When is Gluten Free?

Weighing the Unit of Account Mark-II

Yeah. It does not weigh much. But it is extremely weighty — matters of life & death.

“Money is an IOU of the issuer. The problem is not killing others to get it accepted.” — Bijou Minskysmith.

This is an abbreviated version of the substack piece with the same title. I made a big mistake in it, which Ghost prompted me to correct.

Last week I wrote (containing a falsehood):

“You (and I) pay the tax to drain demand so(?) people constantly are willing to work to get another tax credit, which drives real production, which produces the real output retirees (which hopefully we all can become by the age of 40 soon) can consume.”

After Ghost withheld my biscuits, I added:
“Except even this 👆🏼is not the proper story, it is not the correct causality, the correct story is…”

Thing is, whoever is in power should comprehend all this, whether they want to blow up Russians or Chinese, torture immigrants, or otherwise. Ignorance is never good. If we all know they know then our demands can be that much stronger.

As Grumbine always says (I paraphrase and take license):

“MMT is no cure for macroeconomic ills. A genocide denier can run a payments system to support genocide, guarantee full employment & price stability.”

… the rest is on substack.

Resuming normal transmission.

Real Costs

Seems a lot of people who are n00bies to MMT get into tangles thinking MMT is a set of policy subscriptions. Big mistake!

MMT is an accurate description of a tax driven (or chartalist) currency system.
MMT does not support capitalism (but you could! … why?)
MMT does not support socialism (but you can!)

I like to say the only political economy mindset incompatible with MMT is Neoliberalism (which to a dirtbag MMT’er could be non-standardly defined as "Anyone thinking the government has to get the tax credit before it creates the tax credit." — Why? Because that simple yet false backwards sequence is what drives most neoliberal policy. Here we can grant some degree of wishful fantasy in assuming neoliberals do not set out at the gun to be cruel and stupid. They only evolve that way (let’s be generous) because they have no clue the system they govern is an MMT system.

One of the big aims of MMT activism is to remove completely this ignorance so that our generosity towards neoliberals diminishes over time until they become outright cruel by intention. Then the mask is truly all peeled away, and they are exposed to the wrath of the masses like never before.

The Occupy Movement never peeled away the whole mask, since (I would hazard a guess) 90% of Occupy Movement protesters were “We gotta raise taxes to pay for it.” In other words, in league with Maggie Thatcher.

What is the real take-away? It is,

MMT supports any system you have if MMT is the currency framework.

There is nothing pro-Marx, nor anti-worker, nor “propping up capitalism”, nor “woke”, nor “anti-woke” about MMT. Unless you agree to “be woke” means to desire an accurate framework for analysis of soft currencies and hard commodities.

MMT systems have existed for thousands of years.

There is an important spiritual principle here:

Truth and honesty, and before that the desire to seek truth, is a spiritual virtue (regardless of any practical benefits, which normally also accrue).

It is not hard to see that trying to do away with MMT is a moral hazard. What do you plan to replace the currency system with? How do you know it will be any better in social outcomes? Can you even have a “moneyless” economy?

The answer to that last question is “No!” In any community where there are records of social obligations you have a money system. It might not be formalized, so the unit of account is vague, and only realized in people’s memories. In a large enough city that becomes unsustainable, and account ledgers are needed — not to drive “capitalism” or markets, but for simple Justice. A spiritual virtue.

A further point to ponder is what fatal flaw of MMT systems make the system work so horribly? No one truly knows, so you cannot just stick MMT knowledge up as a strawman and tell me we must abandon soft currencies because they do no good. You first have to show us that people in power understand they are in charge of an MMT system. If they are, then…

… well, even then you cannot make the argument social ills deriving from monetary poverty or financial instability are the fault of MMT. Even in this hypothetical scenario I would still say the problem is policy and lack of spiritual principles. MMT is only the accounting system available to governments. It is neither good nor bad. All moral ad value attributions are what people impose exogenously. And that is where all teh problems arise.

