Nicholas Kaldor was one of the most famous economists of the 20th century. He was considered by many to be the direct heir to John Maynard Keynes as he was not only an extremely accomplished theoretical economist but also played a key role in the construction of British economic policy after World War II and was an all-round politically savvy individual – he ended his life, like Keynes, with a Lordship.
We mention this because if you read his writings you note that there were really two Kaldors. One was the Kaldor of the halls of Cambridge University. This was the Kaldor of abstract mathematical models of how capitalist economies function (some of the finest ever produced, mind you). The other Kaldor was the Kaldor that actually analysed economic problems and proposed solutions – while keeping firmly in mind the political situation of whatever time he was giving advice.Naked Capitalism
Philip Pilkington: Why MMT is Right and the Dreamers are Wrong – Kaldor Versus the Kaldorians
Economics v. political economy.
Phil and Ramanan debate in the comments.
Phil and Ramanan debate in the comments.
70 comments:
Tough call here Tom (for me)...
I'd like to see what would happen if it were CLEARLY explained to these foreigners (by a POTUS) that what they were doing was shipping real goods and services over here in exchange for us marking up balances in our computer system....
The situation might change if they were able to truly see what they were doing in REAL terms...
rsp,
Or,
Tell the Chinese and Japanese that we were going to start to tax their savings here in the US.
A very small amount. Very very small. A teenie-tiny amount. (Nothing like Cyprus is contemplating with the Russians) But yet a TAX nonetheless.
It would be interesting to see their reaction. My guess: They would pay it.
rsp,
The global economy is closed and there is no global currency authority. The closest thing is the issuer of a reserve currency. This means that the global economy is dependent for net saving on the global reserve to the degree that nations don't offset their saving desire.
How come there is no video
"We Won, MMT won, MMT got everything right" annual video here for 2013?
Or is this post a replacement?
The MMTers and Ramanan both agree that most countries can have balance of payments crises which manifest themselves primarily as currency crises — like Britain in 1975
really?
Ramanan,
Haven't read everything on your blog, but I haven't seen many policy proposals on there. For example, what should the UK do to achieve full employment and sustainable economic growth? Another question, not just to you, but others as well, is there an assumption that MMT economists advocate policies under the belief that free trade is best? That's not something I've picked up. Am sure I've read Bill Mitchell advocate capital and import controls in places. Thanks in advance.
Alex
Oliver,
Wasn't GB trying to maintain a 'peg' of some sort at that time?
If so that doesn't sound like 'mmt' which is oriented to FFNC systems....
RSP,
Alex,
Warren (ie MMT) is on the record as saying (imo) that the US should just take these surplus countries up on their offers of real goods and services in exchange for our marking up their account balances on our spreadsheet for as long as they are want to extend this offer....
RSP,
Thanks Matt,
I think the question is more, what should should every country that is not the US do? Should protectionist measures be used? Are they needed? I've seen Ramanan critique MMT from the point of view of balance of payments constraint many times, but have never seen him offer an alternative policy approach, although I may just not have been paying attention.
I believe Ram advocates some sort of balanced trade policy...
His blog title (to me) implies 'concerted action' by (non-moron) human beings to both correct and prevent problems before they become so... So (to me) he is just trying to 'think ahead' on this bop issue... And yes it looks to me also that he has more than just the largest western economies in view...
Iow Ram is looking at the 'tyranny of the math' and thinking 'this can't go on forever, some non-moron needs to politely explain this to these surplus nations and come up with alternative arrangements...'
I personally reject all of the sectarianism though.
Rsp
Oliver,
Wasn't GB trying to maintain a 'peg' of some sort at that time?
If so that doesn't sound like 'mmt' which is oriented to FFNC systems....
RSP
The MMT answer to examples is usually that such countries weren't playing by the MMT rules in the first place. Fair enough, I guess, although that begs the question whether a country actually can play by those rules (no foreign denominated government debt, e.g., which has been challenged by some).
But the quote above seems to suggest that MMT admits that, even for countries that do play by 'the rules', a balance of payments crisis may result. That's new to me and contradicts a lot of other things MMTers have been saying. On the policy side, e.g. such an admission implies that countries very rightly steer far from a full employment fiscal stance. A deterioration of the current account through fiscal expansion may well be bounded by something. But if that something is a currency crisis, then that's a boundary you don't want to get near to.
O,
I'm not sure Warren would necessarily agree with Philip there on the bop issue... I look at Warren as the ultimate authority so to speak wrt 'mmt'....
