June 12, 2019

MMT’s true program

Comment on Bill Mitchell/Thomas Fazi on ‘Seize the Means of Production of Currency ― Part 2’

Blog-Reference and Blog-Reference

Bill Mitchell and Thomas Fazi tell the representatives of the Labour Party and the general public: “There is no MMT program! The ‘Labour’s own economic programme’ will be implemented, if they gain office, in the context of a monetary system that is best understood through the MMT lens and the principles outlined in ― Seize the Means of Production of Currency ― Part 1.”#1

The Labour Party’s representatives, though, are too stupid to live: “Trying to set up a comparison to show ‘Labour’s own economic programme’ is superior or more sensible demonstrates Meadway’s complete lack of understanding of what MMT is. It is such a basic error that he should disqualify himself from further discussion until he takes the time to understand this key difference between a ‘lens’ that allows for understanding and a policy program.”

And this is MMT’s true program in a nutshell: Serve the Oligarchy/Undermine the Labour Party.

Modern Monetary Theory ― or the lens as MMTers like to call it ― is refuted on all counts.#2 The macroeconomic Profit Law entails Public Deficit = Private Profit which means that the central MMT policy recommendation of deficit-spending/money-creation benefits the Oligarchy and certainly not the membership of the Labour Party. In other words, MMTers attempt “… to get citizens and workers to accept ― demand even ― policies that are not in their class interest.”

Accordingly, MMTers vehemently attack the two traditional economic planks of Labour: budget-balancing over the business cycle and taxing the rich.

Budget-balancing in any shape or form is anathema for MMT.

With regard to taxes, which are, according to MMT, not needed at all for funding government programs but only in the improbable case of inflation, Bill Mitchell and Thomas Fazi rhetorically ask: “Does this mean that we shouldn’t ‘tax the rich’? The present authors’ values indicate we are all for taxing the rich. But not to get their money. Rather, the rich should pay higher taxes in order to deprive them of their purchasing power, which translates into economic and political power. This is not a minor issue. Ultimately, fuelling the notion that we need the rich folk’s money to ‘[pay for] our schools and our caring services’, as the likes of Jeremy Corbyn and John McDonnell never tire of repeating, is a dangerous and misguided narrative for progressives to engage in. Not only because it fuels damaging myths about how the monetary system works, but also because it elevates the rich and high-income earners to an indispensable status that is unwarranted.

As Pavlina Tcherneva, from the Levy Economics Institute, notes in her excellent response to Doug Henwood’s rather loopy attack on MMT…: I would say that Henwood (like other “tax-the-rich-to-pay-for-progress” lefties) is tethered to the wealthy by an imaginary umbilical cord that holds his progressive agenda hostage to his oppressors. To me, this is the definition of self-induced paralysis. Time to cut the cord. MMT has a profound emancipatory power and the Left would do well to awaken to its potential. Progressives should come to terms with the fact that the incomes and taxes paid by the rich do not enhance the capacity of a currency-issuing government to provide first-class public services and infrastructure.”

Deficit-spending/money-creation and not taxing the rich are clearly in the interest of the Oligarchy. The policy guidance of MMT, whose proponents call themselves Progressives, is definitively NOT in the class interest of Labour members and voters.

If the general public finds all this perplexing, however, they should not blame MMTers: “If the reader finds all this perplexing, it is because for the past forty or so years policymakers and mainstream economists and commentators have peddled a series of false myths about how modern monetary systems work.”

The claim: “There is no MMT program!” is plain fraud. The true program of MMT is to brainwash WeThePeople. If anything, deficit-spending/money-creation, and not taxing the rich, and driving a wedge between Labour leadership and membership, are in the class interest of the Oligarchy. Bill Mitchell and Thomas Fazi are neither scientists nor Friends-of-the-People but useful idiots of the Oligarchy.

Egmont Kakarot-Handtke

#1 MMT: A new myth for WeThePeople
#2 For the full-spectrum refutation of MMT see cross-references MMT

Related 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'No MMT illusions! YOU are going to pay for it' and 'How MMT fools the ninety-nine-percenters' and 'How to pay for the war and to be bamboozled by economists' and 'Just one more day: How deficit-spending delays the breakdown of Capitalism' and 'For MMT = For the Oligarchy' and 'Links on MMT-Progressives push Wall Street’s agenda' and 'The not so funny MMT vs Neoliberalism slapstick' and 'Economics has arrived at the bottom of the proto-scientific shithole' and 'MMT has an offer that Labour cannot refuse' and 'Some nasty MMT surprises behind the time horizon' and 'Prophet Stephanie divines the seizure of the means of production of currency' and 'State capture ― time to switch rhetoric' and 'MMT sucks'.

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