After several email exchanges where I attempted to explain my ideas and show an MMT perspective could contribute, the guy from United Front Against Austerity (his name is Kyle) sends me this:
| Mike, you have no idea what you're talking about here. Once again, I've offered several ways for you to get involved, and those offers stand. You and your acolytes are pissing and moaning that we're not turning this into the United Front for MMT. Thus far, nobody will provide a clear answer about what the fuck MMT is or why anyone should care. We have a number of collaborators from various economic disciplines, most of whom will not be at this event. I'm sure you could have an interesting discussion with Dr. Tarpley, who will be there. If you want to do something useful for your own movement and your country, stop worrying about a meaningless 5 minute speaking opportunity and please come to the assembly with something concrete to offer. -Kyle |
No idea what the fuck I am talking about, huh?
Well, here are some of their brilliant proposals.
| 1. I and I'm sure Dr. Tarpley would underscore the distinction between fiscal and credit stimulus. The government, via a nationalized or controlled Federal Reserve system, should issue zero interest credit only and specifically for physical production of the types you mention. This is not spending but lending that will be repaid through future tax revenue. 2. Tarpley's plan doesn't really get into income tax, and we'll have to fight a lot of leftists in our coalition who want to focus on some kind of wealth tax or more progressive income tax. I'd argue that Romney's tax plan, for example, is a kick in the nuts to the middle class, who need deductions, and a gift to the super-rich, who will pay less income tax and continue to claim carried interest, capital gains and other preferred types of income. A Wall Street sales tax doesn't touch "wealth" but only penalizes and prevents speculation. If I have to pay 7-10% tax to buy a car, why should Jamie Dimon pay 0% to buy credit default swaps? If "the 1%" wants to invest in production, I assume our program will suggest tax incentives for doing so. |
You decide. One thing is for sure, we have to start organizing our own gatherings. It's a waste of time trying to educate these "progressives." They are their own worst enemies.
They are probably a front for some fat cat funded group to channel the energy of the masses into a distraction and away from the real issues. Fact and economics are clearly a threat to them, and they do not act like they want to broaden the base of support. Cursing out a guy who wants to help? C'mon, something is off here.
ReplyDeleteThe main problem I find is that MMT patches up the existing system.
ReplyDeleteIt proposes a clear way that the work = income = resources distribution model can be made to function and how the monetary circulation can be kept at near optimum for long periods.
And they don't want to hear that. They want to hear how the rich can be punished for being successful at playing the game.
MMTs problem is that it is an entirely pragmatic solution to the current issues with the mixed economy.
"Smash the system" people won't like that.
Now he just sent me this:
ReplyDelete"Ha! Sorry we couldn't accomodate your magic money machine…"
Maybe I was wrong, Neil could be right: maybe they do not want to hear that the system can be easily fixed, your message made them angry.
ReplyDeleteFrom a UFAA Facebook post yesterday: "America doesn't need any new theories about money." Mr. Tarpley has a plan (http://tarpley.net/five-point-program.pdf) that, after much hand-waving, concludes that 30 million U.S. jobs will be created in five years. There is this: "Measures to re-launch world trade and promote world recovery: Create a new world monetary system including the euro, the yen, the dollar, and the ruble, plus emerging Arab and Latin American regional currencies, with fixed exchange rates and narrow bands of fluctuation enforced by participating governments. Institute clearing and gold settlement among member states. Replace the IMF with a Multilateral Development Bank to finance world trade and infrastructure. The goal of the system must be to re-launch world trade through exports of high-technology capital goods, especially to sub-Saharan Africa, south Asia, and the poorer parts of Latin America. Promote a world Marshall Plan of great projects of world infrastructure, including: a Middle East reconstruction and development program; plans for the Ganges-Bramaputra, Indus, Mekong, Amazon, and Nile-Congo river basins; bridge-tunnel combinations to span the Bering Strait, the Straits of Gibraltar, the Straits of Malacca, the Sicilian narrows, and connect Japan to the Asian mainland; second Panama canal and Kra canals; Eurasian silk road, Cape to Cairo/Dakar to Djibouti, Australian coastal,
ReplyDeleteand Inter-American rail projects, and more. American businesses will receive many of these orders, which means American jobs. This program will create 30 million jobs in less than five years. It will end the depression, rebuild the US economy, improve wages and standards of living, re-start productive investment, and attain full employment with increased levels of capital investment per job. Most orders placed under this program will go to US private sector bidders. Because of the vastly increased volume of goods put on the market, inflation will not result."
With no desire to punish good deeds, I nevertheless detect more than a whiff of vanity in Mr. Tarpley's UFAA project and Kyle's "we'll have to fight a lot of leftists" remark suggests the fix is in for any resolutions that might result from the conference. I hope we get a report from someone with the time, patience, and curiosity to attend.
– Joel (@FESPP)
many there are caught up in "precious" metals and a belief that "money" is exogenous.... hence "money machine"...
ReplyDeleteThey cant see that it is not the "money" or 'financial' effects that we are talking about but rather the REAL effects... this is sad...
Similar to Bob Roddis here who is an anarcho-libertarian... and this is interesting as Tarpley rejects Ron Paul and the anarcho-capitalists and anarcho-libertarians....
Tarpley does not understand "modern money" and is making the same basic mistakes here as the Ron Paul people who he is allegedly rejecting...
How do you get thru to these people???
rsp,
Mike, I was an activist back in the 60's and 70's and it was clear to me that it would be better to have the people that we were opposing in charge than the activist leaders. At least the people in charge were competent even if craven. The activists were incompetent and clueless.
ReplyDeleteI realized then that the only practical way forward was through networking and developing alternatives as experimental models. So I agree, the way forward is focusing on building a cyber-community here and networking with others that get it.