RSP,
Matt,
"I'm not sure Warren would necessarily agree with Philip there on the bop issue"
Good point.
Alex,
Somewhere along the lines of "1. The first is coordinated fiscal action including a set of consistent balance of payments targets and “full employment” budgets ... This coordinated action by all countries, instead of isolated actions by each country, is the first and most important requirement of recovery."
http://www.concertedaction.com/2012/08/08/kaldors-growth-plan/
More generally my dream would be to completely change the WTO/GATT!
Thanks Ramanan. You say that action would need to be coordinated, but I suppose my question would be what would happen if a large developed nation unilaterally decided to pursue an axpansionary fiscal policy, but also took steps to control imports and capital?
Just on a side note, it would be nice to have this discussion on your blog. I wish you would allow comments to be shown!
On the policy side, e.g. such an admission implies that countries very rightly steer far from a full employment fiscal stance. A deterioration of the current account through fiscal expansion may well be bounded by something. But if that something is a currency crisis, then that's a boundary you don't want to get near to.
That's a norm. Why is a potential currency crisis "worse" than permanent unemployment, which is a huge waste of resources and over time costs a lot more than an occasional currency crisis?
Alex,
Imports control were also a plan of Kaldor in the late 70s for Britain.
Free from the balance of payments constraint, nations are free to expand domestic demand to grow.
The economics profession is highly obsessed with the problem of inflation. Although important, my opinion is that the balance of payments constraint is more devastating. If a nation is free from this constraint, it grow production faster - increasing productivity faster and hence the inflation problem is also under more control. In general a more regulated system of trade is needed - which gives nations more power to take unilateral actions on its trading partners - such as changing tariffs etc. The current system promotes free trade because it is pushed by the powerful corporations. Of course the opposite extreme - too much protectionism is also bad because it featherbeds the domestic industry.
So basically the profession views controls of imports as taboo - it is against the spirit of the WTO.
A nation can be courageous to take a step to control imports but this may lead to retaliation by its trading partners. Also economists from within the country will oppose this.
A more regulated system will make this smoother but first one has to remove the dogma of free trade. And of course in such a world, because domestic incomes are higher, imports will be hurt - so controls reduce the propensity to import, not the total quantity.
I don't allow comments on my blog as it requires management. But I do receive comments and communicate via the email address given.
I agree with Ramanan in this respect. the current global system is stupid. The world stumbled into it not for economic reason but for political reasons having to do with vested interests and national policies. There are ways to coordinate the global economy in order for it to run more efficiently and effectively as the material life support system for our species and also a key element in ecological balance now that humanity's behavior is a planetary factor.
But I am not particularly concerned with issues like bop. The real issues is always availability of real resources and their distribution.
To me the ethical goal is the good life for individuals lived in the good society, now global. Ethics is concerned with the good life for a human being. This is an age-old debate, which in my view was decided rather definitively ages ago in favor not of "maximizing utility" materially but of human potential holistically. Social and political philosophy is about individuals doing this in the context of culture and society, i.e., civilization.
Materially, this means achieving distributed prosperity in order to provide leisure for immaterial pursuits such as the pursuit of self-actualization and the creative expression that flows from this as a by-product in activity.
In comparison, arguing about income statements and balance sheets while ignoring real potential is just plain stupid. It's taking the trivial as important and the important as trivial, which is a definition of ignorance cognitively and behaviorally.
Supposing the trend continues where much of the world wants to obtain dollars financial assets, and the U.S.gov proceeds as it seems MMT suggests with continual massive deficit spending to make up the Demand-leakage… what's the fear?…that someday in the future there is going to be Dollar-dump?…that worldwide countries will attempt to liquidate and spend their dollars?
1) For every dollar financial assets that is being sold, there must be a buyer, so there is no "printing press" here, right?
2) Even if the U.S.Gov/Fed got somehow pressured into liquidating the Treasuries, and dollar-spending flooded our markets and threatened massive Demand-inflation from not enough output capacity… couldn't the U.S. government just raise taxes to "soak up" much of the excess Demand?
What am I missing? What's the huge fear?
Seems like irrational fear over this is going to lead us to maintain high unemployment for years to come, so long as the world desires to accumulate dollar financial assets.
"imports will be hurt"
Oops typo .. won't be hurt is what I meant.
