When to Discard the MMT Lens

In recent times (tackling libertarians and crypto shills on social media) it has become glaringly apparent in economics — macroeconomics in particular — there is a massive culture of hostility to science. However, it is subtle, so worth writing about today.

When Science is Unscientific

No macroeconomists aim to be unscientific, at least I think not. They do not intend to be hostile to science.

Yet anyone can claim they are “being scientific” — say by legitimately using data, or logic, or a model.

But that’s not automatically science. Proper science comes with something extremely important that I find the Twitterati often ignore, which is that a proper scientist is seeking to falsify their theory, not confirm it.

Theory falsification is not the only activity of a scientist of course, it’s just one of the main modes of operation. The healthy approach is to advance a theory, but then consider it to be collective knowledge, and then adopt a hostile attitude to the theory, because ,

no amount of confirming evidence will ever prove a false theory wrong.

The scientific attitude is to regard all theories as false, and, as the saying goes for the benefit of the applied engineers, “some more useful than others.”

When is fake science being unscientific then? When all it does is seek confirming evidence.

What’s All this Activity at the LHC Then?

You look at “The Hunt for the Higgs Boson” and can then be forgiven for thinking particle theorists are unscientific — because they’re looking to confirm their model, not falsify it.

But while the guilty pleasure of theory confirmation is a natural human emotion, the reason the billion euro LHC was constructed was to test the Standard Model, not to confirm it. In their professional garb, I believe (trust?) every respectable theoretical physicist would agree that the LHC would be even more glorious if it failed to find the Higgs boson.

The discovery was super-hyped by the PR prostituted highly paid executive idiots, not be the humble theorists.

OK, some,… ok, many theorists did also play into the hype. They’re almost forced to because they need to attract research grant funding. It’s pretty sad, but that’s the reality. So the physicist is not always acting like a scientist. I don’t have a problem with that, provided they admit it. I like all the emotion and excitement too.

But it is not “theory confirmation”. It is falsification of classes of rival theories (the crackpots). That’s what should be celebrated. That is indeed what I celebrate with the LHC discoveries. Got rid of a lot of crackpot theories there (maybe later on one of my own, who knows).

Is MMT Science, and the Other’s Not?

MMT is not science. It is a model or framework for understanding the monetary systems. When the postulates of MMT are correct, then one has the start of a scientific approach to some limited set of questions in macroeconomic policy.

(I wrote about the postulates of MMT over on the Theory Pages here .)

MMT is thus more like a model. The science occurs when the model is applicable.

Macroeconomists are Not Willingly Unscientific?

I’ll give people the benefit of the doubt. To engage in social discourse it’s best to be conciliatory, and open. A good way to do this is to assume other people are not wilfully misleading or gaslighting.

However, the libertarians and neoclassicals I run across are both scientific and unscientific.

• When they point to data showing “MMT is Wrong” they are scientific (sometimes). I appreciate this work. None of it has held up though, but they are worthwhile debunking attempts. Vital really. Any other MMT economist should welcome such discourse.
• When they “prove” their ideology is correct, this is when they become unscientific. They enter into the dark realm of ideology confirmation. Every hyperinflation confirms their theory (in their diseased minds).

Note: an MMT system, run by retarded politicians, can result in inflation, maybe even — if they work hard enough — hyperinflation. It would not “disprove MMT”.

One claim of MMT is that the Mosler Base Case for Analysis, absent corruption or fraud, will not result in hyperinflation, and will result in full employment with price stability. That is a model. It is only science when it is found to be applicable for some nation or another. Let’s hope that happens some time. (I hasn’t yet.)

Note also that despite no nation running the Mosler Base Case, there are many nations with MMT monetary systems. Their fiscal policies suck, almost laughably, but they are still MMT systems. New Zealand for one.

MMT For Now

New Zealand has an MMT system, it is easy to check if you adopt a falsification stance — look to see if the postulates of MMT fail to apply. No such “luck.” So I can get scientific about understanding macroeconomics in New Zealand using MMT. For now.

Maybe tomorrow the Parliament will up-end things completely chaotically? In which case, tomorrow I might not be “an MMT’er” in New Zealand context. I’d still “be an MMT’er” for the USA, UK, Australia, Canada, or Japan, &c., analyses.

((Depending on the ingenuity of the Parliamentary changes, I might possibly still be an advocate for NZ using an MMT system, “going back to MMT” as it were.))

It’s easy stuff. I seek falsification. If the tenets of MMT no longer apply to a nation, then I discard MMT, for analysis of that nation.

If Austrian School and Neoclassical economists sought actively to falsify their models, they would no longer be doing macroeconomics with their old models, they’d be doing fantasy gaming. Why? Because long ago they would have discovered their theories are false.

The fact none of them seek to falsify their models is evidence they are not willingly good scientists in the Popperian tradition, nor in any reasonable tradition. They’re just mathematicians, that’s all.

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