Why is it that visibly false economic analogies, such as that of the state managing its budget « as a responsible father, » dominate public debate with such unwavering force? How can we explain that the anxiety-inducing narrative of the « wall of debt » or the « burden on future generations » continues to justify austerity policies, even though detailed operational analyses, describing the system’s actual « plumbing, » demonstrate its inadequacy? The paradox is not so much that misconceptions persist despite the facts, but that they impose themselves as organized narratives, conveying emotion, legitimacy, and power. These narratives are not intellectual accidents, but cognitive and political instruments, shaped to be believed and to make alternatives unthinkable.This article advances a simple thesis: the battle for a better understanding of economics is not simply a battle of facts against errors, but a battle of narratives. Technical reality, however rigorous and demonstrable, struggles to assert itself because it clashes with a dominant narrative that is much older, simpler, and, above all, more emotionally powerful. The main challenge for approaches like Modern Monetary Theory (MMT) is not to prove its technical coherence—it is—but to overcome its own narrative deficit.
This accounts for the persistence of the "fable" of monetarists that underpins the Fed's rationale for interest rates as the single variable "control knob" of the economy, despite not only the lack of evidence but also the admission that there is no justifiable theory of inflation based on the historical data in the present narrative.
MMT France
The Economy of Narratives-How We Become the Guardians of Our Own Ideological PrisonRobert Cauneau
