I find it very regrettable that you are reproducing the blind spot of MMT. The government's demand for money through taxes and tariffs is only a small part of the total economic demand for money. The vast majority of money demand arises from businesses, whose goods and services represent a far more dominant demand for money, resulting from supply chains and interconnected production processes.
If you look at the figures, you'll see that when the Federal Reserve was founded, the government's share of total economic demand was around 5%. This increased to approximately 25% during World Wars I and II, before falling back to 22%. After the end of Bretton Woods and the abolition of gold convertibility, the share rose to about 27% to 30%. Conversely, this means that over 70% of the demand for money comes from private businesses, because their supply of goods and services are based on the fact that they have to generate revenue to cover their costs and loans. This means that the state operates in parallel to supply chains and production interconnections, but does not create them. While the state's demand potential can occasionally lead to higher capacity utilization, it does not create the underlying production structure.
(BTW the posession of dollars do not grant you the right to buy something. The fundamental reason for using money is the existence of a purchase contract with a seller, where a payment obligation is contained. Without a purchase contract there is no use for money, just like you can find in the movie "An indecent proposal".)
Therefore, it is poorly justified to base economic arguments on such a one-sided foundation. Moreover, the statements of MMT are largely fictitious, as there is no unified "government" comprised of the Federal Reserve and the Treasury. This is because the Fed is legally prohibited from directly lending to the Treasury or directly purchasing USTs. For this reason, the instructions the Treasury gives to the Fed are structurally identical to the instructions banks give the Fed when they need to transfer funds to another bank. There is no difference, because all these instructions refer to existing balances held at the Fed. And no one would suggest that this creates money—it is all a reallocation of existing reserves.
It's actually the case that the Fed can buy any securities from banks, but not from the Treasury. Why this is the case is a separate issue, but it shows that the Treasury only acquires reserves indirectly through banks by selling USTs. And only when the banks sell these USTs to the Fed new central bank money is created.
I'm very much looking forward to part 3 of your little series. I hope that these half-truths of MMT, and the confusion they create, will only make up a small part of the forthcoming analysis.
Thank you for this detailed and technically rigorous response. You've raised important points that deserve direct engagement, and I appreciate the opportunity to clarify what I'm arguing and address your specific concerns.
On Facts vs. Theory
Let me start with a crucial clarification. You're critiquing MMT theory. I'm not advocating for any theory. I'm trying to explain operational mechanics that are verifiable facts about how the monetary system functions post-1971. There's an important distinction: the mechanical facts about how reserves move, how the Fed and Treasury interact, how the monetary base expands are observable realities that anyone can verify through Fed documentation and operational data. Theoretical frameworks like MMT, Post-Keynesianism, or New Keynesianism may build different policy prescriptions on those facts, but the underlying operational mechanics aren't theoretical. They're factual.
This 3-part essay series isn't about which economic theory is correct. It's about demonstrating how keeping these operational facts from the public has created an environment where people believe in economic mythology to their detriment. When citizens don't understand the basic mechanics of how the monetary system works, they make political decisions based on false constraints. This serves elite interests by limiting what people consider possible while those who understand the facts operate freely.
Addressing Your Technical Points
You've raised several specific mechanical points that deserve direct responses. I want to address each one factually:
On reserve mechanics and money creation:
You're absolutely correct about the mechanical sequence. When Treasury spends, it draws down existing reserves in its account at the Fed. To replenish those reserves, Treasury sells bonds to primary dealers (banks and broker-dealers) at auction, who purchase them using their reserves. New reserves are created when the Fed conducts open market operations, purchasing securities from banks in the secondary market. The Federal Reserve Act Section 14 explicitly prohibits direct Fed purchases from Treasury.
This is factually accurate. I'm not disputing these mechanics as they currently operate. What I'm pointing out is how these facts get obscured in public discourse, and how some of what appears to be operational necessity is actually institutional design choice (public policy that can be changed).
You mention there is no "unified government" comprised of the Federal Reserve and Treasury because they're legally separate. This is correct as a legal distinction, but it misses the institutional and sectoral reality. In macroeconomic sectoral analysis, there are three domestic sectors: households, firms, and government (the public sector). When we analyze sectoral flows and institutional roles, the Fed belongs to the public sector alongside Treasury. This isn't a modeling choice or theoretical preference. It's a sectoral fact.
The Fed's institutional role comes from the legal charter granted by Congress. Functionally, the Fed operates as an exclusive contracted operating unit of the government, granted a monopoly franchise to conduct monetary operations. Yes, there's legal separation in terms of direct transactions and operational independence. But the Fed's authority, its mandate, its very existence derives from Congressional charter. It exercises public functions under public authority, even if it operates with structural independence within that role.
It's worth noting that the specific institutional arrangement you describe (Treasury selling bonds to banks, then Fed purchasing from banks) is a policy choice embedded in current law, not an operational dependency of fiat currency systems. Other countries with sovereign currencies operate under different institutional arrangements. Some allow central bank overdrafts of government accounts, others have different mechanisms. The Federal Reserve Act could be amended to change these arrangements. The mechanics you describe are how the system currently works under existing legal constraints, not how it must work operationally in all fiat currency systems.
So when I refer to the consolidated government or unified public sector (Fed + Treasury), I'm describing their institutional role within the sectoral framework of the economy, not denying their legal separation. The public is told "government must find the money before spending" as if we still operated under gold standard constraints. That's factually false. The public sector, through the institutional mechanisms you correctly describe, can expand the monetary base in ways that were mechanically impossible under the gold standard.
These aren't competing theories. These are observable facts about system mechanics. The mythology keeping people ignorant of these facts serves those who understand them. Policy makers and their economic advisors understand them. The public has been systematically kept ignorant of them.
On Treasury instructions being identical to bank instructions:
You note correctly that at the operational level, moving reserves between accounts works the same way regardless of who gives the instruction. This is a verifiable mechanical fact.
You're also correct that the difference isn't in the mechanics of the transfer. But here's the factual distinction that matters for citizens: banks must obtain reserves through private transactions or Fed lending. Treasury obtains reserves through bond sales. The Fed can expand or contract total reserves through open market operations. These are different processes even though the final step looks mechanically similar.
The reason this factual distinction matters is about constraints. A currency issuer with a central bank faces different constraints than currency users. This isn't theory. It's observable reality. The constraint for the public sector as currency issuer isn't "do we have reserves" but "do we have productive capacity to mobilize without causing inflation." When the public doesn't understand this factual difference, they accept artificial budget constraints that don't actually bind the currency issuer in the same way they bind currency users in the private sector.
On Government's Share of Economic Demand
Your point about the 70/30 split is factually important and actually strengthens the argument rather than undermining it.
You're absolutely right that government doesn't create the underlying production structures. This is an observable fact about how the economy operates. Private businesses develop supply chains, organize production, create the goods and services that constitute real economic output. Government can utilize existing capacity but 70% of economic activity is fundamentally private sector production.
This factual reality is exactly why the emphasis must be on capacity rather than money. The operational question isn't whether government creates production capacity (it factually doesn't, except for specific infrastructure and public goods). The operational question is: given that productive capacity exists and is primarily private, how do policy decisions direct that capacity?
When the public believes the mythology that government faces money constraints (rather than understanding the factual capacity constraints), they can't ask the right questions. They focus on government budgets while 70% of economic activity operates according to different dynamics. The facts about how capacity works get hidden behind budget mythology. This isn't accidental. It serves those who understand the facts while keeping the public constrained by mythology.
You write that "possession of dollars do not grant you the right to buy something. The fundamental reason for using money is the existence of a purchase contract with a seller."
This is factually correct and actually supports the capacity argument. Money without available goods and services to purchase is meaningless. This is an observable fact. This is exactly why real constraints are productive capacity and resources, not the money itself.
The mythology obscures this fact. When people believe money is the constraint, they miss the factual question: do we have the productive capacity to meet public purposes? The factual answer to that question determines what's actually possible, not the mythology about government budgets.
On "Half-Truths" and "Confusion"
This is where I think examining the factual historical record reveals something important about who creates confusion and why.
Let's look at verifiable facts from Reagan's presidency. Reagan campaigned in 1980 on fiscal restraint, promising balanced budgets and fiscal responsibility. These are documented campaign promises you can verify. Once in office, he implemented combined tax cuts and increased spending (particularly defense). The factual deficit numbers from OMB Historical Tables (Table 1.1) show growth from $74 billion in 1980 to $221 billion by 1986. This produced measurable economic growth through what was functionally demand stimulus, despite anti-Keynesian rhetoric.
Here's what these facts demonstrate: Reagan's economic team understood the operational mechanics you and I are discussing. They understood that the constraints weren't what they told the public. They campaigned on balanced budget mythology while implementing policies based on factual understanding of how the system works.
If the operational understanding of how federal monetary processes work post-1971 were "half-truths," Reagan's team couldn't have used that understanding to produce measurable real economic results. The fact that they could campaign on balanced budgets (mythology) while implementing deficit expansion (operational reality) and achieve documented growth demonstrates that the operational understanding was factually accurate, not confused or half-true.
The confusion doesn't come from the operational facts being wrong. The confusion comes from deliberately maintaining public ignorance of factual operational mechanics while elites act on accurate understanding. When you tell the public "we must balance the budget" while your policies operate according to factual capacity constraints, you're creating confusion deliberately. When someone describes how the system actually operates mechanically, they're not creating confusion. They're revealing factual operations that have been deliberately obscured.
This isn't about theory. It's about facts that can be verified through Fed documentation, OMB data, and observed policy outcomes. The pattern across administrations is factual and documented: leaders campaign on "fiscal responsibility" while those who understand operational facts design policies that work differently than public rhetoric suggests.
When only elites understand the factual operational mechanics while the public accepts mythology, that's not presentation of facts. That's manipulation and exploitation.
Why This Matters for Democracy
This brings me to the core issue. When you write "the statements of MMT are largely fictitious," you're treating this as a theoretical dispute between competing economic schools. But what I'm pointing to isn't a theoretical dispute. It's a factual question: do citizens understand the verifiable operational mechanics of how the monetary system works, or do they make political decisions based on mythology?
After 150 years, economics maintains competing schools with fundamentally different theoretical answers to basic questions, resolving disagreements through institutional power rather than evidence. Meanwhile, the factual operational mechanics of how the system works remain obscured from public understanding.
This matters for democracy because people make political decisions based on what they think are economic facts. When the actual verifiable facts about how the system operates are kept from them, and they instead operate on mythology, their political choices serve those who understand the facts while limiting their own power.
The mythology I'm addressing is the factually false belief that government must "find the money" before it can act, as if we still operated under gold standard constraints. The factual reality is different. This mythology creates artificial constraints that make people believe they must choose between robust democracy OR functioning capitalism. The right concludes they need capitalism without democratic constraints. The left concludes they need democracy without capitalist markets. Both responses attack the American system based on factually false premises.
What Part 3 Actually Addresses
Part 3 isn't about defending any economic theory. It's about showing that the American system (democratic capitalism) can function to serve diverse ideological goals when people understand verifiable operational facts rather than accepting mythology that drives them to attack the system itself.
Your technical expertise about Fed operations and private sector money demand demonstrates you understand these facts. The question is: should these facts be widely distributed so citizens can make informed political decisions, or should factual understanding remain concentrated among elites who use it for their own advantage while maintaining public mythology?
The question isn't "is MMT right?" The question is: "Does keeping citizens ignorant of verifiable operational facts drive them to destroy the democratic capitalist system based on mythological constraints, and does widespread understanding of factual operational mechanics remove that destructive mythology?"
References for Verification
Since you're rightly focused on accuracy, here are references where you can verify the operational facts I'm discussing:
On federal spending mechanics: "The Federal Reserve System: Purposes and Functions" (Board of Governors publication) describes the factual process. When Treasury spends, it instructs the Fed to credit bank accounts, drawing on existing reserves. This is observable, documented operational reality.
On the post-1971 shift: Nixon's closing of the gold window is documented in the Federal Reserve Bank of St. Louis FRASER archives. The factual mechanical differences between commodity-backed and fiat currency systems are described in standard texts like Mishkin's "The Economics of Money, Banking, and Financial Markets."
On Reagan's deficit expansion: Office of Management and Budget Historical Tables (Table 1.1) provide the factual numbers.
These are verifiable operational facts, not theoretical positions. The facts exist independent of what any economic theory says about them.
Moving Forward
I suspect we have more common ground than this exchange might suggest. You clearly understand the factual operational mechanics deeply. My concern isn't about theoretical disputes between economic schools. My concern is that keeping these verifiable facts from the broader public has created an environment where citizens make political decisions based on mythology rather than operational reality, and this serves concentrated interests while undermining democratic capitalism.
This is a strong diagnosis of how purity politics turns into strategic paralysis.
One additional layer worth naming: reform stops working not when people lose faith in markets or democracy in principle, but when legitimacy and time horizons collapse faster than institutions can adapt.
