I have spent a night reflecting on whether to comment on a post Steve Keen made yesterday on his being uninvited from a modern monetary theory (MMT) conference being held in Leeds this week.
Steve reported this:
I fully understand Steve's annoyance. It is wholly appropriate.
But let me be clear that Steve is not the only person about whom this question is being asked. A leading proponent of MMT asked me yesterday why I was not there, and I had to say it was because the conference organisers - the so-called Gower Initiative for Modern Money, whose early development I encouraged, and to whom I became an adviser - long ago threw me out of that position and ostracised me.
My crime was a simple one. I pointed out that a great deal of what Australian academic Bill Mitchell, who created the term 'MMT', says is utter nonsense and has nothing, in my opinion, to do with the principles which underlie MMT.
This became very clear over the same issue over which Steven Keen has now been expelled. I wrote a post in 2019 entitled 'Why Bill Mitchell is simply wrong on modern monetary theory and imports and exports.
You could spend a happy hour or more reading that post and the comments on it, which I acknowledged at the time would annoy many hardcore MMT advocates. It did. The Gower crowd and I parted company because I had the temerity to criticise one of the great white male gods of MMT, and I had no regrets.
The supposedly MMT theory put forward by Bill Mitchell and Warren Mosler on exports and imports has, as far as I can see, nothing whatsoever to do with MMT, whatever they might say. It is also total garbage. Steve Keen has long held this view, I know. We have discussed that fact and shared our utter bafflement at it. Refer to my linked blog to see why.
So, let me be clear about what the real issues are here.
The first is that there is claimed to be an MMT community. Outsiders suggest it is cult-like because of its propensity to expel those who question those to whom the truth was apparently revealed. It is hard to argue against this suggestion. This community, and the associated cult around Bill Mitchell, is exceptionally harmful to MMT in this country, and probably elsewhere. They also talk a great deal of nonsense, promulgating the belief that MMT says governments can spend without taxing, when in reality they cannot.
Secondly, this MMT community thinks its male founders have all the answers to all known questions. They don't. They got many things wrong, and not just imports and exports.
As I have repeatedly pointed out, they do not understand tax, and when it comes to corporation tax, they are on the far-right, in my opinion, in arguing for its abolition. Either they wholly misunderstand that tax, the nature of the company and the way in which entities operate, or they have a deeply pro-wealth, anti-democratic agenda that they are pursuing when making this suggestion.
That agenda is also seen in the indifference of some MMT proponents to tax evasion and tax havens - not caring that these activities undermine the tax base so long as others pay more tax to make good the loss, making clear in the process that they are not concerned about any socially progressive agenda.
Bill Mitchell, meanwhile, also proposed support for the far-right in Italy because they opposed the EU.
All of this is profoundly worrying. Those on the left need to be very wary of all this. I have been.
Third, there is closed-mindedness on display. Randy Wray once acknowledged I was the only person outside the MMT founders who had contributed to MMT theory with my work on tax. You will not find that comment now: it was deleted subsequently. And that is because the ranks are closed: the fragile cohort of male founders seem quite sure that they do not think others can contribute to MMT thought.
The fact that I have is ignored.
The fact that Steve Keen has proved why MMT has to be right using Minskey and the logic of double entry is not enough to allow him entry to an MMT conference: he has transgressed, and the sin will not be forgiven.
This is profoundly unfortunate. I summarise what MMT is all about in this glossary entry. I will not repeat it here. I do not pretend that is the last word on the issue. Of course, it is not. It is an opening point for debate. That is a debate that needs to happen. Either the MMT cult debates these ideas open-mindedly, or they do irreparable damage to important ideas, which I think are correct and best expressed by Stephanie Kelton.
As it is, the event in Leeds is not in any way an academic conference. If some academics are excluded because they are deemed inappropriate because of their intellectual ideas, which are not an affront to anyone's ethics, it cannot be.
