This comment was posted on the blog over the weekend in response to my comments on Recovery Bonds:
You can add the MMT community to the long list of people and groups you've fallen out with. And always, everyone else is wrong and you are right. About everything. If everyone doesn't agree with you, they are ‘neoliberal fascists' and you throw your toys out of the pram and stomp off.
As someone once said. What all your failed relationships have in common is you.
I found the comment quite curious. I know nothing of the person making it. But what I am also unaware of is the MMT community in the singular. I most definitely aware of it in the plural, with disagreement a characteristic. But then, as many will know, this is normal on the left.
And it is true that over the years I have fallen out with some communities, but remarkably few people given the many I have worked with.
I discussed this with my wife. The number of people I might have really fallen out with over 20 years in campaigning fits easily on the fingers of two hands. Some were bullies. I am not sorry for standing up to them. Others, I admit, I disagreed with. Usually that was because of the rigidity, or singularity, of their thinking when I admit that I think the world too complex for such approaches. And maybe with a couple, well, it just did not click. That's life.
But then I reflected on the considerable longevity of most of my working relationships over my career, and the enduring success of those relationships, and to be candid I wondered what this comment was all about.
But it wasn't really hard to fathom it. It's just a variation on a theme I have heard so often over the last twenty years. I first heard it from Jersey, way back when. The suggestion was that ‘if only I would be a bit more reasonable I would achieve so much more'. But that, of course, was never true.
I recall the words of George Bernard Shaw. He said:
The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.
Those with whom I have worked with, successfully, know that by this description I might be a touch unreasonable. I make no apology for it. I am happy to speak truth to power. I accept the price for doing so. And I will write what I will without seeking favour. I think I have more than evidenced that.
The consequence is that I might upset ‘communities'. The communities referred to, from the tax haven financial services community, to some Corbynistas, to some in MMT, to neoliberals and climate change deniers have all tended to demand a consistent world view from their adherents as a condition for group membership. The articles of faith were laid down. Adherence from the acolytes was strong. And alternative opinion has been strongly resisted. That is by necessity; the group survives by denial of possible deviation.
In that case I am, of course, bound to attract criticism from those in such communities by seeing flaws when examining their claims through close association. I make no apology for that. It's what I do. I have no intention of changing it. Seeking truth is always going to be more important than seeking favour, let alone acceptance, to me.
So what have I done to upset the MMT community now?
First, as I have long held, tax is much more important than the MMT community thinks.
Second, I argue governments must borrow even though technically not obliged to do so.
Third, I argue the job guarantee is part of fiscal policy pursued as a consequence of social obligation, rather than a fundamental component of macro policy. I no more buy the fundamental nature of the job guarantee than I buy that a 2% inflation target is key to neoliberalism. Each represents a key policy application, but not a theoretical component (and I understand the arguments).
Fourth, I now appreciate that MMT delivers, as all deficit funding policies by government do, the risk of increasing wealth and income inequality and that demands that there be policies to address these imbalances within MMT, hence the Recovery Bond.
Do I apologise for these different reasons? No, of course I don't, even if promoting them alienates some people. MMT has no social policy implicit within it as mooted by the likes of Bill Mitchell and Randy Wray (I have the textbook, and re-read some of it this weekend, which was not enlightening in this issue, full employment excepted). I am seeking to quite explicitly add that social,policy element, including quite explicit requirement that the negative impact of MMT on wealth distribution be addressed.
Can I live with being abused for that? Of course I can.
Just as I can live with abuse from those who support the absurd idea that MMT requires no taxes on income and sales of any sort so that free markets can operate unfettered by tax constraints and that MMT should be indifferent to wealth because that is just unused tax credits, without taking into consideration any of the resulting consequences of the power imbalances that might arise from that wealth.
Some, in my opinion, get MMT very wrong in that case. That might include some who founded it. So be it. I will say so. The core ideas within it are far too important to ignore. But if it is used by some to promote social abuse I will say so, without fear. Membership of a community is not worth it if it requires accommodating what is wrong. The truth is worth so much more.
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Richard -you are a rare talent. This piece from The Guardian today is extremely interesting and seems to offer a
penetrating explanation for dogmatic behaviour.
https://www.theguardian.com/science/2021/feb/22/people-with-extremist-views-less-able-to-do-complex-mental-tasks-research-suggests
It seems to me that you are probably blessed with the mental capabilities to undertake complex mental processing. …otherwise known colloquially as “being able to join the dots” 🙂
Never give in to dogmatists I say.