And another thing is they can come up with all of the giant public works projects they want, but then not even the policymakers but actually the voters themselves will ask "how can we afford that?" and the whole thing will fall flat...
ReplyDeleteIf you cant answer the question: "How can we afford that?" or refute the "we are out of money" or the "were leaving our debt to our grandchildren" retorts, then you will get nowhere...
They should get read into MMT in any case... even if their goal is giant public works.... education is never wasted...
rsp,
Tarpley's scheme is another hierarchical top-down Rube Goldberg device that is supposed to be tax and export financed.
ReplyDeleteNeil could be right: maybe they do not want to hear that the system can be easily fixed, your message made them angry.
ReplyDeleteNeil is right. These folks and people like them don't like MMT because it fixes the existing system and leaves the power structure in place. They want to run things.
I have the same criticism of MMT leaving the existing system in place, because I think that modern capitalism is headed for collapse due to internal contradictions, due both to system design and human foibles.
But I still think that MMT is the way to improve things most quickly on the way to redesigning the system, which I expect to be forced by realization of impending collapse.
If that doesn't happen in time, then our progeny are going to be in big trouble and the younger ones of us, too.
If you cant answer the question: "How can we afford that?" or refute the "we are out of money" or the "were leaving our debt to our grandchildren" retorts, then you will get nowhere...
ReplyDeleteExactly.
Mike,
ReplyDeleteReading the response that Kyle guy sent you made me sick to my stomach. I wish I had him in a room alone.
"They are their own worst enemies."
ReplyDelete"How do you get thru to these people???"
"I wish I had him in a room alone."
I don't think MMT realizes that MMT is in fact, MMT's worst enemy. Since the inception of MMT you all have treated anyone outside of MMT like they are ignorant fools who have no idea how the world works. You bad mouth everyone. Even close allies. You make enemies out of everyone. It's not that everyone else is the problem. It's that the MMTers running MMT are the problem. From Wray to Norman all the way down to the anonymous people who comment on their behalf. It starts at the top and infects the entire movement.
YOU ALL ARE THE PROBLEM. NOT EVERYONE ELSE.
"YOU ALL ARE THE PROBLEM. NOT EVERYONE ELSE."
ReplyDeleteI think you forgot to take your meds this morning.
I think Mark Stanford's criticism is constructive and should be taken to heart.
ReplyDelete" like they are ignorant fools who have no idea how the world works."
ReplyDelete" like they are ignorant fools": ok....perhaps guilty as charged.... but not this:
"who have no idea how the world works."
NO. They have no idea how a system of free-floating, non-convertible state currency works... there is a BIIIIIIGGG difference...
rsp,
Dan,
ReplyDeleteFor instance these people have an idea for large scale global public works projects; FINE, no one here is arguing with that, or saying "that is not the way the world works" or equivalent... it probably is a good idea sounds like imo...
Buuuuut:
These people have no clue how to get this done financially if their view is exogenous "money"... it will fail due to this ignorance that is in them...
it is in their own best interests to read into MMT...
rsp,
Dan,
ReplyDeleteI guy I've known for like 15 years, who has been making public policy proposals over a long time, became so frustrated with the "we're out of money" retort that he just couldnt believe it was true anymore...
So he started on his own investigation into monetary theories etc... and... came across MMT in the Washington Post this past spring and is JUST ECSTATIC about it now...
he never sensed anybody treating him like an ignorant fool and disrespecting him from the MMT academe, to the contrary they wanted to get him involved and he is J. D. Alt who has had postings over at NEP by Stephanie since then and I saw his posts there and contacted him and now we are meeting here in MD about it... and lets see where this goes now....
These people who claim this about MMT being "combative" and "disrespectful" seem to all come from some other sectarian part of economics and methinks they dost protesteth too much... "not invented here" and they cant admit to themselves that they have had it all wrong for so long....
rsp,
Only people that are not curious feel threatened by ideas they don't understand.
ReplyDeleteI totally "get" how the current system "works" in terms of fiat funny money being created by keystrokes and where and how it is squirted around and about by the "system". That is a completely different topic than the impact of such activities upon the general population, aka the "victims" of such a policy. I've read Unlearning Economics, for example:
ReplyDeleteObviously correlation doesn’t equal causation, but it is based a theoretical link Keen often mentions - Minsky’s observation that, in order for aggregate demand to increase, planned spending must be greater than current income, and therefore credit must fill the gap. This is a pithy observation, but it seems to me that, contra Keen/Schumpeter/Minsky, the exogenous money model can account for this: the central bank fills the gap by increasing the money stock. This can cause both an increase in debt and an increase in aggregate demand, but, in contrast to the endogenous story, the increase in debt does not cause the increase in aggregate demand.
In other words, the exogenous story is that central bank expands the money supply, and this increases both debt and AD. The endogenous story is that banks expand credit, which expands aggregate demand and forces the central bank to expand the money stock. Thus both are compatible with the correlation between private debt and growth, although the exogenous story would not necessarily have the correlation so tight, or have private debt moving first every time.
In any case, given the other evidence – that credit money expansion precedes base money expansions, that central banks have failed to control base money in the past, and that anyone who actually works in a bank will tell you they make loans independently of the number of reserves they have – endogenous money appears to have the mechanics correct.
So why does this matter? Well, the exogenous story has the causality backwards: it assumes that banks receive reserves and then ‘lend them out,’ whereas what they actually do is make loans and then balance their reserve requirements afterwards. Obviously this means economics textbooks are wrong about the causal mechanics, but economists will likely plead that it doesn’t really matter. However, it matters for a couple of reasons.
*******
Thus, the name for endogenous money strongly implies its conclusions: the system is easily destabilised endogenously, and the money stock endogenously expands and contracts to accommodate activity (thus rendering the ‘neutrality of money‘ an absurd proposition in any time frame). The differences in the fundamentals are perhaps more subtle than endogenous money proponents make out, but the conclusions are extremely different, and have strong implications for equilibrium analysis, crises and the relationship between finance and the real economy.
http://unlearningeconomics.wordpress.com/tag/endogenous-versus-exogenous-money/
1. The entire argument is based upon "Minsky’s observation that, in order for aggregate demand to increase, planned spending must be greater than current income, and therefore credit must fill the gap" which is baseless and a bunch of nonsense. Further, the fact that the present system criminally creates new funny money by keystrokes so that purchasing power might be swiped and shifted around without the victims knowing what hit them does not in any way prove Minsky's baseless "observation. But I "get" the argument, which is false.
2. It is you Keynesians who don't "get" my argument. The creation of new funny money by keystrokes or printing or whatever fatally distorts the price, investment and capital structure of the economy and encourages most everyone to engage in lines of labor and production that are unsustainable and are only sustainable for as long as new fiat funny money is injected and squirted into the economy.
I totally "get" your argument. You guys are oblivious to my argument.
Since I'm not connecting here, I'll try it a different way:
ReplyDelete1. The market does not fail on its own accord and does not require monetary or fiscal "stimulus" nor does it require a "government sector" for anything.
2. The problems of poverty, recessions and depressions are caused by the Keynesian policies that are sold to the public as cures.
This is Kyle from UFAA. I thought I'd post some choice quotes Mr. Norman left out from our delightful exchange. I appreciate Mark Stanford's critique, which seems about right, especially considering other commenters are ready to fistfight me for disagreeing with their internet heroes.
ReplyDelete"Good luck to you man, you'll get nowhere. You look like a ragtag bunch of nuts and conspiracy theorist freaks. The 1% are laughing at guys like you. You present ZERO challenge to them, because you fight without the benefit of reason. Just pure emotion and worn out ideas."
"Can you fucking read, asshole? I wrote my views to you. It's not a pitch for MMT. Do your thing, loser. I'll be laughing at you along with the 1-percent."
"You burned the bridge, dude, not me. I was trying to help.
1% tax on financial transactions? Interest free loans by the Fed to be "paid back" with taxes?
What a joke. These are your ideas? If so they display a TOTAL lack of understanding of fiat money. There is no need to tax. There is no need for the Fed to "lend" and then have people pay back fiat money with fiat money. You guys are clueless.
Do you really think you are going to affect change with these ideas? These are Tarpley's ideas, right? They show a fundamental lack of understanding of our monetary system and what "
"I'm no longer interested in your event or your organization. You're a bunch of losers."
"You guys are a bigger danger to freedom and prosperity than Wall Street or the 1%. Your ignorance is monumental. You dig holes for yourselves and in so doing, you dig holes for all the other average middle class Americans who are struggling to get out from under financial oppression. And the worst thing about it is they believe you are trying to help them, but in fact you make it worse. Your comment, "magic money machine," speaks volumes. It's ignorant and childish, just like your cause. You've got a guy who's at the top of your speaker list who still says 9/11 was an inside job pulled off by the American "military-industrial complex." This is National Enquirer stuff. Yet you pawn yourselves off as being serious. What a joke."
I'd like to add a few caveats:
ReplyDelete1. We are not funded by anyone other than some very generous small donations from supporters to help us pay for the conference.
2. My comments don't necessarily represent those of the entire group, which has members with differences of opinion on issues including economics.
3. I was, in my opinion, quite patient, offered a number of ways for Mr. Norman to get involved, and asked for more specifics, all of which were ignored.
4. Mr. Norman and most commenters here are hotheads at best and wreckers at worst. There are a lot of wild misrepresentations about what we're trying to do, and a lot of anger at the fact that MMT is not atop the agenda. That starts with the fact that nobody can tell me what MMT is or suggest what all us hippie/conspiracy theorist whackos are doing wrong. The conference hasn't taken place, we haven't published an official political program, and for all you know, we agree completely with the essentials of your theory.
I agree with a number of comments that the response for any demand to halt austerity will be "how do you pay for that?" In the short run, yes, we have recourse to taxation. Specifically a Wall Street Sales Tax, which generates revenue and reduces predatory speculation. I don't imagine that will be popular with Mr. Norman's employer. In the longer term, we want a national credit system that lends for infrastructure, industry, agriculture and other productive purposes. This can involve creating new credit to keep pace with the national labor power and the goal of full employment. We have a number of members interested in parity pricing for agricultural commodities and other related issues.
I don't see concern coming from your camp that the Federal Reserve gave 20+ Trillion to bail out credit default swaps, mortgage backed securities and other derivatives, etc. This is unearned credit that dilutes the value of the entire economy.
If you want my hunch, MMT sounds like the left flank of Wall Street – "you can't print too much money, so why should you worry about the bailouts, Federal Reserve policy, etc?" We're glad that you oppose deficit hysteria and austerity, but if you can't see a qualitative difference between physical production and derivatives, I don't know what else to say.
Also, the government is subject to precisely the same laws of economics and the galaxy as a family or business except to the extent it can rob, embezzle, pillage and murder to obtain resources.
ReplyDeleteKyle,
ReplyDeleteWray has written extensively on that:
http://www.economonitor.com/lrwray/2012/01/11/the-29-trillion-bailout-of-wall-street-why-should-anyone-care-about-high-crimes-and-misdemeanors/
Mike is scheduled to speak soon in NYC on the topic of Wall Street reform and fraud:
http://www.modernmoneyandpublicpurpose.com/seminar-7-financial-reform.html
Here is Tarpley: "Replace the IMF with a Multilateral Development Bank to finance world trade and infrastructure."
