It’s a deliberately chameleon-esque “theory” that obfuscates its Keynesian roots with the massive dollops of economic jargon that every “explanation” of the theory you’ll encounter describing it indulges in. The end result is that its incomprehensibility leads to people ascribing to it what they want it to be, slapping whatever label they want onto it - a “theory” that works like mayonnaise, something supposedly “good on anything” - for all political ideologies.
For neoliberals and soc dems, it’s the perfect bandaid for the ails of contemporary capitalism; for some leftists, it’s not only “compatible” with socialism but they’d argue that historical socialism actually “sleepwalked” through the precepts of MMT “unknowingly.” This is why you’d see some online leftists on the likes of Hexbear and Reddit who are very vocal on their support of “MMT.” Some of the other comments in this thread actually represent the typical argumentation pattern of “leftist MMT” where they travel back in time to historically backdate past socialist economic successes as “representative” of “MMT in practice.”
The “leftist” argument for MMT is therefore unfalsifiable because any historical or contemporary socialist economic policy with sovereigntist characteristics and state involvement can be appropriated and claimed as demonstrating “MMT in action, if not in name” just like how some Western Marxist historians once tried to untenably label every mildly populist historical figure from the Roman Republic like Julius Caesar as “proto-Marxist.” TL;DR, “leftist MMT” would claim it’s a DLC to classical Marxist economics when in reality, it’s the Keynesian competitor.
In practice, MMT is the modern reincarnation of the FDR New Deal snake oil, something meant to provide a backstop to the contradictions of contemporary capitalism and divert popular attention from the real alternative of socialism, just as how the original New Deal suppressed support for the socialist path. I’ve written my immense skepticism on it before but here’s a proper Marxist critique:
This brings me to the third question: what is the aim of MMT? MMT does not touch on the important issues of the failure of capitalism to deliver social needs and the underlying exploitation of the many by the few. On these questions, MMT has nothing to say, and indeed different MMTers have different views. Most, if not all MMTers (like traditional Keynesians), want governments to intervene to meet social needs. Some even support socialist measures to replace the law of value and the capitalist mode of production; others (like Kelton) don’t. Kelton even insists that is not the point of MMT. She simply wants to show that it is a myth that the state cannot run up deficits without consequences. Again, this does not seem very new or radical – nor even correct in all circumstances.
[…] Where MMT does differ from Keynesian-type fiscal deficit spending is that its proponents see government deficits as permanent in order to drive the economy up and achieve full employment of resources. In this way, the state becomes the ‘employer of last resort’. Indeed, the MMT exponents claim that unemployment can be solved within capitalism. So there is no need to change the social formations based on private capital. Politicians and economists only need only realise that state spending ‘financed’ by money creation can sustain full employment.
[…] It seems that MMT eventually just boils down to offering a theory to justify unrestricted government spending to sustain and/or restore full employment. That’s its task, and no other. This is why it attracts support in the reformist left of the labour movement. But this apparent virtue of MMT hides its much greater vice as an obstacle for real change. MMT says nothing about why there are convulsions in capitalist accumulation. It has no policy for radical change in the social structure.
This is the most telling critique of MMT: that, because it fails to recognise the capitalist sector in its macro model of the circuit of money and instead only focuses on ‘the state’ and ‘the non-state’, it can tell us nothing about why and how there are regular slumps in production and investment in modern economies.
But the answer to unemployment or the end of crises does not lie in the simple recourse of issuing money, as MMT claims. MMT ignores or hides the social relations of exploitation of labour for profit. And by selling the snake oil of MMT instead, it misleads the labour movement away from fundamental change.
Very much agree, another way to approach the problem is by asking what exactly is an economy. Fundamentally, it’s a system for ensuring that labor and resources are allocated to meet the needs of the people living in a particular society. Money is simply the mechanism that’s used to direct the allocation.
From this perspective, what a government does when it issues currency is stimulate activity in a particular sector of the economy where that currency is allocated. For example, Chinese government starting to do investments into chip development is resulting in that sector of the economy growing. Similarly, when private spending and markets allocate funds towards some area of the economy then supply grows to meet that demand.
That’s literally all this is, and obviously the government can issue as much currency as it wants, there’s no fundamental problem here because all it’s doing is directing the growth of the economy. Hence, as you point out, the issue isn’t with the money supply but how that money is used. The problem we have under capitalism is with labor and resource allocation being driven primarily by the interests of the capital owning class. Their goal is to direct labor to grow their capital, with any social benefits being strictly incidental. This breaks the connection between the government issuing currency and that currency being used to direct labor in a productive way.
This brings me to the third question: what is the aim of MMT?.. [Kelton] simply wants to show that it is a myth that the state cannot run up deficits without consequences. Again, this does not seem very new or radical
The author answers their own question here: the aim of MMT is to understand the relationship between monetary supply and inflation. It’s “this is how the world works,” not “here is how the world should work and how we should get there.” Criticizing it for not incorporating a critique of capitalism is like criticizing the germ theory of disease for not incorporating a critique of capitalism.