In Myers Briggs terms I am an INTJ
that definitely beats being an idjt 🙂
I may be alone in finding the irony delicious but in HMRC parlance NT means no tax code
Hmm rereading what I thought at first glance were brackets turn out to be letters.. rather wrecking my point☹ï¸
That headline is a wonderfully gentle way of saying ‘Extremists are dumb’!
MMT in my view has to be right if it is to truly challenge the status quo – dodgy as it is.
And this is ‘Tax Research UK’ – so you came at MMT wearing your own contextual lenses which is totally valid.
Although I can see the benefit of everyone eventually agreeing on MMT one day (it would be nice but also helpful) I think that those comments are rather cruel and uncalled for in my opinion.
That’s life….
Stephanie Kelton argued that Donald Trump followed MMT arguments when he cut taxes in 2017. Since the start of the pandemic others too have argued that US policy has followed MMT. But the policies didnt really focus on social issues such as unemployment, climate change, etc. It was more about helping out corporations, party donors and bailing out unproductive activity.
That is why I do not think it is MMT as I see it
Anyone who spends any time reading your offerings on Tax Research UK will surely become aware that you give short shrift to time-wasters and trolls on the blog (as is your right: it’s your blog, you can do what you want with it). It is also clear that you are not shy of engaging in ‘professional disagreement’ with people in the course of hammering out ideas in the pursuit of the truth, as you see it. I guess there is a danger that some people, including maybe the person who posted that comment, will conflate these with ‘falling out and stomping off’, so turning the battle of ideas into a clash of egos. It’s hard to avoid bruised egos and the taking of offence, when someone doesn’t agree with one’s cherished ideas, but I guess that is the perennial challenge of civilised discourse.
What a pathetic low brow comment, made anonomously, and so cowardly to boot.
There are not many economic thinkers on your level Richard, keep it up.
The suggestion was that ‘if only I would be a bit more reasonable I would achieve so much more’.
Excellent advice. I dip in here because of the quality of some of your insights – the one pager on MMT was excellent – but I do not linger or join in because of the approach to “debate”. The recent MMT video debate (?) was a case in point. Was good but could have been excellent had a more reasonable approach to those with a different outlook/foundation been accommodated rather than squashed.
That’s your view
I know full well that the reasonable person gets to a retirement at the bowls club if lucky, but changes nothing
It is..
And what changes does the unreasonable person deliver?
As I have posted here before, despite its logical and correct foundations, MMT has failed to make the impact on economic and political impact it should have because the powerful descriptive element is lost in the unecessary baggage that accompanies the prescriptive elements.
So we still have a CoE who believes that he has a moral/sacred duty to balance the budget and democrats terrified of (promising the correct level of) fiscal stimulus. What sort of achievement is that?
Nothing makes an impact until it does
Country b6 country reporting too 12 years and it will be 20 by the it’s used in accounts
So?
Does that mean it was a waste of time?
I suggest not
The regular readers of this blog are, in some senses, a community. We dont always agree with each other but that is healthy. What is important is that we debate with respect.
I studied Shaw’s St. Joan (of Arc) for O level. What I learnt from it is that ‘good people’ can sometimes do bad things. The church burned Joan because her voices did not always support the church and if people differed from the church, there was a danger of heresy and they would go to Hell. Therefore, she had to be silenced and punished. Few read him today but did make some interesting observations. Have we come very far since then?
Perhaps your critic cannot meet your arguments so tries to damn you to diminish or silence your voice?
You write above that the number of people you might have really fallen out with over 20 years in campaigning fits easily on the fingers of two hands but then, in your reply to Chris, you say that the reasonable person gets to a retirement at the bowls club if lucky, but changes nothing.
I understand how it can be expedient for a campaigner to be forceful to the extent of being perceived as unreasonable but to campaign in this style for 20 years while antagonising only one person every two years on average is a remarkable record. Well done!
I am quite sure I have antagonised a great many more outside my immediate circle
I don’t call those failed relationships
Those who find thinking hard – which this person clearly does – have always struggled to understand those few who have mastered the art. GBS had something to say about that too.
You have helped me expand my knowledge and thinking on a number of topics. Do I always agree with you? Probably not. But that makes me think harder.
Perhaps this person has an opinion worth hearing; if so it is a pity he wasted his time on an insult rather than sharing something we all might have found useful.
