved 28 May 2011. 
  18. ^ Jump up to: a b Petrany, Mate (Jun 17, 2013). "Mosler Made The First Production Car With No Structural Metal In 1985". Jalopnik. 

External links[edit]