I would call this a criticism of "blog MMT," or "Twitter MMT," or "MMT 101," rather than MMT as reflected in the professional literature. Of course, "blog MMT" and "Twitter MMT" are oversimplified owing to the limitations of the venue and also the audience. Even Bill and Randy's MMT macro textbook is designed for economics students. It is not aimed at the level of professional economics, who are expected to be familiar with the professional literature about what they are criticizing.So, in the end, all simple theories of causation, like MMT, that suggest one particular variable determines the value of another are untenable in any complex system of mutually interrelated phenomena (Hayek 1967). There are few systems in nature as complex as a modern economy; only if it were possible to write out a complete system of equations describing all those interrelationships, could we trace out the effects of increasing the income tax rate or the level of government spending on the overall price level, as MMT claims to do. But for a complex interrelated system, no direct causal relationship between any two variables to the exclusion of all the others is likely to serve as a reliable guide to policy except in special situations when it can plausibly be assumed that a ceteris-paribus assumption is likely to be even approximately true....
Uneasy Money
What's Right and not so Right with Modern Monetary Theory
David Glasner | Economist at the Federal Trade Commission
“ professional economics, who are expected to be familiar with the professional literature about what they are criticizing.”
ReplyDeleteNo they are not….. I don’t know where you keep getting this….
Matt, I am not an economist but I am a scholar and in every field of scholarship I know of, criticizing something embedded in a professional literature regarding which the person doing the criticizing displays lack of familiarity with the relevant publications carries serious reputational risk. Economics seems to be the only exception and this calls into question the entire field as a serious endeavor.
ReplyDeleteNot under a strictly dialogic methodology….
ReplyDeleteWhere are the Roman Catholics supposed to understand and agree with the Southern Baptist Convention?
Darwinists supposed to understand and agree with Creationists?
These are strictly dialogic factions who advocate for their own theses…
“ Eventually rhetoric, grammar, and dialectic (logic) became the educational programme of the trivium.”
https://en.wikipedia.org/wiki/Liberal_arts_education
You seem to be conflating “familiarity” with “agreement “ or “understanding “
You seem to be consistently implying “well, if they would just familiarize themselves with the MMT literature then they would agree with it”..
No way Jose…. Doesn’t work that way…
MMT critics are familiar enough with MMT and they don’t agree with it…they agree with their own thesis…
So they are employing rhetoric to argue against it…
Liberal Arts education 101….
Science degrees don’t work that way we are trained to test and then make adjustment (katharsis) to a correction (epanorthOsin) then retest…
That is not what these people are trained to do they are trained to employ rhetoric in support of their own thesis so that is what they are doing…
They are “familiar “ with MMT…
Here:
ReplyDelete“ Before they became known by their Latin variations (artes liberales, septem artes liberales, studia liberalia),[3] the liberal arts were the continuation of Ancient Greek methods of enquiry that began with a "desire for a universal understanding."[4] Pythagoras argued that there was a mathematical and geometrical harmony to the cosmos or the universe; his followers linked the four arts of astronomy, mathematics, geometry, and music into one area of study to form the "disciplines of the mediaeval quadrivium".[5] In 4th-century Athens, the government of the polis, or city-state, respected the ability of rhetoric or public speaking above almost everything else.[6] Eventually rhetoric, grammar, and dialectic (logic) became the educational programme of the trivium. Together they came to be known as the seven liberal arts.[7] Originally these subjects or skills were held by classical antiquity to be essential for a free person (liberalis, "worthy of a free person")[8] to acquire in order to take an active part in civic life, something that included among other things participating in public debate”
Where is testing.? Not there..
Where is adjusting as result of testing? Not there…
Where is a correction achieved as result of adjustment ? Not there…,
Where is retest as result of correction?. Not there..,
These people are instead trained to keep advocating for the same thesis using grammar and rhetoric and logic……
You should not be expecting them to act differently…
What is deemed unorthodox can be criticized with impunity.