MMT has to get its act in order and allow debate, or the likes of Steve and I will take the ideas in it forward and ignore what the so-called MMT community has to say because, as things stand, it is clear that they are not open to debate or ideas. That is not to their credit.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
When I first came across MMT I was pleased to see fresh thinking. I read the Positive Money website and considered subscribing but I decided not to. I could go with much of the analysis but not their solution. It didn’t seem practical and then I read Ann Pettifor whom you supported in the debate.
I saw some of Mitchell’s videos and didn’t like his dogmatic tone but that doesn’t invalidate the concept. But again I could not quite bring myself to commit. Having a theory which explains everything is very seductive (you see it with dedicated Marxists and Free Marketeers ) but I always keep a sceptical edge. I am not an economist but as a counsellor that sceptical edge saved a lot of potential mistakes.
I began to think that it was another case of an economic theory becoming almost a theological concept. Pragmatism and empiricism are well established positions in England and for good reasons. I think MMT is good generally but doctrines-as in theology for me-and need to be held loosely. A guide not a directive.
It is a map. It is not the terrain.
@ Ian Stevenson
“…economic theory becoming almost a theological concept.”
Spot on. You hit the nail firmly on the head I think.
We have a baby and a great deal of bathwater.
Outrageous. And worryingly, they cannot see this is authoritarian, anti-democratic, anti-intellectual and might even be called fascist. This has all the hallmarks of a cult: the leader(ship) and their “truths” must not be criticised or opposed.
From Cult Education Institute – Some of the 10 signs
Absolute authoritarianism without accountability
Zero tolerance for criticism or questions
Abuse of members
A belief that the leader is right at all times
A belief that the leader is the exclusive means of knowing “truth” or giving validation
A further temptation to despair, Richard – were it not for the likes of Steve Keen, Stephanie Kelton and you.
I think ‘the principles that undermine MMT’ should be ‘the principles that underlie MMT’, though you’ve done an excellent job in this post of exposing the former.
Corrected. Thanks.
The only way to resolve differences is through discussion
And that avenue is not open
If Steve is in the country he could attempt to set up a fringe event one of the dates. This would need a venue, comedy venues can often put something on a short notice, a bit of promotion, and some courage to overcome any opposition that got nasty. Graham Linehan’s team have experience of this.
I am not sure he is, although we have bern on contact with each other
Any belief that is not prepared to face questions is almost certainly wrong (and probably already a cult). By casting themselves in this mould, the self-appointed gurus of MMT will hold back the adoption of their ideas for as long as they hold sway. How sad!
You could organise a conference that was, for example, “A Celebration of Warren Mosler’s Contribution to MMT”. It would be legitimate at such an event to not allow criticism or dissenting voices. That isn’t what this conference claims to be. Blocking dissent and ignoring other opinions is the sin of neoclassical economics. It is therefore sad to see what seems to be the same thing at work here. Proper science only advances by testing theory to destruction and thus dissent is essential. I fully understand folk with established positions often don’t like that. Especially, perhaps, more established and supposedly more important folk. So anything that claims there is only one ‘true’ version is asking for trouble, and I would say it is always counter-productive.
I am told this is a Warren Mosley show but it was not clearly badged as such
Academia is not immune from all the human prejudices – but this just seems ridiculous.
Really undermining themselves by not being able to debate contentious ideas.
Shows the danger of people saying labelling themselves as ‘MMT ‘ – rather than just drawing on MMT-type ideas.
Even BoE admits it creates money by spending it into the economy – so is to some extent MMT
Must read the export import stuff
Interesting, if fruitless.
Obviously rational debate has long been lost with the injection of personal disputes.
John Maynard Keynes was personal friends with Hayek, despite them being polar opposites on both theory and social values.
I’m not sure I would have been able to be cordial with one whose value system was anathema to my own.
In MMT the disagreements are much more nuanced, so ought to be rationally discussed.
Incidentally ,and specifically in non renewable resource terms, it is correct that exporting geographically restricted materials, such as rare earths and metallic ores, does reduce a nation’s wealth, as the stock of a depletable resource reduces, but the calculation of this trade’s value depends on several factors. Firstly, as ores, the value lost in terms of the resource depends on potential future useage, so an element of hope value, and resources are not calculated in straight money values. Then we have externalities to work out. A highly contaminating mining complex will have serious deleterious impacts not included in export pricing, hence disadvantageous to the exporting nation. This primary trade has always been associated with empires and colonies, and is merely exploitative.
