I have spent a night reflecting on whether to comment on a post Steve Keen made yesterday on his being uninvited from a modern monetary theory (MMT) conference being held in Leeds this week.
Steve reported this:
I fully understand Steve's annoyance. It is wholly appropriate.
But let me be clear that Steve is not the only person about whom this question is being asked. A leading proponent of MMT asked me yesterday why I was not there, and I had to say it was because the conference organisers - the so-called Gower Initiative for Modern Money, whose early development I encouraged, and to whom I became an adviser - long ago threw me out of that position and ostracised me.
My crime was a simple one. I pointed out that a great deal of what Australian academic Bill Mitchell, who created the term 'MMT', says is utter nonsense and has nothing, in my opinion, to do with the principles which underlie MMT.
This became very clear over the same issue over which Steven Keen has now been expelled. I wrote a post in 2019 entitled 'Why Bill Mitchell is simply wrong on modern monetary theory and imports and exports.
You could spend a happy hour or more reading that post and the comments on it, which I acknowledged at the time would annoy many hardcore MMT advocates. It did. The Gower crowd and I parted company because I had the temerity to criticise one of the great white male gods of MMT, and I had no regrets.
The supposedly MMT theory put forward by Bill Mitchell and Warren Mosler on exports and imports has, as far as I can see, nothing whatsoever to do with MMT, whatever they might say. It is also total garbage. Steve Keen has long held this view, I know. We have discussed that fact and shared our utter bafflement at it. Refer to my linked blog to see why.
So, let me be clear about what the real issues are here.
The first is that there is claimed to be an MMT community. Outsiders suggest it is cult-like because of its propensity to expel those who question those to whom the truth was apparently revealed. It is hard to argue against this suggestion. This community, and the associated cult around Bill Mitchell, is exceptionally harmful to MMT in this country, and probably elsewhere. They also talk a great deal of nonsense, promulgating the belief that MMT says governments can spend without taxing, when in reality they cannot.
Secondly, this MMT community thinks its male founders have all the answers to all known questions. They don't. They got many things wrong, and not just imports and exports.
As I have repeatedly pointed out, they do not understand tax, and when it comes to corporation tax, they are on the far-right, in my opinion, in arguing for its abolition. Either they wholly misunderstand that tax, the nature of the company and the way in which entities operate, or they have a deeply pro-wealth, anti-democratic agenda that they are pursuing when making this suggestion.
That agenda is also seen in the indifference of some MMT proponents to tax evasion and tax havens - not caring that these activities undermine the tax base so long as others pay more tax to make good the loss, making clear in the process that they are not concerned about any socially progressive agenda.
Bill Mitchell, meanwhile, also proposed support for the far-right in Italy because they opposed the EU.
All of this is profoundly worrying. Those on the left need to be very wary of all this. I have been.
Third, there is closed-mindedness on display. Randy Wray once acknowledged I was the only person outside the MMT founders who had contributed to MMT theory with my work on tax. You will not find that comment now: it was deleted subsequently. And that is because the ranks are closed: the fragile cohort of male founders seem quite sure that they do not think others can contribute to MMT thought.
The fact that I have is ignored.
The fact that Steve Keen has proved why MMT has to be right using Minskey and the logic of double entry is not enough to allow him entry to an MMT conference: he has transgressed, and the sin will not be forgiven.
This is profoundly unfortunate. I summarise what MMT is all about in this glossary entry. I will not repeat it here. I do not pretend that is the last word on the issue. Of course, it is not. It is an opening point for debate. That is a debate that needs to happen. Either the MMT cult debates these ideas open-mindedly, or they do irreparable damage to important ideas, which I think are correct and best expressed by Stephanie Kelton.
As it is, the event in Leeds is not in any way an academic conference. If some academics are excluded because they are deemed inappropriate because of their intellectual ideas, which are not an affront to anyone's ethics, it cannot be.
