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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

    Thank you. A lot to read there.

    I’ve started at the bottom with James Meadway and there is much to pick at. For a start he mentions the usual line about inflation but doesn’t mention the Job Guarantee which is central.

    I’ll work my way up. Slowly
  2. laughingboy

    laughingboy pfm Member

    I'm not sure where the confusion comes from, personally.

    What's interesting about many critiques of MMT is that they pick something that 'feels' wrong to the writer, and use it to try to discredit everything MMT says.

    One instance I remember reading was an FT article by John Kay in 2012. I like John Kay on the whole, but this article saw him attempt to discredit MMT's assertion that tax drives acceptance of a currency. He argued that if the Scottish government wanted payment of tax denominated in cows, people would pay in cows. But people would still use pounds/dollars in shops. There is some truth in what Kay says: acceptance of currency requires social proof, or social acceptance norms, but his argument doesn't get to the root of how the pounds/dollars came to be accepted in the first place. What took the risk away from accepting pounds/dollars when the currency was new? How did social acceptance become embedded? In short, his explanation explained nothing.

    He even suggested that payment in cows would create a market in 'tradeable highland cattle certificates'. But he didn't ask: Why, if RBS issued securities in cows, would anyone want them, except for the fact that the Scottish government wanted payment in cows? Because the answer is probably: because the government demands payment of tax in cows. So, he almost got to the point of accidentally proving the MMT argument right. But in his mind, he had 'debunked' MMT.

    Frankly, a lot of the 'confusion' I see is a bit like this: MMT overturns someone's way of thinking about the world, therefore it must be wrong.
    Last edited: Aug 1, 2022
    Sue Pertwee-Tyr, Klassik and Le Baron like this.
  3. ks.234

    ks.234 pfm Member

    Stephanie Kelton, The Deficit Myth. Even I understood most of it!
  4. ks.234

    ks.234 pfm Member

    Also the GIMMS website is good as it is broken down into different articles which start off with a beginners guide
  5. ks.234

    ks.234 pfm Member

    Narrative tip to MMT newcomers; any use of “printing money” is clear indication of an agenda and should be filed under other trigger words like “maxing out the national credit card”, and “loading debt onto our children and grandchildren”
    Le Baron likes this.
  6. matthewr

    matthewr spɹɐʍʞɔɐq spɹoɔǝɹ ɹnoʎ sʎɐld

    Although most of the heavy lifting was, I think, done by Keynes. And most of our problems seem to be everyone is still stuck on the household model of the economy despite this being 60 years out of date.
    laughingboy likes this.
  7. ks.234

    ks.234 pfm Member

    I must start off by saying that I am not in anyway having a go a @matthewr but I’d do think that those article are some way away from being impartial, they clearly have an axe to grind.

    Of course, I too have an axe to grind, but it is out there in the open. You know which way my axe swings!

    I don’t have the knowledge or understanding of @Le Baron, but I can recognise certain trigger words like “printing money” as a trope to chat about “inflation”. “The word “inflation” it self is not a trope, and should not be dismissed, it needs to be taken seriously. But if you see the words “inflation” in the same sentence as “printing money”, then please, be suspicious. If you also see words like “as MMT says…”, “Weimar” and “Venezuela”, then please, remove all doubt.

    However, the big give away is the translation of Kelton into “printing money” in the first place. I have read Stephanie Kelton more than once, and that is an absolute inversion of my understanding of what she is saying.

    So please, be suspicious of “MMT says….” and if someone says “Even Stephanie Kelton says….” please don’t take them at their word, go and read Stephaine Kelton yourself. It is easy to understand on first reading, it does not have numbers, and is available from all good bookstores and here for only £4.99.

    rue enlightenment is cheap, and not far away……
    Le Baron and Klassik like this.
  8. Klassik

    Klassik Well-Known Member

    Klassik generally recommends two videos by American professors delivering speeches to British audiences. Perhaps it's not necessary to watch both, but it doesn't hurt if one has enough time to devote to the topic.

