Fucked if i know


So anyone have an opinion on this?

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"In the present economic system, real resources are mobilized only on the say-so of the issuers or possessors of money, and only on their terms. No production, even for profit based on the exploitation of labor, takes place until finance is secured. It makes a great difference whether money is made available on our terms, by a democratically accountable currency-issuing government, or on the basis of private interests motivated narrowly by profit, facilitated by an unaccountable government."

"we should beware the right-wing minimum-income schemes, which go back to Milton Friedman’s “negative income tax” and “helicopter money,” and are coming back to the future as capitalist-friendly, inequality-preserving, simplistically anti-tax UBI proposals from Sili-Libertari-con Valley. On the one hand, these proposals demonstrate that they know that taxes-don’t-fund-spending is really the way fiat money works, and they see some hobbled version of UBI—something that provides the masses with subsistence income outside the gated compounds—as necessary to keep the jobless society they’re creating from exploding. On the other hand, they are very wary about coming out too strongly with proposals that might reveal the radical possibilities this knowledge opens up for fiscal policy."

MMT is the way to go. You can watch some interviews/lecture with Michael Hudson for basic overview of his take on the economy and MMT.

Ironically, this also implies that UBI can help raise awareness about how fiat money works among the masses. I didn't think I would ever find a reason to like UBI but here is one.

Thanks, I'll check it out. Seems potentially central to a 21st century socialist platform.

I don't get the big deal with MMT. It's just a slightly different way of looking at taxes, not some kind of breakthrough.

Even if taxes don't directly fund spending, you still need taxes to prevent inflation, presumably in proportion to your spending, so higher taxes do "pay" for spending if you don't want inflation.

MMT attacks the neoclassical economic theories that most bourgeois states use to justify their economic policies. These policies surrender the power to create money to private finance. Unlike industrial capitalism which is progressive, financial capitalism is reactionary and will regress society to something resembling feudalism. Following MMT means that the people (through the superficially democratic system present in bourgeois states) control money creation. MMT is a way to restore some limited degree of democratic oversight over the economy.

Inflation can also be prevented through increasing supply of commodities, which comes with it's own set of problems of course.


muh Venezuelaaaaaa

Did they actually print money?


I think it's a pretty refreshing insight. You might not even have to prevent inflation. Imagine your economy has 90 billion dollars in circulation (emphasis on imagine) and you print 10 billion dollars and spend it all on healthcare. Prices and production levels would adjust all over the economy to accomodate for the movement of resources and labor hours to healthcare. All other sectors would drop a bit, it's the same effect as taxing the whole economy to fund healthcare, just less of a hassle.

Is MMT related to social credit?

The thing china is implementing? Not really.

The balance between inflation and stuff being done is a much more interesting scenario.
If your spending is yielding increased output in a meaningful way, that spending won't be inflationary. I'll confess my ability to explain why in serious economic terms - but it's intuitively obvious, or at least I hope it is. In a verbal sense, there's the basic explanation that "inflation is too much money chasing too few goods" - now, there are little reasons that's not always the case, but ignore those for a bit. What happens if the extra money, or even the hypothetical future promise of extra money, yields more goods? Then the new money is in balance with the new goods, and inflation doesn't result from our verbal model.

This is probably most useful in considering mass unemployment. It's the height of madness to think that we can have millions unemployed, and socially necessary work going undone - not just tasks in need of great numbers of raw resources (which complicate matters), but a perpetual deficit in social care for the elderly and the disabled, in teaching, and so on - and to conclude that although we have huge demand, and a huge supply of labour, we simply lack the numbers on a balance sheet to, as it were, put two and two together. Once it's understood that the numbers aren't magical scarce commodities, as necessary as coal for a fireplace, it becomes possible to seriously look at resolving the problem.

Also because inflation is a complex thing there may arise situations where it just doesn't want to move for no apparent reason. I mean take now, we've got quite low inflation and it's not quite obvious why - or take Japan, which has had deflationary problems. In such circumstances you're literally being handed a licence to print money under the MMT view, rather than being encouraged to "get government out of the way so the market can fix itself." as with the shock therapy outlook.

not the chinese thing, that's not related at all
I mean this: en.wikipedia.org/wiki/Social_credit

bump tbh

The way inflation is understood by the average person seems weirdly unified for how it actually works. There is the general belief that the amount of money circulating has a quick effect on the entire price level. If you look at a yearly CPI report you'll see that the price level for various goods can fluctuate up or down pretty regularly.

Of course, the most weighted good for the index is housing, which has been rising quite a bit more in the past 30 or so years than it ever had before because of the financialization of the economy. To get an idea of the wackiness of inflation, you can also look at how the price level of goods on Amazon has actually had downward pressure. As in, the mere availability of the internet marketplaces increased competition over pricing such that many average goods have been getting cheaper.

There are also theories about oil prices being a big driver in price fluctuations of most goods, which doesn't really coincide with the money supply. I think oil for the december CPI last year was up 9% for the month or something. Most other goods experience minor changes in a month, less than 1%.



lmao@partisan hackery

Venezuela is a welfare state and not even an actual attempt at socialism

Yes, but that doesn't really have any bearing on the validity of MMT. I don't even see how MMT is useful in a socialist economy assuming money is replaced with something like labor vaouchers.

what is our consensus with r/badecon? Some of them seem pretty hostile to Marxists?

just checked, it's shit

It isn't, it's about capitalist economies. But it can be of interest to socialists because it attacks some fundamental beliefs people hold about capitalism. For instance, I know a couple of the MMT guys regularly refer to the amount of money in bank deposits as "scores" and the central bank as a "score keeper". I don't think they actually intend to attack capitalism itself with that kind of phrasing, but they are trying to say that the money economy is somewhat "arbitrary" so to speak. What matters is production, and MMT believes that the government is in a unique position to guide production in the right direction. I think this is tantamount to saying that the form of the process of distribution is largely arbitrary, which lends itself as an argument that the basis of our system of distribution only needs to conform to our desired outcomes. If it creates the desired outcomes, it is useful. If not, then we should try something else.

Capitalism as it is always makes more of an argument that this is the only possible, best outcome. We shouldn't presume that we can guide the economy in any substantial way because it is a natural, living organism almost entirely out of our control to improve. It naturally improves itself, and any significant moves we make to try to guide it will cause it to get sick. Thinking of arguments about how we have so many houses and so many homeless always resulting in "what, do you want to just give people the houses? What about money? You're enslaving the people who paid for the houses to people who didn't do anything!" etc.

they seem to be pretty sharp, should I be intimidated?

they use lots of buzzwords to dress up their neoliberalism, ctrl+f in that thread about MMT and not one (1) mention of "tax"
so they're discussing literally everything about MMT except for the crucial point that the way we think about taxes and spending is shit
do not be intimidated by charlatans

another bump from me tbh
I'm curious, how does MMT tie in with soviet economic policy?