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The Fight for the NHS/MMT economics

Discussion in 'off topic' started by ks.234, Oct 26, 2021.

  1. ks.234

    ks.234 pfm Member

    We seem to be going around in circles again. I don’t understand how you can say the ‘Keynesianism *is* MMT’ and then say that MMT is dangerous but Keynesianism is not.
    Again, all the MMT says on interest rates is that they’re regressive

    If both Keynesianism and MMT agree that there is unused fiscal space that can be used up to but not beyond the point of inflation, what’s the argument? MMT clearly says that inflation is a limit to spending, as are all the other limits you mention

    Of course it’s politics. That’s the point. Economic truths need to be heard outside of academia and get into politics. The fact that academic models of the economy do not find their way into politics is the problem.

    It is true that Krugman is quoted out of context by those who use him to attack MMT, but Krugman says one thing one minute and something else another depending on his audience.

    What is interesting though is how Krugman is used as a stick to beat MMT by both monetarists and Keynesianism alike, despite the fact that a number of MMT supporters have taken on the criticisms head on and answered them.

    There seems to be an alliance between academia and current economic thinking to keep MMT out of politics, not sure why.

    No doubt if MMT makes more headway we’ll start to hear more about MMT being a socialist utopia/dystopia, a far left ideology, or some such nonsense.
     
  2. Spraggons Den

    Spraggons Den pfm Member

    Yes, I think the old dichotomy of private sector equals efficient-public sector equals inefficient is a glib way of viewing modern, complex structures such as supranational corporations, PFI s etc
     
    ks.234 likes this.
  3. ks.234

    ks.234 pfm Member

    No. It’s about spending to utilise resources, not spending beyond available resources. Overspending will of course have economic consequences, but the last time I looked, the NHS was not awash with an over abundance of resources.

    We are a long, long way from a situation where the economy will even begin to suffer consequences due to overspending on the NHS.
     
  4. Ponty

    Ponty pfm Member

    The lack of joined up thinking must be a huge inefficiency across public services full stop. Parochial solutions and empire building rather than a holistic approach. How these issues get fixed with incumbent mindsets I just don’t know.
     
  5. Heckyman

    Heckyman pfm Member

    The root of the problem is that the developed world is over-indebted, the population is ageing and growth is slowing. There are actually very few options left other than fiscal stimulus and a Govt engineered period of financial repression (rate of inflation above interest rates) to inflate away the debt.

    It's scant consolation if you don't own real assets (or if you're a saver rather than a borrower), but at least you could get a nice hospital if the printed money goes on the NHS ;-)
     
  6. Sue Pertwee-Tyr

    Sue Pertwee-Tyr Well, I can dream, can’t I?

    Privatisation is probably about the worst way to achieve a holistic approach, surely? Numerous competing organisations each working to maximise their own advantage, to their own corporate ends, is not the way to achieve a holistic 'best solution for the most people' outcome for anything. It might work when the market is widely differentiated, so multifarious and varied offers are useful by way of providing choice, but I don't think healthcare (or most public services, for that matter) fits that description.
     
  7. Ponty

    Ponty pfm Member

    If resources (including labour) become fully utilised and there is no spare capacity, what will happen to prices?
     
  8. paulfromcamden

    paulfromcamden Baffled

    I dunno to be honest. For one thing I don't imagine it's a situation many working in the NHS have experienced. The only place I've worked that really was awash with cash was an investment bank pre-crunch. Did it lead to gross inefficiencies? Perhaps. But not that were noticeable to me as a lowly IT grunt.

    I guess I'm a little bit wary of politicians talking about inefficiency and red tape in public services as it often seems like an excuse to not properly fund the service. I think you have to accept that there will always be a degree of inefficiency and waste in any very large organisation. Though hopefully the economies of scale work in your favour - example: the NHS buys insulin for a fraction of what it costs US insurance companies.
     
    Sue Pertwee-Tyr likes this.
  9. Ponty

    Ponty pfm Member

    Agree with you, particularly now recessions are banned.
     
  10. ks.234

    ks.234 pfm Member

    We are such a long, long way from that scenario that it really is another world.

    If we ever do get to that El Dorado, I’m not sure even MMT has the crystal ball to predict what will happen to prices. Not sure anyone else has either to be honest.
     
  11. Ponty

    Ponty pfm Member

    I suppose we could go back to the days of everything being nationalised. It was a paragon of efficiency back then so I’m told.
     
  12. Ponty

    Ponty pfm Member

    Well, a real time example is plenty of businesses who can’t find labour. I know people in the hospitality trade who have literally had to shut the doors due to lack of staff. Guess what’s happening to staff wages, and consequently end customer pricing.
     
  13. Sue Pertwee-Tyr

    Sue Pertwee-Tyr Well, I can dream, can’t I?

    Why is it all or nothing with you? Why can't we have some things under public sector, like NHS, critical infrastructure and the like, and other things in the private sector where competition can be beneficial. Why, if I say 'the NHS should be in public ownership' would you respond with something akin to 'I suppose you want British Leyland back'? It's a pretty threadbare line of argument, have you nothing better?
     
  14. Heckyman

    Heckyman pfm Member

    I think they can't allow recessions anymore as there's a pretty good chance the whole house of cards comes crashing down. They daren't even let large individual companies go to the wall because no-one knows who's on the hook at the end of the line.
     
  15. Enfield boy

    Enfield boy pfm Member

    Let's face it, what happened to privately owned Ford UK, GM UK, Rootes/Chrysler UK. All pretty much gone. There was industrial strife but I'd contend this was mostly due to incompetent management.


     
    Sue Pertwee-Tyr likes this.
  16. Ponty

    Ponty pfm Member

    I actually agree with you. Certain things are too important and should be taken out of short term political control. The challenge is, public sector does not generally go hand in hand with efficiency.
     
  17. Spraggons Den

    Spraggons Den pfm Member

    ...are also rife in the private sector...as evidenced in the attitude of the employees from the Slough branch in BBC1 documentary 'The Office' towards their colleagues from Swindon during the merger.
     
  18. Sue Pertwee-Tyr

    Sue Pertwee-Tyr Well, I can dream, can’t I?

    It depends, to some degree, what you regard as efficiency. The public sector tends, in my experience, to aspire to best practice in terms of things like employment rights, pensions, equality and diversity, and generally doing the right thing. Not least because it is required under its enabling legislation. The private sector tends to apply more inventiveness to looking like it is doing the right thing, while cutting corners or actively circumventing some of this, perceived as a drain on the bottom line. I don't consider that to be 'efficiency' in the wider sense of the term.
     
    Enfield boy likes this.
  19. ks.234

    ks.234 pfm Member

    That sounds like a case of wages being held artificially low by years of underemployment based on the threat of unemployment. If those businesses can’t compete in an economic environment in which they can’t pay the current rate for staff, which is still on the low side, perhaps there is something wrong with their business model?
     
    Last edited: Nov 25, 2021 at 5:15 PM
    Sue Pertwee-Tyr likes this.
  20. ks.234

    ks.234 pfm Member

    The question is this, are we in a period of inflation, as described in economic terms as a period of ‘continuous inflation’ or are we seeing a period of structural adjustment?
     

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