Foreign Affairs is an American magazine of international relations and U.S. foreign policy published by the Council on Foreign Relations, a nonprofit, nonpartisan, membership organization and think tank specializing in U.S. foreign policy and international affairs. WikipediaMMT is making it to the top of the list after having been marginalized for decades. Is the elite getting concerned?
This is a superb article and it is addressed to the ruling elite, which is the audience of this venue.
Foreign Affairs
A Job Guarantee Costs Far Less Than Unemployment
Pavlina R. Tcherneva | Assistant Professor of Economics at Bard College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability
20 comments:
Oh yes, the elite are terrified of academics and their followers.
MMT – now official doctrine
Comment on Tom Hickey on ‘A Job Guarantee Costs Far Less Than Unemployment Pavlina Tcherneva’
It has been always clear that MMT is NOT a scientifically valid economic theory but political propaganda for the benefit of the one-percenters.#1 However, MMTers always claimed that their heroic fight was for the benefit of WeThePeople. Tom Hickey, the MMT philosopher, made it quite clear that his mental grandfather was Karl Marx. Same for Bill Mitchell, the MMT chief ideologue.
MMTers placed themselves firmly in the Progressive camp and demonstratively gathered behind the signboard of the Job Guarantee. That’s pro-labor and anti-capitalist? Yes, but only for people who have been trained since childhood to believe any crap.
Tom Hickey is very happy to announce that MMT colleague Pavlina Tcherneva is now on Foreign Affairs: “MMT is making it to the top of the list after having been marginalized for decades. Is the elite getting concerned? This is a superb article and it is addressed to the ruling elite, which is the audience of this venue.”
What is Foreign Affairs? Tom Hickey cites Wikipedia: “Foreign Affairs is an American magazine of international relations and U.S. foreign policy published by the Council on Foreign Relations, a nonprofit, nonpartisan, membership organization and think tank specializing in U.S. foreign policy and international affairs.”
In other words, Foreign Affairs tells the Oligarchy's underlings all over the world what the grand policy outline is. The new strategy in order to save the system is deficit spending/money creation. And this is why MMT and its apostles are currently hyped across all media. Stephanie Kelton is No 1 on the NYT bestseller list and Pavlina Tcherneva is on Foreign Affairs. And the Marx pupil Tom Hickey applauds until he runs out of oxygen behind his mask.
Gentle reminder: MMT policy is NOT and NEVER has been for the benefit of WeThePeople. MMT is the issuance of counterfeit currency in the form of deficit spending/money creation for the benefit of the one-percenters. Because PublicDeficit = PrivateProfit, MMT is the biggest redistribution program ever.#2 MMT is and has always been a political fraud.
That MMT is now promoted by Foreign Affairs is the proof of it.
Egmont Kakarot-Handtke
#1 MMT ― a Wall Street myth
https://axecorg.blogspot.com/2020/07/mmt-wall-street-myth.html
#2 More details
https://axecorg.blogspot.com/2017/07/mmt-cross-references.html
Egmont, you say:
“Of course, scientists who have a true theory can make a conditional prediction, i.e. if a, b, c the outcome will be y.
Economics is a failed science and economists do not have the true theory. So, all debates about what the future will bring are vacuous prophecies, i.e. attempts to brainwash the public.”
Focus here:
“ economists do not have the TRUE Theory”
Yes BUT they do have Theories nonetheless.... they are just not scientific theories....
One can create and publish a NON-Scientific Theory.... we see it all the time... “black holes!”... “entanglement!”... “dark matter!”, etc...
You keep saying “economics is a failed science” nowhere have they ever said they are scientists ... they are not trained under scientific method and never said they were...
I don’t see why you think that accusing them of being failed at something they never said they were doing is going to be helpful...
How do you think this is going to be helpful?
Matt Franko
Economics is not just an ordinary science but sciences: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.”
Or, the classical definition: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins)
Because the science-claim is provably false,#1 economists are in fact fraudsters.
Egmont Kakarot-Handtke
#1 Wikipedia, economics, scientific knowledge, or political agenda pushing?
https://axecorg.blogspot.com/2020/06/wikipedia-economics-scientific.html
Economics is the "science" of self-serving narratives.
@ Peter Pan
The art and "science" of self-serving narratives
There, fixed it for you.