MMT has to get its act in order and allow debate, or the likes of Steve and I will take the ideas in it forward and ignore what the so-called MMT community has to say because, as things stand, it is clear that they are not open to debate or ideas. That is not to their credit.
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When I first came across MMT I was pleased to see fresh thinking. I read the Positive Money website and considered subscribing but I decided not to. I could go with much of the analysis but not their solution. It didn’t seem practical and then I read Ann Pettifor whom you supported in the debate.
I saw some of Mitchell’s videos and didn’t like his dogmatic tone but that doesn’t invalidate the concept. But again I could not quite bring myself to commit. Having a theory which explains everything is very seductive (you see it with dedicated Marxists and Free Marketeers ) but I always keep a sceptical edge. I am not an economist but as a counsellor that sceptical edge saved a lot of potential mistakes.
I began to think that it was another case of an economic theory becoming almost a theological concept. Pragmatism and empiricism are well established positions in England and for good reasons. I think MMT is good generally but doctrines-as in theology for me-and need to be held loosely. A guide not a directive.
It is a map. It is not the terrain.
Outrageous. And worryingly, they cannot see this is authoritarian, anti-democratic, anti-intellectual and might even be called fascist. This has all the hallmarks of a cult: the leader(ship) and their “truths” must not be criticised or opposed.
From Cult Education Institute – Some of the 10 signs
Absolute authoritarianism without accountability
Zero tolerance for criticism or questions
Abuse of members
A belief that the leader is right at all times
A belief that the leader is the exclusive means of knowing “truth” or giving validation
A further temptation to despair, Richard – were it not for the likes of Steve Keen, Stephanie Kelton and you.
I think ‘the principles that undermine MMT’ should be ‘the principles that underlie MMT’, though you’ve done an excellent job in this post of exposing the former.
Corrected. Thanks.
The only way to resolve differences is through discussion
And that avenue is not open
If Steve is in the country he could attempt to set up a fringe event one of the dates. This would need a venue, comedy venues can often put something on a short notice, a bit of promotion, and some courage to overcome any opposition that got nasty. Graham Linehan’s team have experience of this.
I am not sure he is, although we have bern on contact with each other
Any belief that is not prepared to face questions is almost certainly wrong (and probably already a cult). By casting themselves in this mould, the self-appointed gurus of MMT will hold back the adoption of their ideas for as long as they hold sway. How sad!
You could organise a conference that was, for example, “A Celebration of Warren Mosler’s Contribution to MMT”. It would be legitimate at such an event to not allow criticism or dissenting voices. That isn’t what this conference claims to be. Blocking dissent and ignoring other opinions is the sin of neoclassical economics. It is therefore sad to see what seems to be the same thing at work here. Proper science only advances by testing theory to destruction and thus dissent is essential. I fully understand folk with established positions often don’t like that. Especially, perhaps, more established and supposedly more important folk. So anything that claims there is only one ‘true’ version is asking for trouble, and I would say it is always counter-productive.
I am told this is a Warren Mosley show but it was not clearly badged as such
Academia is not immune from all the human prejudices – but this just seems ridiculous.
Really undermining themselves by not being able to debate contentious ideas.
Shows the danger of people saying labelling themselves as ‘MMT ‘ – rather than just drawing on MMT-type ideas.
Even BoE admits it creates money by spending it into the economy – so is to some extent MMT
Must read the export import stuff
Interesting, if fruitless.
Obviously rational debate has long been lost with the injection of personal disputes.
John Maynard Keynes was personal friends with Hayek, despite them being polar opposites on both theory and social values.
I’m not sure I would have been able to be cordial with one whose value system was anathema to my own.
In MMT the disagreements are much more nuanced, so ought to be rationally discussed.