In that regime, both “revolution” and incremental reform fail, not for moral reasons, but because coordination itself breaks.
The next question isn’t just whether reform works, but what institutional forms can still carry legitimacy at scale once trust, time, and accountability decouple.
This is an excellent observation that gets at something fundamental.
You're right that the deeper issue is legitimacy collapse when trust, time horizons, and accountability decouple. I'd argue that knowledge asymmetry is a primary driver of this decoupling. When elites understand operational realities (how monetary systems actually work, what constraints are real vs. mythological) while the public operates on false premises, legitimacy collapses because institutions appear to fail at delivering what people vote for - when actually they're being constrained by mythology rather than operational reality.
The public votes for programs. Politicians say "we can't afford it." Nothing happens. Repeat for fifty years. Eventually people conclude either democracy doesn't work (the right's response) or capitalism is irredeemable (the left's response). Both responses attack the system rather than the mythology creating the legitimacy crisis.
Breaking knowledge asymmetry doesn't just restore legitimacy - it enables the time horizons and accountability mechanisms you're describing. When citizens understand they're managing capacity (resources, productive capability, institutional quality) rather than managing budgets, they can ask: Do we have the workers, materials, technology? What institutional design prevents capture? What accountability mechanisms ensure this serves stated purposes?
This shifts from "vote and hope experts handle it" (which breaks down when trust decouples) to sustained engagement as capacity stewards (which rebuilds legitimacy through transparency and accountability). It's more demanding, but it addresses exactly the coordination problem you're naming - coordination around verifiable facts and quality institutional design rather than around mythology that elites exploit.
The question about what institutional forms can carry legitimacy is what I'm exploring for 2026 - how do citizens as capacity stewards evaluate and demand institutional quality that prevents capture and maintains legitimacy through transparency?
Thanks for this insight - it's exactly the right question.
that was spot on. i'm wondering about degrowt (décroisance) and how that would help the earth climate. and about the probable decline when all the resources are used up. could you comment on that?
Thanks Tim! Great question. Let me clarify my position on degrowth since I'm simplifying it in the essay for space.
I'm not attacking degrowth's environmental concerns, which are completely valid. Climate breakdown and resource depletion are real threats. Leading degrowth scholars like Jason Hickel have explicitly integrated Modern Monetary Theory into their framework. Hickel understands that governments with monetary sovereignty face no financial constraints on funding ecological transition, that taxation doesn't fund spending, and that the real constraint is productive capacity not money. That's the same soft money understanding I advocate throughout the essay.
So where's my concern with degrowth? It's about how the framing shapes the conversation:
The framing itself may reinforce scarcity thinking. Even when degrowth scholars correctly understand monetary operations, the language of "degrowth" centers reduction and contraction. This can accidentally reinforce the scarcity mindset that enables hard money mythology to persist in broader public discourse, even when that's not what the scholars intend.
Consider: Hickel correctly says "wanting to cut GDP is as senseless as wanting to grow it. The objective is to scale down the material throughput of the economy." But the term "degrowth" itself frames the problem as needing less, which can keep people thinking in scarcity terms.
Here's what I mean about the proxy problem: Building coal plants increases material throughput. Building solar farms also increases material throughput (manufacturing panels, mining materials, construction). Expanding highway systems increases throughput. Expanding public transit increases throughput. Clear-cutting forests increases throughput. Restoring degraded ecosystems while employing people increases throughput (people doing restoration work need tools, materials, transportation).
The real issue isn't the quantity of material throughput but whether that throughput depletes resources, damages ecosystems, and who controls the direction of our productive capacity. GDP can't distinguish between these. Material throughput measures also struggle with this distinction.
The questions I think matter more: Do we have workers, materials, and technology to build sustainable systems? How do we prevent rent capture by fossil fuel interests? What accountability mechanisms ensure projects serve ecological goals rather than greenwashing? How do we build capacity for regenerative production while preventing extraction? What quality institutions enable democratic direction of our productive capacity toward sustainability?
These are capacity management questions focused on institutional design and democratic control, not questions about whether we're growing or shrinking aggregate measures.
On resource depletion: Real for some materials, but the framing matters. We're not running out of energy (the sun provides more than we could ever use). We're running out of ecological capacity to absorb waste and maintain stable climate. That's not a "growth vs. degrowth" question but a capacity management question: How do we redirect our productive capacity toward regenerative rather than extractive systems? What quality institutions prevent capture by interests profiting from environmental destruction?
That transition requires massive investment in new systems, retraining workers, building infrastructure, and restoring ecosystems. This is growth in employment, industrial capacity, and economic activity, even while it may reduce material throughput in some sectors and redirect it in others.
The citizenship role this implies: Understanding that the federal government creates money when it spends changes the democratic conversation. Instead of arguing over "can we afford the transition," we have to discuss how investments, resource planning, and outcomes are decided and prioritized. Citizens shift from being fiscal managers asking "how do we pay for it" to being capacity managers asking "how do we build quality institutions that direct our productive capacity toward sustainability while preventing capture by extractive interests." It's a more difficult role but one we owe to each other if we believe in democratic governance.
Does that help clarify? The issue isn't degrowth's environmental concerns or their understanding of monetary operations. It's that framing the solution as reduction and contraction, even when scholars understand it's about redirecting not reducing, may inadvertently keep people in scarcity thinking rather than shifting to the capacity management mindset we need for democratic direction of our productive systems.
As usual, a lot of good stuff in here. As far as I’m concerned, though, the argument is couched in a framework that’s fundamentally flawed: left versus right is a lie, meaning that it’s a very poor means of separating out fact from fiction. You can tell this because no company, and no other social institution outside of politics, uses “left versus right” to make strategic decisions. If it’s a terrible means of arriving at wise decisions on the level of an extended family or a company, there’s no way it’s a good framework for much larger and complex institutions like nation states.
Thanks Lewis, you're touching on something important that I've been thinking about a lot.
You're right that left versus right is a limiting framework. Companies don't organize around "are we left-wing or right-wing capitalists?" They ask: what's our capacity, what are our constraints, how do we build quality systems, who makes decisions, what accountability mechanisms prevent capture?
Here's how I'm using the left/right framework in the essay: I'm describing how people currently organize politically and how hard money mythology affects different political coalitions. But you're identifying a deeper issue - that framework itself keeps us trapped in binary thinking when the real questions are about institutional design and capacity management.
Think about it this way: The American system combines democracy (collective decision-making) with capitalism (market-based wealth creation). That's not an ideology, it's a framework where all ideologies compete. Within it, you can pursue efficiency or justice, transformation or stability, collective ownership or individual enterprise. The system is the stadium where teams compete, not the team you're on.
What happens when we understand soft money operations? The conversation shifts from "left wants this, right wants that, we can't afford both" to "we have these real resources, this productive capacity, these workers and materials. How do we build quality institutions that direct capacity toward goals while preventing capture by concentrated interests? What accountability mechanisms ensure projects serve stated purposes? Who decides priorities and how?"
Those are the questions companies ask. They're also the questions citizens should ask when we understand that federal spending isn't constrained by tax revenue but by real productive capacity.
The shift this enables: Instead of "are you left or right on climate policy," the questions become: Do we have workers, materials, and technology for transition? How do we prevent fossil fuel interests from capturing the process? What institutional design ensures projects serve ecological goals? How do we build regenerative capacity while preventing extraction?
You can pursue these questions from conservative values (efficient resource use, accountability, avoiding waste), progressive values (justice, sustainability, worker power), libertarian values (genuine choice, exit options, preventing monopoly), or any other framework. Different ideologies support quality institutional design for different reasons.
So I hear your critique. Left versus right is how politics currently organizes, but understanding monetary operations enables moving beyond that binary to the harder questions about capacity management and institutional quality. That's where the real work is - and it's work that transcends the left/right framework because it's about making the system function rather than picking an ideological team.
Does that address your concern? I'm still working on Part 3 of this series, but that essay may resolve what you've identified (and if it doesn't I'd love to hear your thoughts about it). Thanks for reading and engaging.
You write interesting stuff, by life's experiences have made me about 10% different from you (and I'm not saying better). You have good problem diagnoses and we line up on that but, imho, your frameworks for fixing them are likely suboptimal because there's ample evidence they don't/can't work.
Yes, I'm advocating for ABANDONING "left versus right" which (1) changes over time - I can go back and show you that "liberals" were for free trade a century ago while "conservatives" wanted to wall off the country, but there are other examples, so right away you can tell there's no such thing as "static" liberal or conservative beliefs when it comes to the major US political parties over time, and (2) there are all sorts of subjective lies used by sophisters and self-interested frauds packed into the current iteration of LvR in any given moment, which are designed raise emotions and block/prevent people from understanding and acting on deeper, more consistent truths.
By simply using LvR, you've already lost the way forward. Everyone will immediately bring their own, often subjective, ill-informed, ands sometimes outright inaccurate beliefs, and pile them onto "your LvR framework," whether you like it or not. Whatever point you hoped to get across will either be obliterated, or at best added and subverted to the (intentionally) toxic superfund site that is LvR.
Imho, your framework for future change should not touch LvR. The good news is that other frameworks can and should be based on science. Just stick to that. Companies do this all the time: they use the scientific method to determine, as best they can, wise choices from poor choices and do the best they can. That's liberalism. That's the scientific revolution in action that came out of the Enlightenment. Any company that used LvR to make decisions would soon run into a wall and crash and burn, so they DON'T DO IT. If you want to create hit, stick with LvR. If you want to create light, stick to science. That's how liberals will win: by doubling down on what produced the Industrial Revolution in the first place - along with the rise of science, came the rise of democracy. Those 2 always and everywhere rise and fall together.
Hi Lewis - thank you for this valuable feedback. You've identified something important that others have noticed too, and I want to address it directly.
First, for transparency: I'm a progressive. I own that and advertise it so readers know where I'm coming from. But that's not what I'm writing about, and Parts 1 and 2 weren't meant to be ideological strawmanning based on my progressive perspective.
What I'm trying to surface is verifiable operational facts about how monetary systems work post-1971, and how widespread ignorance of those facts (what I call mythology) is driving both political extremes to attack the American system itself. The facts about how reserves move, how the Fed and Treasury interact, how the monetary base expands - these are observable realities that can be verified through Fed documentation and operational data, regardless of anyone's ideology.
Your point about companies using scientific method rather than left/right ideology to make decisions is exactly right. Scientists have political views, but that doesn't make the science political. Similarly, I have a progressive ideology, but the operational facts about monetary mechanics exist independent of my political preferences or anyone else's.
The reason I structured Parts 1 and 2 the way I did wasn't to advocate for progressive policies or criticize either side from my ideological position. It was to show how the same factual misunderstanding (believing we still operate under gold standard constraints when we actually operate under fiat currency constraints) drives both extremes to conclude they must destroy the system - the right thinking they need to abandon democracy, the left thinking they need to overthrow capitalism.
Part 3 addresses this directly: preserving the American system (democracy and capitalism working together) requires widespread understanding of operational realities rather than making political decisions based on mythological constraints. This matters regardless of ideology because every ideology needs a functional system to compete in.
Where you advocate for sticking to science and evidence-based decision making, I'm advocating for the same approach - understanding verifiable operational facts rather than accepting mythology. The parallel to the scientific revolution is apt: citizens making political decisions based on operational realities rather than economic mythology, just as the Enlightenment demanded evidence over dogma.
Okay, I look forward to reading your part 3, but to quote Reagan in the meantime, "There you go again."
What you call mythology I call ideology but, imho, only extreme conservatives are ideologues. Extreme liberals believe in science, and you may call science a philosophy, but it is NOT an ideology (go look up the difference). There is a better way forward and it IS the most pure form of liberal philosophy possible, and it has been around since the Enlightenment (not that liberals have lived up their own ideals). The right answer for progressives is to get back to basics.
Stated another way, your framework is wrong, imho. Your yardstick don't measure straight. Your scientific process is flawed. Hence above you wrote:
"is driving both political extremes to attack the American system itself"
"wasn't to advocate for progressive policies or criticize either side from my ideological position"
"drives both extremes to conclude they must destroy the system - the right thinking they need to abandon democracy, the left thinking they need to overthrow capitalism"
No, no no.
You're in the LvR tar pit in all 3 cases (and may not realize it).
There is no U.S. communist party. Once you jettison LvR and put everyone who believes in using the best available science and the most representative democracy possible to make decisions on one side of the ledger, and those who put their ideology (whatever it may be) above science and democracy on the other side of the ledger, you'll see that that the .0001% of Americans who call themselves liberal and who want the overthrow the U.S. government/capitalism based on Marxist bullshit (that has been proven egregiously wrong the world over for 100+ years), you'll see these supposed liberals are, in fact, conservatives (who don't understand or deny history, math, logic and science).
