Blog-Reference and Blog-Reference and Blog-Reference on Sep 15
In order to clarify the specifics of MMT, Bill Mitchell refers back to functional finance: “So his classic statement of functional finance: Government should adjust its rates of expenditure and taxation such that total spending in the economy is neither more nor less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is a deficit, greater borrowing, ‘printing money,’ etc., then these things in themselves are neither good nor bad, they are simply the means to the desired ends of full employment and price stability …” and “But we do consider fiscal policy should be directed to advancing public purpose and the particular levels of resulting aggregates (for example, fiscal deficits/surpluses) are immaterial.”
This, clearly, is a statement about the objectives of economic policy. What everybody overlooks is that the economist as a scientist is NOT entitled to policy agenda pushing. His sole task is to figure out how the actual economy works. So, economists are comparable to the physicists and engineers who figure out how a piece of metal can be made to defy gravity and to get off the ground and to safely land at the desired destination.
Economists as scientists have NO say about the destination. The destination is determined in the political process by the Legitimate Sovereign. So, political economics is a contradiction in itself.#1
Economists are NOT the Legitimate Sovereign as already J. S. Mill made abundantly clear: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”
For 200+ years economists overstep their competence. They have taken on the role as clowns and useful idiots in the political Circus Maximus and they have failed thoroughly as scientists. The four main approaches ― Walrasianism, Keynesianism/MMT, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the pivotal concept of the subject matter ― wrong. With this pluralism of provably false theories, economists have not achieved anything of scientific value.
Bill Mitchell is right in pointing out that mainstream economics is but one big Fallacy of Composition.#2 But he fails to address the fact that MMT is based upon provably false macrofoundations. With regard to economic policy, he fails to address the fact that deficit-spending in the intellectual tradition of Keynes/Lerner has produced the insoluble distributional problems everybody has clearly before their eyes today.#3
So, with regard to scientific failure/corruption, there is NO difference between the mainstream and MMT.#4, #5 With regard to policy there seems to be a real difference. Mainstream economics is traditionally the mouthpiece of the one-percenters. MMT claims to be morally superior and to promote the cause of the ninety-nine-percenters.
This is an optical illusion. There is no real political difference either. Both Mainstreamer and MMTer are agenda-pusher for the oligarchy.#6, #7 The meager academic to-and-fro between Bill Mitchell and Jayadev/Mason has nothing at all to do with science but is a smokescreen for the ongoing joint political fraud that is the economist’s business since Adam Smith/Karl Marx.
#1 The end of political economics
#2 Reference to Arjun Jayadev/J. W. Mason ‘Mainstream Macroeconomics and Modern Monetary Theory: What Really Divides Them?’
#3 Keynes, Lerner, MMT, Trump and exploding profit
#4 MMT, Bill Mitchell, and the lack of basic scientific integrity
#5 For the full-spectrum refutation of MMT see cross-references MMT
#6 MMT: How the Oligarchy communicates with WeThePeople
#7 MMT and grassroots movements
Preceding 'Forget mainstream economics, scrap MMT, move on to the new paradigm' and 'Both, mainstream economics and MMT are axiomatically false' and 'Neoclassics and MMT ― much like pest and cholera'.