And setting aside how much of MMT is new, it’s absolutely radical to question whether printing more money always leads to inflation. That’s been a fundamental axiom in western economic thinking for the last half century or so. “How are you going to pay for it” is a perennial political question in large part due to this.
That conclusion would be to confuse the concepts of subset with superset.
Just because some characteristic (X) is exhibited by Y does not mean that thing X is an exclusive property of Y. A cat being a mammal doesn’t mean all mammals are cats and just because MMT illustrates some mechanics of economic statecraft does not mean those mechanics are exclusive to MMT.
Keynesian economics also illustrates some useful methods of state intervention which Marxists can and have studied but that doesn’t logically follow to mean that to utilize those methods, you then need to adopt Keynesian economics. In fact, this is the same kinda of “gotcha” that Keynes used to do to “dunk” on Marxist economics: “My Keynesianism already accounts for these forms of state intervention so if you practice these forms, you’re actually doing Keynesian economics, not Marxism!”
All its valuable observations about the mechanisms of state economy can already be derived from pre-existing schools of thought, including Marxist economics as the article’s analysis shows. His assessment notes that MMT provides no special conclusions which cannot be reached through a “non-MMT” Marxist economic assessment. As the article observed, Marx himself already assessed in his own time that:
“money in capitalism has three main functions: as a measure of value; as a means of exchange; and ‘money as money’ which includes debt payments. Marx’s theorisation of money as a measure of value derives from his labour theory of value; and this is the main difference between Marx and the Chartalists/MMT supporters, who have no theory of value whatsoever. In effect, for MMT exponents, value is ignored for the primacy of money in social and economic relations.”
The basic errors of MMT are what the article attributes to its intellectual lineage from the 19th century economic theories of Proudhon, who Marx himself refuted in words that can directly be pointed against MMT, its contemporary descendant:
For Marx, ‘the doctrine that proposes tricks of circulation as a way of, on the one hand, avoiding the violent character of these social changes and on the other, of making these changes appear not to be a presupposition but gradual result of these transformations in circulation’ would be a fundamental error and misunderstanding of the reality of capitalism.
In other words, separating money from value, and indeed making money the primary force for change in capitalism, fails to recognise the reality of social relations under capitalism and production for profit. Without a theory of value, MMTers enter a fictitious economic world – one where the state can issue debt and have it converted into credits on the state account by a central bank at will and with no limit or repercussions in the real world of productive capital
To summarize, MMT’s purpose is to repackage Marx’s “measure of value” and ship it out as an “independent unit” while kicking the corresponding Marxist theory of value under the bed while exclaiming, “Eww, we don’t need that,” which is exactly what its Keynesian predecessors did. Through this, it embodies a literal half of Marxist economics with the other half cleaved off through its disdain and/or ignorance of the necessary dialectical analysis that formulated Marx’s own conception of monetary function.
In the past, the purpose of Keynesian economics was to borrow one half of Marxist economics to prevent the other half’s realization: that is, to prevent any consideration of class conscious economic analysis. Similarly, MMT plays the same role, which is both why its value to Marxists is minimal - having itself derived from Marxist thought on the measure of value - and why it is fundamentally adversarial to Marxist economics through its ignorance of the theory of value.
Through that, I will say this: if there ever comes a day where the material conditions of contemporary capitalism deteriorates to that of the mid 20th century post-Great Depression era, mechanisms along the lines of MMT will absolutely be adopted, just as FDR’s New Deal and Keynesian economics were, to prevent the alternative of socialism from being truly considered by the people. Just as that moment proved the true antagonistic and adversarial character of Keynesian economics to socialism, so too will MMT drop the “cousin to Marxist economics” act in order to shut the door to the choice of socialism.
It’s a deliberately chameleon-esque “theory” that obfuscates its Keynesian roots with the massive dollops of economic jargon that every “explanation” of the theory you’ll encounter describing it indulges in. The end result is that its incomprehensibility leads to people ascribing to it what they want it to be, slapping whatever label they want onto it - a “theory” that works like mayonnaise, something supposedly “good on anything” - for all political ideologies.
For neoliberals and soc dems, it’s the perfect bandaid for the ails of contemporary capitalism; for some leftists, it’s not only “compatible” with socialism but they’d argue that historical socialism actually “sleepwalked” through the precepts of MMT “unknowingly.” This is why you’d see some online leftists on the likes of Hexbear and Reddit who are very vocal on their support of “MMT.” Some of the other comments in this thread actually represent the typical argumentation pattern of “leftist MMT” where they travel back in time to historically backdate past socialist economic successes as “representative” of “MMT in practice.”
