This provocative (in the sense of thought provoking) comment was posted on the blog yesterday and I can only apologise to Andrew Sayer and Kevin Morgan of Lancaster University, who offered it, for not getting to read it until late in the day due to other commitments. I found what they had to say extremely useful, and I am accepting the challenge to think hard that they set. Comments are welcome, and today I may be around to moderate more often:
Worth a read.
The problem with understanding MMT is realizing what "a new and different lens" for looking at finance and the economy, as well as their relation to society through institutional arrangements, which are determined arbitrarily, and policy choices, which are political.
All thinking that involves understanding is model-based. A descriptive proposition is a conceptual model of a putative state of affairs that can be compared with the fact that it models to determine its truth value. Descriptive propositions that are elementary involve objects, properties, relations, and classes that are logical maps expressed in symbols that involve different levels of abstraction. In explanation, general propositions articulate developed models of systems. Science is a methodology for doing this rigorously, and formally to the extent practical. But everyone has an intricate model that entails a world view in terms of which information is gathered, processed and used.
While MMT is not a model that embodies a world view conceptually, it does entail a particular view of the world with respect to economics as a field and in relation to anthropology (creditary system as historical), sociology (economic value as a subset of social value), and politics (public purpose). MMT is chiefly an institutional model that is based on how a particular system is organized, that system being the modern monetary system based on chartalism and a floating rate regime, with all this implies.
This is quite a different foundation and starting point from conventional economics and the contemporary "common sense" (naïve) viewpoint. Hence, a revolution in thinking is required in order for MMT to be properly understood and fairly critiqued. Change a major piece of one's world view is a daunting transformation for many, especially when this has far-reaching implications for one's overall world view, including possibly one's ideology. Naturally, there is resistance. But reading comments on Stephanie Kelton's new book, The Deficit Myth, for example on Twitter, some people are experiencing a change in gestalt that results in their seeing the world in a new way, and sometimes this is opposite to their former way of seeing.
What is required for MMT to take hold is nothing less than a cultural shift. It will require a "popcorn" effect of "ah-ha" experiences as people change lenses. I well recall this happening to me one day in interacting with Waren Mosler on his blog when he was taking comments there and very kindly responding to them. At the time, I realized he was using a different lens and to understand MMT I had to "grok" that lens, which is used to create a conceptual model as a gestalt. This was not difficult, since being trained in philosophy, that is what I do as a day job. But I think for many this will be a stretch until MMT becomes a cultural meme. Unfortunately, there is also a lot of misunderstanding that is contributing to the construction of this meme.
The language of 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
3 comments:
Once MMT becomes a meme, the public will have zero understanding of it. Just as they have zero understanding of mainstream economics. At that point, it'll be too late to educate.
Where does the liberal education methodology refer to a “lens” figure of speech as part of it?
There is “thesis” “anti thesis” “dialogue” and “synthesis”....
There is no “lens”...
Rather than lens think looking at the bovine from the smiley end, rather than mainstream economics which prefers the others end - hence why their analysis is full of BS and bollocks.
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