It would seem that many of us lefty types have been paying a lot of attention to something called MMT – Modern Monetary Theory. The central tenet of this school of thought, built on identities in sectoral balance accounting, is that a nation sovereign in its own currency, with a non-convertible currency and floating exchange rates, is not and can not be revenue-constrained. Thus the “problem” of the debt and deficit is actually a “pseudo-problem, an accounting mirage.”
Ok, fair enough. Now what? MMT, in my humble opinion, spins its wheels trying to impress, cajole, plead, or beg for understanding. “If only we could get the word out, and people would come around to the truth, and then we’d be free of Pete Peterson et al.” Perhaps an open letter to the President-cum-Czar would be in order. And yet, people just don’t get it. Why, oh why, can’t they get it?
Two observations, if you will:
One: the powers that be will not “just get it” because the powers that be are intent on screwing us. There is no problem with theory there – the problem is one of power, that is, who has it, who doesn’t, and what they’re doing with it. That is, the Czar “gets it” – but the Czar is our enemy. To supposed otherwise is to suppose that the White House, Congress, the Fed, the Counsel of Economic Advisors, etc., panoplied with advisors, academic chairs, economics PhDs, are all simply ignorant of basic sectoral balance accounting – something that in its broad overview can be taught to any reasonably bright twelve year old in an afternoon. Such a supposition stretches credulity to the breaking point. I agree on this point with a gentleman named Rodger Malcolm Mitchell, whose blog I encourage you to visit.
Two: what makes MMT compelling is not its theoretical basis. That is, in terms of theory, its not really clear that MMT adds much that wasn’t already there, in more refined form, in (post) Keynesian economics. Rather, MMT justifies its existence simply because it is readily noticed, and at the same time, its tenets are utterly incompatible with the dominant discourse in policy and economics. That is: one cannot pay attention to MMT without accepting its rather uncontroversial premises (remember: it’s just accounting), but to accept those premises, one is compelled to recognize that we we’re told is true is in fact a monstrous lie. But it is just there that MMT has not gotten up to speed. The MMT propagandists still seem to want to believe in “innocent frauds” – that our superiors are simply laboring under misunderstandings, which misunderstandings presumably can be “cleared up” through education. At what point, one asks, do we have to come to the realization that the beast actually wants to destroy us? And once we make that recognition, then what is to be done?
But one gets tired. We cannot read every book and blog, and cannot focus our every energy on cracking the code. I thought I’d read through the MMT reading list, and then perhaps look more deeply at heterdox economics generally – the hard but important stuff, like the Cambridge capital debates. Then I could claim some sort of authority in talking about economics, perhaps even say something clever about IS/LM.
But … why? Why bother? So I’m some sort of “expert amateur” – so what? Who am I convincing of what, and to what effect? If I’m to do my duty, then my lot is to make combat against the enemy, not cultivate my own “intellectual authority” (with scare quotes.) And, in making combat, perhaps it would be more important for me to, say, learn Spanish than to, say, decide whether I’m a Kaleckian or Sraffian.
At the same time, perhaps I cannot do my duty. Perhaps I can be no more than a spectator at this point, watching from the cheap seats as this sordid show grinds on to its inevitable denouement. Again, I might as well spend my time doing something more enjoyable than figuring out exactly why and how microeconomics is crap. I could read the Portis miscellany that I bought at Christmas but haven’t read yet. I could get out in the yard or something. It is a lovely day.