Imho, the house cleaning that needs to happen before material progress can be made is for a liberal and progressive movement to come together that puts science, efficient capitalism, and democracy at the center of its agenda - all 3 are rational processes that fit together beautifully - and then push everyone else out who refuses to do the same. The .0001% of revolutionary U.S. commies will all be strained out with the rest of conservative sophisters in the process. Good riddance.
Imho, my prediction is that your "pox on both their houses" framework will be embedded in part 3 and will obfuscate (what my life has led me to believe is) the wise way forward for progressives. Science, efficient capitalism, and democracy will all go down in a conservative conflagration if the progressive side doesn't get back to basics, in which case God help us all.
Before we talk about philosophy I think it’s important we agree that definitions matter. If we can’t agree on what something means then how is there any basis of common discussion or reality?
When I talk about Mythology vs Facts I mean beliefs versus things we can observe or test and confirm. Ideology does represent our beliefs and aspirations - it does represent our personal philosophies.
When I say that taxes fund the federal government is a myth I mean that this can be observed or is documented in procedure. What we want to do with that information does reflect our ideologies but those are two different things.
Also I would definitely not conflate science and ideology and I’m very clear about what a science is in my essay Economics is not a Science.
I agree that you believe science is not an ideology (it's a process that humans have developed to do our best to separate fact from fiction).
If you believe the U.S. Treasury does not collect taxes from families and businesses and so on, and that the government doesn't then repurpose most of those tax resources to fund its services, then no, we disagree.
Thank you for writing this provocative piece. I can't say I agree with your central arguments and conclusions here.
One big background problem I see is that this piece relies almost exclusively on high-level summaries for the views you're attacking. You don't specifically cite anything about the views your criticize, so it's hard to know what exactly you're criticizing. For example, you slam the notion of "immediate degrowth" but don't really cite anyone from the degrowth literature (like Hickel, Kallias, and others, there are a million people you could have chosen). Immediately before that sentence, you talk about how we need to be growing clean energy and promoting sustainability. But that's completely consistent with what most degrowth advocates would say as well: we need to reduce harmful economic sectors and grow the ones that are good for society and the planet. That's the kind of risk you took with your general approach here: because your ideas and the views you're criticizing are presented so broadly and generically, your own views may end up significantly overlapping with what you're criticizing! You quote and cite people extensively in most of your prior posts, which is great. That's how it should be. But for some reason, you didn't really do that here.
Your post also gives the impression that people on the left are just waiting around for the revolution to happen while the rich capture all institutions. That would be news to many people in organizations like the DSA, which has worked hard to organize everyone from teachers to baristas and actively works to swing local elections towards its preferences candidates, with great success in local council elections across America's major cities (and Mamdani being the prime example obviously). Most people on the left understand that we need to work within system, even if on the whole we may have major issues with how the system works. Even Lenin, the greatest revolutionary leader of modern times, knew that there had to be a transitional phase between capitalism and socialism. That's why after the end of the Russian Civil War he implemented the New Economic Policy, which established a mixed economy that allowed small and medium-sized businesses to remain private while also letting most farmers sell their crops on the market for a profit. The NEP spurred a lot of intense discussions within the Communist Party about the right path forward. All of this nuance and so much more is absent from your post, precisely because you repeatedly overgeneralized.
I think the notion of democratic capitalism is a bit of an oxymoron, as capitalism has pushed countless societies towards dictatorship in modern times (Hitler, Mussolini, Franco, Pinochet, etc). But at the end of the day, the devil's in the details. Much of it comes down to how you want to define things, to what kinds of language games you want to play, to echo Wittgenstein. It's possible to define any terms in the right way so you can make them compatible. That's why libertarian socialism is an actual intellectual current. So sure, if you want to preserve a notion of democracy that's closer to modern Western liberal democracy, you can make the two compatible in various waysm But I prefer other conceptions of democracy, ones that focus on boosting the economic and political power of the working class. For me, a democracy is a system where the working class is in charge, and that can't ever really be compatible with capitalism.
I could say a lot more about your post, but I'll leave it at that. This was an interesting read
Erald, thank you for this detailed critique. You've identified real weaknesses in Part 2 that have been incredibly valuable for my thinking. Let me address your points directly.
You're absolutely right about the lack of specific citations. Part 2 relied too heavily on high-level characterizations rather than engaging with actual literature. On degrowth specifically, you caught an important issue: Hickel and others explicitly advocate growing clean sectors while shrinking harmful ones, which overlaps significantly with what I'm arguing. The distinction I should have been making is more nuanced than Part 2 captured.
Here's what I'm actually concerned about with some degrowth framing: even when scholars like Hickel correctly understand monetary operations (he's explicitly integrated MMT), the language of "degrowth" centers reduction and contraction in ways that may inadvertently reinforce scarcity thinking in broader discourse. But that's a critique about framing and political strategy, not about the substance of the scholarship or their understanding of soft money mechanics. Part 2 didn't make that distinction clear.
On characterizing the left as waiting for revolution: You're right, that's an overgeneralization that doesn't reflect actual organizing. DSA's work, Mamdani's campaign, local council victories, all the grassroots institution-building happening across the country - these are exactly examples of working within the system to build power. Your Lenin/NEP example is perfect: even revolutionary theory recognizes the necessity of working within existing structures. I should have been more precise about distinguishing between rhetoric that promotes revolutionary paralysis versus actual organizing that builds institutional power now.
On "democratic capitalism" as potentially oxymoron: This gets to something important about how the framing evolved while I was writing. You're right that capitalism has enabled countless dictatorships. But here's what I'm trying to describe: not capitalism as ideology, but the American system as framework - the combination of democratic governance (collective decision-making) with market-based wealth creation that creates a space where all ideologies can compete. Within that system, you can pursue working class power, collective ownership, economic democracy, or any other vision through democratic means.
Think of it this way: the system is the stadium where ideological teams compete, not the team you play on. Your vision of democracy as working class in charge - that's achievable through building quality institutions within this framework. It requires using democratic power to create institutions that shift economic control to workers: strong unions with real bargaining power, worker representation on boards, public ownership of key sectors, job guarantees that give workers permanent exit options from exploitation, public banking that directs credit toward worker cooperatives rather than extractive finance.
What I'm realizing the conversation should focus on: When we understand soft money operations, we shift from fiscal management thinking ("how do we pay for working class power?") to capacity management thinking ("how do we build quality institutions that shift economic control to workers while preventing capture by capital interests?"). The questions become: What institutional designs give workers genuine power? What accountability mechanisms prevent co-optation? How do we use public capacity to support worker organizing and collective ownership?
Your conception of democracy as working class power doesn't require overthrowing the system. It requires building quality institutions within it that shift power. The examples you gave - DSA organizing, local elections, Mamdani's campaign - that's exactly what this looks like in practice. They're using democratic processes to build working class power through institutional change.
Where you've helped sharpen my thinking: The generic characterizations in Part 2 obscured what should be the central argument. It's not "left ideology bad, democratic capitalism good." It's "hard money mythology makes transformation seem impossible within the system, which drives people toward either accepting dysfunction or attacking the system itself, when understanding soft money operations reveals we can build the institutions we need for genuine working class power right now."
The devil is in the details, as you say. And those details are about institutional design, accountability mechanisms, and preventing capture - not about defending capitalism as ideology but about recognizing we can build democratic worker power within the existing framework if we understand how money actually works and focus on quality institutional design.
Does this address your critique? I'm genuinely grateful for the feedback because it's pushing me to be more precise, conscious and intentional about what I'm actually arguing which I will sharpen in Part 3 of this series.
Thanks for the thoughtful reply Chevan. Always appreciate your perspective, even when we don't fully see eye-to-eye on things. I try to read almost everything you publish here on Substack. Keep doing what you're doing!
Erald thank you for taking the time to read and provide detailed feedback. I always appreciate your thoughts and it gives me a lot to think about - which I will... and will come back with a more detailed response. This is feedback is invaluable for shaping Part 3 which is still in development and I'm grateful for you helping to shape that narrative. I hope you're enjoying the wind down to 2025 year-end and the holidays.
My Dear Mr. Edwards, Let me begin by saying that I have not "removed myself from the fight." I have cognitively reframed the concept of socioeconomic and political struggle from depending on flawed human personality. My point is not Martin Seligman's learned helplessness, to which you referred. Rather, I have based my analyses on two salient and related factors. First and foremost, the professional political planners to whom to referred as structural architects possess the same human flaws we all possess such as fear, greed, and some point at which belief becomes a mere commodity exchangeable for a sum on money. Second, the notion of "the fight" to which you referred suggests pressures which also distort human behavioral choices. I try to conceptualize the struggle for true equality and democracy not as "us versus the billionaires." But rather as humans seeking a way to live on planet Earth by establishing and sustaining an improved way to function in community without conflict and violence. It's a huge undertaking with no guarantee of success. However, my concern is that fear and greed, white supremacy, and ownership of private property have so distorted out thinking and behavior that we cannot imagine any other way. Thank you for helping me achieve greater clarity in my thoughts process. I hope we might continue these discussions. I'm 74 years old and will someday pass on. Nevertheless, I continue to believe that this life can be made better by people whose caring hearts, open minds, and helping hands build the better life for all we both seek. Merry Christmas and Happy New Year to you and your loved ones.
Having wisdom represent in the comments is always a blessing. You'll be around for a long time and will see a lot of amazing things.
Regarding: However, my concern is that fear and greed, white supremacy, and ownership of private property have so distorted out thinking and behavior that we cannot imagine any other way.
I, personally, look at that as "evil will always exist" - people who don't wish good things for other people. For those of us who want to live our individual way in peace we have to fight for the system that will allow us to do that and that's what I'm trying to do with my writing in a really small way. I believe in democracy, private property, individual liberty, capitalism but structured in a way that serves all of us not just the prvileged, wealthy or powerful. I believe if we fight for those things, they are possible... I may be naieve but it is what I believe.
Your restricted in your thinking by certain assumptions. Let me suggest for your consideration:
1 Rather than engage in respectful discussion with me as a fellow human being your preference is to either persuade me that you're right and I'm wrong or perhaps you simply want to win the debate.
2 Campaign finance restrictions can be restored. However, the movement in that direction is disorganized and effectively blocked for the moment by a thoroughly corrupt supreme court.
3 Who said anything about revolution? Violence merely replaces old killers with new ones.
4 Hearts and minds don't change through speaking or writing. People must experience depths of awfulness like war, famine, flood, natural or man-made catastrophe in order to realize that their personal path and goal in life must change.
5 White supremacy is the fundamental base upon which capitalism is built. I'm not an advocate of Karl Marx. Nevertheless, humans as a species are deeply flawed. We're too quick to anger, throw off rationality, and descend into violence. Decades, perhaps centuries, must pass before whomever is left alive, if anyone, learns this vital lesson.
6 With all due respect, and I genuinely mean this, all the things you've predicted have already taken place. Please don't feel obligated to build on base of sand. Without real character virtues, all human endeavor risks being lost or subsumed in unexpected outcomes or unanticipated consequences. The real revolution must be internal, within the heart and mind of each individual. Not for power, or wealth, or status. Higher values include justice, compassion, inclusion, sharing, and equality. If I knew how to get there I would already be doing it.
Jerry, I'm not sure if you were replying to me or someone else (Substack threading gets confusing).
If you were replying to me: I actually agree with your point #6 about character virtues being foundational. You're absolutely right that without justice, compassion, inclusion, and equality driving us, institutions fail.
Here's where I think we complement each other: I focus on monetary understanding because when people believe good ideas are economically impossible before they're even tried, they don't organize for them. The "we can't afford it" myth kills coalition-building before it starts.
My hope is simpler than you might think: if enough people understand how money actually works, they'll recognize their ideas for a better society aren't unfeasible. That unshackled economic thinking could create the critical mass of popular support needed to demand what we actually want - whether that's the values you describe or pragmatic institutional reforms or both.
You said "If I knew how to get there I would already be doing it." I think the path requires both what you're describing (internal transformation toward higher values) AND what I'm describing (understanding we have more economic and political power than we've been taught). Not either/or, but both/and.
We might be aiming at the same destination from different angles.
"Strategic paralysis disguised as principle" = learned helplessness trap in different clothes. Same meta-problem.
The institutional quality point is crucial. Question that follows: who designs institutional quality? We don't have professional governance architecture - politicians make design decisions based on electoral incentives.
Your "democratic capitalism with proper oversight" requires someone to professionally design that oversight. That's the governance architecture gap.
Great piece. Different angle on the same structural problem.
regarding: Question that follows: who designs institutional quality?
Honestly- we have to demand quality and our politicians have to show us they are doing it and putting us on the road or they are out. I think that's the next level for democracy to survive is widespread civic activism not just passive and occasional voting. The bar is very high, but so is the risk that is looming in front of us. The little part I can do is maybe being a catalyst and enabler of that happening.
