Good summary of MMT that anyone should be able to understand.
Richard Murphy (as I understand his position) does not think that a job guarantee is required to ensure full employment, while MMT economists claim that it is essential. This needs unpacking.
It is generally agreed that full employment is of the highest priority socially, politically and economically. ("You are against full employment? Really? Why?")
In the US, the Humphrey-Hawkins Full Employment Act mandates it, while the UN General Assembly Declaration of Human Rights enshrines it as a right.
However, there is disagreement among economists and policy makers over the definition of "full employment."
MMT economists propose a strict definition in terms of a universal unconditional job offer for those willing and able to work at a living wage in the society. MMT economists hold that this provides a buffer stock of employed in contrast to the buffer stock of unemployed under the current policy determined by the assumptions of NAIRU for controlling inflation.
The question then becomes is there any other way of achieving actual full employment along with sustainable growth and stability of prices rather than a notion of full employment that is defined down such as under NAIRU?
If there is one that provides a remedy for inflation while maintaining sustainable growth and relative price stability as MMT economists claim the MMT JG does, then the MMT JG is not "essential" to MMT.
I have not seen a case made for an alternative to the MMT JG to achieve actual full employment consistent with maintaining sustainable growth and controlling the stability of the price level within reasonable limits.
Proponents of a UBI argue that this is a solution. But MMT economists responds by claiming that a UBI would be inflationary.
A targeted basic income guarantee might, but this would involve idling people that might prefer to work and likely would if given the opportunity, thereby disadvantaging them and also idling available resources that could be brought into use, which is inefficient (wasteful) and also reduces effectiveness.
The way I would put it is similar to the way that Randy Wray explains the claim that "taxes drive money." He holds that MMT assumes taxation is a sufficient condition to drive a currency, but not that it is a necessary condition. The same can be said for the MTT JG. It is a sufficient condition to achieve actual full employment defined as work for all that can and wish to work, but that it is not a necessary condition for this.
The questions become 1) is there a necessary condition that is operative and is there at least one other sufficient condition. Affirmative claims require rigorous justification, of course.
Tax Research UK
Mythbuster: 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
18 comments:
("You are against full employment? Really? Why?") Tom Hickey
Note the conflation of engaging in work with being a wage slave.
But suppose you had a family farm or business that was stolen by some legal means and the new owners offered you a minimum wage job there?
Nothing wrong with that, eh Tom?
Meanwhile, those who insist on wage-slavery for their victims also insist on continuing, if not INCREASING, privileges for the usury cartel, aka "the banks."
But MMT economists responds by claiming that a UBI would be inflationary. Tom Hickey
But paying people to waste their time ISN'T inflationary?
Besides which, some price inflation is good as long as it is produced in an ethical manner (e.g. via an equal Citizen's Dividend).
11. Thou shalt not question thy 'Protestant' work ethic.
More and more production will become "labor-less" so then what? UBI is the way to go.
Definition of what work is will change.
Definition of what people should do with their lives will change.
“ Definition of what work is will change”
LOL
If the reality doesn’t fit the Theory then change you have to change reality... ie textbook Liberal Art method 101...
Never adjust the Theory!!
Mike Norman: More and more production will become "labor-less" so then what?
Been happening for centuries. People have been saying this for centuries. Where's the techno-pie in the sky?
UBI is the way to go.
No, it isn't. UBI is a dumb idea that has never, will never, can never work.
If all work is done by the magic robots - why are we charging money for their bounty?
No, there couldn't be people who would OVERcharge for the product of machines. Who keep the product of the machines and that of the current work force almost all for themselves.
That just couldn't be. Nobody could be such a meanie. Nobody could be so dumb as to fall for it: Letting themselves be charged for what should be free, while paying through the nose for work they do themselves but receive pittances for.
After all, they just got their UBI = saddle, stirrups and spurs that they put on themselves to ride themselves off into the sunset.
“If the reality doesn’t fit the Theory then change you have to change reality... ie textbook Liberal Art method 101...”
LOL!
The REALITY is that the definition of what is paid work has changed many times in history.
No reason to think that that will change just because of automation here and there.
If all work is done by the magic robots - why are we charging money for their bounty?
1. Because their bounty is a commodity, not a gift.
No money, no bounty for you.
2. Because their bounty is legally theirs.
Selling bounty that isn't yours to begin with, is against the law.
Hope that helps.
If reality doesn't fit... change your perception.
If reality isn't stylish enough, not meaningful, or too unpleasant... you get the drill.
1. Because their bounty is a commodity, not a gift.
No money, no bounty for you.
Circular argument. The idea is that the magic robots provide everything for nothing. If so, charging for robot bounty, making it a commodity rather than a gift is lunacy. If it is free, then the money is just a sham. The gov gives everyone $, everyone gives $ to the government owned robots. Why bother?
But charging for it/ commodifying it makes it very easy to corrupt, "modernize", by having a public-private partnership monopolize the robots, where a bunch of capitalists work it so they get all the money and dole out as little service as possible. That's what the worldwide wave of privatization was about. Charge $ for stuff that used to be free, so a few parasites can get rich by making the suckers pay through the nose for inferior goods and services. And the suckers deserve it, just as they deserve what they get if they fall for the UBI con.
