Blog-Reference and parallel Blog-Reference
Sean Keith and Alexander Kolokotronis maintain: “An economic doctrine named Modern Monetary Theory (MMT) is surging in popularity and offering answers. MMT is debunking popular narratives about the harsh necessity of austerity and belt-tightening. It is showing that money is not a finite abstraction, but a limitless public utility that can be used to meet human needs. More than this, however, MMT and its heterodox economic cousins offer a framework to build directly democratic, egalitarian political structures, and thus reimagine and recalibrate the viability of democratic socialism.”
MMT has NO sound scientific foundations, therefore, it cannot by any stretch of the imagination offer a framework for building the Good Society. If anything, MMT is a social bluff package for the benefit of the one-percenters.
For details see
- Down with idiocy!
- MMT: Money-making for the one-percenters
- MMT is ALWAYS a bad deal for the 99-percenters
Economics claims to be a science but is NOT. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics (Walrasianism, Keynesianism/MMT, Marxianism, Austrianism) has produced NOTHING of scientific value in the last 200+ years.
MMT is one of the warring factions of political economics. MMTers have NO idea how the price- and profit mechanism works. As fake scientists, MMTers are as helpful for grassroots movements as the barber-surgeons, alchemists, astrologers, and bloodletters of the Dark Ages.
Related 'There is NO such thing as an economic expert' and 'Mr. Corbyn and the perils of political economics' and 'Endtime for soapbox economists' and 'Everything you know about MMT is wrong' and 'MMT: The economics moron as problem solver' and 'Mental messies and loose losers' and 'Make no mistake: there can be only one true theory' and 'MMT is NOT an alternative to Neoliberalism' and 'MMT: scientific incompetence or political fraud?' and 'Are MMTers stupid or corrupt or both?' and 'MMT: Just political heat, no scientific light' and 'Time to retire political economists'.
You say: “If you want something from somebody else, then you have to do something in exchange. That’s called a job. Money isn’t free. You have to work for it.”
Obviously, you have NO idea how the economy works.
In order to see this one has to go back to the most elementary configuration, that is, the production-consumption economy which consists of the household and the business sector.#1
In this elementary economy, three configurations are logically possible: (i) consumption expenditures are equal to wage income C=Yw, (ii) C<Yw, (iii) C>Yw.
In case (i) the monetary saving of the household sector Sm≡Yw−C is zero and the monetary profit of the business sector Qm≡C−Yw, too, is zero.
In case (ii) monetary saving Sm is positive and the business sector makes a loss, i.e. Qm is negative.
In case (iii) monetary saving Sm is negative, i.e. the household sector dissaves, and the business sector makes a profit, i.e. Qm is positive.
It always holds Qm≡−Sm, in other words, at the heart of the monetary economy is an identity: the business sector’s surplus (deficit) equals the household sector’s deficit (surplus). Put bluntly, profit is the counterpart of dissaving. This is the most elementary form of the macroeconomic Profit Law.
Macroeconomic profit has NOTHING to do with working, productivity, exploitation, capital, risk-taking, innovation, monopoly power, etcetera. Loss or profit are NOT income. Only distributed profit is income. The profit theory is false since Adam Smith.#2
Your assertion “Money isn’t free. You have to work for it.” proves that you do not understand the foundational concepts ― income and profit ― of economics.
This, of course, holds for the rest of MMTers, so you are not alone behind the curve.#3
#1 The elementary production-consumption economy is given by three macro axioms: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X. For a start holds X=O.
#2 Essentials of Constructive Heterodoxy: Profit
#3 Down with idiocy!
MMT is advertised as follows: “Social justice folks picking on MMT. ... For all the talk about the national deficit and why it’s the reason our government can’t afford to improve healthcare or education, these developments reveal profound layers of hypocrisy. They show how deficit-talk has constrained political imagination and reduced the economy to a soulless, amoral balance sheet.”
Social justice folks are economically illiterate and fall for the rhetoric. MMT is a social bluff package for the benefit of the one-percenters. The macroeconomic Profit Law says Public Deficit = Private Profit.
For details see
- Austerity: Who takes the little man for a ride?
- MMT, money creation, stealth taxation, and redistribution
You say “… all the MMT people are some of the most legit social justice people on planet earth...”
This, of course, is what they are trying to tell the genuine social justice people of the genuine grassroots movements. In fact, MMT is nothing but good old Political Economy.
What genuine social justice people have first of all to understand is that 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.
Economics started as Political Economy ― that is, as open agenda pushing for the one-percenters ― and in the last 200+ years never advanced to real science. Economists never rose above the proto-scientific level of Adam Smith/Karl Marx.#1
MMTers, like their peers from the other sects, do to this day not understand the difference between profit and income, i.e. of the fundamental concepts of economics.#2 Because of this, MMT is pure proto-scientific garbage = political blather.
Do the genuine social justice people need the support of academics who are too stupid to put 2 and 2 together, that is, who do not even get the sectoral balances of macroeconomics right?#3 The grassroots movements need MMT like a hole in the head.
It is the other way round: the MMTers need the grassrooters to push their own agenda. The debt-does-not-matter meme has no other purpose than to encourage deficit spending for everything which, in turn, has one absolutely certain effect due to the Profit Law, i.e. Public Deficit = Private Profit, that is, to make Wall Street happy.
To pose as social justice fighters is one of the oldest tricks of Political Economy. It is applied right before our eyes by Stephanie Kelton and the other members of Warren Mosler’s academic sales team.
The claim that “all the MMT people are some of the most legit social justice people on planet earth” is perhaps effective for hijacking genuine grassroots movements but otherwise simply a bad joke.
With MMT, original brain-dead Political Economy has, after some pseudo-scientific and pseudo-social window dressing, come full circle.#4
#1 Economics: 200+ years of scientific incompetence and fraud
#2 For the proof see cross-references MMT
#3 Down with idiocy!
#4 The end of political economics
For facts see the MMT-meme on Wikimedia AXEC122
- In case (i) the monetary saving of the household sector Sm≡Yw−C is zero and the monetary profit of the business sector Qm≡C−Yw, too, is zero.
- In case (ii) monetary saving Sm is positive and the business sector makes a loss, i.e. Qm is negative.
- In case (iii) monetary saving Sm is negative, i.e. the household sector dissaves, and the business sector makes a profit, i.e. Qm is positive.