    The first is a presentation by Stephanie Kelton. Her book has been mentioned before:

    The other is by Fadhel Kaboub. Kaboub specializes in MMT and how it can be used to benefit the developing world, but this is a more general introduction to MMT and the job guarantee. Kaboub is a good speaker and so it might be worth seeking out his other speeches as well.

    The Mitchell, Wray, and Watts textbook on Macroeconomics is a good introduction, but unfortunately it is not an open textbook as it should be. Bill Mitchell must need funding to pay for his activities while he works from home. ;)
    IanW and ks.234 like this.
  9. ks.234

    ks.234 pfm Member

    I love Fadhel Kaboub.

    And I want to have Stephanie Kelton’s babies.

    What a strange world MMT is?
    Klassik likes this.
  10. ks.234

    ks.234 pfm Member

    Hopefully everyone one now left on this thread is at least curious about where the logic that as ‘our government is it’s own currency issuer, it cannot therefore run out of the thing it issues’, leads us.

    Monetarism is an idea that contradicts MMT at the very start of that observation by saying that government spending comes from tax.

    Monetarism maintains that all spending is constrained by the tax intake. It maintains that it would love to spend money on making the NHS work, but cannot because there just isn’t enough money. Therefore to spend more would be irresponsible/we’re all in this together/printing money/inflation/Magic Money Tree/Far Left extremist ideology, any one who disagrees is a communist/there is no alternative. Any normal person will follow monetarist logic and vote Conservative.

    You know it makes sense.

    But there is an alternative, and it isn’t far left, it isn’t an ideology, it isn’t inflationary, or printing money, or a type of flora, or any other rude word.

    It is just a logical conclusion from the observation that our government issues it’s own money. It has no need for our in order to spend on the NHS

    Spending where there is a need, like training nurses because there is a shortage of nurses, or developing a Green infrastructure, is not (within certain constraints other than tax, blah, blah, blah) inflationary. It is just a very good idea.

    Acknowledging the logic that flows from an uncontroversial observation, will not cause anything detrimental. Political opposition could destabilise the economy, but the logic of an observable fact, on its own, will not.

    MMT is the alternative to Monetarism.

    Bearing in mind the hostility directed at MMT supporters here on pfm recently, and two MMT supporters banned, I was rather expecting a significant counterbalancing of passion in support of the virtues and singular necessity of Monetarism on other threads. But the silence is ominous.

    Monetarism says that there is no alternative to starving nurses to death. There is at least one that has been consistently thought out. There may be others
    Klassik likes this.
  11. klfrs

    klfrs chill out

    How do you get 12 different answers to the same economic question?
    Ask 11 eleven economists.
  12. Joe Hutch

    Joe Hutch Mate of the bloke

    13 if one went to Harvard.
    klfrs likes this.
  13. ks.234

    ks.234 pfm Member

    What was the question?
  14. ks.234

    ks.234 pfm Member

    What was the question?
  15. klfrs

    klfrs chill out

    What makes you think there was a question?
  16. ks.234

    ks.234 pfm Member

    You said the was
  17. klfrs

    klfrs chill out

  18. ks.234

    ks.234 pfm Member

    If you can’t even remember your own question, probably best to leave it there.
  19. Joe Hutch

    Joe Hutch Mate of the bloke

    'The same question', so it could be any number of things, such as:

    'Will there be a recession?'

    'If there is a recession, how long will it last, and how bad will it be?'

    'Is it better to raise or lower interest rates?'

    'Will employment levels rise or fall?'

    Which reminds me of the anecdote about Lord Melbourne, the Whig Prime Minister. As he was about to go into Parliament to make an announcement about the Corn Laws, he said to his Cabinet colleagues: 'Now, gentlemen, is it to raise or lower the price of corn? It matters little which, only mind, we must all say the same thing.'
  20. ks.234

    ks.234 pfm Member

    None of your questions have anything to do with MMT. Maybe you’re on the wrong thread. There is a Monetarist thread specifically aimed at most of the questions you ask.

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