Thanks
And of course I am not always right!
I think it boils down to “play the ball, not the man.”
If this person had a problem with your position on MMT, or your reasoning for having that position, or your ideas for what needs to change, he/she should have engaged with those–instead of resorting to attacking you personally.
A strong argument, based on logic, shouldn’t need to resort to insulting the person who holds the opposite point of view. In fact, starting with what IS agreed and working from there is usually an effective way to get minds to change.
Until we learn to employ this kind of diplomacy in a debate, any disagreement over any issue is likely to deteriorate quickly. And then nothing changes.
Criticism of Starmer’s Recovery Bonds is not directed at the intrinsic value of the idea, we all have a need for a safe place for our savings, those of us lucky enough to have some, and those that are are socially productive, such as with Credit Unions for example and also support a sense of shared community are to be welcomed.
The problem with this big idea is it’s an exceptionally timid response to recovery but most importantly maintains the narrative that supports austerity and Thatcher’s dictum that “there is no government money only taxpayers money”, except in this case it is savers’ money.
I thought your idea for hypothecated bonds sound for promoting social solidarity in the same way that the Job Guarantee is essential for the same purpose irrespective of its balancing effects in reducing cyclical swings in a capitalist economy. Similarly recovery bonds would not be viewed with despair if they were an addition to the main event.
It is because the world is complex and not simply the technical playing out of arguments in economic theory that this matters. The economy seen as a household budget is so deeply embedded is a difficult narrative to shift but unless we do false economic reasoning will always win the day.
On the claim that some MMT’ers believe no taxation is necessary this is the very opposite of my limited understanding of MMT. A sovereign state that did not demand tax paid in its own issue would produce a currency imbued with no value, so would be a major internal contradiction.
Kelton highlights the problem of inflation and taxation’s role in its mitigation and Mitchell is vocal on the corrupting effects on the polity of wealth inequality, hardly tax deniers.
I really do wonder what I have to do to get the message across here?
Recovery binds are savings products, guaranteed by the government. They hold cash. The cash is guaranteed to be redirected to worthwhile investment. That is likely to be in the public sector, but the private sector would win contracts to deliver it, no doubt
The government guarantees all cash based savings products now
I am suggesting that a guarantee be used for social benefit
That is it
How hard is that to understand?
Built does that pro9ve the household analogy? No way does it. It says there is private capital, Unless your want to pretend it does not exist – and it seems many in MMT do – or would rather it was used purely for speculation then that is is a fact you have to deal with
So why do you object to the use of private capital for social gain and the redirection of government guarantees for this purpose
Stop playing fantasy economics and even fantasy politics here and deal with the real world
This addresses a real world issue – it’s you who is not
And this has nothing to do with trap over se but a lot to do with trap reliefs – which neither Stephanie or Bill address
So, why not deal with what I have addressed, in the real world context of what QE has created rather than pretend the world is something else and then tell me how you could do better? I am more than willing to hear a better plan – but so far have not
So, I came up with one
Unless you want to pretend MMT does create wealth inequality through deficit creation and that QE prevents that wealth coming back to the state sector the need for this is real
Please deal with the real world
Its seems to me that put very simplistically, there are two distinct parts to MMT.
Firstly as an explanation of how money is created by states with their own currency. I find it hard to see how one can argue with that, unless you really believe that the state (BofE?) has bags of notes lurking in a vault somewhere. Its Actual Monetary Practice. Doesn’t stop people from believing that those bags of notes exist, just as they think banks lend you money from their stocks of fivers.
Secondly, is what a government might choose to do as a result and how that capability is deployed, at which point things become deeply political. The consequences that flow from it, both intended and unintended. That is where the deeper divisions lie and where I suspect most of the arguments arise.
To a large degree true
But there are theoretical consequences in the first part not yet worked through – and what is what the inequality issue I have hit on is
There is no hint of it in the Mitchell / Wray textbook
I did agree with the social benefits of your hypothecated bonds.
I did not say the use of private capital for social gain was inappropriate in any way.
I was not suggesting you are promoting the household analogy.
I was saying the Starmer proposal did nothing to undermine this powerful metaphor and impediment to change.
I did not disagree with the idea of a recovery bond per se, I thought they were a timid response that failed to shift this metaphor and in fact support it.
I believe this particular guiding fiction, unfortunately, is the real world.
OK
Sorry if I misunderstood you