This was posted by the Gower Initiative for Modern Money Studies on Facebook this morning, and as I think it's important and I support what they're seeking to do I am sharing it here:
Today we launch our new blog space: Long Read
Our aim is to bring to attention the published academic papers and articles on Modern Monetary Theory and related subjects, for a more in-depth commentary aimed at those wishing to expand their understanding.
For our opening publication we are delighted to present an article by Philip Armstrong. Philip has been a teacher of business, economics and engineering for 34 years, and is currently studying part-time for a PhD in Modern Monetary Theory and Heterodox Alternative approaches.
In the New Year, we shall be expanding the Resources page on our website to include key research papers and including a link to the accessible, comprehensive database of published papers and articles which we are currently developing.
In addition, we shall be expanding our range of entry level MMT fact sheets aimed at those without any knowledge of economics.Many of our fact sheets, leaflets and articles are available as PDF files so that students can download and share them for discussion in their communities.
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Hi Richard
I hope that you’re having a great Christmas.
Thanks for this – really – it looks very promising.
We’ve were discussing these issues around the breakfast / lunch/ dinner table over Christmas and I think that amongst my nearest and dearest I’ve made some headway on MMT. Reaction has gone beyond disbelief and onto enquiry into how it works. This year I was able (because of your blog) to explain how tax can help to control inflation (as long as the cash injection is moderated at the right time too) in MMT.
They certainly got my idea (generated from interaction with your blog of course) of ‘investing out’ hard right wing and even left reactionary tendencies in society through employing MMT/PQE investment principles.
Cheers – and thanks again.
All the best PSR!
Wonder if your sentiment was shared at the breakfast tables up and down the country
Who knows Jim?
I can only speak for myself.
I see a lot of anger from Remain directed at the Leave crowd. It is understandable in some ways but not excusable. Leave advocates have been lied to and toyed with by some dark forces in the Establishment and used as cannon fodder. Their loyalty – whilst overblown – has been abused and taken advantage of by lesser morality. On top of that they feel that the State has abandoned them and they are angry which is why they are so nihilistic. Invest in the people and I’m sure scum bags like Farage and Hannan would never have got a foothold.
However, I’ve seen the leavers up close and personal and they are capable of kindness and compassion as much as any Remain advocate.
We must not abandon the Leave contingent – the supporters. In many ways, they are us. Politics must solve that problem (because politics created it) and offer them and us a compelling vision of an alternative future.
As Ronald Reagan said in one of his more lucid moments ‘Government exists to protect us from each other’. One of the best ways to do that in society is through fairness and applying that to income and resource distribution in the first instance.
I feel that this is the only way that we can heal our nation.
Invest the discontent away.
As for the likes of the ‘prime movers’ Farage, Hannan, Cummings, Davies, Johnson, Fox, Gove et al – they should be made to live outside of the political system forthwith – excommunicated from political machinery as far as I am concerned. They are not worthy.
Compliments of the season all. Armstrong’s paper is good, though in a sense already written outside the prison of the disciplinary matrix of economics. Critical realism is old and there are deeply nuanced (probably agonising) versions like the structural realism of Gunther Ludwig. In philosophy, realism was always critical as the ‘realist hypothesis’ – one of many notions of whether we see a blue book, are deluded into this by an evil genie or hallucinating etc. It’s very easy to get stuck in the mud and re-invent wheels in this area. Lots of effort went into grounding work in logic and producing a ‘neutral observation language’. This failed long ago (1920’s). Data has been spinning with theory since in social constructivism, actor-network theory et al, though our general use of terms like data (or capta) and empiricism has not caught up. We can find a lot of the arguments in Sextus Empiricus, though the Greek solution was poor and problems of incommensurability remain. For plurality, arguments using different root metaphors have to be reconcilable, otherwise we are strangers in paradigm stuck in differently created worlds.
Economics remains some kind of positive engine through which to view worlds of its own creation, heterodox or otherwise.
Good to see a collection of source material. I’m more inclined to think economics needs to address what it excludes and is so scared of green QE and data from people’s lives and our constant failure to address peace – along with some of the models of human nature science has revealed. The MMT descriptor does not cross paradigms. It’s more that it is a model that makes sense against the scientific world view. Most of what economics assumes is hidden and not up for discussion. We need to be further into the hidden material, just how dreadful it is, that important decisions are political and need more than polite discussion to fix.
