Tuesday, June 4, 2019

Peter May - Does MMT trump Marxist theory?

Like Peter May, I still think a mixed economy is best. I'm looking forward to the British Labour Party re-nationalizing the railways.

There is an interesting article by Carlos Garciá Hernández here, arguing that Modern Monetary Theory (MMT) renders the Marxist theory of ownership redundant (I wonder if Paul Mason has read it?):
What happened when fiat money was introduced? As we have seen, the state that issues its own money is no longer dependent on any kind of restriction in spending its own money. In this scenario, the private sector can only save in the national currency if the state goes into public deficit, in other words, if the state decides to spend more than it collects through taxes. In this scheme, the “[…] collective or state administration of the production means and of the distribution of goods” doesn’t have to imply the direct ownership of the means of production. This could stay in private hands, because the level of accumulation in terms of national currency in hands of the owners of the means of production is determined by the state through its fiscal policy. Therefore, the administration of the means of production and the distribution of the goods is done by the state, but in an indirect way. This means that the owners of the means of production can only appropriate the amount of money that the state allows them through the collection of taxes, and this also means that the state can spend as much as it considers necessary, regardless of the level of money accumulation in the hands of the owners of the means of production (money is no longer a scarce commodity).
Basically the capture of excess resources by the capitalist class can be counteracted by taxes because the state has a monopoly on money issuance. Neatly he coins this idea ‘Fiat Socialism’.
There is a lot of truth in this idea.
But ownership is still important as it affects attitudes. Owning things, as distributism suggests, changes people’s outlook and encourages a less superficial membership of and a sense of increased belonging to, society. In the old slang people have more skin in the game.
So ownership actually alters values.
Realising where the money comes from is a big step on the way but to get our values right we need to allow everyone to have some ownership. As we accept that ideas influence the distribution of material things, so we need also to accept that distribution of material things influences ideas.
Progressive Voice

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