The “leftist” argument for MMT is therefore unfalsifiable because any historical or contemporary socialist economic policy with sovereigntist characteristics and state involvement can be appropriated and claimed as demonstrating “MMT in action, if not in name” just like how some Western Marxist historians once tried to untenably label every mildly populist historical figure from the Roman Republic like Julius Caesar as “proto-Marxist.” TL;DR, “leftist MMT” would claim it’s a DLC to classical Marxist economics when in reality, it’s the Keynesian competitor.
In practice, MMT is the modern reincarnation of the FDR New Deal snake oil, something meant to provide a backstop to the contradictions of contemporary capitalism and divert popular attention from the real alternative of socialism, just as how the original New Deal suppressed support for the socialist path. I’ve written my immense skepticism on it before but here’s a proper Marxist critique:
Honestly everyone should probably read the article you linked. Like holy shit, it goes into so much depth.
Very much agree, another way to approach the problem is by asking what exactly is an economy. Fundamentally, it’s a system for ensuring that labor and resources are allocated to meet the needs of the people living in a particular society. Money is simply the mechanism that’s used to direct the allocation.
From this perspective, what a government does when it issues currency is stimulate activity in a particular sector of the economy where that currency is allocated. For example, Chinese government starting to do investments into chip development is resulting in that sector of the economy growing. Similarly, when private spending and markets allocate funds towards some area of the economy then supply grows to meet that demand.
That’s literally all this is, and obviously the government can issue as much currency as it wants, there’s no fundamental problem here because all it’s doing is directing the growth of the economy. Hence, as you point out, the issue isn’t with the money supply but how that money is used. The problem we have under capitalism is with labor and resource allocation being driven primarily by the interests of the capital owning class. Their goal is to direct labor to grow their capital, with any social benefits being strictly incidental. This breaks the connection between the government issuing currency and that currency being used to direct labor in a productive way.
Mesopotamian Rulers allocating currency to their militaries directed their economy to grow supporting those enterprises. This stuff has deep roots
indeed
The author answers their own question here: the aim of MMT is to understand the relationship between monetary supply and inflation. It’s “this is how the world works,” not “here is how the world should work and how we should get there.” Criticizing it for not incorporating a critique of capitalism is like criticizing the germ theory of disease for not incorporating a critique of capitalism.
And setting aside how much of MMT is new, it’s absolutely radical to question whether printing more money always leads to inflation. That’s been a fundamental axiom in western economic thinking for the last half century or so. “How are you going to pay for it” is a perennial political question in large part due to this.
That conclusion would be to confuse the concepts of subset with superset.
Just because some characteristic (X) is exhibited by Y does not mean that thing X is an exclusive property of Y. A cat being a mammal doesn’t mean all mammals are cats and just because MMT illustrates some mechanics of economic statecraft does not mean those mechanics are exclusive to MMT.
Keynesian economics also illustrates some useful methods of state intervention which Marxists can and have studied but that doesn’t logically follow to mean that to utilize those methods, you then need to adopt Keynesian economics. In fact, this is the same kinda of “gotcha” that Keynes used to do to “dunk” on Marxist economics: “My Keynesianism already accounts for these forms of state intervention so if you practice these forms, you’re actually doing Keynesian economics, not Marxism!”
All its valuable observations about the mechanisms of state economy can already be derived from pre-existing schools of thought, including Marxist economics as the article’s analysis shows. His assessment notes that MMT provides no special conclusions which cannot be reached through a “non-MMT” Marxist economic assessment. As the article observed, Marx himself already assessed in his own time that:
The basic errors of MMT are what the article attributes to its intellectual lineage from the 19th century economic theories of Proudhon, who Marx himself refuted in words that can directly be pointed against MMT, its contemporary descendant:
To summarize, MMT’s purpose is to repackage Marx’s “measure of value” and ship it out as an “independent unit” while kicking the corresponding Marxist theory of value under the bed while exclaiming, “Eww, we don’t need that,” which is exactly what its Keynesian predecessors did. Through this, it embodies a literal half of Marxist economics with the other half cleaved off through its disdain and/or ignorance of the necessary dialectical analysis that formulated Marx’s own conception of monetary function.
In the past, the purpose of Keynesian economics was to borrow one half of Marxist economics to prevent the other half’s realization: that is, to prevent any consideration of class conscious economic analysis. Similarly, MMT plays the same role, which is both why its value to Marxists is minimal - having itself derived from Marxist thought on the measure of value - and why it is fundamentally adversarial to Marxist economics through its ignorance of the theory of value.
Through that, I will say this: if there ever comes a day where the material conditions of contemporary capitalism deteriorates to that of the mid 20th century post-Great Depression era, mechanisms along the lines of MMT will absolutely be adopted, just as FDR’s New Deal and Keynesian economics were, to prevent the alternative of socialism from being truly considered by the people. Just as that moment proved the true antagonistic and adversarial character of Keynesian economics to socialism, so too will MMT drop the “cousin to Marxist economics” act in order to shut the door to the choice of socialism.