Blog-Reference and Blog-Reference on May 23
Economics is a science and the task of economists is to explain how the monetary economy works. The task of economists is NOT to push a political agenda. This should be pretty obvious. From an astrophysicist, we expect that he explains how the universe works and we are disappointed when he tells us after years of research that he has come to the conclusion that Democrats are corrupt and stupid and Republicans are stupid and corrupt. This does NOT count as scientific insight.
Economics claims to be a science but does not live up to the definition of science. The most striking feature of economics is schizophrenia: 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. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.#1
MMT is refuted on all counts.#2 And Warren Mosler’s story that fiat money has to be spent by the state into the economy is false. Money has to be lent into the economy in order to enable the business sector to pay the wage income which in turn is then spent on the consumption good output of the business sector.#3
The problem with MMT is that it is built upon a provably false sectoral balances equation. Now, it is known from methodology that when the foundations are false the whole analytical superstructure is false and the whole approach is scientifically worthless.
However, in the political sphere, it does not matter at all whether a theory is true or false. What matters is the propagandistic use-value and not the scientific truth value.
The macroeconomic Profit Law entails Public Deficit = Private Profit which means that the Oligarchy’s financial wealth and public debt (currently $22 trillion) grow in lockstep. Hence the MMTers’ arguments for permanent deficit-spending/money-creation have a tangible use-value for the Oligarchy. Warren Mosler’s claim that MMT is good for Democracy is a plain political fraud. MMTers stand firmly in the tradition of fake scientists and politically useful idiots Adam Smith and Karl Marx. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are all proto-scientific garbage and political fraud.
* Zeit Online
#1 For details of the big picture see cross-references Political Economics/Stupidity/Corruption
#2 For details of the big picture see cross-references MMT
#3 MMT: fundamentally false