Incidentally ,and specifically in non renewable resource terms, it is correct that exporting geographically restricted materials, such as rare earths and metallic ores, does reduce a nation’s wealth, as the stock of a depletable resource reduces, but the calculation of this trade’s value depends on several factors. Firstly, as ores, the value lost in terms of the resource depends on potential future useage, so an element of hope value, and resources are not calculated in straight money values. Then we have externalities to work out. A highly contaminating mining complex will have serious deleterious impacts not included in export pricing, hence disadvantageous to the exporting nation. This primary trade has always been associated with empires and colonies, and is merely exploitative.
Then we have exports of renewable resources, such as the global grain trade, on which the Ukraine is so dependent, as well as the recipient countries. Here the household analogy is clearly wrong as production exceeds the requirements of the local market.
A loss in soil fertility apart, this trade is repeatable and ought to be sustainable.
Then we get into services. Do they remove capacity from internal markets for national provisions ?The answer here is mebbes aye, mebbes nay. Depends on labour markets.
Of course then we get into debates on Ricardian theory too, about comparative advantage.
Basically, it seems to me that the import export discussion does not have a simple single answer, as the basic assumptions are different for different economic activities.
I follow Steve Keen and Bill Mitchell online as well as some conventional economists like Wren-Lewis , and rarely agree with all of them, if any.
However, we need logical and informed debate without amplifying disagreements into turf wars. Then the only winner is neoliberalism.
Much to agree with
https://www.youtube.com/watch?v=WboggjN_G-4
Sometimes, humor is the only answer.
No! we are the carriers of the MMT sacred flame – that lot over there are splittists etc.
Good grief.
Your comments on corporate tax & the MMT crew are interesting/disturbing.
I note that Vance – Trumps No2 is in full on isolationist mode – which is fine – Euros probably do need to spend more on defense. That being the case, he will have no probs with a crack down on UK corporate tax dodging & some of the resulting money being spent on EU defense – will he?
Uncommented on us he is a massive crypto fan – because it undermines the dollar
And, I suspect, permits tax abuse
Richard,
So……….
From reading this blog I have learnt things eg MMT & why Taxing ‘Wealth’ is a bad idea. An idea of course based on your experience as a practising accountant.
You have also clearly learnt things or taken on ideas partly of course from those whose experience is different to yours.
On the other hand the MMT conference is shutting out ideas that just might help MMT develop into a better and more useable school of thought. Why this disinclination to learn, to be challenged?
As has rightly been pointed out it has the hallmarks of a cult.
First of all I’d like to say that I am a keen follower of this blob and have recently become one of Steve Keen’s ‘rebels’.
I am at the Leeds Conference now and have spoken to Warren about imports and exports with specific reference to an article by Fadel Kaboub on exploitation and colonialism in Kenya. Mosler says that there cannot be exploitation because Kenya imports more than it exports. Kaboub disagrees and I notice he is not at the Conference either!
Thanks
Warren Mosler’s position appears utterly illogical to me
Its always incredible how people who ultimately agree on so much can fall out so spectacularly over the finer points… What’s the point in organising a conference if debate isn’t allowed?
Hard to know
This is absolutely disgusting.
I find it weird and distasteful that the organisers refer to “Warren”. Can’t put my finger on why, but it feels uncomfortably messianic.
I see many parallels to Galileo here. Perhaps Steve will be placed under house arrest for his heretical thinking?
Modern monetary trauma. I have made this comment a few years ago on another platform. That MMT doesn’t belong to those who created it. If it is going to survive and enter the political mainstream then it has to be democratised. Only way that will happen is when the creators give up creative control.
Otherwise it is just counter Austrian-economics economics.
Much to agree with
As a consequence of some MMT theorists the following is considered healthy:-
https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
Their stance of course is based on ignoring the fact that China currency rigs to achieve this global manufacturing position. You do not find this manipulation and its global consequences discussed in MMT blogs and articles even though there is belief being expressed there are dangerous geopolitical implications:-
https://www.theguardian.com/politics/article/2024/jul/16/uk-and-its-allies-face-deadly-quartet-of-nations-says-defence-expert
(I would add ignore Trump he failed to do anything significant to address this issue when he was in office despite the rhetoric!)