Then we have exports of renewable resources, such as the global grain trade, on which the Ukraine is so dependent, as well as the recipient countries. Here the household analogy is clearly wrong as production exceeds the requirements of the local market.
A loss in soil fertility apart, this trade is repeatable and ought to be sustainable.
Then we get into services. Do they remove capacity from internal markets for national provisions ?The answer here is mebbes aye, mebbes nay. Depends on labour markets.
Of course then we get into debates on Ricardian theory too, about comparative advantage.
Basically, it seems to me that the import export discussion does not have a simple single answer, as the basic assumptions are different for different economic activities.
I follow Steve Keen and Bill Mitchell online as well as some conventional economists like Wren-Lewis , and rarely agree with all of them, if any.
However, we need logical and informed debate without amplifying disagreements into turf wars. Then the only winner is neoliberalism.
Much to agree with
https://www.youtube.com/watch?v=WboggjN_G-4
Sometimes, humor is the only answer.
No! we are the carriers of the MMT sacred flame – that lot over there are splittists etc.
Good grief.
Your comments on corporate tax & the MMT crew are interesting/disturbing.
I note that Vance – Trumps No2 is in full on isolationist mode – which is fine – Euros probably do need to spend more on defense. That being the case, he will have no probs with a crack down on UK corporate tax dodging & some of the resulting money being spent on EU defense – will he?
Uncommented on us he is a massive crypto fan – because it undermines the dollar
And, I suspect, permits tax abuse
Richard,
So……….
From reading this blog I have learnt things eg MMT & why Taxing ‘Wealth’ is a bad idea. An idea of course based on your experience as a practising accountant.
You have also clearly learnt things or taken on ideas partly of course from those whose experience is different to yours.
On the other hand the MMT conference is shutting out ideas that just might help MMT develop into a better and more useable school of thought. Why this disinclination to learn, to be challenged?
As has rightly been pointed out it has the hallmarks of a cult.
First of all I’d like to say that I am a keen follower of this blob and have recently become one of Steve Keen’s ‘rebels’.
I am at the Leeds Conference now and have spoken to Warren about imports and exports with specific reference to an article by Fadel Kaboub on exploitation and colonialism in Kenya. Mosler says that there cannot be exploitation because Kenya imports more than it exports. Kaboub disagrees and I notice he is not at the Conference either!
Thanks
Warren Mosler’s position appears utterly illogical to me
On the face of it Mosler’s argument makes sense in that more imports means more “stuff”. Could you say a bit more about why you disagree please
I provided links
Its always incredible how people who ultimately agree on so much can fall out so spectacularly over the finer points… What’s the point in organising a conference if debate isn’t allowed?
Hard to know
This is absolutely disgusting.
I find it weird and distasteful that the organisers refer to “Warren”. Can’t put my finger on why, but it feels uncomfortably messianic.
I see many parallels to Galileo here. Perhaps Steve will be placed under house arrest for his heretical thinking?
Modern monetary trauma. I have made this comment a few years ago on another platform. That MMT doesn’t belong to those who created it. If it is going to survive and enter the political mainstream then it has to be democratised. Only way that will happen is when the creators give up creative control.
Otherwise it is just counter Austrian-economics economics.
Much to agree with
As a consequence of some MMT theorists the following is considered healthy:-
https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
Their stance of course is based on ignoring the fact that China currency rigs to achieve this global manufacturing position. You do not find this manipulation and its global consequences discussed in MMT blogs and articles even though there is belief being expressed there are dangerous geopolitical implications:-
https://www.theguardian.com/politics/article/2024/jul/16/uk-and-its-allies-face-deadly-quartet-of-nations-says-defence-expert
(I would add ignore Trump he failed to do anything significant to address this issue when he was in office despite the rhetoric!)
