An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Thursday, November 5, 2020
Is Modern Monetary Theory Pathological Mendacity? —Andrew Moran
Every once in a while I come across criticism of MMT that is over the top funny. Here's one for the record. ROFLMAO.
Btw Tom you and Bill both self identify as libertarians too so you two should be in agreement with this dude ..
Bill and I are libertarians (small l) of the left. This guy is a right Libertarian (capital L).
There's a big difference.
What is the difference?
Short answer: Right Libertarians don't believe society is a thing; that is, society is just an aggregation of individuals. Left libertarians do think that society is a thing, in the sense of a system in which the whole is great than the sum of its parts owing to the relationships and dynamics.
It's related because most of the people on the right think that government has no money other than taxpayers' money. They confuse their preference being followers of Austrian economics, with the reality of the current monetary system or if they realize it, then they predict disaster because of their Austrian assumptions.
Of course, there are many on the left that buy into similar assumption too, but not based on Austrian economics. Marxians assume that gold is real money too, based on their reading of Marx.
There are people on both right and left that understand the reality but they are few and far between its seems.
There is another possibility that affects people in finance who understand reality and also understand that it is not to their individual benefit financially for others to understand it, so they attack it.
Many people are influenced by ideology and propaganda and are wearing blinders when it comes to viewing reality. And lot of this has to do not with facts but with values. Values shape how one sees reality. That's why people live in different worlds, so to speak.
Values and assumptions about criteria determine world views that function as the conceptual lenses through which people view the real world, and the real world appears differently through different lenses and the view through the lens can be distorted by the lens. This is foundational in cognitive-volitional-affective bias.
I would say two major ideological stumbling blocks are Maggie Thatcher's "there is no such thing as society," and "government has no money but taxpayers' money." These are mantras on the right, but they also affect a great many people in the center and on the left.
“ most of the people on the right think that government has no money other than taxpayers' money. They confuse their preference being followers of Austrian economics,”
Bullshit... I have many “out of money!” friends on the right who have no idea what Austrian Economics is...
'I have many “out of money!” friends on the right who have no idea what Austrian Economics is...
That is true. The right is both conservatives and (right) Libertarians. It's the Libertarians whose views are based on Austrian economics.
Political conservatives are (probably) mostly fiscal conservatives that just believe in sound money and the Treasury view as being commonsense owing to the government as firm or household analogy regarding debt and view politicians as fiscally profligate unless reined in by rules like the debt ceiling. But I have almost no contact with people on the right so that's a guess.
It's the Libertarians whose views are based on Austrian economics. Tom Hickey
Needlessly expensive fiat is NOT libertarian since it favors private interests such as gold miners, the banks, and those who seek risk-free real gains from fiat hoarding.
You've been duped, Hickey; the Austrians are NOT libertarian but a form of fascism.
BTW, I am not claiming that all Libertarians understand Austrian economics. Rather, almost all Libertarians are influenced by Austrian economics as one of the foundations of Libertarianism, which is heavily dependent on the work of, e.g., Mises and Hayek, who were Austrian natives, as well as Rothbard who was an Austrian economist but not an Austrian native. How much they actually understand about it is another matter.
There were different waves in the development of Austrian economics, e.g., 1) Carl Menger, Eugen Böhm von Bawerk, Friedrich von Wieser as representative, 2) Mises and Hayek as representative, and 3) Murray Rothbard, Hans-Hermann Hoppe, Joseph Salerno as representative. (Pace those not mentioned).
Austrian economics is the foundation of an intellectual movement or political theory (social and political philosophy). I don't know how much economics adherents to the world view know, but they are heavily influenced by the world view.
The link between 1) right Libertarians and anarcho-capitalists and 2) political conservatives. They both generally favor fiscal conservatism and sound money. As a result they can unite in political coalitions, even though some of their other strongly held beliefs are not very compatible. Traditional conservative are for small government but strong government. Right Libertarians are for small government (night watchman) or no government, and they think that strong government is the problem even if it is small but controls the power.
These are alternatives on the social and political scale that tend to be on the right. Conservatives occupy the authoritarian quadrant and Libertarians the anarchist.
Where one falls on the political compass influences one's approach to economics, finance, and governance.
As far as I can tell, there are very few proponents of MMT on the right in either quadrant, even though descriptively (institutionally) MMT is "policy neutral." But MMT macro theory does prioritize full employment which is a value that falls in the left half of the political compass.
MMT also favors the increased policy space of a floating rate monetary system, while those on the right prefer a fixed rate system with either a real good anchor for the currency, fiscal rules that circumscribed and limit policy space, or free banking. In other words, where government currency issuance is limited thereby circumscribing policy space with a view to maintaining price and currency stability as the priority.
