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I wonder about Modern Money Theory Economcs..often thought of as the polar opposite of Austrian Economics. https://en.wikipedia.org/wiki/Modern_Monetary_Theory

I wonder about Modern Money Theory Economcs..often thought of as the polar opposite of Austrian Economics. https://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory

Gibbon1 8y ago
I tend to see MMT as on the right track in seeing money/finance as a system of control. In that the limits are never financial but resource, technological, social and political.
- SubiculumCode 8y ago
  Agreed. I think that is the main contribution: Resource, technological, social and political limitations can lead to inflation. I have issues with some MMT proposals however. For example, the full employment federal job guarantee proposal goes in the wrong direction I think, because I do not think, as a amateur, that understanding the limits of money creation, role of taxes, etc, implies that centrally planned solutions are the best option (ie. Federal government guarantees you a job), when Top-to-bottom-up (i.e. unrestricted basic income) alternatives might leverage market forces rather than central planning in how that money is spent to better lives or to help fund new businesses.
  - jabl 8y ago
    The common MMT objection against UBI is that it's inflationary, that is, the state spends money (UBI) without getting anything (production) in return. The "efficiency" of job guarantee (JG) jobs is perhaps not the best, but OTOH it's not zero either. The general idea in the JG is that it provides minimum wage jobs, functioning as a social safety net (or, JG effectively sets a minimum wage). When the economy does well, workers migrate to non-JG jobs, and vice versa in a downturn, keeping full employment at all times. To some extent I think there's also a philosophical point here. Do we regard jobs as inherently useful, e.g. providing a social setting for peoples lives, or are most jobs "bullshit jobs" that serve no useful function whatsoever? How you answer that probably makes a difference in how you view JG vs. UBI as well.
    - SubiculumCode 8y ago
      My view is that UBI is not inherently wasteful as it allows people who'd otherwise be productive by giving them room to maneuver.
jabl 8y ago
Some thoughts about MMT: 0) If you, as a layman (and why not, if you're an expert as well), are going to have an informed opinion on economic issues, you owe it to yourself as well as whoever you're going to discuss it with, to educate yourself broadly and study both sides of an issue. Seems that too many people who discuss on the internet happened for some random reason to read a book, then (maybe) continue to read books in the same vein, and are subsequently unable to look out of the ideological pigeonhole they have jumped into. Don't become that old bore that rants endlessly about "libtards/global financial capitalism/whatever" at xmas dinner, while the rest of your family sits there in an embarrassed silence wishing you to drop dead or at least STFU so that the kids can have their presents! For some background that explains the thought behind MMT, I can recommend Mitchell & Fazi, Reclaiming the State. 1) I don't understand the obsession with the gold standard that some in the Austrian school seem to have. Or if not gold, some other valuable commodity, energy, basket of commodities etc. Whatever. Bretton Woods is over, deal with it. The only underlying reason I've been able to find is that to people who dream of a nightwatchman-state, the notion of a state with fiscal and monetary power is poison. 2) The core of MMT, namely the description of the macroeconomics of a sovereign government with a monopoly on issuing its own floating fiat currency, is not new per se, but it's explained maybe slightly differently than usual, but it explains it pretty well. And given how confused people seem to be about macroeconomics, fiscal policy, and fiat currencies, being able to explain it clearly is a big deal. 3) As for the policy implications of MMT. MMT teaches us that in terms of monetary and fiscal policy governments are not as constrained as is commonly thought (the usual anti-MMT slurs of "printing your way to Nirvana" and subsequent hyperinflation tells more about the ignorance of whoever is presenting those). Now, most of the MMT proponents are pretty left-leaning, so they tend to want to use that extra fiscal space for various social programs, but one has to keep in mind that's a policy choice and not something inherent in the theory itself. Another policy choice would be to buy weapons and engage in various foreign policy adventures, but again, nothing that MMT per se prescribes.
- ardy42 8y ago
  > Seems that too many people who discuss on the internet happened for some random reason to read a book, then (maybe) continue to read books in the same vein, and are subsequently unable to look out of the ideological pigeonhole they have jumped into. They're like people who read only one side's arguments in an adversarial court case: it's the job of each lawyer to tell the most compelling story he can that's maximally biased on his client's behalf. They're not going to call attention to holes in their story or more probable theories, but rather paper over them. If they've done a good job you'll come out of with false impression thinking they're perfectly right (or even righteous), when in fact they may have been totally wrong. A lot of books are the same way, arguing as strongly as they can for some point of view. People are busy, and like the righteous feeling of thinking that personally know "how it really is" and who the "real" villains are, so they'll often stop after reading one POV, because reading other POVs feels like a challenge to their new righteous-feeling ideology and therefore a challenge to themselves personally.

