Carlos takes a look at Marx’s economic philosophy through an MMT Lens and comes up with his own unique and updated description – fiat socialism
As has already been explained in the second section of this article, such direct ownership of the means of production is an essential condition if we want to control the economy in a collective way inside of the gold standard. This is because in this scenario, allowing the private ownership of the means of production concentrates the spending capacity in the hands of the minority who control the means of production, while the working class can’t hope for a bigger spending capacity beyond the level of subsistence.
What happened when fiat money was introduced? As we have seen, the state that issues its own money is no longer dependent on any kind of restriction in spending its own money. In this scenario, the private sector can only save in the national currency if the state goes into public deficit, in other words, if the state decides to spend more than it collects through taxes. In this scheme, the “[…] collective or state administration of the production means and of the distribution of goods” doesn’t have to imply the direct ownership of the means of production. This could stay in private hands, because the level of accumulation in terms of national currency in hands of the owners of the means of production is determined by the state through its fiscal policy. Therefore, the administration of the means of production and the distribution of the goods is done by the state, but in an indirect way. This means that the owners of the means of production can only appropriate the amount of money that the state allows them through the collection of taxes, and this also means that the state can spend as much as it considers necessary, regardless of the level of money accumulation in the hands of the owners of the means of production (money is no longer a scarce commodity).
The Gower Initiative for Modern Money Studies.
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