This is my short Wednesday offering, which will be quite short considering the last two days have been (necessary) epics. My three-part series created somewhat of a social media storm, which means people are interested in the topic and I think that is healthy. Democracy is strengthened if people educate themselves and contest propositions that are abroad in the debate. But, as I noted yesterday, social media storms have a way of getting out of control and out of the realm of being complementary to a more considered educative process and interaction. What the recent Twitter storm has demonstrated is that key people are just willing to make spurious accusations (aka lies) without having taken the time to consider the depth of the literature that is available on any topic. That is not helpful to democracy. It undermines it. Anyway, in this short blog post, I consider some of the responses to my three-part series. As a footnote, I have now retitled the three-part series “MMT is just plain good economics” rather than using the quotation from the British Shadow Chancellor’s advisor who said that “MMT is just plain bad old economics”. Framing. I took the points of several commentators on this blog seriously in this regard. Thanks.Bill Mitchell – billy blog
A twitter storm of lies …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
The economist as useful political idiot
ReplyDeleteComment on Simon Wren-Lewis on ‘Interest rate vs fiscal policy stabilisation’
The key point for understanding economics is that there are TWO economixes: political and theoretical economics. The main differences are: (i) The objective of political economics is to successfully push an agenda, the objective of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
Theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. Note that neither Simon Wren-Lewis nor Bill Mitchell knows how the economy works but both have very strong opinions what the Labour Party’s economic policy should look like.
There is no need to bother much with the scientific underpinnings of Simon Wren-Lewis’ or Bill Mitchell’s policy guidance because there are none. Both DSGE and MMT are scientifically worthless. Economics is not a branch of science and economists are not scientists.#1
For political purposes, though, this does not matter much because in the political sphere the number of useful idiots is decisive for success and not any genuine scientific merits.
So, how are the useful idiots positioned these days in the UK?
(i) The hardcore neoliberal position is that the state has to be kept out of the economy, so fiscal policy is a priori ruled out. What is admissible is interest policy of a (nominally) independent central bank. This policy is already in place and is continually adapted/improved.
(ii) The soft neoliberal approach of Simon Wren-Lewis gives fiscal policy a greater role in the case of economic emergency/stress but delegates policy to a (nominally) independent body of experts that is tasked with budget balancing (ex investment spending) over a rolling five-year horizon.
(iii) The hardcore MMT position is that monetary policy has always been ineffective and that only permanent deficit-spending/money-creation keeps the economy going at full employment. Bill Mitchell’s main point of critique of (ii) is that Labour clings to the obsolete idea of budget balancing and is not progressive enough.#2
After blowing the whole pseudo-scientific argumentative fog away what remains with regard to the positioning vis-a-vis the current Labour leadership is:
(i) means attacking Labour/Corbyn from the right,
(iii) means attacking Labour/Corbyn by the fake left a.k.a Progressives,#3
(ii) means neutralizing Labour/Corbyn through a committee of (nominally) independent economic experts.#4
Among economists, the current Labour leadership has NO real supporters. A paranoiac view of the political world would come to the conclusion that the oligarchy has Jeremy Corbyn successfully encircled with their useful academic idiots.
Egmont Kakarot-Handtke
#1 See cross-references Failed/Fake Scientists
http://axecorg.blogspot.com/2015/11/failedfake-scientists-cross-references.html
#2 How Bill Mitchell stalks Jeremy Corbyn
https://axecorg.blogspot.com/2018/08/how-bill-mitchell-stalks-jeremy-corbyn.html
#3 The Kelton-Fraud
https://axecorg.blogspot.com/2018/07/the-kelton-fraud.html
#4 The demise of phony experts: macroeconomics is provably false
https://axecorg.blogspot.com/2018/05/the-demise-of-phony-experts.html
Egmont,
ReplyDeleteMost people get into economics for money, whether its to sell books, subscription services, ad space, trading services, financial advice, to get paid by special interests, to receive grants from special interest groups, or to copyright their materials and hope to sell it to the highest bidding government.