They would be the same problems under any arrangement of records of account!

Or so I will claim. Can you prove otherwise? What does a peg to gold get you, other than constant deflations and debt crises and a massive benefiting of the super rich and pirates the most?

Gluten is Not Free

It costs a worker their labour to produce gluten-free anything. The point here being governments can always provide for “free lunch” programs in school. It need cost the “tax payer” nothing. Nothing.

However, nothing is free. The Sun and Soil do not just grow food for us, the real cost of “free” school lunches is the labour of the workers. By being employed by the State they are not free to be working doing something else. What else? Who can know? But are they going to voluntarily still help out kids in lower income district schools, or anything more valuable for society?

But again, this is nether a good thing nor a bad thing. For many schools free lunch programs are a good thing, and so there is a good government policy option here. Provided the workers making the lunches could not be doing more useful things for society. Could they? That is the question to ask. Not, “Where is the wage bill coming form? If not me taxes?”

This did not segue to where I wished to end, but I will go to the end anyway, It is another issue people seem to “have with MMT” which has nothing to do with MMT. Some folks are out their claiming something along the lines of “oh, mmt is silly, it says we cna have free stuff… but this is only going to create hyperinflation.”

(Maybe I’ve constructed a starwman here, but I’ swear I’ve heard this many times.)

My response is that the government cannot spend on anything not already for sale. They can outbid the other buyers, always, with a vote in Parliament, but why would they? The lesson of teh austerity years is that almost all governments are dead scared of spending too much, except for war. And the artificial fiscal constraints are always removed for war spending anyway. (Or have you been living under a rock all these years?)

There is no point therefore in constraining governments artificially. Let them know they can always employ all unemployed people. Always. If there are artificial constraints then dollars to donuts the neoliberal type mind will use it as a (false) excuse to keep the poor poor and the least powerful workers unemployed — to “discipline inflation”. While more “evil” things do occur, nothing could be more banal in “evil” than this — for a dirtbag MMT’er.

If you honestly believe unemployment is better to have than inflation then I am afraid the lessons of history are dead against you, and your burden is to show me full employment implies any amount of inflation whatsoever. You cannot. Employment is never the source of inflation.

Besides all that, maybe a subtle point I find incredibly too few grasp: deflation is far worse for the poor. It raises the burden of their past debt and disproportionately benefits the hoarders. (This is not an argument for “letting inflation rip.” There are political psychology reasons why governments should also use price stabilization polices, like taxes on rents, especially land, and progressive income tax — why? Because inflation for no sound reason, except false psychology, can get an otherwise good government voted out of office. For some mad reason, bordering on mass psychopathy, people seem to prefer unemployment to inflation.

Can anyone tell me why? I truly do not know. Is it just greed and the outrageous cruel incentives governments impose forcing people to generate insatiable savings desires?

It is worse than this though. Full employment is not linked to inflation, except via misguided policy. Another banality of evil. The fear of inflation is legit for the hoarders, but they are wrong that it implies to quell their fear they (since they are always the elites) must discipline workers. I should elaborate, but this is longer story of the NAIRU myth which is for another day.

Is this all too materialistic for you?

Then let me finish on a spiritual note. Another thing MMT reveals is that the source of all unemployment today (I do not care about past eras or unusual systems) is government. Governments today cause all the unemployment = people seeking the tax credit.

If you do not like that thought, you can instead say plutocrats and oligarchs today are causing all unemployment, and I would agree, since they are the ones who control our governments, in one way or another (they are either many of the politicians or the influencers and lobbyists who push certain politicians upon our government).

The governments are damaging people with austerity policies, not just in material terms, but spiritually as well. If you’ve never been unemployed for a decent stretch of time I guess I can see why you do not understand. But it kills people inside, well before actual physical death.

It is immoral for this to be happening, but perhaps a thing to be forgiven since the people running our governments are so ignorant. In any case I consider it a spiritual burden to try to educate youngsters today, who may become leaders tomorrow.