I am working on something like the logic you propose right now
A good point archytas.
I am reading ‘Economics: The User’s Guide’ by Ha-Joon Chang and he tries to bring economic concepts (and their counter arguments thank goodness) alive by using illustrations from popular contemporary entertainment – TV programmes for example.
I love this quote from Aristotle that he uses in Chapter 11 about the role of the State:
‘The proof that the state is a creation of nature and prior to the individual is that the individual, when isolated, is not self-sufficing; and therefore he is like a part in relation to the whole’.
I used this in a discussion over Christmas with a family friend when I was arguing for improved state intervention in markets and through PQE.
We are told by our Neo-lib friends that we all got here by competing and killing each other. But how can puny man ever had survived the ice age and ferocious beasts standing alone? For all the talk of independence (financial and living-wise) humans are actually inter-dependent beings which points us in the direction of a ‘state’ being a natural phenomenon in human life.
You are right
We were born to live in society
And therefore we were born to subject ourselves to the rules of communal living
Sorry to introduce a note of dissent at this time of goodwill etc but I think Aristotle is wrong. The State is not a “creation of nature” but is most obviously a creation of humans, and human elites at that. Of course that doesn’t deny that humans are co-operative social animals, like most of our closest relatives.
“The founding of the earliest agrarian societies and states in Mesopotamia occurred in the latest five percent of our history as a species on the planet. And by that metric, the fossil fuel era, beginning at the end of the eighteenth century, represents merely the last quarter of a percent of our species history.” (Scott, James C.. Against the Grain: A Deep History of the Earliest States)
It is beguiling to see human history as an upward sloping line of “progress” – the stereotypical cartoon of shambling brute emerging finally as sophisticated man or woman about town – but there is good evidence to suggest that life as a hunter/gatherer was not so nasty, brutish and short and that sedentism, livestock rearing, crowding in settled communities brought a whole lot of unintended consequences such as disease, poor diet, reduced leisure time, increased violence, loss of freedoms etc. One could see the State as a form of bondage.
An interesting aspect of Scott’s thesis is the role of cereals as a taxable commodity par excellence and their central role in leading to State formation. Perhaps the State is a product of “nurture” and not “nature”.
I am not willing to risk the step backward
Holmes Rolston III has it about right in regard to human beings. In evolutionary terms we’re not the Finished Product, not by a long chalk:-
https://mountainscholar.org/bitstream/handle/10217/39368/Care-on-Earth.pdf?sequence=1&isAllowed=y
Graham
Why so conservative? Can the state not be concerned with nurture AND be natural?
Do you deny dialectics? Is every thing back and white with no shades of grey? Are you von Hayek in disguise Graham?
The state has put people into bondage (and so have private individuals and corporations who are not states) but states have also freed people from bondage and also freed people from debt with debt jubilees.
The state is an organising principle – sometimes it is used to organise for the few, sometimes for the many and best of all – for all. All versions work for their intended beneficiaries but I know which one I prefer.
The states we see around us these days, yes. Broadening the view, though, the “state” has been around us, one way or another, since before the lemurs were our ancestors’ cousins.
Always remember this philosophy jive has no bottom Pilgrim. Good thinking practice though. A man has to know his limitations sort of stuff. Plato, who I often don’t like, did say that his society’s attitude towards women meant Athens lost half its potential. Nietzsche came out with ‘women were God’s second mistake’ – my partner laughs at that one. Science now has us living in co-evolution both cooperating and in competition. I have little doubt economics needs science beyond ‘physics envy’ – great paper on that somewhere. There was a guy called Wrong (1961) who echoed Aristotle in that we had an over-individualised version of man. Some good stuff at Stanford Encyclopaedia of Philosophy just searching “economics” there. If those smart Ancient Greeks had economists they weren’t smart enough to realise they were wasting half their talent. What might we be doing now that is similar?
