Edward Harrison is the only subscriber to the Austrian school of economics who has publicly embraced the monetary economics aspect of MMT, to the best of my knowledge anyway. He is also favorably disposed to much of the MMT macro. He has said that his main reservation has to do with controlling malinvestment, and MMT does not deal with this to his satisfaction as an Austrian schooler.
The current debate was sparked by John Carney's suggestion that MMTers and Austrians find common ground. So Edward Harrison's thoughts are extremely significant in this controversy.
Read it at Credit Writedowns
My comments on MMT’s job guarantee idea
by Edward Harrison
In this post, Harrison refers to a previous post that is a must-read, too.
Edward is always a very constructive and reasonable guy.
ReplyDeleteFrom an MMT perspective,to what degree would the employer of last resort macro benefits would be equally well accomplished by a customer of last resort approach?
I ask because people always turn to the issue of infrastructure spending in connection with a government jobs program. But most of that spending doesn't involve the government actually hiring people. It involves the government buying goods and services contracted from private companies.
As far as the run down school example goes, why need there be malinvestment? The answer seems to be that the government could have been providing work by paying people to get the school up to code, right?
Whether ELR or the JG seems politically realistic depends, I think, on what kind of crowd you hang around with. If your peers are the generally conservative Wall Street community, like it is with Edward and Cullen, then yes, you are going to hear a lot of negativity about proposals of any kind for expanded government involvement in the economy. Wall Street is the citadel of American capitalist ideology. This stuff won't go over well with them. Neither has most of the progressive legislation ever passed in the US. Wall Street almost always opposes it.
But if you propose the idea to a bunch of the young people now out on the streets protesting, I think you will get a very different response. (Spain isn't the only country with massive youth unemployment.)
MMT needs to get to work on the grass roots and build from the bottom up. That was part of what I was attempting to help stimulate with my essay "Public Money for Public Purpose".