Sunday, January 26, 2014

Mark Pascal on MMT

I will return to Modern Monetary Theory (MMT) for the masochists on TMV. There are important points I wish to repeat with respect to MMT. It may describe the underlying operations of monetarily sovereign nations but when a political/economic system is so corrupt, fraudulent, manipulated and criminal, it doesn’t matter what the underlying policies and principles are when those entrusted with running the system cannot do so honestly or competently. In a country where the “rule of law” only applies to the non-elite, non-wealthy and powerless, then anything goes and nothing matters.
The Moderate Voice
On My Writing...
Mark Pascal
(h/t Charles Hayden)

11 comments:

Anonymous said...

That's a reasonable assertion.

It's time for people to move beyond the fixation on money mechanics and monetary policies. We have profound structural problems in the United States, and they need to be addressed directly. There is no royal macroeconomic road to fixing this broken country or taking on the problems of this threatened planet. The mad proliferation of populist obsessions with the monetary system are symptoms of denial, avoidance and fear.

People need to start looking at fundamental economic and social institutions and how to change them.

Even if policy makers are armed with MMT, we can get a very rotten and evil world if economic power, control and values aren't addressed. And even without much understanding of MMT we can get a very decent world if we mobilize to build it.

I'm sick of the endless, worthless battles with the monetarists, the monetary reformers, and the monetary cranks. 95% of this discourse is a waste of time and diversion from addressing more important issues.

Matt Franko said...

Dan I agree with you on the 'larger' issues but I think many would-be "righteous" people just still are not understanding the "technical" situation wrt these monetary system operations, and then think our govt is without any true/adequate authority to do anything about it... "we're out of money!",etc..

All they are left with is this view of social Darwinism that dominates the picture... "survival of the fittest", etc... "the 1% are evolving into a 'higher social species", etc..

So we need to have a grounding of these monetary system details in our back pockets ready to draw if we get "technical" push-back, but I agree we also need to move on and start to address the "denial/avoidance/fear' issue head on...

rsp,

STF said...

As long as you have things like the Eurozone being founded entirely on flawed understandings of the monetary system, it will be important to understand the monetary system in and of itself. Similarly, as long as you have parties in Congress willing to hold the debt ceiling hostage, it will be important to understand the monetary in and of itself.

The real problem I see here, and I've seen it other places, is the view that learning the monetary system and learning about kleptocracy are somehow mutually exclusive. Bill Black shows all the time why that's not true and why one's ability to analyze events and policy is strengthened with an understanding of both.

Calgacus said...

Baloney to Mark Pascal. Kudos to STF, especially about "the real problem".

Today's USA is probably the most corrupt society in human history. Still, the thugs at the top fear genuine monetary understanding, and genuine monetary understanding put into action - full employment, like nothing else. They understand how loosely the slumbering lions are bound.

Dan: There is no royal macroeconomic road to fixing this broken country or taking on the problems of this threatened planet. Yes, there is. It is called MMT & the JG in particular, which is a “rule of law” applied to the non-elite, non-wealthy and powerless, note. With all due respect, the academic MMTers undersell the JG and their own ideas. It damn well is a panacea. It is a panacea the way that not stabbing yourself is a miracle cure for bleeding.

Marx was wrong about the philosophers -some of whom had understood this and fiat money, probably better than he did, centuries ago. Keynes, Biko were right. Understanding the world IS changing it, the best and surest way of changing it.

Tom Hickey said...

Who at UMKC is getting the widest exposure on the left and right? Bill Black and Michael Hudson. Over MMT's monetary description? No. By emphasizing, "when a political/economic system is so corrupt, fraudulent, manipulated and criminal, it doesn’t matter what the underlying policies and principles are when those entrusted with running the system cannot do so honestly or competently. In a country where the “rule of law” only applies to the non-elite, non-wealthy and powerless, then anything goes and nothing matters."

As Lawrence Lessig said, “There is no important issue that the government … will address sensibly until we address this issue first,” that issue being legalized bribery leading to state capture.