That's very useful Ramanan, thanks. To bring it back to MMT, I would guess that the key proponents being largely US-based, the balance of payments constraint is less of an issue. It may be an issue one day, but that day doesn't seem imminent. I think MMT economists do say that fiscal policy is not an entire solution and that floating exchange rates are not a panacea, they just give a country more room to manoeuvre. When trying to communicate to lay people in the US, it doesn't seem to me to be useful to discuss balance of payments, as it is not something likely to effect the US in the next 20 years. Unemployment on the other hand is happening now.
Perhaps though trade is something that has received less attention by MMTers, but there aren't very many MMT economists, so I don't hold that against them. Maybe that's an area to be developed going forward. I would be interested to hear Bill Mitchell's view on Kaldor's ideas you shared above and on your blog, as the leading MMTer outside the US.
A final question for Ramanan. Given we are not going to get an international agreement on restricting free trade any time soon, what should a country like the UK do now? By your view, a fiscal expansion would lead to a worsening BoP, which at some point will cause a problem. Should it pursue expansion now regardless, and deal with the BoP issue when it comes, or stick with austerity and stagnate indefinitely?
Alittleecon,
Just ignore the balance of payments. Foreign exchange rates deal with it. E.g. if there are too many imports due to stimulus, the relevant country’s currency just slumps relative to the currency of other countries.
Devaluation certainly doesn’t work QUICKLY: it takes far longer than we would like for exporters to react. But it works eventually.
Alex,
Same is the attitude as Ralph above of the MMTers!
There are various degrees to which fiscal expansion can happen - some expansion to bring unemployment down and so forth. Politicians seem to take a harsh austerity approach which is bad for the world as a whole. Some amount of coordination will help for the short run but by no means this coordination alone will be sufficient. A totally different approach is needed.
What am I missing? What's the huge fear?
Seems like irrational fear over this is going to lead us to maintain high unemployment for years to come, so long as the world desires to accumulate dollar financial assets.
JK, it's not what you are missing but what TPTB are missing. Due to nationalism (power) and vested interests (control of financial and non-financial resources), the folks in charge can't see what is actually going on since they are looking through "colored glasses." The wealthy and power are committed to neoliberal ideology because it suits their interests and allows them to justify the unjustifiable as "natural."
But they are not totally stupid, either. The history of controls over movement of goods and capital is not a pleasant story and usually does not end well, so there is method in the madness of neoliberal policy.
Without setting distributed prosperity as a global goal and looking at the global economy as it is, a closed system that is the material life support system of humanity, we are so screwed.
The rest of the century is promising to become a nightmare if the world continues on the present track, and more war is virtually inevitable.
It is necessary to realize that this is not chiefly about money but about power. Money is just a means. Power is the goal. Domination is a strong evolutionary force, and human being are pack animals vying for control of territory.
This is why it is not possible to understand or analyze the European situation economically, for example. It's not chiefly about economics but global politics.
That's a norm. Why is a potential currency crisis "worse" than permanent unemployment, which is a huge waste of resources and over time costs a lot more than an occasional currency crisis?
True, but I think stability, at least stability at a bearable level, is not an entirely futile goal. What is money, if not an insurance against instability? And wy does MMT stress price stability so often? A lack of stability has repercussions that may be greater than a stock of unemployes, depending on your point of view and what you stand to lose. In the end it's a judgement call that voters have to make, preferably equipped with a better knowledge base than is currently the case. But political reality dictates it will always be those in power and the majority of voters who make the calls - whether you or I like it or not.
Oliver -- Great Britain in 1975 was trying to prevent the pound from falling in value, and they failed. There's nothing there that contradicts MMT in the least. MMT recognizes as a core principle that currencies can depreciate -- "floating currency" is always part of the discussion. So, no, Great Britain was playing by the MMT rules. They needed to let their currency depreciate, and ended up having no choice. If they had understood MMT, they wouldn't have tried to prop up their currency...
I meant to say Great Britain was not playing by the MMT rules...
" So, no, Great Britain was playing by the MMT rules."
And which "rule" was this?
Ramanan-- I was responding to Oliver's post. He made a claim that Great Britain was playing by the MMT rules when it tryed to prop up the pound. MMT is quite clear about the ineffectiveness of currency pegs...
The loss of trillions of work hours, several % pts of GDP, incredible waste of real resources and opportunities in the present would seem to me to vastly overshadow potential price instability or currency depreciation in the uncertain future, especially when markets are discounting it in the present. Sounds to me like monsters in the closet.
Economics is about trade-offs. Trading some potential future problem on theoretical grounds in favor of a much larger real problem in the present based on a normative criterion of "stability" seems blindsided to me. The purpose of floating rates is to adjust for "imbalances" as markets render their verdict on likelihood of potential instability.