I would assume he does not know how this would actually work operationally ...... if you guys hit a brick wall wrt the FINANCE of your ideas, perhaps give Mike a call up there and try to patch it up....
rsp,
Mark Stanford,
ReplyDeleteWe are nice to newcomers but not to hostile people and not to professional economists whose JOB it is to know this stuff down cold. They are clueless and the public trusts them, this is downright criminal, disgusting at the very least. You should be angry too.
"Ha! Sorry we couldn't accomodate your magic money machine…"
ReplyDeleteI wonder where he thinks "credit from the federal reserve" comes from
Kyle:
ReplyDelete"If you want my hunch, MMT sounds like the left flank of Wall Street – "you can't print too much money, so why should you worry about the bailouts, Federal Reserve policy, etc?" We're glad that you oppose deficit hysteria and austerity, but if you can't see a qualitative difference between physical production and derivatives, I don't know what else to say."
MMT is the application of closed-system arithmetic to the monetary economy, since the performance of our economy is measured in the unit of account…dollars.
Since the net number of dollars in the economy are fixed and finite unless:
1. The government spends more in through deficit spending ("printing",been doing it for over 150 years).
2. There is no number 2, unless we assume the special case of a trade surplus (when was the last time that happened?) in which case the government would still have to "print" the dollars.
Keeping track of the flows tells us pretty much everything we need to know about the economy, and is accomplished through simple double-entry accounting.
No complex math, incantations or other magical "expectations" expectation.
Here's a little video that may help:
http://youtu.be/yb5DTf5ifJY
And sorry about the comment but really, I was just being dramatic. Your coment wasn't real pretty either.
Bob Roddis The problems of poverty, recessions and depressions are caused by the Keynesian policies that are sold to the public as cures.
ReplyDeleteThe problems of poverty, recessions and depressions began with Keynes ( 5 June 1883 – 21 April 1946)?
Kyle,
ReplyDeleteYou write "the Federal Reserve gave 20+ Trillion "
I believe this $20T+ figure that is out there that you are using is actually FROM Wray (ie MMT) analysis originally ... rsp,
miller B right...
ReplyDeleteWhere does Tarpley think a 'Multilateral Development Bank that replaces the IMF' will get it's capitalization?
I assume Tarpley here: "Create a new world monetary system including the euro, the yen, the dollar, and the ruble, plus emerging Arab and Latin American regional currencies, with fixed exchange rates and narrow bands of fluctuation enforced by participating governments. Institute clearing and gold settlement among member states"
Whaaaaattt???? he has thrown in just about every "buzzword" but this in the end is incoherent. This makes me suspect he does not really know how these systems work... he conflates a system of floating fx with gold settlement, etc.. what is he talking about..... these folks need to get read into MMT....
rsp,
The problems of poverty, recessions and depressions are caused by the Keynesian policies that are sold to the public as cures.
ReplyDeleteI thought the words "are caused by" clearly referred to the present. Further, the boom/bust cycle was historically caused by Keynesian-style artificial increases in credit beyond that of actual savings.
You just want to change the subject.
Bob,
ReplyDeleteNo droughts or floods or earthquakes or volcanoes involved over time????
rsp,
Bob, since the advent of non-subsistence, surplus economies, which spawned hierarchical societies and ruling elites that controlled the surplus, there has been a problem of poverty and recurrent war. With the advent of capitalism, recurrent recessions and depressions were added as a problem. Where exactly was or is the no-problem, non-subsistence, surplus society of which you speak?
ReplyDeleteNo droughts or floods or earthquakes or volcanoes involved over time????
ReplyDeleteI enjoy it when you change the subject instead of addressing the substance.
So Bob if there is a drought and it causes a big bust in the economy that is somehow Keynes fault????
ReplyDeleteWhaaaaaatt????
rsp,
I know you people cannot be this dumb. Earthquakes and Martian invasions cannot be blamed on Keynes.
ReplyDeletehttp://station79.files.wordpress.com/2011/10/marsattacks04.jpg
But you know that and are just changing the subject because you are unable to deal with the substantive objections to your unfounded theories.
Bob,
ReplyDeleteCredit money has existed since the Sumer civilization, 5000 years before Keynes, it allows the economy to contract and expand the money supply as needed. Please learn something about the history of money in the 3000 years before commodity money came into use.
So much on substance, you have no idea what you are talking about blaming credit on Keynesian policies.
Bob,
ReplyDeleteWhy do you bother with us stupid folks? Don't you realize we're unreachable?
Tom,
ReplyDeleteThis is from Tim Johnson's post today: "neoclassical economics has been developed to address scarcity,"
But yet as you point out, we typically run surplus economies (in real terms only perhaps)...
This is a strange dichotomy...
Unless because they looked upon "money" as scarce as it was gold/silver ie scarce "precious" metals this is where the concept of scarcity might have came in?
ie financial assets were scarce but real assets were typically in surplus?
Perhaps the typical mistake we still see today where TPTB got too focused on the financial and lost sight of the real? And designed their main economic theory to fit this false view of "scarcity"?
rsp,
Credit money has existed since the Sumer civilization, 5000 years before Keynes, it allows the economy to contract and expand the money supply as needed.
ReplyDeleteSo what? How does that possibly impact economic principles and axioms and/or problems of economic calculation induced by fiat funny money?
It is a shame because you do have an important message.
ReplyDeleteMike and everyone else, please don't give up on trying to educate people. Unlike today's right-wing nuts, progressives are more amenable to facts and reason. And please try make it to mainstream TV. I still support you
Bob,
ReplyDeleteYou were whining against "artificial credit". For 3000 years before gold coins appeared people used credit, *completely* unregulated. That was "funny money" at its best. Only in the period of wars of conquest started gold was looted, melted and used as money *by states* as tax-backed fiat money. But you know nothing about it.