I have said many times that in my view as philosopher that is acquainted with philosophy of science, I have said many times that the social sciences including economics are not "sciences" in the sense that natural sciences are taken to be. Moreover, psychology is not "scientific" in the same sense as biology. They are more akin to philosophy than natural science, which used to be called "natural philosophy" until the natural fields were formalized using mathematical model within frameworks that competing theories could be formulated and tested against obervations, direct and indirect using instrumentation.
Any field of knowledge can be pursued "scientifically" where it is possible to formulate a theory that cam be disconfirmed by applying rigorous methods. There is now a "scientific" approach to philosophical issues.
Concerning philosophy of science, I stand with Feynman and Feyerabend on scientific method. None can be defined. "Science" is what scientists do, and they do a lot of different things in the pursuit of truth, which parahrasing Feynman can be "defined" as not fooling ourselves into thinking we know things when we do not. I think Keynes would largely agree with this based on things he has said about econometrics and uncertainty.
Thre is much more to add to this, of course. Suffice it say, I am highly skeptical of claims being "scientific" in psychology and the social sciences including economics. As a philosopher, I can say that there are many knotty issues involved that remain at loose ends.
Many think that "science" or scientific" equates with being true. But every general statement, and theories are built of generaly statements, can be disconfirmed by a counterexample. Science is therefore always tentative and genuine scientists are open to chaning their views based on new finding. Good science is based on a healthy liberalism, e.g, free and open inquiry and informed debate based on agreed upon criteria that are also open to change.
Otherwise, it's not science but dogmatism, which is similar to institutional religion based on received wisdom in the form of scripture taken to be revelation, or tradition that has been sacralized. For example, conventional economists sacralize the methodological tradition under which they operate, rejecting new findings that do not emerge out of their traditions.
Economics is the vulgar art and "science" of self-serving narratives.
Fixed it again.
I should also make clear that while I have been influenced by Marx philosophically in addition to many others, I do not claim to be either a Marxist or Marxisn in economics. I am simply not well acquanted with Marx's works on economics. I have never read Das Kapital, other than piecemeal. Marx is a minor infuence on my thinking in comparison with those I regard as major. This is an economics blog, however, and I don't get into all that here other than in the background.
Based on major influences, I disagree with Marx's foundatonal assumption of ontological materialism, although I think he makes a contribution if this ontological assumption is viewed instead as involving methodological naturualism rather than ontological materialism. This choice affects the entire body of Marx's work, which I find contributive and also highly limited by the foundational assumptions.
But I am highly skeptical of economics that does not take Marx into account, or does in a biased way that precludes objective study of what he had to say. Much of what Marx said has been influential in sociology. For example, C. Wright Mill is one of the most widely read sociologists. Class and class power are studied seriously in sociology but dismissed by most economists. Analysis of class and class power was one of Marx's most significant contribution. It is carried on in eonomomics mostly by institutionalists.
Many Marxists take a dogmatic approach to the "master." Curiously, they argue mostly among themselves over the interpretation of Marx's text and his intention. This may be interesting for interpreting Marx. This is what happen, for instance, in the study of the history of philosophy and thought in general. It's reason that quantitative formalization came to be preferred, but that has it own problems, too.
From the standpoint of history of philosophy, Marx is a minor figure. However, historically exerted a major influence. A revolution in thought took place in the 19th century and some figures stand out and Marx was one of them, along with Darwin,
Freud, Nietzsche, all of whom were seminal in the development of the 20th century.
Regarding MMT, I have continuously said that MMT is situated within the framework of capitalism, and capitalis is about upward distribution of ownership and claims on resources based on class structure and class power. This is clear when "capitalism" is defined as favoring capital as factor over other factors, in particular, people ("labor") and the environment ("land").
Knowledge of MMT and use of fiscal space for public purpose can improve this situation but not change it fundamentally. Morevoer, policy formulation is a matter of political ecnomony and implementation is dependent on politics.
MMT is macroeconomics theory. It reveals policy options based on institutional arrangements. It is "Keynesian" in the sense of prioritizing full employment as Keynes did. While there is a political component to full employment, the economic rational is based on efficiency — reducing or eliminating waste of available or potential resources — as an economic "good."
Tom Hickey
When the folks of the social sciences cannot do real science for some spurious methodological reasons#1 that’s no problem. They can do talk shows or polit-marketing or comedy or social media trolling. What they cannot do is to claim that whatever they do is science and to award themselves Nobel prizes. They can award themselves Oscars for the funniest financial hoax and such things.
