MMT, Interest Rates, and Political Limits

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Clara Mattei and her first book, The Capital Order, were hugely important to Real Progressives as we began to expand our focus from Modern Monetary Theory and investigate the political economy of the capitalist system.

Now she joins Steve to talk about her new book, Escape from Capitalism. They discuss how capitalism maintains itself through market dependence, exploitation, and austerity, and why escaping it requires building alternative institutions rather than relying on elections or reforms within the capitalist state.

Steve and Clara are largely aligned in their critique of the system, but there are some disagreements. They debate aspects of MMT, including how interest rates, state spending, and monetary sovereignty function across different contexts. Their differences open up a deeper discussion about the limits of reform, the state's role, and what meaningful change would require.

There is a reason elections cannot deliver emancipation. The capitalist state is structurally designed to insulate elites from popular control. Clara describes her practical organizing work with FREE (Forum for Real Economic Emancipation) in Tulsa, building horizontal assemblies, participatory budgeting campaigns, community land trusts, and mutual aid.

Steve touches on the concept of de-commodifying basic needs (housing, healthcare, food), to break market dependence. But then, capitalism would be unworkable.

Clara E. Mattei is Professor of Economics at The University of Tulsa and the Founding President of FREE: Forum for Real Economic Emancipation. She was previously associate professor at The New School for Social Research Economics Department and has been a fellow of the Institute for Advanced Studies, Princeton. Her research contributes to the analysis and history of capitalism, exploring the critical relation between economic ideas and technocratic policy making.

Clara is author of The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism (University of Chicago Press, 2022), and the recently published Escape from Capitalism (Allen Lane, Penguin Press, and Simon & Schuster, January 2026), which will soon be translated into multiple languages, including French, German, and Italian.

Learn more @ freefreeforum.org, where she hosts the weekly FREE podcast.

@claraemattei on X