MMArt Critics

Published on 2023-01-15

Contents

Following on from the Questions chapter I wrote last week “MMT and the Periphery ” commentary, I thought it might be useful to critically review the defences of MMT, from a hard core MMT perspective (that’s me). At least I think I am hard core. As in what Buttercup said to Bubbles . What I’d mean by that is taking a view that the Mosler MMT Base Case is in fact realizable in the real world.

But what does that mean?

It means a strong enough government (meaning it has the backing of a majority of the population in real terms, not mere votes) can instruct their central bank to institute ZIRP, and run a decent Job Guarantee program. We should throw in various banking reforms to “make banking boring again” — the Mosler narrow banking proposals . In addition the MMT Base Case for analysis considers a non-convertible fiat currency driven by tax liabilities and on a floating exchange rate. But otherwise MMT is not prescriptive for all sorts of other hot button culture war issues. The MMT Base Case admits whatever the culture war presently gives you.

This is no failing of MMT. If you get nasty culture that’s on you and your people. MMT would probably run very well if complemented by a decent society, say in Finland, New Zealand or Costa Rica. Dick Cheney shows you how aspects of (not the whole of) MMT works in a messed up culture.

That last statement is suss of course, since the USA is already “doing MMT” and have been doing so for a long while. What we mean here is running the Base Case for analysis, which the neocon Bush Administration warmongers certainly did not “do”. Nor did anyone from George Washington to Joe Biden.

New Zealand does of course run an MMT system. The trouble is our politicians do not know it, so they abuse it — they tolerate involuntary unemployment because they (falsely) think this fights inflation. Part of “a decent society” should thus by rights include well-informed and morally conscious politicians, this New Zealand does not completely have just yet.

Why “MMArt”?

Most orthodox economics critiques of MMT construct a straw man, but not in a good way. A good straw man might be Mosler’s MMT Base Case, since no country on Earth is operating this base case, so you have to imagine it —a straw country. That’s a proper quasi-straw man, but then of course the critique is not a straw man fallacy. It’d be a theoretical analysis, and could be good and proper. But this is not what we find in the academic journals.

In the academic journals, and newspapers, we find utterly fanciful fabrications of something bizarre, that people think is “MMT” but which is no such thing. These give rise to proper straw man fallacies. It can look pretty to an orthodox economist of course. It is MMArt. You could insert an “F” there before the “A”, but it’d be the mainstream economists emitting the vapours.

Muscle Flexing Score

I am going to start with a perhaps less well read defence of MMT from Eric Tymoigne (2022) , which I think is good because it is less well known, but also because it takes on a particularly dull yet weirdly fanatical anti-MMT critique by Drumetz and Pfister (2021) , and the fanaticism in the latter makes it relatively less dull, than say a moderately “good faith” critique by someone like Tom Palley, Steve Keen or Paul Krugman.

Krugman, almost on public record, understands and agrees with MMT, he’s debated Steve Keen, and has talked to Stephanie Kelton. He just doesn’t have the balls to admit it, which I’m not so sure is not more despicable than an honest neoclassical? C’mon Kruggers, you can do better.

OK, so this is an exercise. We’re going to see if Eric Tymoigne mounted a good defence, and see what he could’ve written better. Before I even begin reading it (this is an extra exercise I like to do, to predict my own response ahead of time, only possible in a blog, you cannot get this sort of stuff published in academic journals) I am going to guess what my reaction will be.

I am guessing Tymoigne will do a fair job, accurate, but missing some critical spiritual principles and moral analysis. MMT needs defence not only because it is accurate, but because this matters, it matters a helluva lot.

So we’ll give him strength, style, streetsmart, and Blackadder points. I’m predicting 60 to 70 out of 100 points. Maybe 80, since Tymoigne is no slouch and seems to be a bit of a progressive “leftie”. Progressive lefties tend to be overly geeky and analytical, lacking humour, and too willing to display “scientific” credentials to the detriment, or maybe just the de-emphasis, of the more important moral and ethical principles. I do not really know why this is so (I am myself probably a progressive leftie, so atypical) but it is what it is, perhaps some blind subconscious allegiance to Marxism (a supposed “materialist” philosophy devoid of spirituality when taken irreligiously, which is to say religiously ).

((Of course, I’ve written on this elsewhere: Marx was certainly a very spiritual guy, since his heart was obviously deeply concerned for the plight of the poor and the needless suffering of the working class. (Needless, that is, if you’re not a rentier capitalist.) He was also arrogant (anti-spiritual quality) and pompous, and lacked a scientific investigation of monetary economics and real production. Just sayin’.))

Let’s get on with the Marxometer muscle flexing scoring then…

Marxometer Readings

TODO: only just getting started. This is a stub.

Style Points

For style points we need to pull out the Keltonometer.

Street Populism

It is tricky to assess streetsmart points. The Moslerometer would normally do, but suffers from calibration uncertainty owing to logarithmic scale jumps when encountering neoclassicals, and I have not learned to do the stochastic equilibrium calibration corrections. The ThomasFrankerator however is a very simple device and soft enough it can also be used to slap orthodox economists after use, which is a handy dual purpose. The Moslerometer is more sensitive and requires recuperation in the Caribbean tropics after use, so I’m going with the ThomasFrankerator.

Blackadder Points

The easiest thing to do here in-person is to pull out the Python Holy Grail and see if its waters sizzle Tymoigne’s skin. But lacking Tymoigne in person, we resort to the Chaplinograph, which produces a silent black & white test. No ambiguity here.