@Schofield
“…(I would add ignore Trump he failed to do anything significant to address this issue when he was in office despite the rhetoric!)”
Did Trump do anything that his ‘manifesto’ rhetoric promised? I think not.
@ Andrew (Andy) Crow. Apart from inadequately raising tariffs on some Chinese imports he slashed the taxes on the rich. The latter is the only one that stands out for me having lived in the United States during his term of office. I use the term “inadequately” because the American farming lobby got him to tone down his imposition of tariffs on China because American farmers make a lot of money exporting corn (sweet) and soya to China and the Chinese government was threatening to retaliate by substantially raising tariffs on these imports.
Mike Parr got there first with the Judean People’s Front sketch… but it really does capture it well.
Currently searching Youtube for the “offensive” video…. but can’t see it. Can you help with the link? Anything that annoys Warren Mosler that much has got to be worth a look!
Here
https://www.youtube.com/live/MNpVQvgzn30?si=RcDa2DdabjNsQgHW
Thanks…. and THAT is deemed offensive?
Steve’s a pussy cat
Steves point regarding ‘Exports are a cost, Imports are a benefit’ doesn’t come until 1 hour 16 minutes 30 seconds into the video and is notably non-controversial.
https://www.youtube.com/live/MNpVQvgzn30?t=4595s
Anyone who has been following him for for the last decade or more will know both that he has deliberately chosen to be quite circumspect in criticising the issues with the incomplete ‘theory’ of MMT, and that he can be extremely ‘Aussie’ in his language, if he chooses to be! 😉
Many good points in this video, if people are not aware of Economic History.
Thanks
Crikey! Talk about pettiness and insecurity. I say that as an academic who was heavily into/involved in Critical Realism for over a decade from the late 1990s. This was an emergent (at the time) theoretical/analytical approach generally associated with Roy Bhaskar and Margaret Archer (both sadly no longer with us), and I attended numerous conferences and workshops where papers that sought to advance, refine or take issue with various aspects of Critical Realism were presented and discussed, and nobody was ever rejected or ejected for putting forward alternative arguments and ideas. Indeed, I can confidently say that many (most?) of those who were involved in these events and debates benefited greatly from them, as did Critical Realism more generally as the approach was honed and refined and its application extended right across the social sciences.
It is absurd
Critical Realism is philosophy. The problem is that MMT attracts economists, and economists think they are scientists; and the terrible secret of economists is that they do not think they are social scientists. They think they are effectively pure scientists, because they seduced themselves that a total commitment to mathematics by economics would make their science more like Physics (the economists Gold Standard), than mere social science. The problem is that the methodology of Physics relies on both theory and experiment. Economists unfortunately have never been able to establish a usable experimental method (the variables are too complex, or too loose and imprecise – physicists wouldn’t touch this dubious material with a barge-pole); and they have been reduced to making not predictions, but “forecasts”; and their forecasting is generally appalling and their output of little usable value. Economics is one of the weakest of social sciences, because they have not become adept at using usable methods; but cling to a wholly unsatisfactory commitment to mathematics. They do not generally understand money, and critically know nothing about double-entry (it is not in their curriculum). Fiat Money is a double-entry; that is what it is; a double-entry with unique characteristics. Economic has real problems. It is no wonder that when economists gather to discuss something controversial and problematic for the mainstream, there will be differences, and it is likely to go wrong.
The discipline of Economics badly needs drastic reform.
Agreed
I am sorry to say this, but reading this thread; I am glad I am not a conference attendee; and my broad take on the comments is that I find them mildly dispiriting. The obsession with the minutiae of the theory by economists (and the apparent timidity in debating with Warren Mosler), merely reflects the inability of economists to rise above theory, or provide an adequate and robust test of the claims or subscribe to the results (and, I have often surmised, a mediaeval sense of natural hierarchy – and even pomposity – in this scholastic backwater).
My apologies if I have offended anyone ….. but, really?
Double plus ultra good.
Economics – Social Science – perhaps more social commentary? with too much “funny” maths?