Yes of course. One day, murderous kings decided on a whim that people should desire gold/silver AND that people should be forced to use it to exchange for other stuff. There was no antecedent event where people on their own accord simply desired gold and silver for whatever reason with gold and silver being valued independent of and prior to the murderous butchering king declaring them "valuable" and/or useful. Just like there was no language or music until some butchering king invented it out of nothing and forced it upon an ignorant and reluctant mankind.
ReplyDeletehttp://www.theamericanconservative.com/articles/origin-of-the-specie/
Bob,
ReplyDeletePeople were not using gold as money because it was stored in palaces and temples, you are just making things up. People had no access to gold so how would they come up with the idea of "exchanging it"? Only after it was looted the kings who took complete control over it used it as a fiat currency, stamping arbitrary value on it (nominalism - it is historical record not an article of faith that you present), which means they only used gold because it was rare and hard to forge, like we use hard to falsify watermarks today, but the value stamped on the coin corresponded to how much tax obligation given coin cancelled, NOT to its intrinsic value, *just like with paper money today*. Gold was thus used to organize markets so that wars could be waged and supplied for. You have no clue about historical facts. Murphy backtracked on every argument in the article you cite.
Also, how about that credit funny money that ruled the roost for a whopping 3000 years, with no state to control it, what a Keynesian plot, right?
Bob Murray is an economist, not an anthropologist. If you want to attack an anthropologist, find an expert, not someone who doesn't know the field.
ReplyDeleteGraeber unwittingly makes even more concessions to the Mengerian account when he later writes: “In the marketplaces that cropped up in Mesopotamian cities, prices were also calculated in silver, and the prices of commodities that weren’t entirely controlled by the Temples and Palaces would tend to fluctuate according to supply and demand.” So what the historical record actually shows us is a Sumerian economy in which merchants used silver in actual spot transactions when trading in the outside marketplace and Temple authorities kept track of internal bookkeeping operations through the use of silver valuations. And Graeber thinks it so self-evident that the causality ran from the Temple bureaucrats to the merchants that he actually says of the Mengerian account, “rarely has an historical theory been so absolutely and systematically refuted”!
ReplyDeleteGraeber is an anthropologist, not an economist and he certainly has no feel for Austrian or Mengerian economics. If you want to attack an economic theory, find an expert, not someone who doesn't know the field.
And everyone knows that the only reason the ladies like getting gold and diamond jewelry is because the local satrap declared it so. If he changed his mind and said the ladies must love 85 pound bags of belly button lint instead, then the ladies, of course, would be demanding gifts of belly button lint. But of course.
ReplyDeleteBob, I am not attacking an economic theory. I am saying that anthropology is about historical evidence and the methodology used wrt to. Bob Murphy is not an expert in this field and so what he says is irrelevant to debates in the field. Do any anthropologists or historians dispute Graeber's account?
ReplyDeleteEconomists can argue over the theory of money if that is what they choose to do, but I will believe the ones that appeal to historical evidence and anthropological research rather than the ones that just make stuff up and then claim it is "obvious."
You saw Graeber's factual evidence. It is consistent with what everyone already knows, that value is purely subjective and that people like gold, silver and diamonds just because they like they like gold, silver and diamonds. It didn't take a king to tell people to like gold, silver and diamonds. It might have taken a king to declare some form of uniformity in coins or to declare fair prices and price controls, but that's a whole other story.
ReplyDeleteDel Mar (mining engineer) made the point that gold is one of if not the only metal that can be found in it's pure form in nuggets. (Most exalted of the Noble Metals)
ReplyDeleteThis was the first metal that humans then would have discovered and used... then perhaps silver which some nuggets are found but very rarely... then somehow they found copper (bronze) and then iron (steel)...
They didnt have more than two or perhaps 3 metals to choose from thru the bronze age...
rsp,
Bob,
ReplyDeleteNot everyone knows, because you for example still don't know what Graeber is saying. If people were willing to trade a bushel of wheat for an ounce of gold the king had a different plan: he decided by fiat that 1 ounce gold coin cancels tax equal to 2 bushels of wheat, and voila: he just persuaded people to "like" gold 2x as much. The value of gold coin was decided by fiat, not by its intrinsic value, you still don't get it. At no point metallism was the case, the value was decided by the king, not by the people. So it is not what "everybody already knows". Gold was fiat (funny) money, just like printed green pieces of paper, where the state decides how much of the tax obligation they cancel, simply by stamping a number on them. In NO historical case a king would adopt money that had already been in circulation, this is just a fairy tale with zero backing in historical record.
Similarly, societies in colonial Africa were monetized, the colonial powers imposed a hut tax on them payable only in European money they didn't have and didn't care for (previous attempts to buy stuff from locals with European money failed). But after a tax was levied they *needed* the coins, you may say they liked the coins. They might have liked them before as toys, but now they were money with value decided by the colonial governors, in terms of how much of the arbitrary "hut tax" they extinguished.
[N]ot by its intrinsic value
ReplyDeleteFor your harebrained "state theory of money" to be true, NOTHING CAN HAVE ANY "INTRINSIC VALUE". And certainly gold, silver and diamonds cannot have any "intrinsic value" because there cannot be any such thing. Even the concept of "value" must have been invented by some vicious king who just out of the blue ordered his poor subjects to "value" every single item of a physical nature in their lives according to his whims. Since, of course, they could not have "valued" anything in their lives or even conceptualized the concept of value itself until ordered to do so by the king.
Bob,
ReplyDeleteNo Bob, you are just confused. Even a dollar bill or a Zimbabwean dollar have intrinsic value, I can wipe my a$$ with them, so they are worth something in themselves. It is just much much lower than the value the state can assign to it if it taxes enough to ensure that people need the thing. Gold can have intrinsic value, but nothing prevents the king from stamping 10x of the value on the coin. Indeed, he *has to* stamp a higher value, otherwise he will never see his coins again - they will be melted and the tax will be paid in ingots, with most of king's gold being thus stolen from him.
Your theory has no backing in data. Zero. You can write the whole post in CAPITAL LETTERS and you won't change that fact.
I've been long aware of Warren "Hut Tax" Mosler and the glories European colonial brutality. It seems to me that money was created long before the British forced it upon the poor Africans. And (surprise) the British used pre-existing British coins. How convenient.
ReplyDeletehttp://tinyurl.com/93kqbrl
Just a short hop from the "hut tax" to the hand chop. The things you guys celebrate are simply amazing.
We don't celebrate things, we say how they work: gold was fiat funny money, you have no arguments otherwise. Gold was given nominal value higher than intrinsic value exactly in the same fashion as low intrinsic value coins Africans didn't want were given value by imposing a hut tax.
ReplyDeleteUsage of gold coins was enforced by a threat of violence. That you celebrate this without even knowing it is simply amazing.
I've never denied that the use of gold coins might be enforced by the threat of violence. In fact, price controls are an example of enforcing a higher "value" on a form of currency than would otherwise occur voluntarily. So freakin' what? Like everything else in MMT, WTF is that supposed to prove? Anyone with an IQ above Forest Gump knows price controls cause shortages.
ReplyDeletehttp://www.flickr.com/photos/bob_roddis/5665427476/in/set-72157600951970959
The fact that governments imposed price controls sure doesn't prove that governments invented the concept of money.
Bob: One day, murderous kings decided on a whim that people should desire gold/silver AND that people should be forced to use it to exchange for other stuff. There was no antecedent event where people on their own accord simply desired gold and silver for whatever reason with gold and silver being valued independent of and prior to the murderous butchering king declaring them "valuable" and/or useful. Pretty much right. :-)
ReplyDeleteMoney is just standardized, negotiable credit (negotiable debt). And state money is just the King's credit.
John Henry's article in the Mitchell-Innes volume on money in Old Kingdom Egypt is a particularly good refutation of the Mengerian story, because it describes an economy with money, but no markets or exchange (nor probably private property in land). The only monetary "exchange" was between the people, who paid their goods in kind to the King, and got their accounts credited for this in terms of debens, which he denominated his taxation in. Debens were originally based on weights of wheat, no metals involved.
The concept of a quantity of a good being worth a fixed quantity of another good is found nowhere in history or in modern pre-monetary societies, while the concept of goods being traded for some sort of credit is seen everywhere, and that is what money arose from.
Quote from UFAA: " This is Kyle from UFAA. I thought I'd post some choice quotes Mr. Norman left out from our delightful exchange. I appreciate Mark Stanford's critique, which seems about right, especially considering other commenters are ready to fistfight me for disagreeing with their internet heroes"
ReplyDeleteI don't want your to fistfight you for disagreeing we just want a open platform that includes our paradigm rather than "business as usual" progressive antiwar left paradigm. I just want you to extend the platform of the UFAA towards MMT and stay away from politically alienating ideas that some of UFAA folks seem to be allied with like "9-11 truthers." UFAA doesn't need that shit anymore than Occupy needed black block anarchists. You need serious and technically correct arguments against the austerity agenda that are bulletproof and that is exactly what we MMTers are trying to give you.
We don't need vanity projects and Dr. Tarpley or Larouche approved litmus test. I'm sorry if found Mike's comments about you guys being "nutjobs" offensive but most Americans find alot of the radical antiwar leftist politics and conspiracy stuff to be equally offensive. We don't want to drag useless and offensive politics about foreign policy and 9-11 into this movement. We have to focus on one thing: Defeat Austerity.
Quote from UFAA: "3. I was, in my opinion, quite patient, offered a number of ways for Mr. Norman to get involved, and asked for more specifics, all of which were ignored."
Okay, I have listened to folks like Dr. Tarpley and Glenn Ford for years and I even own several of his books (I was going to buy some of his other books until this snafu came up) so I really want to try and bridge the gap between our two camps because I respect the genuine certain about austerity and the Neoliberal agenda that both groups hold so I can only hope that both parties will read these comments and try to work it out. I will try and answer as many specific as I can about why the MMT paradigm is important and needed for the fight against austerity. I would attend your meeting if I was in New York (I'm on the West Coast) because I really to want a broad coalition against the oligarchy's push for austerity. If you want to know more of the specifics of MMT read the primer at neweconomicperspectives.com.
Continued on next post...
Quote from Bob Roddis:
ReplyDelete"1. The market does not fail on its own accord and does not require monetary or fiscal "stimulus" nor does it require a "government sector" for anything.
2. The problems of poverty, recessions and depressions are caused by the Keynesian policies that are sold to the public as cures."
So our favorite slavertarian is back...and off his meds as usual.
1. The Market is people exchanging stuff and so according "magical thinking" Bob Robbis that can never fail never to be the best allocation of resources because magically all the miscalculations of imperfect actors will result in a utopia of perfect information and calculation. The mind boggles at the sheer stupidity.
2. Bob claims the problems of poverty, recessions and depressions are caused by the Keynesian policies contrary the fact the greatest amount wealth was during the Keynesian policy period of development after WWII.
Bob simply doesn't care about the truth because he is an amoral subjectivist who doesn't believe that facts and reality have
INTRINSIC VALUE.
He simply prefers his own projections to reality and get his jollies trying to force everyone agree to that his personal ideas of "free market" gold money are the absolute truth that everyone should fall down in amazement at his vast intellect in awe of his godlike wisdom and wit putting down the Keynesian heretics.
To the rest of us, Bob is like one of those experts in Troll Physics incoherently muttering about his golden perfect computronium "free market" perpetual motion is the cure for all the world problems. It's just kinda sad...
"Troll Physics" :-)
ReplyDeletesepteus7 wins the internet for today, at least as far as I'm concerned.
This comment has been removed by the author.
ReplyDelete"fistfight me for disagreeing with their internet heroes"
ReplyDeleteAnother missed target. I suggested a fist fight (not literally, but…) because of his attitude, not because of his disagreement.
Besides, for all I know Kyle is 6'5 275 lbs and he'd kick my ass three ways to Sunday.
The drama is strong with this thread…
Bob,
ReplyDelete"So freakin' what? Like everything else in MMT, WTF is that supposed to prove? Anyone with an IQ above Forest Gump knows price controls cause shortages. "
Great, so you have transited from "this is bullshit" to "this is obvious". So what? Exacly like you say: fiat currencies, be it gold or paper with watermarks which are given value by imposing a tax WILL cause unemployment unless the taxing entity issues enough tokens for us to pay taxes and save for later. So there you have it: the value is given to money by tax, and you have to spend enough to decrease unemployment. Welcome to MMT.
"The fact that governments imposed price controls sure doesn't prove that governments invented the concept of money."
Yep. That is why I never said that. I said: money was invented 3000 years PRIOR to metallic state money which didn't appear until 800-500BC in the era of great wars of conquest. Before that money was uncontrolled (funny) credit, and people did just fine. But yes, gold money was a state creation.
Dear Kyle of UFAA,
ReplyDeleteThat starts with the fact that nobody can tell me what MMT is or suggest what all us hippie/conspiracy theorist whackos are doing wrong.
New, liability free money comes from government spending. Money is destroyed by taxation. When the government spends, deposits are created along with either new reserves or new interest bearing assets (Treasury bonds, Treasury notes, or Treasury bills).
It is asserted that it is irrelevant how the deficit is financed, i.e. if new reserves are created or new bonds/notes/bills are made. This conclusion would also tend to flow from a New Keynesian model that doesn't explicitly show "money", which would be most of them.
Everything else seems debatable: the real effects of interest rates, the efficacy of job guarantees. The above, however, is not debatable in MMT, and the main and most important conclusion that flows from it is this: the United States and any other monetarily sovereign nation, like Canada, the UK, Japan and others cannot have a sovereign financing crisis akin to Greece or Argentina. The size of the debt outstanding poses no danger. The only danger is that our spending in excess of taxes may outstrip the productive capacity of the economy, or in other words cause undesirable inflation.
Many mainstream economists hedge toward the above, but back away for one reason or another - usually backed up by some fuzzy thinking. Paul Krugman is almost on board. James Galbraith and Dean Baker are completely on board.
septeus7:
ReplyDeleteBob simply doesn't care about the truth because he is an amoral subjectivist who doesn't believe that facts and reality have
INTRINSIC VALUE
No, reality does NOT have "intrinsic value". Value is created with valuations, and valuations are human centered. Value is given by humans.
Intrinsic value is a dogmatic religion in the dustbin of history.
Intrinsic value is a dogmatic religion in the dustbin of history.
ReplyDeleteLibertarians reject virtue ethics and hold that morality is subjective instead of transcendental. But then they claim that there is an "intrinsic right" to private property (which is manifestly a cultural institution rather rather than intrinsic), and that there are "natural laws" of economics that are intrinsic.
That is to to say, they make shit up that suits their worldview.
Libertarians reject virtue ethics and hold that morality is subjective instead of transcendental. But then they claim that there is an "intrinsic right" to private property (which is manifestly a cultural institution rather rather than intrinsic), and that there are "natural laws" of economics that are intrinsic.
ReplyDeleteThat is to to say, they make shit up that suits their worldview.
Lies lies and more lies. You have nothing else.
Libertarianism is only concerned with the initiation of force and the prevention of fraud. What you do with your freedom is simply a different topic however important that might be.
http://www.lewrockwell.com/rothbard/rothbard12.html
Libertarians have either not thought through the philosophical (ontological, epistemological and ethical) foundations of their position, or they have have adopted a doctrinaire viewpoint that only they think is reasonable.
ReplyDeleteBob,
ReplyDeleteI showed you above that gold as currency was based on violence or a threat thereof. So libertarians who are "only concerned with the initiation of force and the prevention of fraud" should reject gold as currency. But they won't because they are clueless of facts and historical record.
I showed you above that gold as currency was based on violence or a threat thereof.
ReplyDeleteYou didn't show any such thing. In order to show that, you would have to show that ladies would immediately cease demanding gifts of gold and diamonds and switch to demanding gifts of 95 pound bags of chicken flickings upon the order of the local satrap. Your theory is desperate, absurd, silly and pathetic.
Actually, Bob, there is little evidence of tribal people's acquiring gold, let alone competing for it to use for sexual favors. The demand for gold, silver, copper and other metals arose in surplus economies, when metals were needed for weapons manufacture and shining metals were used by aristocrats as indications of their rank, along with fine fabrics and scarce dyes, which why purple was the royal color. Priests also convinced people that deities could be propitiated with precious metals, fine cloth, choice food, and the like.
ReplyDeleteInitially, precious metals were only used in external trade. Later, when kings turned to professional militaries and mercenaries, coins of precious metals were used to pay soldiers' wages, with seignorage attached.
In the history of exchange, markets based on commodity money are a blip on the screen. if only because such money was scarce even when available. Even today, with fiat currency, many if not most people finance purchases with credit. Without abundant credit, monetary economies dry up.
I have nothing against credit. Austrians have nothing against credit. People are free to make whatever contractual arrangement they want. People like and liked gold because people like and liked gold. Otherwise, why would a king have demanded gold? He might have otherwise demanded a box of acorns. What are you people talking about? Are you all brain dead?
ReplyDeletePeople like and liked gold because people like and liked gold. Otherwise, why would a king have demanded gold? He might have otherwise demanded a box of acorns. What are you people talking about?
ReplyDeleteYou seem to think that human naturally like gold because there is something intrinsically valuable about gold that underlies an otherwise subjective preference. If that were so, primitive peoples would have valued gold, gems, etc, but there is no record of gold, gems, being special other than as a mark of rank — for two reasons, one scarcity and two the striking shininess that made the person wearing it look "divine." This was the impression that the aristocracy sought to create — that "noble birth" made them super-human and not only fit to rule rule but also to be venerated as of divine heritage.
Bob,
ReplyDeleteI showed you that historical record is such that the value stamped on coins had nothing to do with how much women liked gold, it was invariably higher. This is not a theory but historical record. But i guess it was yesterday and you already forgot...
The size of the debt outstanding poses no danger. The only danger is that our spending in excess of taxes may outstrip the productive capacity of the economy, or in other words cause undesirable inflation.
ReplyDeleteAnd the fact that the government can create an unlimited supply of "dollars" makes moot any need to disprove the opposing view that "the economy" will not and cannot have the goods and services available at a moment's notice (or ever) to satisfy $200 trillion in unfunded liabilities, right?
Bob:
ReplyDelete"And the fact that the government can create an unlimited supply of "dollars" makes moot any need to disprove the opposing view that "the economy" will not and cannot have the goods and services available at a moment's notice (or ever) to satisfy $200 trillion in unfunded liabilities, right?"
Why would the economy need to have $200 trilion in goods and services available at a moment's notice? The "$200 trillion in unfunded liabilities" will be paid out over multiple decades, not at a "moment". Don't let intergenerational accounting nonsense scare you, Bob. Because it's nonsense.
Why would the economy need to have $200 trilion in goods and services available at a moment's notice? The "$200 trillion in unfunded liabilities" will be paid out over multiple decades, not at a "moment". Don't let intergenerational accounting nonsense scare you, Bob. Because it's nonsense.
ReplyDeleteRight. All those houses, lawn mowers, physicians, lab technicians, nursing homes, drivers, adult diaper changers, and people to watch the senile who are chained to their beds will magically appear out of nowhere to take care of the aging horde of baby boomers because the government can never run out of funny money. I suppose that is also true for the Congo which also can never run out its sovereign currency.
That’s the entirety of your grand “theory”. There's no there there. Naturally it will be rejected by intelligent people.
http://consultingbyrpm.com/blog/2012/10/illustration-todays-generation-eating-more-at-expense-of-next-65-descendants.html
The food I will need to eat over the next year is an unfunded liability.
ReplyDeleteThe food I will need to eat over the next year is an unfunded liability.
ReplyDeleteExactly. And you shouldn't take it for granted. And even having enough food next year is potentially problematic. Why impose upon society a harebrained fiat funny money system which distorts the pricing process and economic calculation and reduces the likelihood of prosperity in the future?
Who's taking what for granted?
ReplyDeleteIf people don't have the "funny money" dollars in their hands to buy food in the future the food-producing companies will begin to suffer losses because we aren't about to starve…we can produce our own food, and we can make less expensive choices…good-bye cattle producers, at least many of them.
Hell, I have a lifetime supply of squirrel, in my yard alone.
If people don't have the "funny money" dollars in their hands to buy food in the future the food-producing companies will begin to suffer losses because we aren't about to starve...
ReplyDeleteIf that's your pea-brained idea of how modern civilization works, I'm certainly not in a position to dissuade you. Thankfully, you have made clear to others who might be tuning in here for the first time the type of nonsense upon which MMT is based.
Bob: "Right. All those houses, lawn mowers, physicians, lab technicians, nursing homes, drivers, adult diaper changers, and people to watch the senile who are chained to their beds will magically appear out of nowhere to take care of the aging horde of baby boomers because the government can never run out of funny money."
ReplyDeleteThey won't magically appear, Bob. They will be lured to appear with U.S. Dollars, the same thing that will lure me to work tomorrow. In your magical world that is free of fraud and "the initiation of violence", workers will only appear to change the diapers of those who caught enough good breaks to have some money left over to pay them. I suspect that will lead to violence as people desperately try to obtain money to get their diapers changed, to eat, etc. Perhaps you should move to a country that doesn't have much government or a social safety net and see how that works out for you. Good luck and we will see you in a couple of weeks.
So, Bob, how will commerce take place? What will we use for money? Who will we earn which money from?
ReplyDeletehow will commerce take place?
ReplyDeletePeople will exchange goods and services which can and do include monetary and banking services. There is no requirement for a bureaucracy backed by SWAT teams to provide or initiate those services. That is so obvious that I'm not going to waste my time debating it. It's enough that MMTers deny the obvious in public for all to see.
Bob: "That is so obvious that I'm not going to waste my time debating it. It's enough that MMTers deny the obvious in public for all to see."
ReplyDeleteRoddissian to English translation: "None of my crackpot theories ever gain any traction here. I'm not even gonna try."
"None of my crackpot theories ever gain any traction here. I'm not even gonna try."
ReplyDeleteOne can always hope.
Just testing out how this sign in process works...
ReplyDelete