Agreed. That was the impetus for starting The Statecraft Blueprint, and it is my singular goal. I'm currently working on a series of essays that addresses this. It's just a massive undertaking and has turned into a bigger project than I imagined.
I respectfully disagree. Every American institution is, in fact, irredeemably corrupt. You're espousing a fantasy that past regulatory actions can be resurrected. Eight hundred billionaires say they can buy more politicians than your fanciful dream can persuade. This is late stage capitalism we're discussing. Your assumptions are outdated and no longer useful. It's all pay to play now. Perhaps your book sales can earn a sufficient amount to buy your way into the decision making chamber. If not, you're merely shouting into the wind.
You're proving Chevan's point about strategic paralysis. Let me show you the trap you're in:
You say institutions are "irredeemably corrupt" - meaning reform is futile. So what's your alternative? Revolution? Collapse? Waiting for conditions to change?
While you wait, those 800 billionaires you mention are actively using the institutions you've abandoned to consolidate control. They don't need to defeat you - you've defeated yourself by declaring reform impossible.
Here's the structural question: Why does "pay-to-play" exist?
Not "who's doing it" - but what design feature of our governance architecture allows politicians to sell access?
The answer: We have no separation between "people who make policy decisions" and "people who design the rules about how policy decisions get made." It's like letting the sales team design the product architecture based on what's easiest to sell.
Campaign finance corruption isn't inevitable - it's a design flaw with a design solution. We just don't have professional governance architecture to implement that solution, because politicians designing their own rules have zero incentive to remove pay-to-play.
The difference between "reform is futile" and "reform requires changing the governance architecture itself" is the difference between learned helplessness and structural thinking.
Billionaires don't fear your outrage. They fear organized demand for institutional redesign. Your framework gives them exactly what they want: no organized opposition.
- It's like letting the sales team design the product architecture based on what's easiest to sell.
- The difference between "reform is futile" and "reform requires changing the governance architecture itself" is the difference between learned helplessness and structural thinking.
Jerry, I really appreciate this comment. You're expressing exactly the frustration I'm addressing, and you're right about crucial things.
What you get right: Billionaire influence over politics is real and documented. Regulatory capture happens. Institutions get corrupted by concentrated wealth. The pay-to-play dynamic you describe isn't paranoia - it's observable reality. Any serious framework must address these concerns.
But here's where I disagree: Concluding that "everything is irredeemably corrupt" leads to strategic paralysis that serves exactly the wealth you oppose. While you debate whether reform is possible, those 800 billionaires operate unopposed through the institutions you've abandoned.
The alternative I'm proposing is designed specifically to constrain billionaire power:
Quality institutions with restraint mechanisms prevent any single actor from dominating. Transparency makes corruption visible and punishable. Accountability creates consequences for capture. Evidence-based operation makes rent-seeking harder to hide. This isn't naive faith - it's specific institutional design addressing the corruption you correctly identify.
Historical proof: The New Deal constrained concentrated wealth during the robber baron era. The GI Bill built broad prosperity despite elite opposition. Medicare passed against insurance industry resistance. These weren't revolutions - they were well-designed institutions with enough political pressure to implement them.
You say I'm "shouting into the wind." My target isn't politicians or billionaires - it's people like you. Your frustration is valid, but it's also exactly what concentrated wealth wants: people who understand the problems giving up on solutions. When enough people recognize we can fund quality institutions through understanding monetary operations, that collective power constrains even billionaires.
The question isn't whether billionaires exist but whether we organize effectively to build systems they can't capture. Giving up guarantees they win. Building coalitions around institutional quality gives us a fighting chance.
I'm not selling books to buy influence. I'm not selling anything. I write because I've learned something that changes the game: understanding how money actually works reveals we have more power than we've been taught. You already see the corruption clearly. What's missing is recognizing that quality institutional design can constrain it. When people who understand the problem also understand the solution, that's what actually threatens concentrated wealth.
My opinion is that organizing institutions billionaires cannot capture is a logical fallacy. My experience has been that the amount of bribery money matters. Artificially low interest rates in more than a decade of accommodative Federal Reserve monetary policy created excess liquidity that has been hoarded by oligarchs. Anyone who is too virtuous to be bribed will likely be murdered. The oligarchs we're discussing are as ruthless and merciless as Vladimir Putin.
Jerry, I want to show you something about the pattern you're stuck in - not to attack you, but because I think you'll recognize it once I point it out.
Here's what just happened:
Chevan: "Here's how institutional design can constrain concentrated wealth"
You: "That's impossible - they'll just capture it"
Chevan: "Here's historical evidence it worked"
You: "That was different - now they're too powerful"
Chevan: "Here's the specific mechanisms"
You: "They'll murder anyone who tries"
Notice the pattern? Every time a solution appears, you escalate the threat to justify why it can't work. This isn't analysis - it's learned helplessness in action.
Here's the structural question you're not asking:
Why do we even have a system where billionaires can capture institutions?
Not "how much money do they have" - but what design feature of our governance architecture allows wealth to convert directly into political power?
The answer: We let the same people who benefit from corruption design the rules about corruption. It's like asking foxes to design henhouse security.
The real question isn't "can we outspend billionaires?" It's "can we separate institutional design from electoral politics?"
Politicians design lobbying rules (while benefiting from lobbying)
Politicians design oversight mechanisms (while wanting to avoid oversight)
This is a governance architecture problem, not a money problem.
What if we had professional governance architects - insulated from electoral cycles, measuring success by institutional performance, designing the systems within which politicians operate?
You know how the Federal Reserve makes monetary policy decisions without Congress voting on interest rates every cycle? Same principle. Professional institutional design separated from the people operating within those institutions.
Would billionaires try to capture that too? Of course. But here's the difference:
Current system: Politicians design their own rules while needing billionaire money
Alternative: Professional body designs accountability mechanisms, transparency requirements, enforcement authority - and politicians operate within those rules
It's the difference between "please police yourselves" and "you're being policed by an independent professional body."
Your framework - "they're too powerful to stop" - is exactly what concentrated wealth wants you to believe. While you cycle through escalating reasons why nothing can work, they're consolidating control through the institutions you've abandoned.
Chevan's point about strategic paralysis isn't an insult - it's a structural observation. The system produces this hopelessness in you. Not because you're wrong about billionaire power, but because you can't see the governance architecture alternative.
The question isn't whether billionaires are ruthless. It's whether we're going to design systems that constrain ruthless actors, or give up because ruthless actors exist.
One path leads to professional governance architecture with enforcement authority. The other leads to exactly the technofeudalism you're describing - because you removed yourself from the fight.
Dear Mr. Nanayakkara, My choice is to cognitively reframe the political, economic, and social struggle away from the “fight” against oligarchs to building the “beloved community” espoused by humanists like Ghandi and ML King, Jr. I recently read an essay by Substacker Qasim Rashid, Esq. (Highly recommended) He talked about his religious beliefs and ethical principles of the Muslim Faith. As you know, the term “jihad” has been hijacked and distorted for white supremacist purposes to suggest terrorism. I'm sure you actually know jihad means a process of self-evaluation in the context of Muslim principles that improve one’s personal choices and which ultimately enhances piety. Such an “internal process” is what I have in mind. Humanity cannot cast off the social Darwinian concept of predation in which we are currently stuck. My concern is that without human advancement all attempts to humanize capitalism will end up captured and co-opted by the predators. Please be assured that I value and appreciate our correspondence, for which I thank you with sincere gratitude. We are in what many Americans call “the Holiday Season.” In truth, we can advocate and model peace on earth, goodwill, and giving gifts to others every single day. In this spirit of generosity I extend to you my hope for your abundant health and happiness throughout 2026.
Please call me Chevan, for heaven's sake, no formality here, though your graciousness is appreciated.
Regarding politics, in my "old age" I've recognized it is a fight. Seeing what has happened in the U.S. over the last 50 years has really opened my eyes to the extend to what people will say and do to protect power, wealth and privilege. As an example, I frequently refer to mainstream economics as "the greatest fraud perpetrated against humanity".
I believe that we can build political and economic systems to allow individuals to flourish and live together - it's not logical to believe that but I guess lots of people believe things that aren't logical and this is mine.
I think you and I want good things but good things are not given, they have to be fought for, won and then defended. The Americans who came before us did a great job with that in their time and in their context. My writing and trying to build collective power for commond good is the small contribution I am trying to make towards all of us having good things in my time and my context.
I hope you enjoy the Holidays and the wind-down to the end of 2025 and it sets up a healthy, happy and prosperous 2026 for you and I thank you for being part of my audience and community.
This is brilliant work on the paralysis trap. The way strategic paralysis gets dressed up as principle is spot-on, saw this play out in alomost every organizing meeting Ive been to where we spent hours debating theory while landlords quietly lobbied city council. Denmark's 30% higher business formaton rate is the kinda concrete evidence that cuts through the purity nonsense.
Thank you for reading and engaging. I have my own policy framework but honestly I just want Americans to have good information about how disengagement leads to the opposite outcome they want. I appreciate your thoughtful comment and sharing your lived experience- there can be no more powerful validation of my obervations that what you've seen and been a part of.
Dear Mr. Roulston, It appears that you are a fan of the late Milton Friedman and echo his belief that markets must be free from regulatory burdens to make prosperity broadly available to the public at large. My disagreement with the esteemed economist is that markets cannot exist without human interactions. People are capable of engaging in an infinitely broad range of observable and concealed behaviors that interfere with and distort every aspect of commerce. It's not the commerce that needs regulation as much as the individuals who engage in it. Nevertheless, I always respected Professor Friedman's ideas despite my disagreement.
What you get right: Regulatory capture is real and pervasive. Politicians often create rules that benefit connected insiders rather than serving everyone. Heavy-handed regulation can stifle innovation. These aren't theoretical concerns - they're documented patterns I acknowledge in the essays.
But here's where I disagree with your framing:
"Free markets" don't exist independently of government. Every market transaction you describe depends on government infrastructure: property rights enforced by courts, contracts upheld by law, currencies maintained by central banks, and networks of trust backed by regulatory systems. The "free market" has never existed separately from these public institutions. Even your ability to "save, invest, and take risks" requires government creating and maintaining the money you're saving.
Your "dashboard vs. gas pedal" analogy actually proves my point. Markets aren't natural phenomena we should leave alone - they're human-designed systems, like cars. And just like cars, they work well when designed properly and fail catastrophically when designed poorly. The question isn't "government intervention vs. free markets" but "what institutional design produces the outcomes we want?"
The prosperity you attribute to "freedom" actually came from quality institutional design. America's post-WWII boom - the period of greatest broad-based prosperity - wasn't from less government but from well-designed government programs: GI Bill, interstate highways, strong labor protections, financial regulation. These weren't "complicated theater." They were quality institutions with accountability that made markets work for everyone, not just the well-connected.
Here's the deeper issue: You're absolutely right that bad regulation helps the well-connected. But your solution - eliminating government intervention - doesn't prevent that capture. It just hands complete control to concentrated corporate power without any democratic accountability. As I document in How Corporate-Friendly Accounting Rules Create a $30 Trillion Transfer (https://chevan.substack.com/p/how-corporate-friendly-accounting?r=33jv1), the largest wealth transfers happen through rules that look like "free market" policy but systematically advantage concentrated wealth.
The real question isn't "government vs. markets" but "who designs the rules?"
Right now, concentrated wealth designs market rules to serve themselves while using "free market" rhetoric to prevent democratic accountability. What you call "freedom" is actually a system where 800 billionaires have captured the institutional design process while everyone else accepts artificial constraints.
Part 3 (publishing soon) provides the synthesis: Understanding how money actually works since 1971 reveals we can design quality institutions with accountability that serve everyone - addressing both the regulatory capture you fear AND the concentrated corporate power that "free markets" enable. The framework transcends the "government vs. markets" binary you're stuck in.
Your choice: Keep believing the "free market" mythology that serves concentrated wealth perfectly by preventing democratic accountability, or recognize that markets are human-designed systems requiring quality institutional design with transparency and restraint mechanisms.
I'm not selling books or building a following. I write because breaking the economic mythology you're expressing is essential for democracy's survival. The 800 billionaires who benefit from your "free market" thinking thank you for defending the system that enriches them while keeping everyone else constrained.
I find it very regrettable that you are reproducing the blind spot of MMT. The government's demand for money through taxes and tariffs is only a small part of the total economic demand for money. The vast majority of money demand arises from businesses, whose goods and services represent a far more dominant demand for money, resulting from supply chains and interconnected production processes.
If you look at the figures, you'll see that when the Federal Reserve was founded, the government's share of total economic demand was around 5%. This increased to approximately 25% during World Wars I and II, before falling back to 22%. After the end of Bretton Woods and the abolition of gold convertibility, the share rose to about 27% to 30%. Conversely, this means that over 70% of the demand for money comes from private businesses, because their supply of goods and services are based on the fact that they have to generate revenue to cover their costs and loans. This means that the state operates in parallel to supply chains and production interconnections, but does not create them. While the state's demand potential can occasionally lead to higher capacity utilization, it does not create the underlying production structure.