There are some minimum requirements for science. One is to realize in seconds, not in years, that 2+2=5 is false. Or, for that matter, that the Keynesian I=S is false.#2 MMTers do not satisfy these requirements. They still don’t get the macroeconomic balances right.#3 That is, they fail at elementary algebra. There is NO methodological excuse for that, ever.
There are also some ethical requirements for science. The first and foremost is not to lie and not to cheat. Another is, not to manipulate the communication. MMTers are big-time #EconBlocker and that is the unassailable proof that they are not scientists but political crooks.
MMT is hyped at the moment because the biggest Ponzi scheme of all time has to be sold as an employment program and academically blessed.
People trust in science. What they don’t know is that economics in general and MMT, in particular, is fake science.#4
Egmont Kakarot-Handtke
#1 How incompetent are economic methodologists? Very!
https://axecorg.blogspot.com/2019/07/how-incompetent-are-economic.html
#2 Cross-references
https://axecorg.blogspot.com/2015/01/is-cross-references.html
#3 Profit
https://axecorg.blogspot.com/2020/06/profit-axiomatic-economics.html
#4 Trust in science? Yes, but economics is NOT a science
https://axecorg.blogspot.com/2019/12/trust-in-science-yes-but-economics-is.html
I disagree on both these points. Really, the lady doth protest too much, methinks. Contrary to unconvincing protestations, MMT and much other economics is "science". MMTers argue reasonably and pay attention to "the real world" - there isn't anything to science other than that.
And the Job Guarantee, full employment is a fundamental, "radical", "revolutionary" change. More revolutionary than most ideas touted as radical change.
Why are intellectuals trying to save the system from itself?
A JG is an unacceptable reform of the status quo, so that part will be left out. To paraphrase Bill Gates: "Unemployment is not a bug, it's a feature!"
Eventually an external shock will bring the system down. Then you'll have your "in weeks, decades happen" scenario.
Arguing over what "science" is or what counts as "scientific" is philosophy of science and there is no general agreement on criteria for this terms. This can of worms is going nowwhere on a blog's comments. Everyoine is free, of course, to adopt their own criteria, but the trick is arguing compelling for it in a debate that will withstand the withering criticism that is surely coming down if those involved in such debates regard it as serous enough to engage.
For example, falsification has merits but it has its issues too.
Falsification and its discontents
A fundamental issue is that a theory can never proven to be true since theories are general descriptions containing variables with myriads of arguments. As the article notes, there is a temptation to conclude that since a general statement can be disproved by a single counterinstance, falsification is a criterion.
But, as the article continues, few scientists actually act in that fashion, or thinks this. When anomialies arise they first look very closely at the data to see whether it is actually an anomaly. Often it difficult to show this other than in very exacting experimental protocols. If it is they adjust their thinking in terms of assumptions, parameters, etc. In reality a theory or "law" remains until there is a more suitable resplacement for it. Who thinks that what we now accept as knowledge will be substantially the same 500 years from now? Only those naïve of history.
Engineers famously go with works without being overly conderned with theory. It turns out that theoretical scientists do too. The test of science is more pragmatic than realistically representations (correspondence). It is well-known that Richard Feynman and Feyerabend posited this. Feynman considered philosophy of science to be a total waste of time, while Paul Feyerabend built a philosophy of science on this "negative" vies, in Against Method, for example. But even Feynman's rejection of thinking about science abstractly and universally is an approach to philosophy of science.
When I was a young person off to college, I started out in science (chem), but later switched to philosophy. One of the controlling reasons was that it seemed to me that in 500 years science would be completely different and I was interested in eternal truth. Math is tempting in that regard but it is empty of content with respect to reality. Moreover, I was fascinated by words but not numbvers and mathematical expressions. So I gravitated toward philosophy, never looked back, and was not disappointed — although one has to go beyond philosophy, too.
The question now is how MMT will work as an instrument of "policy science," which I think is better termed "political theory," with its economic aspect called "political economy." My view is that MMT will work a lot better than what is being used now economically.
But MMT is still embedded in capitalism. Therefore in the end, the direction of distribution will be upward until the social-political-economic system is overhauled, although rent extaction can be bridled in the meanwhile.
And then the next iteration will develop its own issues. History is dialectical, after all. There is not "end of history," as some thought about modern (bourgeois) liberalism and capitalism. While this superficially similar to Marx, it is neither a necesary nor a sufficient condition to make one a Marxist or even a Marxian. There are plenty of other thinkers along these lines.
