Blog-Reference and Blog-Reference
Tom Hickey sums up: “The goal is run a policy that optimizes use of available resources in the present, while also generating the economic capability to increase real resources for future use. The purpose of MMT as a ‘policy science’ is showing how this is possible based on the actual operations of a modern monetary production economy.”
This is the wrong priority. In order to see this, one has to get out of the forever inconclusive discussion about monetary and fiscal policy and to look at the panorama of the failed science called economics.
There is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
Economic policy presupposes knowledge of how the actual economy works. This knowledge is embodied in the true theory: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
Because of the lack of the true theory the policy guidance of economists ― Walrasians, Keynesians/MMTers, Marxians, Austrians, and Pluralists ― has NO sound scientific foundations.
Economics had the bad luck to start as Political Economy. This means that the political agenda had been given and the argumentation had to support the agenda. This is the wrong sequence.
This is the difference between theoretical economics (= science) and political economics (= agenda pushing): “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)
Theoretical economics had been hijacked from the very beginning by political economists. Political economics has produced NOTHING of scientific value in the last 200+ years.
There is absolutely no use to follow the discussion between what Bill Mitchell calls mainstream and progressives. Both sides lack sound scientific foundations, that is, the true theory. MMTers have until this day not realized that their foundational premise and their elementary accounting identities are false.#1
The general public is confronted with conflicting economic policy messages and cannot see that they have no sound scientific foundations. The economist distinguishes himself from the soapbox propagandist and the snake oil seller by claiming that his policy proposals are based on the true theory. This is NOT the case.
From the standpoint of science, the economist is worse than the snake oil seller and fraudster because by posing as a scientist he, in addition to causing severe economic damages,#2 corrupts the integrity of science as an even worse collateral damage.#3
#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 Mass unemployment: The joint failure of orthodox and heterodox economics
#3 Scientists and science actors
Related 'The moralizing economist is not a good guy but a fake scientist'
Hayek was a political agenda pusher and his position was anti-state. His information theory of market interaction is not more than an interesting story. Hayek never produced a scientifically valid proof that the market system is in a very general sense self-stabilizing. Hayekian “economics” is proto-scientific crap.#1
Mitchell is a political agenda pusher and his position is pro-state. His monetary theory of market interaction is not more than an interesting story. Mitchell never produced a scientifically valid theory of how the modern monetary economy works and no proof that it is inherently unstable. MMT “economics” is proto-scientific crap.#2
As a result, we have neither the scientifically valid proof that the monetary economy works fine in principle and needs no state intervention nor the scientifically valid proof that the monetary economy is inherently unstable and continuously needs compensating state intervention.
So, both the anti-state and the pro-state position lacks sound scientific foundations simply because economics as a whole is a failed science. Both Hayek and Mitchell are political agenda pushers who abuse economics, which claims since 200+ years to be a science, in a low-level academic sitcom. Both Hayek and Mitchell have to be expelled from the sciences.
The alternative is that economics gives up the pretensions to science and first of all abolishes the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#3
#1 Hayek and other informationally retarded proto-economists
#2 For the full-spectrum refutation of MMT see cross-references MMT
#3 The real problem with the economics Nobel