Otherwise, it is reading tea leaves.
"ineffectiveness of currency pegs.."
What peg?
I belive the pound was free-floating after 1972
This is my comment from FB on the UK and IMF...scaremongering basically. There was no balance of payments issue... the whole thing was "could" be a BoP issue.
Background to the UK IMF request.
http://www.lobster-magazine.co.uk/free/lobster64/lob64-running-britain.pdf pages 12 to 26
Because some of the things on the site look borderline nuts so did some checking of my own.
Fortunately someone did a freedom of info request to the BoE, 47 pages but frankly you only need the first 3 and you will spot it straight away. http://www.bankofengland.co.uk/publications/Documents/foi/disc060519c.pdf The BBC link is confusing, its claiming inflation/unemployment was the problem but looking here (graph #10) already going down quickly by the start of 1976 (request for IMF assistance wasn't until late Sep 1976)
http://www.economicshelp.org/blog/5720/economics/inflation-stats-and-graphs/ Unemployment had levelled off (I used from jan 74 to dec 76)at the dizzy heights of 5.5%
of course a different labour market in those days with less women working (but then again probably a lot more teens working as school leaving age was 16 then)
http://www.tradingeconomics.com/united-kingdom/unemployment-rate
Inflation was going down and unemployment had levelled off by the time of the request to the IMF.
Thanks for the BOE link.
Crystal clear it was a balance of payments crisis - predicted first by none other than Wynne Godley.
".scaremongering basically."
Oh theory doesn't work blame others for scaremongering!
Trading some potential future problem on theoretical grounds in favor of a much larger real problem in the present based on a normative criterion of "stability" seems blindsided to me.
Absolutely. But it is dependent on what monsters people think are in the closet and to what extent current problems are someone else's. Just sayin'
Ram
It was all what ifs, could etc etc... there was NO balance of payments issue. It quite clearly stated that it "could" happen... not that it will. "The possibility on a fairly large scale cannot be ignored"
so it was a "possibility"
You are seeing what you want to see. Now go and read the lobster link for the politics behind it. The main worry seemed to be if inflation went back up then there would be a problem... but as the graphs show inflation was coming down rapidly.
to what extent current problems are someone else's
This is why individual utility maximization does't actually work due to a fallacy of composition. Loss of trillions of currency units due to waste of real resources makes the pie smaller for everyone.
Oh yeah wouldn't have happened, simply deficit spend!
Central banks do take precautions and it is helpful. But if I were to believe you it wouldn't even be needed. Scaremongering supposedly.
Look inflation is one problem but Britain also needed foreign financing should its currency plummett as the pound was already under pressure.
It is true inflationary pressures would arise but it I were you I would have to pretend it the sole reason.
" there was NO balance of payments issue."
Puhleez!
Read the first para of the BOE link you provided!
"Oh yeah wouldn't have happened, simply deficit spend!"
Did I say anything of the kind?
I was pointing out there was no balance of payments crisis in 1976. There "could" have been granted but there wasn't.. to claim there was a balance of payments crisis is incorrect and a rewriting of history, and very much a political rewriting at that normally to have a go at the labour party. We have a saying in the UK quite crude but to the point "if my auntie had bollocks she would be my uncle"
It was all what if.
"Read the first para of the BOE link you provided!"
yes you mean the "provide some insurance against a possible further drawing down of the Sterling balances"
Note "insurance" and "possible"
So i take out house insurance against a possible fire and that would mean I had a fire.
Oh yeah Spain requires ECB's help but supposedly if I believe you and interpret it your way, it is not in a bad situation. Just look at the yields - 10y went maximum to 7.75% .. oh not bad at all!
Ram you seem to think the reason they went to the IMF was the balance of payments issue... they didnt, try that Lobster link.
The 1976 events started when the treasury gave the government the PSBR for 77-78 and 78-79 for 22 billion in total which the Government then decided to request a loan from the IMF (which the big deal about that is dunno, happened all the time by countries at the time)
November 1976 the IMF come in.
3 months later the treasury then announced they had got their figures wrong and over estimated by 50%
Dennis Healy interviewed years later had this to say
..any excuse they can find for getting spending cut they will take. It wasn’t so much a conspiracy against the government as an attempt to get the policies they believed in....The whole thing was unnecessary. If I’d had the right figures I needn’t have gone to the IMF. Very irritating,but there you are.’
It was politics Ram.
Thanks Andy!