Drastic reform? perhaps a bit more humility and a recognition that it ain;t a science.
That would help
Hi Richard,
I am at the conference today and the content is fantastic. I am learning a lot! It would have been great to see Steve’s presentation as he outlined on his blog post. I will make sure to read that. A testament to the many forums in which we can engage on MMT related content.
A few thoughts.
The ‘theme’ of the conference was work inspired or involving Warren. It is a rather tight focus for an academic conference I agree, but all conferences have a scope for their call for papers. This was very clear at the start. I was surprised to read that Steve submitted and that they accepted his paper as it had nothing directly to do with Warren. This sounds initially like a miscommunication. You can argue that this was too narrow for an academic conference but the content has certainly been of a high academic nature.
The presentations (almost all having some very strong Warren Mosler) connection have included sessions from female presenters and presentations from the global South. These are very positive things to say about an economics conference and they also speak to Warren’s support for economists (almost all very progressive) across the globe. There is no denying this event has, by design, Warren at the centre. He would be the first to say this. I personally have no issue with this as I have much to learn from Warren and from others who he has inspired.
I was attracted to MMT and promised myself to maintain a critical eye. And this has not changed despite the Warren Mosler doctine across the content so far. The MMT lens can tell us so much and also support some of the policy recommendations. However, the idea that we accept it all or none of it is totally against my belief system. Some attendees do take this approach, but others take MMT very differently. Most of the younger economist take a more nuanced approach. I know many of the MMT students on the course at Torrens University (which is underpinned by MMT) feel like this. Like every single school it has areas I, and most ecologically minded, systems design folks disagree with. And we will no doubt continue to discuss and debate hopefully, if not at conferences in other forums.
And finally, as you know, I have organised over 700 conferences and things like this happen all the time. There are so many moving parts.
Hope this helps.
Thanks William, and a noble defence.
But this dismisses why Steve was disinvited and why over time Bill Mitchell has gone out of his way to be divisive on my work and alienated many others, and why this has alienated GIMMs from me and Steve, and why they are also the supposed arbiters of the MMT community, which I most certainly think they are not.
Some people need to stop fighting Steve and me for heresy and start realising fascism is the enemy.
Hi William.
I was at the conference too, were you at the pre conference meet with WM on Sunday Morning?
There were only a few people there so it was nice to be able to have a small discussion. I asked WM about a Fadhel Kaboub article in The Guardian in which FK said that there was on going colonial extraction from Kenya to which the great man said his thing about imports and exports so there was no extraction. I did try to press him on this apparent disagreement, but only very timidly.
Yan Liang’s presentation this morning was brilliant and seemed to back up Kaboub’s thesis. There seemed to be a bit of a disagreement between her and Mosler at the end in which I felt WM talked across her every time she tried to disagree.
Interesting ……
This seems to be the ‘MMT community’s’ weak spot!
I was taken to task (including ad hominems) more than 5 years ago for similar questioning on the same subject of imports and exports.
https://www.progressivepulse.org/economics/modern-monetary-theory-mmt-and-international-trade
Certainly some appear to consider MMT as a religious belief where Mosler and Mitchell’s tablets of stone should not be questioned…
That is the issue, Peter
I forgot you got the flak as well
After the “live” reviews sounds even more like a cult.
Any chance of seeing “Where will you get the money?” Stephanie Kelton film in the UK, please?
I have no control on that
As a very uninformed member of the public, trying understand MMT, I find this narrow minded attitude very worrying. For ideas to develop we need open, honest dialogue and informed debate.
By hand picking who can and can not present their research this group brings the whole area of economics into disrepute. Your suggestion of cult like behaviour seems appropriate.
I would suggest that what we need is a conference where both proponents of MMT and those who disagree can present their finds and ideas freely and open themselves to reasoned debate.
Sad times.
You’d think we should all be aligning against global neoliberalism,this is thus very disappointing for the cause.
WM is American, and I do wonder if this has swayed his views on import/ export, what with the dollar being the global reserve currency. His theory probably holds if you view the system as a US point of view, but the rest of world doesn’t have that significant privilege. Why he doesn’t accept that now is rather perturbing.
