Sunday, March 31, 2019

Alan Austin — Modern monetary theory and the real game

Good presentation about why getting progressives to admit that MMT is correct won't change them. It's about politics. Short read.

In my view, the way to proceed is by calling attention to economic rent — financial rent, land rent, natural resources rent, and monopoly-monopsony rent — along with socializing negative externality instead of imposing true cost.

A comprehensive analysis also necessitates going beyond economics and finance to include all other areas that are relevant ‚ individual and social, and social, political and economic — as well as how they fit structurally and operate functionally in terms of a whole system — the global economy.

MMT is an integral part of the solution. But it is not THE solution.

Independent Australia
Modern monetary theory and the real game
Alan Austin


Unknown said...

The real answer lies on fusing on the needs of society, and the policies needed to address the needs, and to look at what needs to be done to mobilize or create the real resources needed to address those issues. If the resources exist, or can be created, then "money" is not an issue.

I think the Left progressives are now increasingly focused on policy.

Detroit Dan said...

Thanks, Tom, as usual.

I think Austin makes a good point, but one that is 180° off. To me, MMT provides the simple, common sense explanations, while conventional economics provides the contortions which serve to obscure. Sovereign government debt, in its own currency, is much more like money than it is like private debt. Thus, conventional discussion of the "national debt" is nonsense. Similarly, confounding a trade deficit with a fiscal deficit, as Austin does here, is confusing. If China has a lot of U.S. "debt", that is because we buy a lot of stuff from them and not because we borrow money from them. I could go on and on. There's a reason that Paul Krugman labels many of his columns "wonkish". That's because they are hard to understand.

The most intuitive explanation of the monetary system is that it is a pyramid of IOUs, with the central bank at the apex. That's why, when the financial system was about to collapse in 2008-2009, the central bank could step in to guarantee liabilities. This is a much simpler explanation than the conventional discussion.

GSorosForSecState said...

Tom Hickey, can you help me as I am from the UK can you contact Bernie Sanders via the senate contact page I cannot as from UK. As a resident of Iowa City you should be able to contact him and tell him about it even if not from Vermont (allows all USA.) The police are currently monitoring my traffic and as a fellow anarchist contact him on bank regulation, Job Guarantee etc...

As to policy I propose:

* George Soros Secretary of State supports ending war on terror anti-Saudi and anti-Isreali views.

* Banning all bank lending except capital development, 0% overdrafts from central bank for capital development lending (agency businesses deliver state funds) and monetarising our entire national debt.

* 100% land value tax on unimproved site value of land (not including buildings and improvements) to replace most taxes. High in central London, low in the countryside! Supply of land fixed – no deadweight loss (unlike income tax discourages people from working!)

* Job Guarantee implement via Bernie Sanders in USA and then at EU Level with EU Job Guarantee and EU Common Treasury. Guarantee every European a job. Hours you want, near where you live. Examples of JG: open source programming, side of a motorway, trim down a row of trees, social care, environmental work, tour guides, teacher assistants, community handyman, mothering as a caring job. Compete away private sector jobs with very bad pay and conditions! Eliminate poverty, unemployment and underemployment. Lower NAIRU as easier to hire employed relative to unemployed buffer. Aforementioned bank regulation with Job Guarantee as stimulus to counter recessionary effect of bank regulation