The Real Progressive #MMT @sdgrumbine
(https://twitter.com/sdgrumbine/status/989643135683842048)
The big dogs are coming out to play at Real Progressives with 2 heavy weights as @wbmosler and @ProfSteveKeen will join me on May 6th at 8PM @RealProgressUS a gentleman’s discussion on Modern Monetary Theory. JOIN US!!!!! #MMT #LearnMMT
2018 api. 26
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Mosler-Keen debate 4PM NYT/9PM GMT Sunday May 6: my points of contention with #MMT
(https://www.patreon.com/posts/mosler-keen-4pm-18467116)
Apr 28
The debate is now confirmed for a more reasonable hour for me (10PM in Amsterdam) than first proposed (2AM!). So Warren and I will now debate the finer points of MMT and economics in general. At the allotted time, go to https://www.facebook.com/RealProgressive/ and you should be able to watch the debate live. Steve Grumbine will be chairing, and I expect firing questions at myself and Warren.
To “telegraph my punches”, of course, in general, I agree with MMT: it is based on the proper accounting of the creation and destruction of money in a mixed fiat/credit monetary economy. Government spending in excess of taxation is (a) perfectly feasible, (b) creates money (and net financial assets for the private sector, without which the non-bank financial sector would necessarily be in net negative equity), and (c) is limited by its practical effects, rather than the prospect that the government can run out of its own promises to pay.
My disagreements are in areas where I think MMT does not go far enough, and also where I think it goes too far:
- The same accounting that concludes that (a) banks create money (but net zero financial assets for borrowers) by lending more than they get back in repayments and (b) governments create money by spending more than they get back in taxation implies that (c) running a current account surplus (exports exceeding imports) also creates money for the surplus country.
I therefore think the widespread MMT position that “exports are a cost and imports are a benefit” are the product of the American origins of MMT, since the US dollar is the international currency, and it therefore doesn’t face the international exchange constraints that face other nations.
It also under-emphasises the physical side of economics: manufacturing is the major source of trade surpluses, and trade surplus nations like Germany, Japan, South Korea (and now China) have both built that manufacturing capability using their trade surplus, and keep that surplus in place by further advancing their manufacturing capability over time.
- Some MMT advocates interpret the implication of MMT, that all resources including labor can be fully-employed if the government runs a big enough excess of spending over taxation (I refuse to use the word deficit, given its false negative connotations here), to mean that the government “causes” unemployment.
To me, this is rather like blaming cold temperatures inside a house on the air-conditioning system rather than the weather outside. Yes, the house would be warmer if someone turned the temperature up, but fundamentally it’s cold inside because it’s cold outside.
It also implies that in the absence of government (or equally, if government always ran a balanced budget) there would be no unemployment: in other words, it’s Say’s Law in another guise.
From my complex systems perspective–and I believe from the historical record of the 19th century when government (including in the USA) was much smaller than today–capitalism is a far-from-equilibrium monetary and physical production system which can crash into a private-debt-driven debt-deflation under its own dynamics. It is not something that reaches the tepid equilibrium of Say’s Law.
- Finally, I think this is bad politics. The bland way in which this is stated in some MMT literature could easily be used by libertarian and Austrian economists to say “well great then, let’s abolish government and bring about full employment (via Say’s Law).
MMT can instead argue that government can reduce unemployment and stabilize an unstable economy by focusing on the essential contradiction in capitalism that proper monetary accounting exposes: in the absence of government money creation, the non-bank private sector would necessarily be in negative net equity, yet at the same time most economic actors desire to achieve positive net equity. This gives a pure credit monetary economy a necessarily deflationary bias, which net money and private sector financial asset creation by a government than spends more than it taxes can overcome this contradiction, thus allowing both the banks and the non-bank private sector (households and firms) to achieve positive equity.
Apart from these issues, as noted, I’m in agreement with MMT, and of course I acknowledge Warren’s role in creating this insight in the modern era, after it was gained by American economists via the WWII experience (including the then Chairman of the New York Federal Reserve Beardsley Ruml), but lost by the rise of American Neoclassicism from Samuelson on.
