Bill Mitchell — The provenance of the Job Guarantee concept in MMT

As the public scrutiny of the body of work we now refer to as Modern Monetary Theory (MMT) widens there is a lot of misinformation abroad that distorts or otherwise undermines what has been done to date. Most, but not all the misinformation or emphasis comes from those who attack our work. Their criticisms usually disclose an incomplete understanding of where MMT came from and what the core propositions and logic are. They stylise, usually using terms and constructs that are present in mainstream thinking, but inapplicable to an MMT way of thinking, and end up spitting out things like ‘printing money’ etc, which they think represents a devastating rejection of our work. As part of my own work, and I do this in liaison with Warren Mosler, I am interested in documenting the train of events that led to what we now call MMT. I love history and think it is very important in helping us understand things. So today I am continuing to examine archives to trace the provenance of key MMT concepts. And I am continuing to document the idea of a Job Guarantee, which is central to the MMT framework, despite many who claim to be MMTers thinking otherwise. I have noted in the recent press, claims that the origins of the buffer stock employment approach that became the Job Guarantee was the work of Hyman Minsky. Nothing could be further from the truth as you will see. It is important, in my view, to make the provenance very clear and that is what this blog post is about....

Essential reading (higher category than "must-read"). The MMT JG is probably the most misunderstood aspect of MMT. Hence, it is also the most mischaracterized.

It is a BUFFER STOCK (Bill Mitchell) based on an EMPLOYER OF LAST RESORT (Warren Mosler).

It is not Keynes. It is not Minsky. It did not come from Post Keynesianism. 

The BDE/ELR concept is original to MMT, being attributable initially to Mitchell and Mosler independently of each other. They worked out the together to put flesh on the bare bones. 

Randy Wray subsequently pointed out the similarity with Minsky, but the concept of a JG that Minsky proposed and the concept of the MMT JG are different.

The point is that:

1. The concept of a Job Guarantee that is now core MMT was entered into the discussion at that time by Warren Mosler (ELR) and myself (BSE). This was the provenance of the concept within MMT.

2. Minsky was never mentioned. Only his former PhD student, Randy Wray, once exposed to the BSE/ELR ideas, noted some overlap between the BSE/ELR approach and Minsky’s own, earlier ideas. But that was well into the PKT debate about the concept.

3. Anyone with knowledge of the history and the beginnings of the MMT work would not reasonably say that the reason that MMT considers a Job Guarantee to be an essential part of the body of work was due to anything that Hyman Minsky had written or said.
It is important to render history as accurately as we can.

This blog post is a key document of MMT on this matter. Bill is in the process of documenting the history of MMT, and I think it is safe to assume that this will eventually result in a formal document as an article or book. In the scholarly world, provenance is of the highest importance, and Bill documenting MMT history will be valuable in establishing priority. In the meanwhile, here it is.

Bill Mitchell – billy blog
The provenance of the Job Guarantee concept in MMT
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia