As if one Christmas day video was not enough, Steve Keen put this out last night. It's a rework of a previous video here. If you want a distraction today, take a look:
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That was amazing, thank you both. A real Boxing Day treat!
I’ve just watched this on X – I’m a big fan of Robert Reich but hasn’t he got this half wrong? May be worth replying to.
https://x.com/RBReich/status/2004571093156151334?s=20
He really does not get MMT.
I will leave Stephanie to take that on.
Double entry booking is just a remnant of Capitalist ideology – and MMT proves it.
It seems that the ability of some to make crass comments has survived Chrsitmas.
Double entry is not capitalist, socialist or Marxist, any more than English is. It is a language of record. If you do not get that, your lack of understanding is the problem you have to address.
Well if you’d prefer the longer version:
https://open.substack.com/pub/justaghostinthemachine/p/double-entry-bookkeeping-the-ideological?
There’s an Abstract, a Summary, and a Conclusion if you don’t want to read the whole thing.
Your essay is a good example of top-down reasoning used to reach a predetermined conclusion, rather than an analysis that follows from evidence or history.
Your core argument is that because double-entry bookkeeping (DEB) can be used to describe capitalist activity, it is to be treated as constitutive of capitalism and therefore ideologically suspect. That is a category error. By the same logic, one would have to argue that the English language is inherently capitalist because it is routinely used to justify capitalism, and yet English is equally capable of describing feudalism, socialism, fascism, anarchism or care-based political economy. A language is not defined by its misuse.
The same is true of accounting.
Double-entry bookkeeping is not a capitalist invention in the sense claimed here. It predates industrial capitalism by centuries and emerged to describe reciprocal obligations, stewardship, continuity and accountability long before profit-maximisation became the dominant organising principle of economic life. Double entry bookkeeping is a grammar, not an ideology. It records relationships between resources, claims and responsibilities. What those relationships are used for is a separate question.
Your essay is also based on a false understanding of income, capital and accounting, treating them as concepts that exist solely to serve profit-motivated financial capitalism. That is simply untrue. Capital maintenance, income measurement and balance are necessary in any system that wishes to distinguish between what can be consumed and what must be preserved if future capacity is not to be undermined, including socialist, public-sector and care-based economies.
MMT does not undermine this. It clarifies monetary sovereignty; it does not abolish the need for coherent accounting of resources, obligations and continuity over time. Rejecting double entry bookkeeping would not liberate us from any ideology. Instead, it risks abandoning discipline altogether.
The problem is not double-entry bookkeeping. The problem is what we choose to measure, prioritise and preserve within it. That is a political choice, not a technical flaw. Your argument is fundamentally flawed as a result. I will not waste further time discussing it.
This is interesting but i wasnt aware economist’s didnt understand Double entry ? i learnt double entry around ’86 when i studied book keeping then went on to study and work in accountancy early 90’s. i didnt stay in the sector that long but in being self employed this knowledge has always stayed with me
Robert
Double entry is never taught to economists.
The head of national acounting at the Office for National Statistics told me, rather proudly, a few years ago that the natiomnal accounts were not based on double entry and I an assure you that they are not. That is they they are rubbish.