The contribution of the historical dimension to a theory, monetary or otherwise, is undoubtedly not sufficient in itself to demonstrate the correctness of this theory. But it does shed light on the underlying dynamics and the way in which they are articulated. It helps to identify the chains of causality that serve as a basis for the construction of a coherent body of theory, and it helps to eliminate arbitrariness in reasoning. It also helps to falsify certain ideas, such as the idea that bartering preceded the appearance of money, or that the market and real exchange predate money.Exploring the societal, cultural and institutional history and foundations of money-use.
The main objective of this article is to show that MMT (Modern Monetary Theory) is based on solid historical facts and on the use of logic. In particular, it explains that coercive power is absolutely necessary for the emergence of monetized societies, and that the market is an epiphenomenon of the State, while unemployment is a social construction of the State, which itself has a monopoly on currency. Finally, he presents the specificity of MMT thinking compared to all other monetary approaches, taking "money" as a token of value that can be expropriated by those in authority....
Conclusion
It is clear that MMT is not a simple contribution, not only to economic thought, but also to the whole of the social sciences. It is a profound questioning of it, in the sense that it lays down bases common to all social classes, and therefore contains a theoretical value that goes far beyond the economic dimension. Indeed, by providing an explanation of the foundations of society, it presents itself as a possible starting point for understanding the macro level of the social sciences as a whole. It thus suggests the possibility of a transdisciplinarity allowing to lay the foundations of an integral social science, not only to realize bridges between the conclusions of the social sciences, but rather to lead to an organization of the knowledge concerning them. And this possibility, which has not yet been fully expressed, suggests how potentially very influential MMT is.
While most are familiar with "economics" as a disciple of study, having encountered it in their education, few are aware of economic anthropology, economic sociology, or economic geography as important fields in the social sciences. They also underlie anthropology, sociology and the world system, in which trade is foundational and where reserve currencies play a key role.
Getting the analysis of "money" right is necessary for understanding how societies function and how the world works. MMT purports to provide that. So as a result understanding MMT correctly becomes important.
MMT France
MMT: historical and logical foundations
Robert Cauneau
Robert Cauneau
But CBDCs will make money obsolete.
ReplyDeleteNo unemployment in non-monetary economies. This quote from a Mosler article:
ReplyDelete“… one wants to explain the empirical fact that involuntary unemployment is only associated with money-using contractual economies. In other words, real economies that do not use money and money labor contracts to organize production (e.g., feudalism, slave economies, South Sea Islanders discovered by Margaret Meed, etc) may possess important nonlinearities and even an uncertain future — but there is never an important involuntary unemployment problem. Slaves are always fully employed as well as are serfs in feudalism…….Finally it should be noted that herds of animals, schools of fish, etc organize together to solve the economic problems of What? How? For Whom? Without using money, contracts or markets, these animals still face complex nonlinear problems in their search for food and interaction with other herds. Yet animals never suffer from involuntary unemployment!.
Professor Paul Davidson
University of Tennessee
(PKT Archives)
But CBDCs will make money obsolete.
ReplyDeleteCDDCs are tokens of value — unlike commodities, which are objects of value, not tokens of it.
The article points out that the continued use of worn coins at face value shows that they are tokens of value rather than objects of value based on the worth of the commodity.
CBDCs can be used as ration coupons or time limited vouchers, eliminating the problems associated with monetary systems. That's the plan, depending on which right wing site you visit. They believe it's horrific, I don't. As Ahmed wrote, the current system is permanently flawed.
ReplyDeleteA central bank digital currency simply means having your bank account on the books of the central bank rather than a commercial bank. It's nothing more than that.
ReplyDeleteAt the moment cash is basically printed or tokenised receipts giving a claim over a bank account at the central bank that is usually held by the country's Treasury. There are some ideas to play with electronic tokens rather than physical ones, but nearly all of them fail due to money laundering requirements stopping anonymous transactions.
As to time limited vouchers, what happens now when the issuing authority removes legal tender status from printed notes and replaces them with different ones? It's only laws that state that they have to honour old notes, and those laws can be changed.
The biggest issue central banks are wrestling with is that CBDC throws their interest rate con into sharp relief. How can the central bank pay interest to commercial banks for reserves, but not to individuals holding those same reserves as a CBDC? Moreover if CBDC is the same as cash, then so are bank reserves, so why is there no interest on cash?
“ How can the central bank pay interest to commercial banks for reserves, but not to individuals holding those same reserves as a CBDC?”
ReplyDeleteCB can just pay the broker where you have your CBDCs more CBDC to credit to your account…
eg if you have your CBDC at Coinbase then CB provides additional CBDC to Coinbase then Coinbase provides it to you…
Coinbase would be a regulated institution…
If you had yourCBDC ina digital wallet then you would not receive interest…
ReplyDelete“ But CBDCs will make money obsolete.”
ReplyDeleteHow can you make a figure of speech obsolete?
The Art Degree morons will just include CBDCs as part of their figurative construct of “money!”….
iow if you were playing cards with your buddies and you each had CBDC in a digital wallet and you won you would tell your buddies “hey! Pay me the money you owe me!” then they would tap their wallet to your wallet and the CBDCs would transfer from wallet to wallet…
Then you would say”hey thanks for the money!”
So money would still exist…
A central bank digital currency simply means having your bank account on the books of the central bank rather than a commercial bank. It's nothing more than that.
ReplyDeleteHave you not read of the brouhaha surrounding programmability?
What you can buy with your tokens can be based on criteria that have nothing to do with price or face value of the token or the commodity. Metrics such as carbon emissions or your social credit score will determine what, when, where, and how much of a commodity you can buy.
I understand these are just proposals, but an economics blog ought to be more interested in it.
Will never happen… in US… too complicated…
ReplyDelete"if you have your CBDC at Coinbase"
ReplyDeleteYou don't have CBDC at Coinbase. They are not bitcoin. They are just bank accounts at central banks. The whole blockchain thing is a pipe dream. No way are they going to permit money laundering on that scale.
It will be memorandum accounts on the central bank at best, to keep it off balance sheet.
"What you can buy with your tokens can be based on criteria"
ReplyDeleteThat's crypto BS. Not going to happen with a state currency for the same reason it hasn't already happened with normal bank accounts.
It may be right wing BS, but they believe it is doable.
ReplyDeleteFurthermore, they aren't talking about digital IDs to kill time.
Will their technological plans go bust? Yep.
“ You don't have CBDC at Coinbase”
ReplyDeleteYou could if thats the way they set it up…
What I see is the banks are all going to establish their own stable coins..
So if I bank at JPM I will have JPMcoin then if the guy I owe $6 to because I lost to him at golf has his bank at WFC in WFCcoin then I would just send him jpm coin to him at WFC and they would clear them thru Coinbase…
Something like that