Gibbon1 8y ago

I tend to see MMT as on the right track in seeing money/finance as a system of control. In that the limits are never financial but resource, technological, social and political.

SubiculumCode 8y ago
Agreed. I think that is the main contribution: Resource, technological, social and political limitations can lead to inflation. I have issues with some MMT proposals however. For example, the full employment federal job guarantee proposal goes in the wrong direction I think, because I do not think, as a amateur, that understanding the limits of money creation, role of taxes, etc, implies that centrally planned solutions are the best option (ie. Federal government guarantees you a job), when Top-to-bottom-up (i.e. unrestricted basic income) alternatives might leverage market forces rather than central planning in how that money is spent to better lives or to help fund new businesses.
- jabl 8y ago
  The common MMT objection against UBI is that it's inflationary, that is, the state spends money (UBI) without getting anything (production) in return. The "efficiency" of job guarantee (JG) jobs is perhaps not the best, but OTOH it's not zero either. The general idea in the JG is that it provides minimum wage jobs, functioning as a social safety net (or, JG effectively sets a minimum wage). When the economy does well, workers migrate to non-JG jobs, and vice versa in a downturn, keeping full employment at all times. To some extent I think there's also a philosophical point here. Do we regard jobs as inherently useful, e.g. providing a social setting for peoples lives, or are most jobs "bullshit jobs" that serve no useful function whatsoever? How you answer that probably makes a difference in how you view JG vs. UBI as well.
  - SubiculumCode 8y ago
    My view is that UBI is not inherently wasteful as it allows people who'd otherwise be productive by giving them room to maneuver.

jabl 8y ago

Some thoughts about MMT: 0) If you, as a layman (and why not, if you're an expert as well), are going to have an informed opinion on economic issues, you owe it to yourself as well as whoever you're going to discuss it with, to educate yourself broadly and study both sides of an issue. Seems that too many people who discuss on the internet happened for some random reason to read a book, then (maybe) continue to read books in the same vein, and are subsequently unable to look out of the ideological pigeonhole they have jumped into. Don't become that old bore that rants endlessly about "libtards/global financial capitalism/whatever" at xmas dinner, while the rest of your family sits there in an embarrassed silence wishing you to drop dead or at least STFU so that the kids can have their presents! For some background that explains the thought behind MMT, I can recommend Mitchell & Fazi, Reclaiming the State. 1) I don't understand the obsession with the gold standard that some in the Austrian school seem to have. Or if not gold, some other valuable commodity, energy, basket of commodities etc. Whatever. Bretton Woods is over, deal with it. The only underlying reason I've been able to find is that to people who dream of a nightwatchman-state, the notion of a state with fiscal and monetary power is poison. 2) The core of MMT, namely the description of the macroeconomics of a sovereign government with a monopoly on issuing its own floating fiat currency, is not new per se, but it's explained maybe slightly differently than usual, but it explains it pretty well. And given how confused people seem to be about macroeconomics, fiscal policy, and fiat currencies, being able to explain it clearly is a big deal. 3) As for the policy implications of MMT. MMT teaches us that in terms of monetary and fiscal policy governments are not as constrained as is commonly thought (the usual anti-MMT slurs of "printing your way to Nirvana" and subsequent hyperinflation tells more about the ignorance of whoever is presenting those). Now, most of the MMT proponents are pretty left-leaning, so they tend to want to use that extra fiscal space for various social programs, but one has to keep in mind that's a policy choice and not something inherent in the theory itself. Another policy choice would be to buy weapons and engage in various foreign policy adventures, but again, nothing that MMT per se prescribes.

ardy42 8y ago
> Seems that too many people who discuss on the internet happened for some random reason to read a book, then (maybe) continue to read books in the same vein, and are subsequently unable to look out of the ideological pigeonhole they have jumped into. They're like people who read only one side's arguments in an adversarial court case: it's the job of each lawyer to tell the most compelling story he can that's maximally biased on his client's behalf. They're not going to call attention to holes in their story or more probable theories, but rather paper over them. If they've done a good job you'll come out of with false impression thinking they're perfectly right (or even righteous), when in fact they may have been totally wrong. A lot of books are the same way, arguing as strongly as they can for some point of view. People are busy, and like the righteous feeling of thinking that personally know "how it really is" and who the "real" villains are, so they'll often stop after reading one POV, because reading other POVs feels like a challenge to their new righteous-feeling ideology and therefore a challenge to themselves personally.