September 8, 2021
From the fact that mainstream economics is false does not logically follow that MMT is true
Comment on Bill Mitchell on ‘As the mainstream paradigm breaks down’*
Bill Mitchell comments on the address the Head of the BIS Monetary and Economic Department, Claudio Borio, gave at the University of Melbourne and claims that the mainstream economics central bankers have in the back of their minds is false.
This, of course, is true but not news. Macroeconomics in all its variants is known to be proto-scientific garbage since Keynes.#1 So, criticizing mainstream economics is nothing else than dead-horse beating. It is a cheap pleasure for Heterodoxy with no consequences for the advancement of science.#2
The correct conclusion from Bill Mitchell's debunking is that economics needs a Paradigm Shift and the one and only task of economists is to implement the new Paradigm.
This, however, is not Bill Mitchell's conclusion. He suggests that MMT and he personally were right all along. This is true with regard to mainstream economics which is based on false microfoundations. However, MMT, too, is axiomatically false but with regard to macrofoundations.
Both mainstream economics and MMT get macroeconomic profit wrong.#3-#5 So both are scientifically worthless.
* Bill Mitchell's blog
#2 For more about dead horse beating see AXECquery