(BTW the posession of dollars do not grant you the right to buy something. The fundamental reason for using money is the existence of a purchase contract with a seller, where a payment obligation is contained. Without a purchase contract there is no use for money, just like you can find in the movie "An indecent proposal".)
Therefore, it is poorly justified to base economic arguments on such a one-sided foundation. Moreover, the statements of MMT are largely fictitious, as there is no unified "government" comprised of the Federal Reserve and the Treasury. This is because the Fed is legally prohibited from directly lending to the Treasury or directly purchasing USTs. For this reason, the instructions the Treasury gives to the Fed are structurally identical to the instructions banks give the Fed when they need to transfer funds to another bank. There is no difference, because all these instructions refer to existing balances held at the Fed. And no one would suggest that this creates money—it is all a reallocation of existing reserves.
It's actually the case that the Fed can buy any securities from banks, but not from the Treasury. Why this is the case is a separate issue, but it shows that the Treasury only acquires reserves indirectly through banks by selling USTs. And only when the banks sell these USTs to the Fed new central bank money is created.
I'm very much looking forward to part 3 of your little series. I hope that these half-truths of MMT, and the confusion they create, will only make up a small part of the forthcoming analysis.
[A lengthy response, so presented in 2 parts]
Hi Renée,
Thank you for this detailed and technically rigorous response. You've raised important points that deserve direct engagement, and I appreciate the opportunity to clarify what I'm arguing and address your specific concerns.
On Facts vs. Theory
Let me start with a crucial clarification. You're critiquing MMT theory. I'm not advocating for any theory. I'm trying to explain operational mechanics that are verifiable facts about how the monetary system functions post-1971. There's an important distinction: the mechanical facts about how reserves move, how the Fed and Treasury interact, how the monetary base expands are observable realities that anyone can verify through Fed documentation and operational data. Theoretical frameworks like MMT, Post-Keynesianism, or New Keynesianism may build different policy prescriptions on those facts, but the underlying operational mechanics aren't theoretical. They're factual.
This 3-part essay series isn't about which economic theory is correct. It's about demonstrating how keeping these operational facts from the public has created an environment where people believe in economic mythology to their detriment. When citizens don't understand the basic mechanics of how the monetary system works, they make political decisions based on false constraints. This serves elite interests by limiting what people consider possible while those who understand the facts operate freely.
Addressing Your Technical Points
You've raised several specific mechanical points that deserve direct responses. I want to address each one factually:
On reserve mechanics and money creation:
You're absolutely correct about the mechanical sequence. When Treasury spends, it draws down existing reserves in its account at the Fed. To replenish those reserves, Treasury sells bonds to primary dealers (banks and broker-dealers) at auction, who purchase them using their reserves. New reserves are created when the Fed conducts open market operations, purchasing securities from banks in the secondary market. The Federal Reserve Act Section 14 explicitly prohibits direct Fed purchases from Treasury.
This is factually accurate. I'm not disputing these mechanics as they currently operate. What I'm pointing out is how these facts get obscured in public discourse, and how some of what appears to be operational necessity is actually institutional design choice (public policy that can be changed).
You mention there is no "unified government" comprised of the Federal Reserve and Treasury because they're legally separate. This is correct as a legal distinction, but it misses the institutional and sectoral reality. In macroeconomic sectoral analysis, there are three domestic sectors: households, firms, and government (the public sector). When we analyze sectoral flows and institutional roles, the Fed belongs to the public sector alongside Treasury. This isn't a modeling choice or theoretical preference. It's a sectoral fact.
The Fed's institutional role comes from the legal charter granted by Congress. Functionally, the Fed operates as an exclusive contracted operating unit of the government, granted a monopoly franchise to conduct monetary operations. Yes, there's legal separation in terms of direct transactions and operational independence. But the Fed's authority, its mandate, its very existence derives from Congressional charter. It exercises public functions under public authority, even if it operates with structural independence within that role.
It's worth noting that the specific institutional arrangement you describe (Treasury selling bonds to banks, then Fed purchasing from banks) is a policy choice embedded in current law, not an operational dependency of fiat currency systems. Other countries with sovereign currencies operate under different institutional arrangements. Some allow central bank overdrafts of government accounts, others have different mechanisms. The Federal Reserve Act could be amended to change these arrangements. The mechanics you describe are how the system currently works under existing legal constraints, not how it must work operationally in all fiat currency systems.
So when I refer to the consolidated government or unified public sector (Fed + Treasury), I'm describing their institutional role within the sectoral framework of the economy, not denying their legal separation. The public is told "government must find the money before spending" as if we still operated under gold standard constraints. That's factually false. The public sector, through the institutional mechanisms you correctly describe, can expand the monetary base in ways that were mechanically impossible under the gold standard.
These aren't competing theories. These are observable facts about system mechanics. The mythology keeping people ignorant of these facts serves those who understand them. Policy makers and their economic advisors understand them. The public has been systematically kept ignorant of them.
On Treasury instructions being identical to bank instructions:
You note correctly that at the operational level, moving reserves between accounts works the same way regardless of who gives the instruction. This is a verifiable mechanical fact.
You're also correct that the difference isn't in the mechanics of the transfer. But here's the factual distinction that matters for citizens: banks must obtain reserves through private transactions or Fed lending. Treasury obtains reserves through bond sales. The Fed can expand or contract total reserves through open market operations. These are different processes even though the final step looks mechanically similar.
The reason this factual distinction matters is about constraints. A currency issuer with a central bank faces different constraints than currency users. This isn't theory. It's observable reality. The constraint for the public sector as currency issuer isn't "do we have reserves" but "do we have productive capacity to mobilize without causing inflation." When the public doesn't understand this factual difference, they accept artificial budget constraints that don't actually bind the currency issuer in the same way they bind currency users in the private sector.
On Government's Share of Economic Demand
Your point about the 70/30 split is factually important and actually strengthens the argument rather than undermining it.
You're absolutely right that government doesn't create the underlying production structures. This is an observable fact about how the economy operates. Private businesses develop supply chains, organize production, create the goods and services that constitute real economic output. Government can utilize existing capacity but 70% of economic activity is fundamentally private sector production.
This factual reality is exactly why the emphasis must be on capacity rather than money. The operational question isn't whether government creates production capacity (it factually doesn't, except for specific infrastructure and public goods). The operational question is: given that productive capacity exists and is primarily private, how do policy decisions direct that capacity?
When the public believes the mythology that government faces money constraints (rather than understanding the factual capacity constraints), they can't ask the right questions. They focus on government budgets while 70% of economic activity operates according to different dynamics. The facts about how capacity works get hidden behind budget mythology. This isn't accidental. It serves those who understand the facts while keeping the public constrained by mythology.
[continued in Part 2]
[Part 2]
On Purchase Contracts and Money
You write that "possession of dollars do not grant you the right to buy something. The fundamental reason for using money is the existence of a purchase contract with a seller."
This is factually correct and actually supports the capacity argument. Money without available goods and services to purchase is meaningless. This is an observable fact. This is exactly why real constraints are productive capacity and resources, not the money itself.
The mythology obscures this fact. When people believe money is the constraint, they miss the factual question: do we have the productive capacity to meet public purposes? The factual answer to that question determines what's actually possible, not the mythology about government budgets.
On "Half-Truths" and "Confusion"
This is where I think examining the factual historical record reveals something important about who creates confusion and why.
Let's look at verifiable facts from Reagan's presidency. Reagan campaigned in 1980 on fiscal restraint, promising balanced budgets and fiscal responsibility. These are documented campaign promises you can verify. Once in office, he implemented combined tax cuts and increased spending (particularly defense). The factual deficit numbers from OMB Historical Tables (Table 1.1) show growth from $74 billion in 1980 to $221 billion by 1986. This produced measurable economic growth through what was functionally demand stimulus, despite anti-Keynesian rhetoric.
Here's what these facts demonstrate: Reagan's economic team understood the operational mechanics you and I are discussing. They understood that the constraints weren't what they told the public. They campaigned on balanced budget mythology while implementing policies based on factual understanding of how the system works.
If the operational understanding of how federal monetary processes work post-1971 were "half-truths," Reagan's team couldn't have used that understanding to produce measurable real economic results. The fact that they could campaign on balanced budgets (mythology) while implementing deficit expansion (operational reality) and achieve documented growth demonstrates that the operational understanding was factually accurate, not confused or half-true.
The confusion doesn't come from the operational facts being wrong. The confusion comes from deliberately maintaining public ignorance of factual operational mechanics while elites act on accurate understanding. When you tell the public "we must balance the budget" while your policies operate according to factual capacity constraints, you're creating confusion deliberately. When someone describes how the system actually operates mechanically, they're not creating confusion. They're revealing factual operations that have been deliberately obscured.
This isn't about theory. It's about facts that can be verified through Fed documentation, OMB data, and observed policy outcomes. The pattern across administrations is factual and documented: leaders campaign on "fiscal responsibility" while those who understand operational facts design policies that work differently than public rhetoric suggests.
When only elites understand the factual operational mechanics while the public accepts mythology, that's not presentation of facts. That's manipulation and exploitation.
Why This Matters for Democracy
This brings me to the core issue. When you write "the statements of MMT are largely fictitious," you're treating this as a theoretical dispute between competing economic schools. But what I'm pointing to isn't a theoretical dispute. It's a factual question: do citizens understand the verifiable operational mechanics of how the monetary system works, or do they make political decisions based on mythology?
After 150 years, economics maintains competing schools with fundamentally different theoretical answers to basic questions, resolving disagreements through institutional power rather than evidence. Meanwhile, the factual operational mechanics of how the system works remain obscured from public understanding.
This matters for democracy because people make political decisions based on what they think are economic facts. When the actual verifiable facts about how the system operates are kept from them, and they instead operate on mythology, their political choices serve those who understand the facts while limiting their own power.
The mythology I'm addressing is the factually false belief that government must "find the money" before it can act, as if we still operated under gold standard constraints. The factual reality is different. This mythology creates artificial constraints that make people believe they must choose between robust democracy OR functioning capitalism. The right concludes they need capitalism without democratic constraints. The left concludes they need democracy without capitalist markets. Both responses attack the American system based on factually false premises.
What Part 3 Actually Addresses
Part 3 isn't about defending any economic theory. It's about showing that the American system (democratic capitalism) can function to serve diverse ideological goals when people understand verifiable operational facts rather than accepting mythology that drives them to attack the system itself.
Your technical expertise about Fed operations and private sector money demand demonstrates you understand these facts. The question is: should these facts be widely distributed so citizens can make informed political decisions, or should factual understanding remain concentrated among elites who use it for their own advantage while maintaining public mythology?
The question isn't "is MMT right?" The question is: "Does keeping citizens ignorant of verifiable operational facts drive them to destroy the democratic capitalist system based on mythological constraints, and does widespread understanding of factual operational mechanics remove that destructive mythology?"
References for Verification
Since you're rightly focused on accuracy, here are references where you can verify the operational facts I'm discussing:
On federal spending mechanics: "The Federal Reserve System: Purposes and Functions" (Board of Governors publication) describes the factual process. When Treasury spends, it instructs the Fed to credit bank accounts, drawing on existing reserves. This is observable, documented operational reality.
On the post-1971 shift: Nixon's closing of the gold window is documented in the Federal Reserve Bank of St. Louis FRASER archives. The factual mechanical differences between commodity-backed and fiat currency systems are described in standard texts like Mishkin's "The Economics of Money, Banking, and Financial Markets."
On Reagan's deficit expansion: Office of Management and Budget Historical Tables (Table 1.1) provide the factual numbers.
These are verifiable operational facts, not theoretical positions. The facts exist independent of what any economic theory says about them.
Moving Forward
I suspect we have more common ground than this exchange might suggest. You clearly understand the factual operational mechanics deeply. My concern isn't about theoretical disputes between economic schools. My concern is that keeping these verifiable facts from the broader public has created an environment where citizens make political decisions based on mythology rather than operational reality, and this serves concentrated interests while undermining democratic capitalism.
Looking forward to your thoughts on Part 3.
Best regards,
Chevan
thank you for that explanation and the many questions you raised and answerd
Thank you for reading and being here.
This is a strong diagnosis of how purity politics turns into strategic paralysis.
One additional layer worth naming: reform stops working not when people lose faith in markets or democracy in principle, but when legitimacy and time horizons collapse faster than institutions can adapt.
In that regime, both “revolution” and incremental reform fail, not for moral reasons, but because coordination itself breaks.
The next question isn’t just whether reform works, but what institutional forms can still carry legitimacy at scale once trust, time, and accountability decouple.
