June 18, 2018

Wrapping up the MMT narrative

Comment on Tom Hickey on ‘The Wage[s]-Lump Doctrine ― still dogma after all these years’


Tom Hickey puts the MMT narrative straight: “… it’s contradicted by Warren Mosler’s account of how he discovered what he called ‘soft currency economics’ through an operationally-based understand of government finance, from which he made a pile of $. Subsequently, Warren met Randy Wray and then Bill Mitchell, who jointly developed the economics that came to be called MMT. Warren funded it.”

This information helps to wrap up this thread.*

• MMT is the most recent incarnation of Political Economy. Political Economy abuses science since Adam Smith/Karl Marx for the purpose of agenda pushing.

• Political Economy started as open propaganda, became more sophisticated over time, and is now a mixture of propaganda and science with varying proportions of the component parts. In most cases, the science ingredient does not satisfy the criteria of material and formal consistency. So what remains in the end of political economics, is a piece of communication with zero scientific content.

• The scientific component of MMT is provably false. More precisely: MMT’s foundational macroeconomic balances equation, i.e. (X−M)+(G−T)+(I−S)=0, is false. The true equation reads (X−M)+(G−T)+(I−S)−(Q−Yd)=0.#1

• The true equation says, inter alia, Public Deficit = Private Profit.

• The economic policy guidance of MMT boils down to money-creation/deficit spending. Deficit spending has multiple effects, the main and immediate effect is that it increases macroeconomic profit.

• MMT is presented to the general public as a socially beneficial program that uses the fiat money system for the Common Good. MMT’s argumentative flagship is the Job Guarantee. MMTers always talk about the employment effect of deficit spending but never about the profit effect.

• As matter of fact, MMT amounts to a capturing of the state/central bank for continuous deficit spending which in turn amounts to a continuous self-financing of the one-percenters.

• Members of the Oligarchy like Warren Mosler fund the propagation of the MMT self-financing scheme on all levels of communication from academia to the social media.

• With regard to economics, which still claims to be a science, this has become common practice.#2

• The real problem with MMT, though, consists in the employment of the well-meaning and unsuspecting philosopher Tom Hickey and other proponents of the Good Society for pushing an a-social agenda.#3

Egmont Kakarot-Handtke

#1 MMT: The one deadly error/fraud of Warren Mosler
#2 Meet the Economist Behind the One Percent’s Stealth Takeover of America
#3 MMT is ALWAYS a bad deal for the 99-percenters

* Preceding posts Employment theory as an example of proto-scientific soapbubbling