I did recall a video I saw years ago, sadly I haven’t the link. But it was interviewing an economist who initally worked for some big bank in the 60s. His first job was to study US foreign trade.After a white he realised that increases in the US deficit was largely matched by holders of US Sovereign bonds. What he also said was that this effectively meant foreign investors basically paid for the entire Vietnam War. It’s crazy not to factor in currency values or whatever is being used in global payments.
Vincent, this sounds very much like the analysis of the estimable and now I think perhaps semi retired former professor Michael Hudson.
Super-Imperialism : The Economic Strategy of American Empire, New York: Holt, Rinehart and Winston, 1968
https://michael-hudson.com/books/super-imperialism-the-economic-strategy-of-american-empire/
Which he has discussed in reminiscences on his youtube channel :
https://www.youtube.com/@profmichaelhudson102
Probably the great economist Michael Hudson…
https://michael-hudson.com/2018/08/life-thought-an-autobiography/
John and aLurker, you are both correct it was Micheal Hudson, thank you for linking him. His story was remarkable. It explains his discovery about US currency/trade/defcit links here.
https://en.m.wikipedia.org/wiki/Michael_Hudson_(economist)
He does also appear sympathetic to MMT views from a some of those videos.
The fundamental crisis of the economics discipline is still increasing: complexity economics, evonomics, econophysics, MMT, degrowth.. The last few decades of globalization and proliferation of IT (synthetic markets) have catapulted the nonlinear and thermodynamic nature of the economic system (and hosting social and natural systems) out of undercurrent drivers to the top-drivers, dwarfing ‘capitalism’.
As such, the need for convergence towards a single (natural-sciences based) matured paradigm is more pressing then ever, but there is still going to be a lot more paradigmatic divergence first.
I am sure you know what you mean….
I know what you’ve been using!
https://phrasegenerator.com/academic
https://www.entropometrics.com/contact.jsp
And tonight’s bedtime reading: https://www.entropometrics.com/docs/EconomicFractalEntropy.pdf
Much appreciated.
Well, it gets the standard definition of entropy, as used in, say, statistical mechanics, right. However I fail to see the point of the paper.
First it shows a meaningful definition of economic entropy (settlement of supply and demand) for which the 2nd law of thermodynamics holds, meaning that this entropy will increase as fast as possible. Can be used as new KPI in agent-based models, might provide for interesting market-profiling/diagnostic purposes.
Second it provides a generalized, continuous metric between organic and synthetic economic growth, by introducing a fractal market-depth quantity. It can then be determined ‘how much’ of growth is actually just adding more synthetic market-depth, for which, in aggregate, only market-makers/liquidity-provider benefit. Theoretically, you can add synthetic markets ad infinitum, but at some point reducing financial systemic risk and associated regulatories are not actually working anymore if it only incentivizes deeper fractal synthetic market structure.
Do you honestly think that this adds to debate here?
This is not an academic site
It must be right that any theoretical approach to economics must take account of its stochastic processes and non linearity. That is very far from assuming that we will obtain any kind of convincing mathematical paradigm of the whole economy. Without the heroic assumptions (rational operators, perfect information, no externalities, perfect competition, etc etc) that allow simplistic models to work, the human element means economics is more akin to psychology than mathematics or physics.
I think we might first see a convincing theory of gravity built from quantum mechanics before we build a convincing theory of macroeconomics from microeconomics.
“I think we might first see a convincing theory of gravity built from quantum mechanics before we build a convincing theory of macroeconomics from microeconomics.”
So that’s what they are trying to do.
The early signs of this was 5 years ago when the a policy prescription of a “Job guarantee” was made part of MMT, and anyone who disagreed – not necessary with a policy, but in mixing policy and theory – was shot down.
Thanks for this, I used the quote “anything we actually do we can afford” and changed the note from a GIMMS article to one on Adam Tooze’s site Chartbook. For what its worth…
https://brianfishhope.com/blog/577-ending-austerity