In STEM (Electricity and Electromagnetism) I was never trained to think that we could run out of Volts or meters... I also was NOT trained to think we COULDNT run out of them either...
These morons are being TAUGHT that we CAN run out of USDs...
So trying to teach them that we CANNOT run out of USD (MMT strategy) isnt going to work either...
That is NOT how its done over on the STEM side of the academe...
Tom Hickey
You say “Arguing over what "science" is or what counts as "scientific" is philosophy of science and there is no general agreement on criteria for this terms.”
Yes, but there is a general agreement that 2+2=5 is false. And more agreement is not needed.
The foundational MMT sectoral balances equation is algebraically false.#1 And this settles the matter already. Because the foundational economic concept of profit is false the whole theoretical superstructure is false. Because of this, MMT policy guidance has no sound scientific foundations. The only open question is whether MMTers are too stupid for science or whether they abuse the prestige of science for political agenda pushing.
This question is answered by the appearance of MMT’s Pavlina Tcherneva on Foreign Policy. Roughly speaking, Foreign Policy is for the Capitalist Party what Pravda has been for the Communist Party. Foreign Policy is the mouthpiece of the CFR. And everybody knows since Carrol Quigley’s Tragedy and Hope that the CFR and its forerunners had the interests of the Oligarchy on their mind and not so much the interests of WeThePeople.
The appearance of Pavlina Tcherneva on Foreign Policy is a message from the Central Committee of Capitalism to economists worldwide to make up their minds and to support the current policy of deficit spending/money creation which is the last instrument to mitigate the accelerated breakdown of the system.
Of course, MMTers are free to fight for the survival of Capitalism but it is utter corruption to pretend that this is science.
Egmont Kakarot-Handtke
#1 Profit
https://axecorg.blogspot.com/2020/06/profit-axiomatic-economics.html
Well then, MMT has been there all along. 2007/2008 and 2020 are its most noteworthy application in terms of policy. It may not be science, it may be wrong, but it was applied, and will be applied until the bitter end.
Correction
Foreign Affairs instead of Foreign Policy.
@ASEC
The foundational MMT sectoral balances equation is an accounting identity. Are you disputing that? You can argue over the theoretic use of the identity, but if it is an identity is a tautology that follows from correct application of accounting rules.
If are not disputing the accounting, that means sectoral balance "equation" it is not an algebraic equation but an identity resulting from double-entry that ensures stock-flow consistency. An accounting identity is a tautology. That means necessarily true based on the syntactical structure.
As identities (tautologies) acounting identities simply show how accounts balance.
Use of such identities in a theory involves the interpretation of the identities, e.g., direction of cauality. This argument cannot be based on accounting along but in the case of macro involves examination of institutional factors. The MMT institutional analysis not only can be disputed but has. This is another issue.
As far as I can tell looking in from the outside of the discipline of economics, it appears to me that a lot of the disputation involves issues involving causal factors and direction.
You seem to be arguing about whence and how profits arises.
Since profit is defined in accounting as revenue minus expenses, firm profits have to come from either either government or non-government spending (including foreign). If all private spending is not from private incomes, then the residual private spending contribution must comes from savings, sale of assets, or borrowing.
This is not as much institutional analysis as accounting requirements, since it revolves around income statements and balance sheets.
MMT holds that if other spending is insufficient for the level of demand, then households must borrow to make up the difference. This is unsustainable over time owing to the ability to meet debt obligations, demand decreases, inventory builds, firms cut back, and profits contract.
Seems pretty straight forward.
Tom Hickey
You say “The foundational MMT sectoral balances equation is an accounting identity. Are you disputing that?”
Not at all. The crucial point is, that I have given the unassailable proof that MMTers have messed up the foundational macroeconomic accounting identity. See
Wikipedia, economics, scientific knowledge, or political agenda pushing?
https://axecorg.blogspot.com/2020/06/wikipedia-economics-scientific.html
Section ‘Exemplary proof of the inconsistency of economics’ and Sub-sections ‘Provably false Keynes/MMT’.
Everyone with basic mathematical skills can immediately check the proof.
So, MMT is disproved at the elementary level. Meaning, MMT is scientifically worthless. Meaning, MMT is brain-dead political agenda pushing for the advantage of the Oligarchy and the disadvantage of WeThePeople.
And this is exactly why MMT is promoted by Foreign Affairs.
Pretty straightforward, indeed.
Egmont Kakarot-Handtke
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