This is an early sign of informed and open debate based on the MMT framework by up-and-comers. Positive development.
Open Democracy
Is Modern Monetary Theory useful for developing countries?
Open Democracy
Is Modern Monetary Theory useful for developing countries?
Adam Aboobaker and Esra Nur Ugurlu, Ph.D. candidates in the Economics Department at the University of Massachusetts, Amherst
11 comments:
It's extremely useful for developing countries - just as soon as you stop talking about money.
Not one sentence in this entire piece about physical stuff. Development is about physical transformation by labour of elements you have to hand. Government can do that, or private business can do that.
The whole dollar argument is very weak. The issue is one put forward by Fadel - one of power dynamics. Generally governments in these nations are weak compared to private actors. It's consolidating that power base so that resources can be directed that is the challenge.
You have to make stuff with what you have so you can exchange that for investment goods from abroad if needed. But you are far better to invest with what you have. The Job Guarantee ensures you have as much from the current capital as it is capable of creating - from which you have to reserve the distribution between consumption and investment goods.
Having everybody stood idle due to a lack of circulation makes no sense.
Having everybody stood idle due to a lack of circulation makes no sense. NeilW
As if the only alternative to working for wages is to stand idle, eh Neil?
But if standing idle is the only alternative to working for wages then what exists is WAGE SLAVERY, not honest idleness.
Or is slavery not a problem to you, Neil?
But as for developing countries, they could vastly increase the DEMAND for their fiat by allowing everyone to use it and by de-privileging private depository institutions, aka "the banks."
NeilW:Generally governments in these nations are weak compared to private actors.
Yes, that's the basic problem.
The real tragedy is that sometimes the government is strong enough, means well enough, but then it follows the same sort of nonsense-economics that this piece is tinged by - it has a link to their working paper that is a bit better. So the government destroys itself for no reason at all. Brazil, Venezuela, Greece are only some recent cases. Exaggerated imitation of the lunacy of Britain and France or even Sweden, surely with sufficiently strong governments, in the 70s & 80s.
The competent people end up leaving and going to the US to make munnie...
... to make munnie... Franko
Literally in the case of the government-privileged usury cartel while honest people have to EARN money.
They operate the payments and credit system... their work is part of gdp...
The problems in the turd world are REAL not financial...
Few more points. They complain of MMT conflating Marxian unemployment and Keynesian unemployment. I've seen Edward Nell a friend of MMT from way back make this misguided distinction a long time ago. You can only be unemployed in one way - by not having a job and wanting one. Marx, as Bill Mitchell often points out, anticipated Keynes on the failure of demand causing unemployment. And Keynes was certainly aware of and made plans to fight localized, concentrated, structural unemployment that was not caused by lack of total demand.
So they are painting MMT as old-Keynesian aggregate demand boosters, which Keynes himself certainly was not. The Job guarantee is tailor made to cure both Marxian & Keynesian unemployment simultaneously. The JG itself takes care of the "Marxian", the demand it adds takes care of the "Keynesian".
Also they complain about problems with the MMT approach when exchange rates are rising and when they're falling. They can't do both at the same time and the same problems cannot occur at the same time. This is a common and crazy critique.
Similarly they seem to think a CB strategy of buying fx when high and selling low is a good idea. Urp.
The comfortably employed sure have a lot of complaints.
.. their work is part of gdp... Franko
So is the work of arsonists.
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