This is an excellent observation that gets at something fundamental.
You're right that the deeper issue is legitimacy collapse when trust, time horizons, and accountability decouple. I'd argue that knowledge asymmetry is a primary driver of this decoupling. When elites understand operational realities (how monetary systems actually work, what constraints are real vs. mythological) while the public operates on false premises, legitimacy collapses because institutions appear to fail at delivering what people vote for - when actually they're being constrained by mythology rather than operational reality.
The public votes for programs. Politicians say "we can't afford it." Nothing happens. Repeat for fifty years. Eventually people conclude either democracy doesn't work (the right's response) or capitalism is irredeemable (the left's response). Both responses attack the system rather than the mythology creating the legitimacy crisis.
Breaking knowledge asymmetry doesn't just restore legitimacy - it enables the time horizons and accountability mechanisms you're describing. When citizens understand they're managing capacity (resources, productive capability, institutional quality) rather than managing budgets, they can ask: Do we have the workers, materials, technology? What institutional design prevents capture? What accountability mechanisms ensure this serves stated purposes?
This shifts from "vote and hope experts handle it" (which breaks down when trust decouples) to sustained engagement as capacity stewards (which rebuilds legitimacy through transparency and accountability). It's more demanding, but it addresses exactly the coordination problem you're naming - coordination around verifiable facts and quality institutional design rather than around mythology that elites exploit.
The question about what institutional forms can carry legitimacy is what I'm exploring for 2026 - how do citizens as capacity stewards evaluate and demand institutional quality that prevents capture and maintains legitimacy through transparency?
Thanks for this insight - it's exactly the right question.
that was spot on. i'm wondering about degrowt (décroisance) and how that would help the earth climate. and about the probable decline when all the resources are used up. could you comment on that?
Thanks Tim! Great question. Let me clarify my position on degrowth since I'm simplifying it in the essay for space.
I'm not attacking degrowth's environmental concerns, which are completely valid. Climate breakdown and resource depletion are real threats. Leading degrowth scholars like Jason Hickel have explicitly integrated Modern Monetary Theory into their framework. Hickel understands that governments with monetary sovereignty face no financial constraints on funding ecological transition, that taxation doesn't fund spending, and that the real constraint is productive capacity not money. That's the same soft money understanding I advocate throughout the essay.
So where's my concern with degrowth? It's about how the framing shapes the conversation:
The framing itself may reinforce scarcity thinking. Even when degrowth scholars correctly understand monetary operations, the language of "degrowth" centers reduction and contraction. This can accidentally reinforce the scarcity mindset that enables hard money mythology to persist in broader public discourse, even when that's not what the scholars intend.
Consider: Hickel correctly says "wanting to cut GDP is as senseless as wanting to grow it. The objective is to scale down the material throughput of the economy." But the term "degrowth" itself frames the problem as needing less, which can keep people thinking in scarcity terms.
Here's what I mean about the proxy problem: Building coal plants increases material throughput. Building solar farms also increases material throughput (manufacturing panels, mining materials, construction). Expanding highway systems increases throughput. Expanding public transit increases throughput. Clear-cutting forests increases throughput. Restoring degraded ecosystems while employing people increases throughput (people doing restoration work need tools, materials, transportation).
The real issue isn't the quantity of material throughput but whether that throughput depletes resources, damages ecosystems, and who controls the direction of our productive capacity. GDP can't distinguish between these. Material throughput measures also struggle with this distinction.
The questions I think matter more: Do we have workers, materials, and technology to build sustainable systems? How do we prevent rent capture by fossil fuel interests? What accountability mechanisms ensure projects serve ecological goals rather than greenwashing? How do we build capacity for regenerative production while preventing extraction? What quality institutions enable democratic direction of our productive capacity toward sustainability?
These are capacity management questions focused on institutional design and democratic control, not questions about whether we're growing or shrinking aggregate measures.
On resource depletion: Real for some materials, but the framing matters. We're not running out of energy (the sun provides more than we could ever use). We're running out of ecological capacity to absorb waste and maintain stable climate. That's not a "growth vs. degrowth" question but a capacity management question: How do we redirect our productive capacity toward regenerative rather than extractive systems? What quality institutions prevent capture by interests profiting from environmental destruction?
That transition requires massive investment in new systems, retraining workers, building infrastructure, and restoring ecosystems. This is growth in employment, industrial capacity, and economic activity, even while it may reduce material throughput in some sectors and redirect it in others.
The citizenship role this implies: Understanding that the federal government creates money when it spends changes the democratic conversation. Instead of arguing over "can we afford the transition," we have to discuss how investments, resource planning, and outcomes are decided and prioritized. Citizens shift from being fiscal managers asking "how do we pay for it" to being capacity managers asking "how do we build quality institutions that direct our productive capacity toward sustainability while preventing capture by extractive interests." It's a more difficult role but one we owe to each other if we believe in democratic governance.
Does that help clarify? The issue isn't degrowth's environmental concerns or their understanding of monetary operations. It's that framing the solution as reduction and contraction, even when scholars understand it's about redirecting not reducing, may inadvertently keep people in scarcity thinking rather than shifting to the capacity management mindset we need for democratic direction of our productive systems.
As usual, a lot of good stuff in here. As far as I’m concerned, though, the argument is couched in a framework that’s fundamentally flawed: left versus right is a lie, meaning that it’s a very poor means of separating out fact from fiction. You can tell this because no company, and no other social institution outside of politics, uses “left versus right” to make strategic decisions. If it’s a terrible means of arriving at wise decisions on the level of an extended family or a company, there’s no way it’s a good framework for much larger and complex institutions like nation states.
Thanks Lewis, you're touching on something important that I've been thinking about a lot.
You're right that left versus right is a limiting framework. Companies don't organize around "are we left-wing or right-wing capitalists?" They ask: what's our capacity, what are our constraints, how do we build quality systems, who makes decisions, what accountability mechanisms prevent capture?
Here's how I'm using the left/right framework in the essay: I'm describing how people currently organize politically and how hard money mythology affects different political coalitions. But you're identifying a deeper issue - that framework itself keeps us trapped in binary thinking when the real questions are about institutional design and capacity management.
Think about it this way: The American system combines democracy (collective decision-making) with capitalism (market-based wealth creation). That's not an ideology, it's a framework where all ideologies compete. Within it, you can pursue efficiency or justice, transformation or stability, collective ownership or individual enterprise. The system is the stadium where teams compete, not the team you're on.
What happens when we understand soft money operations? The conversation shifts from "left wants this, right wants that, we can't afford both" to "we have these real resources, this productive capacity, these workers and materials. How do we build quality institutions that direct capacity toward goals while preventing capture by concentrated interests? What accountability mechanisms ensure projects serve stated purposes? Who decides priorities and how?"
Those are the questions companies ask. They're also the questions citizens should ask when we understand that federal spending isn't constrained by tax revenue but by real productive capacity.
The shift this enables: Instead of "are you left or right on climate policy," the questions become: Do we have workers, materials, and technology for transition? How do we prevent fossil fuel interests from capturing the process? What institutional design ensures projects serve ecological goals? How do we build regenerative capacity while preventing extraction?
You can pursue these questions from conservative values (efficient resource use, accountability, avoiding waste), progressive values (justice, sustainability, worker power), libertarian values (genuine choice, exit options, preventing monopoly), or any other framework. Different ideologies support quality institutional design for different reasons.
So I hear your critique. Left versus right is how politics currently organizes, but understanding monetary operations enables moving beyond that binary to the harder questions about capacity management and institutional quality. That's where the real work is - and it's work that transcends the left/right framework because it's about making the system function rather than picking an ideological team.
Does that address your concern? I'm still working on Part 3 of this series, but that essay may resolve what you've identified (and if it doesn't I'd love to hear your thoughts about it). Thanks for reading and engaging.
Hey, first, happy holidays.
Sure thing.
You write interesting stuff, by life's experiences have made me about 10% different from you (and I'm not saying better). You have good problem diagnoses and we line up on that but, imho, your frameworks for fixing them are likely suboptimal because there's ample evidence they don't/can't work.
Yes, I'm advocating for ABANDONING "left versus right" which (1) changes over time - I can go back and show you that "liberals" were for free trade a century ago while "conservatives" wanted to wall off the country, but there are other examples, so right away you can tell there's no such thing as "static" liberal or conservative beliefs when it comes to the major US political parties over time, and (2) there are all sorts of subjective lies used by sophisters and self-interested frauds packed into the current iteration of LvR in any given moment, which are designed raise emotions and block/prevent people from understanding and acting on deeper, more consistent truths.
By simply using LvR, you've already lost the way forward. Everyone will immediately bring their own, often subjective, ill-informed, ands sometimes outright inaccurate beliefs, and pile them onto "your LvR framework," whether you like it or not. Whatever point you hoped to get across will either be obliterated, or at best added and subverted to the (intentionally) toxic superfund site that is LvR.
Imho, your framework for future change should not touch LvR. The good news is that other frameworks can and should be based on science. Just stick to that. Companies do this all the time: they use the scientific method to determine, as best they can, wise choices from poor choices and do the best they can. That's liberalism. That's the scientific revolution in action that came out of the Enlightenment. Any company that used LvR to make decisions would soon run into a wall and crash and burn, so they DON'T DO IT. If you want to create hit, stick with LvR. If you want to create light, stick to science. That's how liberals will win: by doubling down on what produced the Industrial Revolution in the first place - along with the rise of science, came the rise of democracy. Those 2 always and everywhere rise and fall together.
Which frameworks I’ve discussed can’t or don’t work and why? Always looking for a fresh perspective.
Hi Lewis - thank you for this valuable feedback. You've identified something important that others have noticed too, and I want to address it directly.
First, for transparency: I'm a progressive. I own that and advertise it so readers know where I'm coming from. But that's not what I'm writing about, and Parts 1 and 2 weren't meant to be ideological strawmanning based on my progressive perspective.
What I'm trying to surface is verifiable operational facts about how monetary systems work post-1971, and how widespread ignorance of those facts (what I call mythology) is driving both political extremes to attack the American system itself. The facts about how reserves move, how the Fed and Treasury interact, how the monetary base expands - these are observable realities that can be verified through Fed documentation and operational data, regardless of anyone's ideology.
Your point about companies using scientific method rather than left/right ideology to make decisions is exactly right. Scientists have political views, but that doesn't make the science political. Similarly, I have a progressive ideology, but the operational facts about monetary mechanics exist independent of my political preferences or anyone else's.
The reason I structured Parts 1 and 2 the way I did wasn't to advocate for progressive policies or criticize either side from my ideological position. It was to show how the same factual misunderstanding (believing we still operate under gold standard constraints when we actually operate under fiat currency constraints) drives both extremes to conclude they must destroy the system - the right thinking they need to abandon democracy, the left thinking they need to overthrow capitalism.
Part 3 addresses this directly: preserving the American system (democracy and capitalism working together) requires widespread understanding of operational realities rather than making political decisions based on mythological constraints. This matters regardless of ideology because every ideology needs a functional system to compete in.
Where you advocate for sticking to science and evidence-based decision making, I'm advocating for the same approach - understanding verifiable operational facts rather than accepting mythology. The parallel to the scientific revolution is apt: citizens making political decisions based on operational realities rather than economic mythology, just as the Enlightenment demanded evidence over dogma.
I look forward to your thoughts on Part 3.
Best regards,
Chevan
Okay, I look forward to reading your part 3, but to quote Reagan in the meantime, "There you go again."
What you call mythology I call ideology but, imho, only extreme conservatives are ideologues. Extreme liberals believe in science, and you may call science a philosophy, but it is NOT an ideology (go look up the difference). There is a better way forward and it IS the most pure form of liberal philosophy possible, and it has been around since the Enlightenment (not that liberals have lived up their own ideals). The right answer for progressives is to get back to basics.
Stated another way, your framework is wrong, imho. Your yardstick don't measure straight. Your scientific process is flawed. Hence above you wrote:
"is driving both political extremes to attack the American system itself"
"wasn't to advocate for progressive policies or criticize either side from my ideological position"
"drives both extremes to conclude they must destroy the system - the right thinking they need to abandon democracy, the left thinking they need to overthrow capitalism"
No, no no.
You're in the LvR tar pit in all 3 cases (and may not realize it).
There is no U.S. communist party. Once you jettison LvR and put everyone who believes in using the best available science and the most representative democracy possible to make decisions on one side of the ledger, and those who put their ideology (whatever it may be) above science and democracy on the other side of the ledger, you'll see that that the .0001% of Americans who call themselves liberal and who want the overthrow the U.S. government/capitalism based on Marxist bullshit (that has been proven egregiously wrong the world over for 100+ years), you'll see these supposed liberals are, in fact, conservatives (who don't understand or deny history, math, logic and science).
Imho, the house cleaning that needs to happen before material progress can be made is for a liberal and progressive movement to come together that puts science, efficient capitalism, and democracy at the center of its agenda - all 3 are rational processes that fit together beautifully - and then push everyone else out who refuses to do the same. The .0001% of revolutionary U.S. commies will all be strained out with the rest of conservative sophisters in the process. Good riddance.
Imho, my prediction is that your "pox on both their houses" framework will be embedded in part 3 and will obfuscate (what my life has led me to believe is) the wise way forward for progressives. Science, efficient capitalism, and democracy will all go down in a conservative conflagration if the progressive side doesn't get back to basics, in which case God help us all.
Hi Lewis thanks for being here!
Before we talk about philosophy I think it’s important we agree that definitions matter. If we can’t agree on what something means then how is there any basis of common discussion or reality?
When I talk about Mythology vs Facts I mean beliefs versus things we can observe or test and confirm. Ideology does represent our beliefs and aspirations - it does represent our personal philosophies.
When I say that taxes fund the federal government is a myth I mean that this can be observed or is documented in procedure. What we want to do with that information does reflect our ideologies but those are two different things.
Also I would definitely not conflate science and ideology and I’m very clear about what a science is in my essay Economics is not a Science.
Would you agree with what I just presented?
I agree that you believe science is not an ideology (it's a process that humans have developed to do our best to separate fact from fiction).
If you believe the U.S. Treasury does not collect taxes from families and businesses and so on, and that the government doesn't then repurpose most of those tax resources to fund its services, then no, we disagree.
Hey Chevan,
Thank you for writing this provocative piece. I can't say I agree with your central arguments and conclusions here.
One big background problem I see is that this piece relies almost exclusively on high-level summaries for the views you're attacking. You don't specifically cite anything about the views your criticize, so it's hard to know what exactly you're criticizing. For example, you slam the notion of "immediate degrowth" but don't really cite anyone from the degrowth literature (like Hickel, Kallias, and others, there are a million people you could have chosen). Immediately before that sentence, you talk about how we need to be growing clean energy and promoting sustainability. But that's completely consistent with what most degrowth advocates would say as well: we need to reduce harmful economic sectors and grow the ones that are good for society and the planet. That's the kind of risk you took with your general approach here: because your ideas and the views you're criticizing are presented so broadly and generically, your own views may end up significantly overlapping with what you're criticizing! You quote and cite people extensively in most of your prior posts, which is great. That's how it should be. But for some reason, you didn't really do that here.
Your post also gives the impression that people on the left are just waiting around for the revolution to happen while the rich capture all institutions. That would be news to many people in organizations like the DSA, which has worked hard to organize everyone from teachers to baristas and actively works to swing local elections towards its preferences candidates, with great success in local council elections across America's major cities (and Mamdani being the prime example obviously). Most people on the left understand that we need to work within system, even if on the whole we may have major issues with how the system works. Even Lenin, the greatest revolutionary leader of modern times, knew that there had to be a transitional phase between capitalism and socialism. That's why after the end of the Russian Civil War he implemented the New Economic Policy, which established a mixed economy that allowed small and medium-sized businesses to remain private while also letting most farmers sell their crops on the market for a profit. The NEP spurred a lot of intense discussions within the Communist Party about the right path forward. All of this nuance and so much more is absent from your post, precisely because you repeatedly overgeneralized.
I think the notion of democratic capitalism is a bit of an oxymoron, as capitalism has pushed countless societies towards dictatorship in modern times (Hitler, Mussolini, Franco, Pinochet, etc). But at the end of the day, the devil's in the details. Much of it comes down to how you want to define things, to what kinds of language games you want to play, to echo Wittgenstein. It's possible to define any terms in the right way so you can make them compatible. That's why libertarian socialism is an actual intellectual current. So sure, if you want to preserve a notion of democracy that's closer to modern Western liberal democracy, you can make the two compatible in various waysm But I prefer other conceptions of democracy, ones that focus on boosting the economic and political power of the working class. For me, a democracy is a system where the working class is in charge, and that can't ever really be compatible with capitalism.
I could say a lot more about your post, but I'll leave it at that. This was an interesting read
Erald, thank you for this detailed critique. You've identified real weaknesses in Part 2 that have been incredibly valuable for my thinking. Let me address your points directly.
You're absolutely right about the lack of specific citations. Part 2 relied too heavily on high-level characterizations rather than engaging with actual literature. On degrowth specifically, you caught an important issue: Hickel and others explicitly advocate growing clean sectors while shrinking harmful ones, which overlaps significantly with what I'm arguing. The distinction I should have been making is more nuanced than Part 2 captured.
Here's what I'm actually concerned about with some degrowth framing: even when scholars like Hickel correctly understand monetary operations (he's explicitly integrated MMT), the language of "degrowth" centers reduction and contraction in ways that may inadvertently reinforce scarcity thinking in broader discourse. But that's a critique about framing and political strategy, not about the substance of the scholarship or their understanding of soft money mechanics. Part 2 didn't make that distinction clear.
On characterizing the left as waiting for revolution: You're right, that's an overgeneralization that doesn't reflect actual organizing. DSA's work, Mamdani's campaign, local council victories, all the grassroots institution-building happening across the country - these are exactly examples of working within the system to build power. Your Lenin/NEP example is perfect: even revolutionary theory recognizes the necessity of working within existing structures. I should have been more precise about distinguishing between rhetoric that promotes revolutionary paralysis versus actual organizing that builds institutional power now.
On "democratic capitalism" as potentially oxymoron: This gets to something important about how the framing evolved while I was writing. You're right that capitalism has enabled countless dictatorships. But here's what I'm trying to describe: not capitalism as ideology, but the American system as framework - the combination of democratic governance (collective decision-making) with market-based wealth creation that creates a space where all ideologies can compete. Within that system, you can pursue working class power, collective ownership, economic democracy, or any other vision through democratic means.
Think of it this way: the system is the stadium where ideological teams compete, not the team you play on. Your vision of democracy as working class in charge - that's achievable through building quality institutions within this framework. It requires using democratic power to create institutions that shift economic control to workers: strong unions with real bargaining power, worker representation on boards, public ownership of key sectors, job guarantees that give workers permanent exit options from exploitation, public banking that directs credit toward worker cooperatives rather than extractive finance.
What I'm realizing the conversation should focus on: When we understand soft money operations, we shift from fiscal management thinking ("how do we pay for working class power?") to capacity management thinking ("how do we build quality institutions that shift economic control to workers while preventing capture by capital interests?"). The questions become: What institutional designs give workers genuine power? What accountability mechanisms prevent co-optation? How do we use public capacity to support worker organizing and collective ownership?
Your conception of democracy as working class power doesn't require overthrowing the system. It requires building quality institutions within it that shift power. The examples you gave - DSA organizing, local elections, Mamdani's campaign - that's exactly what this looks like in practice. They're using democratic processes to build working class power through institutional change.
Where you've helped sharpen my thinking: The generic characterizations in Part 2 obscured what should be the central argument. It's not "left ideology bad, democratic capitalism good." It's "hard money mythology makes transformation seem impossible within the system, which drives people toward either accepting dysfunction or attacking the system itself, when understanding soft money operations reveals we can build the institutions we need for genuine working class power right now."
The devil is in the details, as you say. And those details are about institutional design, accountability mechanisms, and preventing capture - not about defending capitalism as ideology but about recognizing we can build democratic worker power within the existing framework if we understand how money actually works and focus on quality institutional design.
Does this address your critique? I'm genuinely grateful for the feedback because it's pushing me to be more precise, conscious and intentional about what I'm actually arguing which I will sharpen in Part 3 of this series.
Thanks for the thoughtful reply Chevan. Always appreciate your perspective, even when we don't fully see eye-to-eye on things. I try to read almost everything you publish here on Substack. Keep doing what you're doing!
Thank you Erald, I feel the same and do the same - your writing always makes me smarter!
Erald thank you for taking the time to read and provide detailed feedback. I always appreciate your thoughts and it gives me a lot to think about - which I will... and will come back with a more detailed response. This is feedback is invaluable for shaping Part 3 which is still in development and I'm grateful for you helping to shape that narrative. I hope you're enjoying the wind down to 2025 year-end and the holidays.
My Dear Mr. Edwards, Let me begin by saying that I have not "removed myself from the fight." I have cognitively reframed the concept of socioeconomic and political struggle from depending on flawed human personality. My point is not Martin Seligman's learned helplessness, to which you referred. Rather, I have based my analyses on two salient and related factors. First and foremost, the professional political planners to whom to referred as structural architects possess the same human flaws we all possess such as fear, greed, and some point at which belief becomes a mere commodity exchangeable for a sum on money. Second, the notion of "the fight" to which you referred suggests pressures which also distort human behavioral choices. I try to conceptualize the struggle for true equality and democracy not as "us versus the billionaires." But rather as humans seeking a way to live on planet Earth by establishing and sustaining an improved way to function in community without conflict and violence. It's a huge undertaking with no guarantee of success. However, my concern is that fear and greed, white supremacy, and ownership of private property have so distorted out thinking and behavior that we cannot imagine any other way. Thank you for helping me achieve greater clarity in my thoughts process. I hope we might continue these discussions. I'm 74 years old and will someday pass on. Nevertheless, I continue to believe that this life can be made better by people whose caring hearts, open minds, and helping hands build the better life for all we both seek. Merry Christmas and Happy New Year to you and your loved ones.
Having wisdom represent in the comments is always a blessing. You'll be around for a long time and will see a lot of amazing things.
Regarding: However, my concern is that fear and greed, white supremacy, and ownership of private property have so distorted out thinking and behavior that we cannot imagine any other way.
I, personally, look at that as "evil will always exist" - people who don't wish good things for other people. For those of us who want to live our individual way in peace we have to fight for the system that will allow us to do that and that's what I'm trying to do with my writing in a really small way. I believe in democracy, private property, individual liberty, capitalism but structured in a way that serves all of us not just the prvileged, wealthy or powerful. I believe if we fight for those things, they are possible... I may be naieve but it is what I believe.
Your restricted in your thinking by certain assumptions. Let me suggest for your consideration:
1 Rather than engage in respectful discussion with me as a fellow human being your preference is to either persuade me that you're right and I'm wrong or perhaps you simply want to win the debate.
2 Campaign finance restrictions can be restored. However, the movement in that direction is disorganized and effectively blocked for the moment by a thoroughly corrupt supreme court.
3 Who said anything about revolution? Violence merely replaces old killers with new ones.
4 Hearts and minds don't change through speaking or writing. People must experience depths of awfulness like war, famine, flood, natural or man-made catastrophe in order to realize that their personal path and goal in life must change.
5 White supremacy is the fundamental base upon which capitalism is built. I'm not an advocate of Karl Marx. Nevertheless, humans as a species are deeply flawed. We're too quick to anger, throw off rationality, and descend into violence. Decades, perhaps centuries, must pass before whomever is left alive, if anyone, learns this vital lesson.
6 With all due respect, and I genuinely mean this, all the things you've predicted have already taken place. Please don't feel obligated to build on base of sand. Without real character virtues, all human endeavor risks being lost or subsumed in unexpected outcomes or unanticipated consequences. The real revolution must be internal, within the heart and mind of each individual. Not for power, or wealth, or status. Higher values include justice, compassion, inclusion, sharing, and equality. If I knew how to get there I would already be doing it.
Jerry, I'm not sure if you were replying to me or someone else (Substack threading gets confusing).
If you were replying to me: I actually agree with your point #6 about character virtues being foundational. You're absolutely right that without justice, compassion, inclusion, and equality driving us, institutions fail.
Here's where I think we complement each other: I focus on monetary understanding because when people believe good ideas are economically impossible before they're even tried, they don't organize for them. The "we can't afford it" myth kills coalition-building before it starts.
My hope is simpler than you might think: if enough people understand how money actually works, they'll recognize their ideas for a better society aren't unfeasible. That unshackled economic thinking could create the critical mass of popular support needed to demand what we actually want - whether that's the values you describe or pragmatic institutional reforms or both.
You said "If I knew how to get there I would already be doing it." I think the path requires both what you're describing (internal transformation toward higher values) AND what I'm describing (understanding we have more economic and political power than we've been taught). Not either/or, but both/and.
We might be aiming at the same destination from different angles.
"Strategic paralysis disguised as principle" = learned helplessness trap in different clothes. Same meta-problem.
The institutional quality point is crucial. Question that follows: who designs institutional quality? We don't have professional governance architecture - politicians make design decisions based on electoral incentives.
Your "democratic capitalism with proper oversight" requires someone to professionally design that oversight. That's the governance architecture gap.
Great piece. Different angle on the same structural problem.
regarding: Question that follows: who designs institutional quality?
Honestly- we have to demand quality and our politicians have to show us they are doing it and putting us on the road or they are out. I think that's the next level for democracy to survive is widespread civic activism not just passive and occasional voting. The bar is very high, but so is the risk that is looming in front of us. The little part I can do is maybe being a catalyst and enabler of that happening.
Agreed. That was the impetus for starting The Statecraft Blueprint, and it is my singular goal. I'm currently working on a series of essays that addresses this. It's just a massive undertaking and has turned into a bigger project than I imagined.
I respectfully disagree. Every American institution is, in fact, irredeemably corrupt. You're espousing a fantasy that past regulatory actions can be resurrected. Eight hundred billionaires say they can buy more politicians than your fanciful dream can persuade. This is late stage capitalism we're discussing. Your assumptions are outdated and no longer useful. It's all pay to play now. Perhaps your book sales can earn a sufficient amount to buy your way into the decision making chamber. If not, you're merely shouting into the wind.
You're proving Chevan's point about strategic paralysis. Let me show you the trap you're in:
You say institutions are "irredeemably corrupt" - meaning reform is futile. So what's your alternative? Revolution? Collapse? Waiting for conditions to change?
While you wait, those 800 billionaires you mention are actively using the institutions you've abandoned to consolidate control. They don't need to defeat you - you've defeated yourself by declaring reform impossible.
Here's the structural question: Why does "pay-to-play" exist?
Not "who's doing it" - but what design feature of our governance architecture allows politicians to sell access?
The answer: We have no separation between "people who make policy decisions" and "people who design the rules about how policy decisions get made." It's like letting the sales team design the product architecture based on what's easiest to sell.
Campaign finance corruption isn't inevitable - it's a design flaw with a design solution. We just don't have professional governance architecture to implement that solution, because politicians designing their own rules have zero incentive to remove pay-to-play.
The difference between "reform is futile" and "reform requires changing the governance architecture itself" is the difference between learned helplessness and structural thinking.
Billionaires don't fear your outrage. They fear organized demand for institutional redesign. Your framework gives them exactly what they want: no organized opposition.
These are great lines:
- It's like letting the sales team design the product architecture based on what's easiest to sell.
- The difference between "reform is futile" and "reform requires changing the governance architecture itself" is the difference between learned helplessness and structural thinking.
Jerry, I really appreciate this comment. You're expressing exactly the frustration I'm addressing, and you're right about crucial things.
What you get right: Billionaire influence over politics is real and documented. Regulatory capture happens. Institutions get corrupted by concentrated wealth. The pay-to-play dynamic you describe isn't paranoia - it's observable reality. Any serious framework must address these concerns.
But here's where I disagree: Concluding that "everything is irredeemably corrupt" leads to strategic paralysis that serves exactly the wealth you oppose. While you debate whether reform is possible, those 800 billionaires operate unopposed through the institutions you've abandoned.
The alternative I'm proposing is designed specifically to constrain billionaire power:
Quality institutions with restraint mechanisms prevent any single actor from dominating. Transparency makes corruption visible and punishable. Accountability creates consequences for capture. Evidence-based operation makes rent-seeking harder to hide. This isn't naive faith - it's specific institutional design addressing the corruption you correctly identify.
Historical proof: The New Deal constrained concentrated wealth during the robber baron era. The GI Bill built broad prosperity despite elite opposition. Medicare passed against insurance industry resistance. These weren't revolutions - they were well-designed institutions with enough political pressure to implement them.
You say I'm "shouting into the wind." My target isn't politicians or billionaires - it's people like you. Your frustration is valid, but it's also exactly what concentrated wealth wants: people who understand the problems giving up on solutions. When enough people recognize we can fund quality institutions through understanding monetary operations, that collective power constrains even billionaires.
The question isn't whether billionaires exist but whether we organize effectively to build systems they can't capture. Giving up guarantees they win. Building coalitions around institutional quality gives us a fighting chance.
I'm not selling books to buy influence. I'm not selling anything. I write because I've learned something that changes the game: understanding how money actually works reveals we have more power than we've been taught. You already see the corruption clearly. What's missing is recognizing that quality institutional design can constrain it. When people who understand the problem also understand the solution, that's what actually threatens concentrated wealth.
My opinion is that organizing institutions billionaires cannot capture is a logical fallacy. My experience has been that the amount of bribery money matters. Artificially low interest rates in more than a decade of accommodative Federal Reserve monetary policy created excess liquidity that has been hoarded by oligarchs. Anyone who is too virtuous to be bribed will likely be murdered. The oligarchs we're discussing are as ruthless and merciless as Vladimir Putin.
Jerry, I want to show you something about the pattern you're stuck in - not to attack you, but because I think you'll recognize it once I point it out.
Here's what just happened:
Chevan: "Here's how institutional design can constrain concentrated wealth"
You: "That's impossible - they'll just capture it"
Chevan: "Here's historical evidence it worked"
You: "That was different - now they're too powerful"
Chevan: "Here's the specific mechanisms"
You: "They'll murder anyone who tries"
Notice the pattern? Every time a solution appears, you escalate the threat to justify why it can't work. This isn't analysis - it's learned helplessness in action.
Here's the structural question you're not asking:
Why do we even have a system where billionaires can capture institutions?
Not "how much money do they have" - but what design feature of our governance architecture allows wealth to convert directly into political power?
The answer: We let the same people who benefit from corruption design the rules about corruption. It's like asking foxes to design henhouse security.
The real question isn't "can we outspend billionaires?" It's "can we separate institutional design from electoral politics?"
Right now:
Politicians design campaign finance rules (while needing campaign money)
Politicians design lobbying rules (while benefiting from lobbying)
Politicians design oversight mechanisms (while wanting to avoid oversight)
This is a governance architecture problem, not a money problem.
What if we had professional governance architects - insulated from electoral cycles, measuring success by institutional performance, designing the systems within which politicians operate?
You know how the Federal Reserve makes monetary policy decisions without Congress voting on interest rates every cycle? Same principle. Professional institutional design separated from the people operating within those institutions.
Would billionaires try to capture that too? Of course. But here's the difference:
Current system: Politicians design their own rules while needing billionaire money
Alternative: Professional body designs accountability mechanisms, transparency requirements, enforcement authority - and politicians operate within those rules
It's the difference between "please police yourselves" and "you're being policed by an independent professional body."
Your framework - "they're too powerful to stop" - is exactly what concentrated wealth wants you to believe. While you cycle through escalating reasons why nothing can work, they're consolidating control through the institutions you've abandoned.
Chevan's point about strategic paralysis isn't an insult - it's a structural observation. The system produces this hopelessness in you. Not because you're wrong about billionaire power, but because you can't see the governance architecture alternative.
The question isn't whether billionaires are ruthless. It's whether we're going to design systems that constrain ruthless actors, or give up because ruthless actors exist.
One path leads to professional governance architecture with enforcement authority. The other leads to exactly the technofeudalism you're describing - because you removed yourself from the fight.
I agree, I just ask what choice do we have? Pursuing collective action and building institutional resilience is the only option I can see.
Dear Mr. Nanayakkara, My choice is to cognitively reframe the political, economic, and social struggle away from the “fight” against oligarchs to building the “beloved community” espoused by humanists like Ghandi and ML King, Jr. I recently read an essay by Substacker Qasim Rashid, Esq. (Highly recommended) He talked about his religious beliefs and ethical principles of the Muslim Faith. As you know, the term “jihad” has been hijacked and distorted for white supremacist purposes to suggest terrorism. I'm sure you actually know jihad means a process of self-evaluation in the context of Muslim principles that improve one’s personal choices and which ultimately enhances piety. Such an “internal process” is what I have in mind. Humanity cannot cast off the social Darwinian concept of predation in which we are currently stuck. My concern is that without human advancement all attempts to humanize capitalism will end up captured and co-opted by the predators. Please be assured that I value and appreciate our correspondence, for which I thank you with sincere gratitude. We are in what many Americans call “the Holiday Season.” In truth, we can advocate and model peace on earth, goodwill, and giving gifts to others every single day. In this spirit of generosity I extend to you my hope for your abundant health and happiness throughout 2026.
Please call me Chevan, for heaven's sake, no formality here, though your graciousness is appreciated.
Regarding politics, in my "old age" I've recognized it is a fight. Seeing what has happened in the U.S. over the last 50 years has really opened my eyes to the extend to what people will say and do to protect power, wealth and privilege. As an example, I frequently refer to mainstream economics as "the greatest fraud perpetrated against humanity".
I believe that we can build political and economic systems to allow individuals to flourish and live together - it's not logical to believe that but I guess lots of people believe things that aren't logical and this is mine.
I think you and I want good things but good things are not given, they have to be fought for, won and then defended. The Americans who came before us did a great job with that in their time and in their context. My writing and trying to build collective power for commond good is the small contribution I am trying to make towards all of us having good things in my time and my context.
I hope you enjoy the Holidays and the wind-down to the end of 2025 and it sets up a healthy, happy and prosperous 2026 for you and I thank you for being part of my audience and community.
Ok. Chevan, it is. Please call me Jerry.
This is brilliant work on the paralysis trap. The way strategic paralysis gets dressed up as principle is spot-on, saw this play out in alomost every organizing meeting Ive been to where we spent hours debating theory while landlords quietly lobbied city council. Denmark's 30% higher business formaton rate is the kinda concrete evidence that cuts through the purity nonsense.
Thank you for reading and engaging. I have my own policy framework but honestly I just want Americans to have good information about how disengagement leads to the opposite outcome they want. I appreciate your thoughtful comment and sharing your lived experience- there can be no more powerful validation of my obervations that what you've seen and been a part of.
https://chevan.substack.com/p/introducing-opportunity-economics?r=33jv1
Dear Mr. Roulston, It appears that you are a fan of the late Milton Friedman and echo his belief that markets must be free from regulatory burdens to make prosperity broadly available to the public at large. My disagreement with the esteemed economist is that markets cannot exist without human interactions. People are capable of engaging in an infinitely broad range of observable and concealed behaviors that interfere with and distort every aspect of commerce. It's not the commerce that needs regulation as much as the individuals who engage in it. Nevertheless, I always respected Professor Friedman's ideas despite my disagreement.
Brett, thanks for this comment. You're expressing exactly the concern the previous essay in this trilogy addresses (https://chevan.substack.com/p/defending-democratic-capitalism-from?r=33jv1), and you're right about crucial things.
What you get right: Regulatory capture is real and pervasive. Politicians often create rules that benefit connected insiders rather than serving everyone. Heavy-handed regulation can stifle innovation. These aren't theoretical concerns - they're documented patterns I acknowledge in the essays.
But here's where I disagree with your framing:
"Free markets" don't exist independently of government. Every market transaction you describe depends on government infrastructure: property rights enforced by courts, contracts upheld by law, currencies maintained by central banks, and networks of trust backed by regulatory systems. The "free market" has never existed separately from these public institutions. Even your ability to "save, invest, and take risks" requires government creating and maintaining the money you're saving.
Your "dashboard vs. gas pedal" analogy actually proves my point. Markets aren't natural phenomena we should leave alone - they're human-designed systems, like cars. And just like cars, they work well when designed properly and fail catastrophically when designed poorly. The question isn't "government intervention vs. free markets" but "what institutional design produces the outcomes we want?"
The prosperity you attribute to "freedom" actually came from quality institutional design. America's post-WWII boom - the period of greatest broad-based prosperity - wasn't from less government but from well-designed government programs: GI Bill, interstate highways, strong labor protections, financial regulation. These weren't "complicated theater." They were quality institutions with accountability that made markets work for everyone, not just the well-connected.
Here's the deeper issue: You're absolutely right that bad regulation helps the well-connected. But your solution - eliminating government intervention - doesn't prevent that capture. It just hands complete control to concentrated corporate power without any democratic accountability. As I document in How Corporate-Friendly Accounting Rules Create a $30 Trillion Transfer (https://chevan.substack.com/p/how-corporate-friendly-accounting?r=33jv1), the largest wealth transfers happen through rules that look like "free market" policy but systematically advantage concentrated wealth.
The real question isn't "government vs. markets" but "who designs the rules?"
Right now, concentrated wealth designs market rules to serve themselves while using "free market" rhetoric to prevent democratic accountability. What you call "freedom" is actually a system where 800 billionaires have captured the institutional design process while everyone else accepts artificial constraints.
Part 3 (publishing soon) provides the synthesis: Understanding how money actually works since 1971 reveals we can design quality institutions with accountability that serve everyone - addressing both the regulatory capture you fear AND the concentrated corporate power that "free markets" enable. The framework transcends the "government vs. markets" binary you're stuck in.
Your choice: Keep believing the "free market" mythology that serves concentrated wealth perfectly by preventing democratic accountability, or recognize that markets are human-designed systems requiring quality institutional design with transparency and restraint mechanisms.
I'm not selling books or building a following. I write because breaking the economic mythology you're expressing is essential for democracy's survival. The 800 billionaires who benefit from your "free market" thinking thank you for defending the system that enriches them while keeping everyone else constrained.