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You make some interesting points, but not MMT. It's actually quite an easy view to fall into which I also did for a bit based on a few, but nowhere near enough,
by hgomersall 2y ago
You make some interesting points, but not MMT. It's actually quite an easy view to fall into which I also did for a bit based on a few, but nowhere near enough, snippets of MMT along with much prior baggage.
The core point of MMT is that monetarily sovereign states should primarily consider the resources available to buy with little to no consideration of the financial side, since such states are never financially constrained. The focus of the government then is all about making sure such resources are properly managed. That means the primary role of taxation is to free resources (read people) that can be purchased. It recognises a potential cause of inflation is a lack of things the state needs being available to purchase by the state leading the state to out-compete the private sector using its greater financial power.
Conversely, if things are available to buy, then the state can use its financial might to buy up those things. This is most notable in the primary policy prescription of MMT of the Job Guarantee - acting as an employer of last resort and providing a job to anyone that wants one (and in the process, rendering the minimum wage somewhat moot). The JG is especially interesting when you realise what you're actually doing is anchoring the value of the currency to X units per hour of unskilled labour. At that point, spending is all relative to that price anchor. Things can and should float relative to it in response to supply and demand, but that fundamentally the JG wage is the financial control point.
It's kind of funny how little consideration is given in the mainstream to establishing a proper value for the currency given how much hand-wringing is performed over inflation fears.
- thrw42A8N 2y agoHow many hours of unskilled labor equal one hour of principal software engineer labor? Imho the answer is NaN/infinite - the unskilled person won't be able to do in years what the engineer does in minutes while picking today's lunch restaurant. Sounds very much like 9 women delivering a baby in a month.
- hgomersall 2y agoYou can make the same argument about principle software engineers. How many php front end developers does it take to write a kernel driver? Of course, the question actually being asked is what the relative pay of the different positions are, since that's how money works.
- thrw42A8N 2y agoYes. Our money works because it's not pegged to unskilled labor. Money tied to it wouldn't work.
- hgomersall 2y ago"And you should listen to me because I'm unwilling to stand behind my opinion.". Why would it not work?
- thrw42A8N 2y agoBecause unskilled labor is incomparable to skilled labor, and various specializations of skilled labor are incomparable to each other. It's an infinite money glitch - computers can do many unskilled labor tasks autonomously. I have an AWS account and am happy to sell.
- hgomersall 2y agoWhen your AWS account can remove graffiti from the wall, or plant flowers, or dig a road, please do let me know. Even when that happens, I don't think a job guarantee would extend to an AWS account. Despite your protests, people manage just fine to compare labour based on how much the provider of said labour is paid using the single measure of quantity of currency.
- thrw42A8N 2y agoNo, they compare the market value of labor, which is the part that makes the economy possible and this proposal would remove it.
- hgomersall 2y agoIt would not remove it, everything would float relative to that point. If you don't define the reference point, things still move about the price of labour since that's the dominant variable, just the absolute baseline can float around too. Defining a single point allows any arbitrary market position for everything else. Since money is a social construct with a social purpose (and indeed, is the reason people are unemployed) it's perfectly reasonable that we define it's value to provide a social purpose, which has the added benefit of providing price stability. Moreover, it provides a buffer stock of employed that can easily transfer to and from the private sector.