I was on Steve Keen and Friends yesterday. This is the video, all two hours of it:
We discussed a lot of topics, with much more on accounting and its relationship with economics than I expected. That is a shared mutual concern for Steve and me.
It did, in fact, take us more than an hour to get to modern monetary theory (MMT). When we did, we agreed that MMT has done something amazing. It has created a heterodox economic school of thought that is noticed.
We also agreed that MMT is powerful precisely because it does explain how money does work now in a way that is consistent with the evidence available to us, and most especially that shows that governments create money by spending, increasing private wealth in the process, whilst the withdrawal of it from use by taxation reduces private wealth and the money supply as a result.
We then reserved the right to disagree with MMT's founders, including on the role of taxation and the claim it makes that exports are a cost to society and imports are a gain - which neither of us agrees with. As a result, we agreed MMT has to be open to both criticism and development.
But there was much more to the discussion than that and I admit the two hours flew by.
Steve and I are planning to meet up, probably in June. It was clear that there are areas of common interest for us. Let's see what happens next.
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I am an amateur follower of economics and have read what you have written about MMT with great interest. It makes absolute sense to me. I was surprised that it was not mentioned at all in Ha-Joon Chang’s excellent book (for beginners) “Economics: the users guide”. When confronted with new ideas (to me) I like to see what the critics say about them to ensure I’m not being carried away by my enthusiasm for values and thinking which is simpatico with my own. I wondered if you could direct me to the most cogent critique of MMT? The manner in which Chang evaluated the strengths and weaknesses in the various schools of political economy was extremely helpful!
And in passing, I really appreciate your blog – it makes a truly refreshing change from the anodyne and often facile reporting elsewhere in the media.
I have discussed MMT with Ha-Joon Chang because we talk occasionally.
He is not a fan – at least the moment it goes beyond what I might call the core principles
But that is a good book
Economists want a theory; I suspect to justify their narrow, largely irrelevant expertise. There is something tedious about their frankly inutile obsessions. Chang, Keen, Kelton seem to me refreshingly robust and practical
On exports, I was long puzzled by this; but slowly realised that the proponents are predominantly American, and if you happen to take for granted that the US dollar ($) is the world reserve currency, then that will influence thought processes (surprising as it may be, for aspirational ‘scientists’. economists are prone to taking a great deal more in the world for granted, that they are extremely ill-advised to indulge).
I learned a lot from this. I hope you consider doing something similar yourself.
It’s possible….
It’s been a long time coming, but angles are being discussed