Stephen Fergusson, who wrote the comment I reposted on MMT and football league points, has provided another interesting comment in which he has pointed to the work of a climate change scientist called John Cook on debunking myths.
Cook seems to have dedicated quite a lot of thought to this issue, which could obviously be readily translated to debunking myths about money. As he puts it:
People build mental models of how the world works, where all the different parts of the model fit together like cogs. Imagine one of those cogs is a myth. When you explain that the myth is false, you pluck out that cog, leaving a gap in their mental model.
But people feel uncomfortable with an incomplete model. They want to feel as if they know what’s going on. So if you create a gap, you need to fill the gap with an alternative fact.
His handbook on debunking myths looks to be useful:
As does this video:
Very good. There are similar parallels between the 2 ‘myths’. There is perhaps a need for a coordinated international organisation to bring together the different strands of MMS in order promote a basic single ‘debunked myth’ using the techniques suggested, with relevant peer group endorsement.
Thanks for the link. Handbook downloaded. I especially like the concept of stickiness & ‘Stories are stickier in memory than numbers & abstract concepts’. The family analogy has stuck & so why try & get away from it by saying ‘ it’s not like that, in macroeconomic terms….etc’- people will keep remembering the original story.
It’s not MMT, Post keynsian, etc, it’s basic economics – which as I understand it is what MMTers were trying to get back to in the first place. So stick with it. It is basic economics that a family has to live within its means. But its means are not money – that’s the con that the Austerity Con is built on. A family’s means are the abilty of that family to earn income & generate wealth. Money isn’t wealth – Adam Smith said that in 1776. Wealth is what a nation can produce, not how much money is in the exchequer.
What if the family had a printing press in the basement it didn’t know about, that could print all the money it needed for things like training, transport, IT, a bigger & better house etc. And cousin Rupert who’d been eating all the family food & using the electric, it turns out knew all about it & had been using it all the time. Oh, and by the way, he’d sold the house out from under them & now they’d have to pay rent to Rupert’s mate.
Yes – agreed – that is the basic mechanism.
But we also need to consider the volume of the factual alternative.
In my view we (society) are inducted into false consciounesses about how money works 24/7. It’s a tsunami of bad information that is being thrown at us continually about how the world works being delivered to individuals via their personal devices such as phones, iPads etc.
Factual alternatives (and new ideas such as MMT and ideas here about tax and money supply which deserve to be tried) will need to compete against lies and received wisdom – the basis of the tyranny of ignorance.
It is also an issue therefore of volume and how facts or new ideas are delivered. We must not lose sight of that going forward.
I think this is similar to what I do when I argue for money creation, which many people automatically see as a bad thing because of its perceived inflationary effects. To replace the general “Money Creation” concept, I introduce a new “cog” titled “Non-inflationary Money Creation”. Many people accept that Non-inflationary Money Creation would be a nice thing to have in theory, even if they don’t believe it exists. Providing them with evidence of its existence then hopefully makes the idea stick.
Bernard J. Luskin coined the phrase “Stinking Thinking” defining it as:
“Techniques used in mass media, in organizational management or by advertising firms to create bias in and influence personal decision-making and/or the nature of relationships and judgment in situations by creating intentional preformed expectations.”
Stinking thinking strategies are fundamental to behavior manipulation and widely used by governments to direct public information, manipulate beliefs and to influence and control the masses. Techniques range from bullying to continuous repetition of a message or more subtle use of information designed to cloud clear objective thinking leaving you with self doubt and a belief that if you differ from the mainstream you are a bad person and bad things will happen to you. Purely subjective in nature and framed to suggest people are either good or bad, smart or stupid, brave or cowardly etc this can be used to develop irrational fears of systems or people that are different to you.
Stinking Thinking is social control which once successfully delivered is self regulating and difficult to alter. A bit like tax & spend.
When Rugby Union changed its points system one reason was to prevent a team with an expert drop kicker winning without scoring any tries, or indeed not involved much in all the physical stuff. Also, they tinkered with other rules so it is now a rather different game. One effect is that I have moved on to watching golf, cycling and darts.
Never forget David Cameron’s infamous Goebbelesque “Behavioural Insight Team”, better known as “the Nudge Unit”, avowedly about scientific analysis, actually about manipulation of behaviour.
See https://www.behaviouralinsights.co.uk/, for the PR puff
And maybe this, for a different view:
http://www.wired.co.uk/article/david-cameron-behavioural-insights-team
Andrew Dickie says “the Nudge Unit”…
The thing is some of this can make sense as it can improve behaviour, especially around helping people behave honestly. Obviously it can get a bit disconcerting when we think we feel we are being manipulated especially by parties we don’t think are benevolent.
I really enjoyed reading a couple of Dan Ariely’s books e.g. “Predictable Irrationality”.
Also worth reading Richard Thaler’s books, e.g. Misbehaving. Thaler did as much as anyone to debunk the homo economicus, rational agent theory of neoclassical economics.
My advice, is set out out to control your own mind rather than let others manipulate you – reading Thaler helps. I do not have a problem with being nudged because I know that I can also think for myself.
@ KenM
Here are couple of articles from the redoubtable Kitty S Jones
https://kittysjones.wordpress.com/2014/12/17/camerons-nudge-that-knocked-democracy-down-mind-the-mindspace/
and
https://kittysjones.wordpress.com/2016/10/20/the-nudge-units-u-turn-on-benefit-sanctions-indicates-the-need-for-even-more-lucrative-nudge-interventions-say-nudge-theorists/
that are considerably more critical of the “Nudge” Unit, and also of the idea that it is easy to resist the manipulation that is being exercised over us. After all, the thinking of the Nudge Unit surely derives from that of Bernays and PR (see https://en.wikipedia.org/wiki/Edward_Bernays) – someone Richard has regularly held up for critical, and unfavourable, consideration.
Andrew Dickie, thanks for the links -very interesting and broadly correct- and your comment they are “considerably more critical of the “Nudge” Unit, and also of the idea that it is easy to resist the manipulation that is being exercised over us”… is a valid point.
Dan Ariely had a controlled experiment where some people were given what they thought were counterfeit goods and they on average then behaved less honestly! Many of us are easily influenced and I’m not so stupid as to think I’m not one of the many. So now I don’t have any counterfeit goods…
Now you might have noticed I have been nudged to behave better by an academic and facts 😉
So what do you guys think the faulty cogs are in the case of misunderstandings of the modern money system?
By this I mean the root ideas.
So obviously the household budget analogy is erroneous but it’s likely composed of a whole load of more specific ideas about money. What do we think those most basic erroneous ideas most commonly entail?
That it is ‘real’
And that it circulates
And is stored in banks
And is finite
Or, alternatively, limited in amount
Those are my openers
I think that’s most of them Richard.
I don’t know how exactly to articulate this one but I hear people say things like “‘Proper money’ is only created when some productive activity produces real value. Government just creating money doesn’t create value.” That guy suggesting money is like a map of real assets sort of was making this error in my opinion.
I guess this error is a sort of reversal of causality: they don’t understand that in reality the money (IOUs = promises to do something) come first and then the thing that’s been promised is done (usually!) and hopefully that activity adds real value. I suppose this error is related to an over emphasis on the “store of value” function of money and is also related to the belief money is backed by some commodity like gold.
Not sure if that makes sense but I hear similar frequently.
Oh, and thanks again to Stephen Fergusson – downloaded the handbook and watched the video. All good stuff!