Ah ... choose to intepret it on your own way. Supposedly, if Spain makes use of the ECB OMT line, I could quote some newspaper articles and make the case that it was politics!
Ha!
Plus you fail to understand the potential balance of payments crisis (and it was already there) is cured by adjustment to domestic income. How would you know, the Lords of MMT haven't told you so. For them it is not a problem at all.
BTW Ram, I am not trying to convince you about MMT, not even worth trying you dont agree... thats fine. What I am pointing out is what happened in 1976 and the rewriting of history for political purposes.
I did the same with Mexico and that BIS paper if you remember what happened there.
Oh yeah another crisis and you keep denying.
I thought MMT is a Minskyian theory but supposedly a crisis cannot occur in the external sector!
Dark age of macro.
"potential balance of payments crisis"
So you agree then that there was no balance of payments crisis? just a potential, could, if my auntie...you know the rest.
You are completely missing what i am saying. This is not about MMT this about the UK in 1976.
Just look at the scaremongering going on in the US now over the deficit, debt to GDP ratio, "unfunded liabilities," etc., with many prominent economists, e.g., John Taylor, on board with it.
Virtually everything to do with inflation, devaluation, and other potential or "looming" currency issues is politics, and almost always the politics of "sound money" that is promoted by vested (neoliberal) interests.
Indeed Tom and exactly what went on in the UK in 1976.
But it seems that you see a currency crisis around every corner. Existing unemployment?
"Can't do anything about that by running bigger deficits to offset demand leakage. Could (or would) create a currency crisis somewhere down the line." Or substitute "inflation" or "hyperinflation" for "currency crisis."
Seems to me that Phil is correct that some people have difficulty distinguishing between economic modeling and political economy.
All the concern with price stability and currency stability is about savers. Workers? Not so much. "Let them eat cake."
Well said, Tom. Ramanan has made an excellent case here in support of Phil's thesis...
"Seems to me that Phil is correct that some people have difficulty distinguishing between economic modeling and political economy."
Yep was Phils whole point. Then Ramanan used the UK in 1976 as an example but that one was blatent politicing and seems to have been the "Treasury View" rearing its head again. Tony Benn sussed it and requested the cabinet minutes of 1931 and passed them around to some colleagues.
Oh yeah Spain has a potential crisis not a real crisis!
Look at the yields not even like Greece.
The point is that the Pound was under severe pressure and central banks take the help of the IMF in advance but you refuse to see it!
It was not like the house insurance analogy where fire is a rare event. Here the crisis was already there.
What do I pretend - no crisis?
"Treasury View" rearing its head again"
Whatever!
Good point Ramanan! No MMTers have ever addressed the issues with Spain and the Euro...
Ram its all there in black and white.
Do you not consider what Dennis Healy said who was chancellor at the time accurate? quite clearly he said if he had the correct figures he wouldnt have gone to the IMF.
Who said anything about Spain? I didnt say they didnt have a crisis... you might as well have said Cyprus doesnt have a crisis... what has that got to do with the UK in 1976?
DD,
It was sarcasm.
Andy is arguing as if one needed the pound to have plumetted to say that there is indeed a crisis. But it so happened that the Bank of England took a precautionary line of credit from the IMF to prevent this from happening.
So supposedly there was no crisis according to him.
So do I pretend that Spain is in a crisis only its yields hit 28%?
"quite clearly he said if he had the correct figures he wouldnt have gone to the IMF."
Oh yeah very clearly!
oh and "whatever" seriously?
So they took a precautionary line... noone ever takes precautions do they? I was once subcontracted at a major US company who in their disaster recovery systems had a precautionary plan in case Lake Michigan dried up.
Look what you are calling a crisis wasnt, could have been but was not and had nothing to do with the IMF which you used.
"Oh yeah very clearly!"
So you think he wasn't telling the truth then? had no reason years later to lie... could have been but does seem unlikely as had nothing to gain by that time.
Ram--
Perhaps sarcasm isn't the best way to make your point here...
"Look what you are calling a crisis wasnt,"
Keep dreaming!
If its descended to that then Ram... might as well join in... Tendulker is past it. :)
In the end, argument ends with disagreement over assumptions, or over what the facts are, but facts, other than the most simple and usually trivial, are theory-laden. At the risk of getting all postmodernist, people see what they want to see and there are often many angles from which it is possible to view the same data.
matt,
"Iow Ram is looking at the 'tyranny of the math' and thinking 'this can't go on forever, some non-moron needs to politely explain this to these surplus nations and come up with alternative arrangements...'"