I’ll conclude with images of the long-neglected paper by Beardsley Ruml (1946) “Taxes for Revenue are Obsolete“, American Affairs, January 1946, pp. 35-39.
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Steve Keen @ProfSteveKeen api. 28
Mosler-Keen debate 4PM NYT/9PM GMT Sunday May 6: my points of contention with #MMT https://www.patreon.com/posts/mosler-keen-4pm-18467116 … @wbmosler @RealProgressUS @rethinkecon @Renegade_Inc @RichardJMurphy
Mosler-Keen debate 4PM NYT/9PM GMT Sunday May 6: my points of contention with #MMT
(https://www.patreon.com/posts/mosler-keen-4pm-18467116)
(https://twitter.com/wbmosler/status/991491096667742210)
erabiltzaileri erantzuten @ProfSteveKeen @RealProgressUS erabiltzaileari eta 3 beste
erabiltzaileri erantzuten
Confirms it will be a discussion rather than a debate. 😉
2018 mai. 1
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(https://twitter.com/wbmosler/status/993250316555640833)
Mosler-Keen debate 4PM NYT/9PM GMT Sunday May 6: my points of contention with #MMT https://www.patreon.com/posts/mosler-keen-4pm-18467116 … @wbmosler @RealProgressUS @rethinkecon @Renegade_Inc @RichardJMurphy
Cynical Sceptic @CynicalSceptic
Re money conversion: When you pay 50 pounds for a software from Italy via internet, those 50 pounds get destroyed in the UK while the new money (equivalent in value) in € is being created in Italy and assigned to sellers account, did I get this right Prof Keen? @ProfessorWerner
Yes.
Cynical Sceptic @CynicalSceptic
Thank you! I was thinking of this myself few weeks back and came to the conclusion that this is the only way it could work. It’s this extra money from trade surplus that forces Germany to run budget surplus to avoid inflation. Why couldn’t Mosler agree to this I will never know.
erabiltzaileri erantzuten @CynicalSceptic_ @ProfSteveKeen erabiltzaileari eta
erabiltzaileri erantzuten
I do agree with the logic of that statement.
2018 mai. 6
erabiltzaileri erantzuten @wbmosler @CynicalSceptic erabiltzaileari eta
erabiltzaileri erantzuten
We’re on the same page then mate. Glad to see it.
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(https://twitter.com/wbmosler/status/993311644246859776)
Cynical Sceptic @CynicalSceptic
Re money conversion: When you pay 50 pounds for a software from Italy via internet, those 50 pounds get destroyed in the UK while the new money (equivalent in value) in € is being created in Italy and assigned to sellers account, did I get this right Prof Keen? @ProfessorWerner
erabiltzaileri erantzuten @CynicalSceptic_ @ProfSteveKeen erabiltzaileari eta
erabiltzaileri erantzuten
not how it works
2018 mai. 6
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(https://twitter.com/ProfSteveKeen/status/993190413182885888)
Warren Mosler’s responses before our debate https://www.patreon.com/posts/warren-moslers-18642777 … @wbmosler @sdgrumbine @rethinkecon @Renegade_Inc
2018 mai. 6
Warren Mosler’s responses before our debate
May 6
Warren has just sent me some comments on my post, annotated in an email. They don’t transfer well to the blog format, so I’ve attached them to this message as a PDF.
mosler-keen-4pm-18467116.pdf <===
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The Real Progressive #MMT @sdgrumbine
(https://twitter.com/sdgrumbine/status/993295100443873280)
Oh yes… an intense discussion about trade, foreign exchange and currency holdings and the role of banks in the national and global economy with @wbmosler and @ProfSteveKeen (Warren Mosler and Steve Keen) Please like and subscribe to our YouTube channel!
Steve Grumbine – Warren Mosler and Steve Keen join Real Progressives
Warren Mosler and Steve Keen join Real Progressives to discuss the differences between MCT and MMT, full employment, the effects of international trade and the role of capitalism, and government in creating instability and unemployment
Bideoa: https://www.youtube.com/watch?v=TRtzLTl4j1A&feature=youtu.be
2018 mai. 6