All very similar to the conclusions here:
http://www.progressivepulse.org/economics/the-co-operative-eyes-have-it
🙂
Nature-nurture doesn’t sit well with post-60’s biology and epigenetics. In biology we routinely question just what “individual” to focus on across 20 or so possibilities and we regularly find (at micro levels) that what we were accounting as the same cause stochastic fluctuations. For economics, if we can’t do away with the subject, I’d regard maths modelling to reveal structure rather than assumption of an essential form, including designing a database to crunch past papers for evidence in the noise. Economics is a religion, so I wouldn’t bother.
There is much to be said for our cultures being elite created, though much we do is at least somewhat parasite-led. Each human has two brains (the gut one is larger than in some animals actual brain) and we carry about 5 pounds of micro-organisms in various stages of integration with our own cells. Just whose or what’s nature we exhibit gets tricky. Various parasites play a role. Look up toxoplasma gondii.
Economics is not a religion.
It is the study of human interaction with the resources it needs to survive – whether they be natural (oil) or man made (money).
Only when economics stops seeing what has happened and starts to be used selectively and to predict what will happen next does it (1) lose the right to be called a science and (2) strays into religiosity (and even clairvoyance). Which is 99% of the time these days it seems.
Not a religion, but for some, a belief system – ie one untroubled by lack of, or indeed counter, evidence in support of their beliefs.
Re the State, I would argue that only very, very recently has the State been concerned with “civic society” ie communal interests, rather than the aggrandisement of elites. And is the State able or willing, as so many seem to be slipping back to into oligarchy/plutocracy/tyranny (even), to deal with the (State created) looming crisis of global warming which may take us on the road to, if not Serfdom, but perhaps extinction.
Well Graham look at 2008 and all of that.
The State rode to the rescue of the financial system. And yes you are right it – it has to ride to the rescue of the eco system too.
And I disagree once again that it has only enabled elites. A State (under the guidance of Lincoln in the U.S) abolished slavery. Many civil rights for minorities such as BME, LGB&T have been taken away and then given back.
The State also unfortunately granted corporations the rights of a citizen and recognises the investor above the worker or end user with dire consequences for the latter.
Sometimes the State gets it wrong; sometimes it get its right. This is because it is not the State as such – it is the bloody people who happen to be running the State at the time and their political views (the same issue which hampers the EU Treaty). This was von Hayek’s major flaw in his analysis of state power – the human element. This is the same man who completely ignored altruism as a human trait in his so-called theories (what an arrogant bastard).
Whether discussing the financial system or eco system the same problem is evident. Making the State the last resort for the worlds’ problems does not work because it enables too much damage to be done before whatever it is, is stopped. We need interventionist states – regulatory, monitoring and ever-awake (and not just about the bottom line) to moderate human/market behaviour for the good of ALL.
This will not happen as we continue to have politicians the world over in charge of sovereign laws who believe in ‘efficient (i.e. unfettered) markets’, ‘rational self interest’ (a big joke – honestly) and small Government to name but a few deeply flawed ideas.
But the State as an organising principle is still a wholesome idea in my view. The State created the NHS Graham. Yes – that same State is now seeking to undermine what it made. But it was created.
The same could be said about religion in terms of the impact of the human element on a wholesome idea. To me religion is a deferential process where we look up and seek guidance about how we humans should behave properly towards one another. Religion is also an organising principle – I look at the local church voluntary groups we work with in providing accommodation for move on cases in drug rehabilitation. We could not do it without their help.
But even man has to mess religion up too, interpreting God’s word to reflect his own views that leads to things like torture, war, FGM ad nauseum.
If we want a better society, we pick off the people first and win our argument because in reality the State and how it treats people is a reflection of the dominant values we hold as a society at any moment in time. When a State goes wrong, do not see it as an abstract ‘State problem’ (because then the von Hayekian justification for making it smaller or not at all is easier to make); see it as a human problem
instead contained within the organising principle of the State. And then we deal with the human problem at the heart of it.
Changing the people who run the state is the key objective therefore or changing their minds. What about the MP Nigel Evans who voted for legal aid cuts in 2012 only to have his mind apparently changed after going through a costly court case of his own? We need more things like this to happen and/or better concerted opposition through a better political system than first past the post. To my mind FPTP hampers the workings of a good State. It has to go.
Thanks,
PSR.
No science in economics mate. Lacks the right values and morality.
Archytas. The foundation of all knowledge is believe.
Or was that belief?