The Deficit Myth: a review — Chris Dillow

Should-read.

Chris Dillow is a Marxian economist. Like Michael Roberts is moderately familiar with the MMT literature. Both offers critiques of MMT from the Marxian perspective. The critique of Roberts is more from the macro side and in my view has weaknesses although it is worth responding to as an intelligent and moderately informed criticism.

Chris Dillow's critique is from the side of political economy, which is different from contemporary macro. He socres points with respect to Stephanie's presentation of MMT in The Deficit Myth and also to the MMT literature in general based on its approach limited to the conventional approach to economics.

This conventional approach ignores that the subject matter of economics is embedded in a social, political and economic system as a whole and is strongly influenced by the structure and dynamics of the system. This system is often called a "socio-economic" system, but that ignores the political component and is therefore deficient.

The parts cannot be adequately analyzed independently of that whole and in isolation from it since social and political factors are causal factors in economics and especially macroeconomics since macro is oriented toward policy formulation. Of course, as Marx observed, economic infrastructure is also systemically foundational. These aspects of the system function like fingers of a hand.

I would say this critique applies to MMT presentation, with the notable exception of Bill Mitchell, who is outspoken as a political economist and is "impolitic." I think that the rest of the MMT economists look with both economists eyes and so the eyes of political strategists. They avoid being impolitic.

 I would say further that I suspect that all the MMT economists get this critique— how could they not with outspoken Marxian economist Michael Hudson as an ally, at the very least. But they are certainly aware of Kalecki, too. So I doubt that the MMT economists overlook this. I would suspect instead that they would like to influence the political debate and being associated with "Marx" would be a disadvantage.

The MMT JG is especially vulnerable to attack by the ownership class as "socialism," if not closet Marxism. It addresses the issue that Kalecki raised about the political implications of unemployment without specifying him. Advertising this in the analysis that would just confirm it. I am somewhat surprised that Chris Dillow didn't pick up on that.

Anyway, I suggest you read the review "We" need to talk about class  structure and networking, class power, in particular with respect to institutional arrangements, and networking based on class. Underlying is class heritage that results in an unequal structure across generations that undermines equal opportunity in life.

In my view it is time to be bold while not getting reckless. But I don't think I need to tell the MMT cohort in general to be bold. The activist base is pretty active.

Stumbling and Mumbling
The Deficit Myth: a review
Chris Dillow | Investors Chronicle