Richard Murphy — Fisking Martin Wolf on modern monetary theory

I suspect Wolf chose to get this wrong, deliberately. His narrative does not work if he noted correctly what MMT said.

But his real disagreement is that whilst MMT is correct (subject to his own misconceptions) he thinks the policy implications are wrong.

Nice smackdown, if a smackdown can be considered nice.

Richard Murphy concludes:

Wolf has conceded MMT is right. Now he needs to accept the consequences. Including that democracy by and for the people should prevail.

To this I would add that representative democracy can only work if the electorate and the those they elect to represent them are properly informed. In a society in which wealth, influence, power and knowledge are unevenly distributed, with the top enjoying a disproportionate share of these, political outcomes will be biased in that direction.

Those at the top will therefore do what is in their considerable power to maintain the status quo by controlling the narrative. The narrative is now shifting with understanding of MMT proliferating to the extent that VSPs can no longer retain their credibility by denying the evident. Therefore, the narrative is beginning to shift away from attacking MMT. after having failed with ignoring it, toward blunting it. This can be read as the social and political subtext of Martin Wolf's piece, which is ostensibly chiefly economic and financial.

Tax Research UK

Fisking Martin Wolf on modern monetary theory

Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum