Review: 'The Deficit Myth' – two wrongs don't make a right — Adam Booth

It should be stated from the outset that Kelton (like Keynes) is not a socialist, but a liberal. There is not one mention of socialism throughout the entirety of The Deficit Myth. Similarly, at no point does the author suggest that capitalism should be replaced or overthrown.

Indeed, the title of Kelton’s book gives the game away. Her aim is to argue against austerity, not to fight for socialism. Her target audience is not a radical one, but a liberal one. Like Keynes, she is looking to convince the elites, policymakers, and intellectuals, not workers and youth.

Usually I don't link to criticism of MMT that doesn't advance the debate, but in this case other relevant issues are also involved, namely reaching an audience that so far has resisted MMT when adapting the MMT viewpoint would, or could at least advance, their goals. Many don't yet seem to grasp this, so further education is needed.

Ultimately, the question of reform turns on how to get from here to the "there." "There" needs to be defined and a plausible path to in proposed as an action plan.

MMT never promised to create a socialist economy, so the critique that Stephanie Kelton doesn't deal with this is moot. This is beyond the scope of MMT.

A socialist system that uses "money" has to deal with it, too. MMT actually provides the analytic and theoretical basis for that in viewing currency as a public utility and subject to public policy.

There are various types of both capitalism and socialism as economic systems, and feudalism as well. To the extent that currency plays a role in them, MMT provides the basis for dealing with this issue in any type of monetary production economy.

The review completely misses the implications for a JG in transforming a capitalism based on "sound finance" and favoring capital as a factor of production over labor and the environment. MMT provides the basis now for transforming neoliberalism into social democracy as a step toward democratic socialism.

This trajectory means moving from favoring capital as the necessary condition for growth to integrating all factors of production, recognizing that the economy is a subsystem of the larger system, society, and prioritizing people's welfare over private profit.

The post may make some Marxists happy but it offers little toward advancing the debate. "Revolution" is a tactic that leaves many questions open. It is not an action plan.

Still this point of view is increasingly shared by some, and to gain political traction with progressives,  especially "workers and youth," MMT strategy is going to have to take these constituencies into account, which to a degree is already happening.

See, for example, the following bog posts by Bill Mitchell:

• Reducing income inequality
• There is a class warfare and the workers are not winning 
•  Massive real wage cuts will not improve growth prospects
• The origins of the economic crisis.

In Defense of Marxism
Review: 'The Deficit Myth' – two wrongs don't make a right

Adam Booth

"Communist" China is no exception after opening up and liberalizing, which some view as overly capitalistic in its effects.

SCMP
China’s university students escape online to rail against the nation’s growing inequality

Sidney Leng