This feels like the morning when MMT needs to be spoken about.
Commentators on the blog are still asking what it is.
Commentators in the media are far from asking anything like the right questions, if Rafael Behr in The Guardian is to be taken as an example of them suggesting the household analogy is still,very much alive and well.
And Molly Scott Cato tweeted the Green Party's support for Positive Money's views on banks, which are both technically wrong and not MMT, which is unfortunate.
That there is still work to do is still obvious.
I could at this point refer to two blogs I have written. One is MMT in a nutshell. The other is on stripping MMT back to its core. But maybe they have not really worked, as yet.
I would love to answer all such points right now, but there are trains to catch, meetings to go to and work that demands attention.
What I have begun work on is an MMT Q&A. I would rather not. But my searching can't produce anything I want, so I will work on it. I'll get it out as soon as possible.
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It would be very helpful to me if you could outline the key differences between Positive Money and MMT, in a way which hopefully enlightens both camps and does not lead to a retreat into tribalism. I for one have not got my head around the key differences yet.
Try this
https://www.taxresearch.org.uk/Blog/2018/05/06/why-positive-money-is-wrong/
Since your May blog, Richard, I think Positive Money have become more accepting of MMT in the sense of government creating money out of thin air for public purpose. But they still seem to want private banks only as intermediaries and they consider tax ‘not part of their remit’!
I think their ideas are currently just confused:
http://www.progressivepulse.org/economics/positive-money-thinking
Their own website discussed MMT at the end of last year
https://positivemoney.org/2018/09/modern-monetary-theory-and-positive-money-part-ii-money-and-debt-1/
I’m afraid I think for the moment they have to be treated simply as a useful conduit to get more people thinking about money rather than themselves able to offer much idea about the way it works, or should work. They are supposed to be rewriting their book ‘Modernising Money’ to come out later this year, so maybe all will then be clear…. We shall see!
Peter
I agree: they remain confused
I think they are even confused as to the issue themselves. Indeed, Positive Money seem s to be morphing into an environmental campaign
It’s all rather odd
Richard
So glad it’s the day for MMT!
I’ve suggested an MMT for Britain here:
http://www.progressivepulse.org/economics/suggested-requirements-for-a-properly-functioning-monetary-system-based-on-mmt-in-the-uk
trying to take account of Britain running a continuous trade deficit and consciously trying to avoid that strange Mitchell/Mosler idea that exports are a cost.
I agree with you re Mosler / Mitchell
I have plugged on twitter
I used to think that it was the First-Past-the-Post voting system that was the main thing that stopped the Greens from becoming as successful as their counterparts in places like Australia and New Zealand where they have become the 2nd force in left-of-centre politics in two national, Westminster parliaments
But no, the more I hear from them in Britain the more I realise that is the Greens themselves stumbling from one ill-considered, inexpedient, wrong-headed notion to the next. “Positive Money” is Milton Freidman’s monetarism except for the fact that Friedman failed to acknowledge endogenous money and the P.M. crew want to prohibit it completely. Their prescription for banks would be dangerously austere in a fiat currency world.
Progressives should be looking to repair and prevent neo-liberalism’s financial crises not to invent new ones of our own.
On this issue I have to agree
“Commentators on the blog are still asking what it is.”
This is quite user-friendly for laymen and beginners:
https://theconversation.com/explainer-what-is-modern-monetary-theory-72095
Its Australian, as is its academic author, but then again so is Bill Mitchell. This, however, is a lot more concise and readable than Bill Mitchell.
Steven his very good
Marco
This is a good, concise piece, thanks for the link, I’m definitely going to pass it on.
However, something that strikes me about it is that it speaks very clearly to anyone who either gets MMT or understands how the economy operates via a mainstream neo-keynsian/neo-classical perspective but isn’t so wedded to that paradigm as to protect it (i.e not a paid mainstream economist).
Where I suspect it and anything else like it will fall flat is communicating to lay people (like myself) who don’t understand the economy or money in any real depth at all. Until I learned what money actually was I wasn’t discerning enough to identify a truthful statement about the economy from a lie or a twisted version of the truth. So I think for people like me something simpler, more immediately comprehensible and more starkly surprising is required to pull us out of our ignorance. For me that was fully understanding what it means to say that money is an I-owe-you.
Maybe I’m slow of learning but I honesty didn’t get what money was till I was well into my thirties. I now try to explain the revelation I’ve stumbled upon to my well educated and intelligent friends and they are completely nonplussed. I don’t know how to even convince them that there’s something important that they’re missing – and that is what I think is the crux of the problem.
Because most of us think we know what money is and how it works we…
a) don’t take kindly to being told we are missing something…
b) are not at all motivated to learn what that missing something is.
It’s like being told we’re actually getting basic primary school level maths or english wrong! It’s annoying and off-putting.
Even with my politically motivated and more radical friends I garner no interest. Often this seems to stem from the fact they are all utterly convinced they have some other radical insight or understanding that’s the key to making the world a better place and they kind of take me telling them about MMT as a challenge to their own hobby-horse and their intellectual superiority.
Then again, maybe I just suck at communicating! Whatever it is I feel like I’m trapped in a bubble outside of which no-one can hear me if I mention economics 😉
Fair point Adam,
I might be a little naive about the beginner’s perspective.
Fortunately the Guardian has Zoe Williams….
https://www.theguardian.com/global/shortcuts/2017/oct/29/how-the-actual-magic-money-tree-works