Well it certainly does not help in the longer term to keep this status quo.
Just check in the last 2 centuries how often has the dominant monetary status quo changed for geopolitical reasons and the disruption it has created for the world population. Including massive wealth destruction, wars and conflicts and a lot of human suffering; the falling of empires, several depressions, etc.
And this has mostly happened because these sort of imbalanced have built over time until someone realized the situation was not optimal and benefiting everybody.
The problem with advocating 'there is no alternative' policies is that is a political choice to reinforce the status quo, this seems what P.P. is doing. The lack of long term vision is a troubling feature of our specie which in the end results in incredible unstable societies subject to collapse. Imagine what promoting these eternal CAD does to the economic structure of each nation in REAL terms.
The destruction of productive jobs, knowledge (and know-how), and progress that is lost to things like the growth of a monstrous FIRE which predates the economy or growing inequality, increasing pvte debt etc. for example is caused by this indirectly.
Ignacio,
Great to hear from you here again... I hope you and yours are doing well over there friend...
Yes, Ram imo looks like he is just thinking ahead and can't see a correction of current injustice under current policy or a long term result that would avoid such chaos you correctly identify imo...
That said, I look at the MMT folks as thinking that in the short term, fear of an increasing bop should not prevent us from using fiscal domestically to achieve full employment NOW... until we can get things straightened out internationally...
I think we probably need both views, one short term, one longer term....
But it pains me to watch these 'fightings', I dont think the "sectarianism" adds any value to what we are trying to do on either side of this discussion ...
ie "keynesIAN" "KaldorIAN" .... whenever they start adding "-ian" or "-ist" to some humans name: I just can't get into that, leads to "rabbit hole" discussions, etc...
Reminds me of a scripture from Paul:
"9 Yet stand aloof from stupid questioning and genealogies and strifes and fightings about law, for they are without benefit and vain.
10 A sectarian man, after one and a second admonition, refuse," (Titus 3:9-10)
We owe our allegiance to truth and justice alone imo...
Be well friend! rsp,
Seems to me that Ramanan and Phil just kept talking past each other. I think beowulf wins the thread with his concrete policy options. I'd be fine with any of beowulf's proposals. Does that mean I lose my MMT card? ^_^
Matt appreciated, and also wholeheartedly agree with your concerns respect. sectarianism.
The choice between short/long term policies is a difficult one. It's double edged, because if we somewhat figure ways to keep 'kickin the can' we do (and will do in name of any ghost, like 'realpolitiks'). What I mean is that if a short term policy manages to 'fix' problems temporary nothing else will be really pursued beyond that. Reinforcing the status quo.
The trick, given our species apparent lack of long term vision, is to pursue policies that work in the best way both long and short term. I agree that from that thread discussion Beo is the big winner (again?), we need pragmatic minds which can come with this sort of solutions. Solutions that work in the best of everybody's interests, not only in the short, but also in the long term. I don't think it's mutually exclusively and that's what we have to find.
Coming back to sectarianism, this is the real problem I believe. A lot of the Roger Erickson criticism has to do with the lack of adaptability rate from our current societal arrangements, and this has to do with the way politics is structured, and monolithic institutions which reinforce (and most usually, skew) way's of thinking, certain policies and sectarianism.
We need new 'politics', to rework them, or otherwise implementing smart policies, adapting to new situations, and abandoning sectarianism will be outright impossible, and an other big failure will come soon or later.
Coming back to the original discussion to sum it up, MMT is a framework, a description of how the fiat system works, but beyond it we have to take decisions (even how that system operates is a function of political decisions taken in the past). There is nothing set in stone, except there are certain mathematical (accounting?) realities at aggregate levels.
But we also have to check the political & societal realities, and these do not say we can treat single nations as the the only aggregate that matters, hence frictions will come between nations. And we have to address these frictions and balance them overtime. To do so we need smart policies that work both in the short and the long term, and are not just 'kick the can' policies, and to implement these we need to rework and rethink how politics work, otherwise we are destined to fail again and again in too disruptive ways.
My thought on this issue.
"Beo is the big winner (again?)"
The big man has that what I call a "balanced intellect"...ie he has both "the math" AND "the semantics"... my experience is that NOT MANY do....
But you also (as usual) bring up some key points on long term vs short term trade-offs and how we as humans look at these two time series cognitively .... these which look like are at play in the issue between "MMT" and Ramanan...
Hang in there amigo... rsp
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