Of course we need to talk about monetary and economic issues, but the central issue is power, who holds it, on what basis, and how to change, e.g, by a constitutional amendment getting the money out of politics and closing the revolving door.

Until that is fixed, no one capable of reforming the system will get anywhere near the levers of power. Right now, it's not even possible to dislodge the cohort of crazies that are able to shape policy based on the crazy due to Citizens United.

We can't let up on the political issues. At the same time we can and should bring in monetary and economics matters to support the political argument. But we must recognize that this is a political issue rather than an economic one in that there are moral, ethical, institutional, and legal dimensions to it in addition to economic.

In the final analysis, it will involve a cultural shift toward a more participatory society that one organized on neoliberal principles. That is not going to happen without huge resistance from TPTB.

AS Matt says, there are probably about 1000 people that understand the MMT monetary description, and even then the monetary stuff is getting lost in the proliferation of alternatives, from MMT, to AMI, to Positive Money, Ron Paul, to Karl Denniger, etc.

ON the other hand, everyone left, right and center understands crony capitalism and corruption, even Zero Hedge.

Tom Hickey said...

BTW , this is about strategy and tactics, not either theory or policy, which we generally agree upon.

Tom Hickey said...

Roger talks a lot about return on coordination. The worst nightmare of TPTB is that the masses will coordinate other than under their command. They realize that they are parasites on the system and if the social system is allowed to operate in coordinated way its "immune system" acting through the electoral process will dispatch them in short order as a threat to the health of the society.

Malmo's Ghost said...

Bravo!, Dan and Tom.

STF said...

I don't really disagree, Tom. But you must realize this battle is on multiple fronts. There's an ideological battle within the field of economics that drives the people at the Fed and ECB. There's corruption there, too, obviously, but as much as anything there's a mistaken view of how the monetary system works. This has driven a lot of bad monetary policy, it's driven bad currency regime design, it's driven bad recomendations to fiscal policy makters. And it continues to be the paradigm used by monetary policmakers. There's a profession here that is poorly trained and which is highly integrated into policymaking, whether the latter is corrupt or not.

I just think it's misguided to pretend one is more important than the other---certainly one can bring up contexts where one is more important as you did (and in those contexts I don't disagree), but if you don't do both, you are ultimately lost. This is a silly discussion to be having in my opinion. It's both/and, not either/or. We CAN walk and chew gum at the same time, and indeed we must. Stop the silliness.

Tom Hickey said...

STF: "It's both/and, not either/or. We CAN walk and chew gum at the same time, and indeed we must. Stop the silliness."

Absolutely agree. in any conflict there are many roles to play. MMT economist have to confront mainstream economists, MMT financial types need to confront conventional financial types. Political activists have to act as political activists.

All the pieces fit together, just as in an army the various ranks and rates all have key roles to play right down to the boots on the ground.

It's silly to criticize Mark Pascal as a political activist that embraces MMT for also prioritizing abuse of power, individually and institutionally. Crony capitalism and corruption are more institutional problems than individual ones.

We need to be showing how the key institutional arrangements are biased to privilege individuals who play roles in those institutions.

It's not a matter of replacing individuals with better ones but changing the institutional arrangements that foster privilege and institutionalize cronyism and corruption.

We should be congratulating him for figuring out that MMT is one of the weapons and a most effective one at that.

I also think that we have to be aware that for MMT to get credibility on the left it has to overcome the perception that Keynesianism in general is a compromise with capitalism to save the system from socialism., distributivism or communitarianism as antidotes to established privilege.

After all, Keynes was an aristocrat himself and he attempted a centrist solution that navigated between the hard capitalism of his day and "the red menace."

Now that communism is no longer a political factor and neoliberalism is making its move for global hegemony, this means taking an institutional approach that recognizes institutional overhaul is needed.

Tom Hickey said...

Politics (power) intersects with finance and economics at the point of distribution of income and wealth, since in monetary economies wealth translates directly into social status (class) and position (power) through the influence that money buys.