ReplyDeleteBill Mitchell is probably regarded as a heretic.
Criticizing the work of heretics adds to one's reputation.
Off target, Matt. One can't set up a straw man and attack him and expect to be taken seriously but people that know the literature. This is an informal fallacy taught in Logic 101. Not being familiar with your opponents position or else misrepresenting it knowingly is considered a huge no-no among scholars. This is basic to the dialogical method of debate that has characterized Western liberalism from its outset with the ancient Greeks.
ReplyDeleteAnd there was a Twitter rant by Summers attacking MMT. Was that a huge no-no?
ReplyDeleteWhat kind of genteel world do you live in, Tom?
Lawrence H. Summers
ReplyDeleteCharles W. Eliot University Professor and President Emeritus at Harvard.
"I am all for intellectual diversity and wish that the NYT would give more attention to Marxist scholars like Steve Marglin, whose book Raising Keynes deserves extensive debate, or other left scholars like Tom Palley, Dean Baker or Jamie Galbraith."
"Serious leftist scholars submit their work to peer review, are willing to engage in public debate with their critics and carry out empirical work that others can try to replicate. Not the MMT movement."
https://twitter.com/LHSummers/status/1490424199290273794
Get off your leather chairs and get in the trenches, scholars.
ReplyDeleteWas that a huge no-no?
ReplyDeleteI thought that some of his comments sounded hateful. OK, it was Twitter, but in my view professionals should be very careful about what they fire off on Twitter. Looking at it initially, my first thought was that LS had become unhinged and lost it.
From the MMT POV, Warren reported that in a meeting with then Treasury Secretary Summers, when Warren brought up reserve accounting, Summers said that he was not familiar with it. Well, if you don't understand reserve accounting, how can you hope to understand MMT, so how can you criticize it intelligently? It's absurd.
These conventional economists are out of their league with respect to MMT in that that they do not understand either the requisite accounting and finance. They are stuck in their axiomatic models founded on assumptions (maximization, equilibrium) that don't accord with reality. They don't get that economic activity is embedded in society, which undercuts their framework based on microfoundations (as Keynes pointed out, e.g, fallacy of composition).
Since the journals they regard as worthy of being published in require conformity with the conventional framework, of course MMT economists are not going to get articles published in them. ("Where is your model?") Reviewers would not be able to understand the MMT papers anyway, lacking familiarity with accounting and finance.
In addition, Summers contradicts himself. Summers cites Jamie Galbraith positively and JG is an MMT proponent, which LS should know.
If this were a huge no-no, Mr. Summers would suffer consequences. As would past outbursts from economists who didn't read the literature.
ReplyDeleteBefore the pandemic, I would've believed that violating the Hippocratic Oath was a huge no-no. Instead, those few professionals who upheld the oath were punished.
If these examples don't sum up how academia and the professions are being internally policed, then what does?
“ my first thought was that LS had become unhinged and lost it.”
ReplyDeleteHe did! 😂
“ Warren brought up reserve accounting, Summers said that he was not familiar with it. ”
ReplyDeleteAccounting is a Science degree not a Liberal Art degree…. B.S.Acc.
Summers is Liberal Art degree….
Galbraith is Ivy League too Liberal Art trained…. SK is at a NY state public school I guess similar to a Land Grant institution… no bueno to liberal Art Ivy leaguer…. ie vanity…
ReplyDelete“ One can't set up a straw man”
ReplyDeleteWhat do you mean what Areopagus are you living on they do it ALL THE TIME…
Tom if the Liberal Art methodology worked then we would see it working… it’s not… it doesn’t work … that why we have the Science degree now… since 1860…. man on moon about 100 years later, etc…
ReplyDeleteBreaking news! Lawrence Summers' twitter account has been suspended for "spreading misinformation about MMT"...
ReplyDeleteLOL… No way in hell… they’d probably suspend SK…
ReplyDelete