An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
I left the following comment on this post at Peter's site as well.
Peter, Your posts on the JG, BIG, JIG and related matters have been wonderfully clear and well-written, and I've enjoyed every one of them, including this one. I also compliment everyone on the discussion here which is a fine exchange on some serious cognitive issues.
I must take issue with one thing, however.
"For brevity, my focus will be on points of difference, but this should not obscure the fact that there is much more in both Modern Monetary Realism and Modern Monetary Theory with which I agree than disagree. I will simply refer to the two groups as Realists and Theorists. I am not strictly in either group, but consider myself closest to the perspective of the Theorists."
I very strongly disagree with your easy granting of the MMR group's own branding of their disagreement with MMT. They carefully framed that branding for political effect in the MMT community and beyond.
It says two things. First, that within the group of researchers and writers who share the MMT view of modern monetary "operations," the MMR people are the "pragmatic" "realists" devoted to the facts, who other people can deal with, while the rest of the group agreeing on the monetary narrative of MMT are "idealistic" "impractical" and "ideological" -- mere "theorists" who cannot be trusted in the area of policy recommendations because they are "unrealistic," as evidenced by their advocacy of the JG; who do not stick to the facts, and who cannot be reasoned with because they are ideological.
And second, this branding is an attempt to claim that the MMR group's views are neither "political" nor "theoretical," but only "factual and "descriptive", while the MMT "theorists" are "ivory tower" academics who are much more "political" and much less concerned with facts, and who are much more "prescriptive" than the realists. . . .
Agree again, Joe. The assertion should have been that that they were not interested in doing macro,which they stated they don't, only describing monetary operations.
The whole matter is framed in a typically right wing way that seek to marginalize and discredit the left. And I don't think that they see this, even though it is transparent, with MMR emphasizing supply side and MMT demand side. MMT is in the Post Keynesian tradition, and MMR is kicking off in the neoliberal tradition with low taxes and low spending to increase investment and a buffer stock of unemployed to control inflation with definition of unemployment higher than it needs to be to conceal this inefficiency of needlessly idle resources.
It is typical of the right to complain that the left is "big government" and bringing in the normative, while it is "small government" and entirely positive. As critics like Noah Smith have pointed out, the normative presumptions of the right are just left unstated.
While I regard all of the participants as friends, and this won't affect that, I think that they made a serious faux pas and agree that it needs to be called to attention in order to set the record straight.
However, I also think it is good development, because it makes clear that there is a right wing and left wing to this, since the monetary system can be used to effect different policy choices. If the GOP were following MMR and the Dems MMT, then the country would be better off than it is now. This is the natural way for the dynamic to develop, since monetary economics and macroeconomics serve policy. So I suppose this was an inevitable development.
2 comments:
I left the following comment on this post at Peter's site as well.
Peter, Your posts on the JG, BIG, JIG and related matters have been wonderfully clear and well-written, and I've enjoyed every one of them, including this one. I also compliment everyone on the discussion here which is a fine exchange on some serious cognitive issues.
I must take issue with one thing, however.
"For brevity, my focus will be on points of difference, but this should not obscure the fact that there is much more in both Modern Monetary Realism and Modern Monetary Theory with which I agree than disagree. I will simply refer to the two groups as Realists and Theorists. I am not strictly in either group, but consider myself closest to the perspective of the Theorists."
I very strongly disagree with your easy granting of the MMR group's own branding of their disagreement with MMT. They carefully framed that branding for political effect in the MMT community and beyond.
It says two things. First, that within the group of researchers and writers who share the MMT view of modern monetary "operations," the MMR people are the "pragmatic" "realists" devoted to the facts, who other people can deal with, while the rest of the group agreeing on the monetary narrative of MMT are "idealistic" "impractical" and "ideological" -- mere "theorists" who cannot be trusted in the area of policy recommendations because they are "unrealistic," as evidenced by their advocacy of the JG; who do not stick to the facts, and who cannot be reasoned with because they are ideological.
And second, this branding is an attempt to claim that the MMR group's views are neither "political" nor "theoretical," but only "factual and "descriptive", while the MMT "theorists" are "ivory tower" academics who are much more "political" and much less concerned with facts, and who are much more "prescriptive" than the realists. . . .
See the rest at Peter's site
Agree again, Joe. The assertion should have been that that they were not interested in doing macro,which they stated they don't, only describing monetary operations.
The whole matter is framed in a typically right wing way that seek to marginalize and discredit the left. And I don't think that they see this, even though it is transparent, with MMR emphasizing supply side and MMT demand side. MMT is in the Post Keynesian tradition, and MMR is kicking off in the neoliberal tradition with low taxes and low spending to increase investment and a buffer stock of unemployed to control inflation with definition of unemployment higher than it needs to be to conceal this inefficiency of needlessly idle resources.
It is typical of the right to complain that the left is "big government" and bringing in the normative, while it is "small government" and entirely positive. As critics like Noah Smith have pointed out, the normative presumptions of the right are just left unstated.
While I regard all of the participants as friends, and this won't affect that, I think that they made a serious faux pas and agree that it needs to be called to attention in order to set the record straight.
However, I also think it is good development, because it makes clear that there is a right wing and left wing to this, since the monetary system can be used to effect different policy choices. If the GOP were following MMR and the Dems MMT, then the country would be better off than it is now. This is the natural way for the dynamic to develop, since monetary economics and macroeconomics serve policy. So I suppose this was an inevitable development.
Post a Comment