An effect of being trained in mainstream economics but then encountering alternative approaches is to experience a growing realization — or at least a creeping suspicion — that most of what has been taught is the opposite of the truth. Even when the story told contains some truth, it is likely to have been turned on its head. Thanks to Kalecki and Keynes, for example, it becomes clear that demand (spending) determines supply (income), including in the long run. Spending, in a monetary production economy, must come before production can commence. Thanks to Post Keynesians, it becomes evident that loans create deposits, not the reverse. There could be no deposit prior to the decision to extend the first private or public loan (unless through government spending). Thanks especially to Sraffians, it has been established that profit cannot be a remuneration for productive contribution. We can conceptualize profit as unpaid labor (Marx) or due to ownership (Sraffians, Post Keynesians).
An observation due to Modern Monetary Theory (MMT) that sometimes meets with resistance, though in my view is convincing, is that government spending or lending is logically prior to the receipt of tax revenue or government borrowing. This is a recognition that, from inception, government must issue its currency (spend or lend) before reserve accounts can be debited.
I often ponder this and other aspects of MMT in relation to Marx. In this regard, a statement made by Yanis Varoufakis in a fascinating presentation recorded in May 2013 caught my attention. Here, I will use it as a springboard for a brief consideration of Marx in relation to MMT on the question of fiscal policy, without intending to imply that Varoufakis would necessarily agree with the interpretation (or with MMT, for that matter).heteconomist
Marx’s View of Production in Relation to MMT and Taxes
Peter Cooper
5 comments:
Is Yanis' dichotomy correct here?
Ie that between "collective" and "private"?
Seems to me thus
Collective: Individual (libertarian)
Private: Public
So he is close here but seems to be conflating the "private" with the "libertarian"... which in this era, libertarianism is soooooooo dominant that I can see how easy it is to conflate these two things..
It seems easy to assume that all non-collective is "private" these days...
" the truth of the opposite, that wealth is collectively produced and privately appropriated. "
Should be: "collectively produced and individualistically appropriated" .... which is textbook libertarianism 101...
"Private" firms can be "collectively" owned by numerous shareholders...
You could be right, Matt. Come to think of it, Marx tends to refer to social rather than collective production.
In fairness to Yanis, he used the term once in the context of thinking on his feet giving a talk. In contrast, I repeated the use of "collective" multiple times in the post with the benefit of the chance to self-edit. :-)
Peter from listening to his talk he has had quite a diverse experience in his career.... my head would be spinning if I was him....
Seems like now he has settled down into a more singular focus at this stage of his career and now he has his eye on the prize... rsp
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