They [libertarians] are anti-statist, pro-market. pp
No since they would use the power of the State to artificially increase the demand for gold by using it as or to back fiat. That's not pro-market; that's pro-market manipulation. It's also pro-bank since it would make fiat too expensive for all citizens to use.
And they certainly expect the State to protect their claims to property - however absurd.
The only true anti-state purists are the anarchists but their problem is they are contrary to the Bible.
They believe in commodity money - gold coins, tokens, etc. What's the point in having a piece of paper saying you own gold, or is exchangeable for gold. The state always reneges on its word.
The State should not make such promises in the first place since they violate equal protection under the law in favor of private interests such as gold owners.
n other words, where government currency issuance is limited thereby circumscribing policy space with a view to maintaining price and currency stability as the priority. Tom Hickey
You've been duped Hickey; the Austrians adore actual monetary DE-flation so they can accrue risk-free real gains from price deflation for their fiat hoards.
They would also enslave the young to the old via wage-deflation via a money supply that does not keep up with population growth.
And they're pretty loathsome people in person too - not surprising for money lovers.
“so spending does not need to be constrained by the principles of Accounting 101”
ReplyDeletelol ask this libertarian unqualified art degree moron what basis of accounting the federal govt uses and I GUARANTEE he will not know...
AND Basis of Accounting is not covered in Accounting 101 .... 101 is introductory it uses simple Cash Basis....
Get some training....
Btw Tom you and Bill both self identify as libertarians too so you two should be in agreement with this dude ...
ReplyDeletemen·dac·i·ty
ReplyDelete/menˈdasədē/
noun
noun: mendacity
untruthfulness.
(Had to look it up....)
Btw Tom you and Bill both self identify as libertarians too so you two should be in agreement with this dude ..
ReplyDeleteBill and I are libertarians (small l) of the left. This guy is a right Libertarian (capital L).
There's a big difference.
What is the difference?
Short answer: Right Libertarians don't believe society is a thing; that is, society is just an aggregation of individuals. Left libertarians do think that society is a thing, in the sense of a system in which the whole is great than the sum of its parts owing to the relationships and dynamics.
But there are “out of money!” people on the left and the right... so how does “left” and “right” help delineate the problem?
ReplyDeleteSo you are saying that if someone says they don’t think there is any such thing as society this somehow makes them also think we are “out of money!”?
ReplyDeleteI don’t see the causality...
I’m right of fascism and I don’t think we are “out of money!”... you are left of communism and you don’t think we are “out of money!” ...
ReplyDeleteSo how is “left” or “right” making these morons of both sides think “we’re out of money!”?
It’s not related...
I just sent a message to Liberty Nation suggesting that Andrew Moran changes his name to Moron.....:-)
ReplyDeleteAnarchists believing we're out of money... I don't get it either.
ReplyDelete"I just sent a message to Liberty Nation suggesting that Andrew Moran changes his name to Moron.....:-)"
ReplyDeleteWay to go, Ralph!
It’s not related...
ReplyDeleteIt's related because most of the people on the right think that government has no money other than taxpayers' money. They confuse their preference being followers of Austrian economics, with the reality of the current monetary system or if they realize it, then they predict disaster because of their Austrian assumptions.
Of course, there are many on the left that buy into similar assumption too, but not based on Austrian economics. Marxians assume that gold is real money too, based on their reading of Marx.
There are people on both right and left that understand the reality but they are few and far between its seems.
There is another possibility that affects people in finance who understand reality and also understand that it is not to their individual benefit financially for others to understand it, so they attack it.
Many people are influenced by ideology and propaganda and are wearing blinders when it comes to viewing reality. And lot of this has to do not with facts but with values. Values shape how one sees reality. That's why people live in different worlds, so to speak.
ReplyDeleteValues and assumptions about criteria determine world views that function as the conceptual lenses through which people view the real world, and the real world appears differently through different lenses and the view through the lens can be distorted by the lens. This is foundational in cognitive-volitional-affective bias.
I would say two major ideological stumbling blocks are Maggie Thatcher's "there is no such thing as society," and "government has no money but taxpayers' money." These are mantras on the right, but they also affect a great many people in the center and on the left.
I would say two major ideological stumbling blocks are Maggie Thatcher's "there is no such thing as society," Tom Hickey
ReplyDeleteExcept for the banks, a government-privileged private credit for usury cartel.
and "government has no money but taxpayers' money." ibid
Pure hypocrisy since Central Banks can and do create fiat for private interests when ALL fiat creation should be for the general welfare ONLY.
And, btw, the MMT gang would increase privileges and fiat creation for private banks.
“ most of the people on the right think that government has no money other than taxpayers' money. They confuse their preference being followers of Austrian economics,”
ReplyDeleteBullshit... I have many “out of money!” friends on the right who have no idea what Austrian Economics is...
They probably never even heard of Austrian Economics...
ReplyDelete'I have many “out of money!” friends on the right who have no idea what Austrian Economics is...
ReplyDeleteThat is true. The right is both conservatives and (right) Libertarians. It's the Libertarians whose views are based on Austrian economics.
Political conservatives are (probably) mostly fiscal conservatives that just believe in sound money and the Treasury view as being commonsense owing to the government as firm or household analogy regarding debt and view politicians as fiscally profligate unless reined in by rules like the debt ceiling. But I have almost no contact with people on the right so that's a guess.
I think you have that right...and I have a lot of contact with people on right....
ReplyDeleteStill just a corellation not any causation...
The narrative isn't Austrian... there are few households in the US who could be considered Austrian.
ReplyDeleteIt's the Libertarians whose views are based on Austrian economics. Tom Hickey
ReplyDeleteNeedlessly expensive fiat is NOT libertarian since it favors private interests such as gold miners, the banks, and those who seek risk-free real gains from fiat hoarding.
You've been duped, Hickey; the Austrians are NOT libertarian but a form of fascism.
BTW, I am not claiming that all Libertarians understand Austrian economics. Rather, almost all Libertarians are influenced by Austrian economics as one of the foundations of Libertarianism, which is heavily dependent on the work of, e.g., Mises and Hayek, who were Austrian natives, as well as Rothbard who was an Austrian economist but not an Austrian native. How much they actually understand about it is another matter.
ReplyDeleteThere were different waves in the development of Austrian economics, e.g., 1) Carl Menger, Eugen Böhm von Bawerk, Friedrich von Wieser as representative, 2) Mises and Hayek as representative, and 3) Murray Rothbard, Hans-Hermann Hoppe, Joseph Salerno as representative. (Pace those not mentioned).
Austrian economics is the foundation of an intellectual movement or political theory (social and political philosophy). I don't know how much economics adherents to the world view know, but they are heavily influenced by the world view.
The link between 1) right Libertarians and anarcho-capitalists and 2) political conservatives. They both generally favor fiscal conservatism and sound money. As a result they can unite in political coalitions, even though some of their other strongly held beliefs are not very compatible. Traditional conservative are for small government but strong government. Right Libertarians are for small government (night watchman) or no government, and they think that strong government is the problem even if it is small but controls the power.
These are alternatives on the social and political scale that tend to be on the right. Conservatives occupy the authoritarian quadrant and Libertarians the anarchist.
Where one falls on the political compass influences one's approach to economics, finance, and governance.
As far as I can tell, there are very few proponents of MMT on the right in either quadrant, even though descriptively (institutionally) MMT is "policy neutral." But MMT macro theory does prioritize full employment which is a value that falls in the left half of the political compass.
MMT also favors the increased policy space of a floating rate monetary system, while those on the right prefer a fixed rate system with either a real good anchor for the currency, fiscal rules that circumscribed and limit policy space, or free banking. In other words, where government currency issuance is limited thereby circumscribing policy space with a view to maintaining price and currency stability as the priority.
They are anti-statist, pro-market.
ReplyDeleteUnlike conservatives, they keep their noses out of your bedroom.
They [libertarians] are anti-statist, pro-market. pp
ReplyDeleteNo since they would use the power of the State to artificially increase the demand for gold by using it as or to back fiat. That's not pro-market; that's pro-market manipulation. It's also pro-bank since it would make fiat too expensive for all citizens to use.
And they certainly expect the State to protect their claims to property - however absurd.
The only true anti-state purists are the anarchists but their problem is they are contrary to the Bible.
They believe in commodity money - gold coins, tokens, etc.
ReplyDeleteWhat's the point in having a piece of paper saying you own gold, or is exchangeable for gold. The state always reneges on its word.
The State should not make such promises in the first place since they violate equal protection under the law in favor of private interests such as gold owners.
ReplyDeleteIt was a bygone era. These were institutional arrangements that were unsustainable.
ReplyDeleteThey were never ethical to begin with and obsolete since Christ said "Then render to Caesar what is Caesar's" and the Talley Stick (1100 AD).
ReplyDeleteNext time I encounter a libertarian, I'll tell them their values are unethical. That should make them question their economics.
ReplyDeleten other words, where government currency issuance is limited thereby circumscribing policy space with a view to maintaining price and currency stability as the priority. Tom Hickey
ReplyDeleteYou've been duped Hickey; the Austrians adore actual monetary DE-flation so they can accrue risk-free real gains from price deflation for their fiat hoards.
They would also enslave the young to the old via wage-deflation via a money supply that does not keep up with population growth.
And they're pretty loathsome people in person too - not surprising for money lovers.