2. Because their bounty is legally theirs.
Selling bounty that isn't yours to begin with, is against the law.
Whose? The robots? Ok, if they protest they are workers, sign them up for the MMT communist party. If you mean the capitalist robot-owners, then that's the world we live in. Parasites own the machines/robots and use them to enslave everyone else. If the magic robots are owned by the government, we are back to #1 - charging for them is lunacy. Which in turn shows that the UBI is a worthless idea. It could only work if there are magic robots, and in that case it is just a sham, a decoration that serves no purpose, but since it presupposes money for robot bounty, is very dangerous and easy to corrupt.
Of course I am talking about what the law should be. So obscure citation of what it is - is beside the point. Or have you become a right-wing defender of capitalists?
The robots should be owned by The People. And they should perform their magic for free. Charging anything (beyond that of a nice squirt of WD-40) for the kind robot is a trap, a con game.
The idea is that the magic robots provide everything for nothing.
The idea is that everyone requires an income in order to purchase commodities. That income can come from a job, a UBI, an inheritance, etc.
If you mean the capitalist robot-owners, then that's the world we live in.
Yes. Did you believe I was referring to a make-believe world?
Proponents of UBI, JG are thinking about improving the world we live in.
The robots should be owned by The People. And they should perform their magic for free. Charging anything (beyond that of a nice squirt of WD-40) for the kind robot is a trap, a con game.
We live in a world where the average person expects reciprocity, and you want to foist a gift economy on them. Believing this is a con is the gentlest reaction you will get. Not even Trump could sell that one.
Or have you become a right-wing defender of capitalists?
I'm telling you what is, as opposed to what should be. I've followed this blog, on and off, for over a decade. In that time, many words have been spilled on what "should" be. MMT, JG, UBI, capitalism, neoliberalism, police violence, you name it. What has it accomplished?
The chattering classes are talented at spilling words, and god-awful at breaking people's ignorance. With that kind of opposition, capitalism doesn't need any defenders.
The idea is that the magic robots provide everything for nothing.
The idea is that everyone requires an income in order to purchase commodities. That income can come from a job, a UBI, an inheritance, etc.
Income can't come from a UBI, because a UBI cannot work. Never has, never will. It is logically impossible essentially, because it violates reciprocity too much.
I / we were talking about the techno-utopia situation, where robots could do everything, My point is that even if we had that, charging money for the robots is a horrible idea, because that is basically the world we have right now. Another way that the UBI solves nothing, but creates problems.
We live in a world where the average person expects reciprocity, and you want to foist a gift economy on them. Believing this is a con is the gentlest reaction you will get. Not even Trump could sell that one.
Quite confused on basic definitions. Reciprocity is the essence of a gift economy. The concept and phrase "gift economy" comes from Marcel Mauss, and that's what he said. Charging for magic robots violates reciprocity, it's like charging for gravity because by hypothesis it can be done for free - the robots are magic. Not charging is the reciprocal thing, because there is nothing done to warrant reciprocity.
The reaction I would get would be understanding that I am right, not running a con game. Because I am explaining what is and what isn't a con game. Most people aren't emotionally attached or repelled by a JG or UBI, so they can understand which is a moral necessity and which is a con game once it is logically explained. But some people get so attached to UBI that they can't grasp the bait and switch, the con.
"Expecting" reciprocity has nothing to do with anything - people insist on reciprocity because it works - and the JG uses that correct cognition. The UBI spurns it - and while it sounds nice to suckers, it is just another means to enslave those who are too dumb to understand that we cannot all be masters. "Protestant work ethic" has nothing to do with a JG. Reciprocity, a JG etc allow people to choose work or leisure. Slavery, modern wage-slavery capitalism without a JG, UBI don't allow people a choice.
Or have you become a right-wing defender of capitalists?
The "theirs" or "yours" in "Because their bounty is legally theirs. Selling bounty that isn't yours to begin with, is against the law." is obscure. Who does it refer to?
If it is the government, the people, whatever, it should be basically free as I explained. If it isn't then don't you realize you are praising an economy with capitalist lords and everyone else a serf?
That's what happens if one doesn't follow logical arguments and define and use concepts correctly. But I am not doing that sort of chattering, and I am satisfied with the progress. It has accomplished a great deal. MMT had been very successful in breaking people's ignorance, not "god-awful".
Reciprocity is lost when someone gets something for nothing, and when other people observe this. Welfare payments are a case in point.
A gift economy would collapse from free ridership because people don't understand that they need to volunteer their time to sustain it. Reciprocity exists, but few will see it since they are used to the exchange of money.
A UBI can be made to work with help from price controls. The existing welfare system would also benefit from such controls.
Political reality won't allow for a JG. Workers have to be kept desperate. We might get a UBI, but disguised as a Trojan horse to dismantle and destroy the welfare state.
"Theirs" refers to owners.
"Yours" refers to people in general, and owners in particular.
MMT is of no interest to the general public. There's a small percentage of the population that can grasp the larger picture; the rest don't get the implications.
Without an independent grassroots political movement, MMT is a dead letter.
Going to the beach to surf could be defined as work. Bill Mitchell has used that example numerous times.
Where's Tom and Kaivey?
They haven't posted in awhile.
Are they dead?
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