Monday, February 11, 2019

Inês Goncalves Raposo — On Modern Monetary Theory

It is February 2019 and modern monetary theory (MMT), a heterodox theory born in the late 1990s, has made its way into mainstream discussions, on the back of public support from political figures both in the United States and the United Kingdom.
Interest around MMT is now at its peak (Figure 1) and the economic blogosphere and #econtwitter have been having heated discussions on the matter. A few weeks ago, we reviewed some of the opinions around MMT, most of which tied with the debate on US debt. In this post, we gather the main points that have been raised over the past week.
On Modern Monetary Theory
Inês Goncalves Raposo


Konrad said...

“The basis for MMT started in the 1940s.”

The basis for MMT started around 3,300 BC when city states and proto-states began keeping ledgers with units of account. These were the first forms of “money.” Currency tokens came later. MMT describes what has actually been happening since the beginning.

AXEC / E.K-H said...

Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems
Comment on Inês Goncalves Raposo on ‘On Modern Monetary Theory’*

Contrary to their claim of doing science, economists have never been anything else than political agenda pushers. Because of this, the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is a fraud.#1

“There are always many different opinions and conventions concerning any one problem or subject-matter... This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper)

The ancient Greek’s distinction between episteme (= knowledge) and doxa (= opinion) corresponds to the distinction between science and non-science.

The scientist’s goal is to definitively settle a given question: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (Peirce)

Scientific logic posits a binary division between opposites. Truth and falsehood are opposites: there is no half-truth or half-falsehood.#2 Science is predicated on the Principle of the Excluded Middle.

The Excluded Middle, the swamp between true/false where ‘nothing is clear and everything is possible’ (Keynes), is the habitat of non- and anti-scientists, believers, IQ-test-failures, schizophrenics, political agenda pushers, and fraudsters.

At present, economics is NOT a science but a heap of half-truths/half-falsehoods. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational concept of the subject matter ― profit ― wrong.

Economists work hard to maintain the status quo of the pluralism of false theories. Their modus operandi is meta-communication, that is, economists mainly talk about what other economists have said or really meant or how they have been misinterpreted.

A recent example is MMT. Inês Goncalves Raposo exhaust herself with name dropping and who said what without ever coming to a conclusion what is true and what is false. Thus she follows the basic methodological rule of economics, i.e. never to reach a final true/false conclusion but keep everything in the swamp of inconclusiveness.#3

The fact of the matter is that MMT is refuted on all counts.#4 Scientifically, MMT is dead and buried. And exactly at this point, the habitual fraud kicks in: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941)

Inês Goncalves Raposo’s blog post is a clear attempt to keep economics in the proto-scientific swamp of the pluralism of provably false theories.#5

Egmont Kakarot-Handtke

* Bruegel, blog post Feb 11

#1 The real problem with the economics Nobel

#2 Keynesians never got this vital point: “For Keynes, as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’” (Davidson). See

#3 MMT: How to get out of the infinite meta-communication loop

#4 For the full-spectrum refutation of MMT see cross-references MMT

#5 There is NO such thing as “smart, honest, honorable economists”

Noah Way said...

Don't feed the link-spamming troll.

Andrew Anderson said...

[Off topic]

Here ya go Tom, some universal moral principles:

Anthropologists at the University of Oxford have discovered what they believe to be seven universal moral rules.

The rules: help your family, help your group, return favours, be brave, defer to superiors, divide resources fairly, and respect others' property. These were found in a survey of 60 cultures from all around the world.
Read more at: [bold added]

So how do government privileges for "the banks" divide resources fairly, and respect others' property?

AXEC / E.K-H said...

Noah Way

Economists/MMTers: agenda pushers, distractors, blockers, muters, censors

Egmont Kakarot-Handtke