Modern monetary theory and its critics | real-world economics review

Modern monetary theory and its critics

3 October 2019

Introduction: Whither MMT?
The editors
2
Alternative paths to modern money theory
L. Randall Wray
5
Initiating a parallel electronic currency in a eurocrisis country – why it would work
Trond Andresen
23
An MMT perspective on macroeconomic policy space
Phil Armstrong
32
Monetary sovereignty is a spectrum: modern monetary theory and developing countries
Bruno Bonizzi, Annina Kaltenbrunner and Jo Michell
46
Are modern monetary theory’s lies “plausible lies”?
David Colander
62
What is modern about MMT? A concise note
Paul Davidson
72
Modern monetary theory: a European perspective
Dirk H. Ehnts and Maurice Höfgen
75
MMT: the wrong answer to the wrong question
Jan Kregel
85
Modern monetary theory and post-Keynesian economics
Marc Lavoie
97
Money’s relation to debt: some problems with MMT’s conception of money
Tony Lawson
109
The sleights of hand of MMT
Anne Mayhew
129
Tax and modern monetary theory
Richard Murphy
138
Macroeconomics vs. modern money theory: some unpleasant Keynesian arithmetic and monetary dynamics
Thomas I. Palley   
148
MMT and TINA
Louis-Philippe Rochon
156
Modern monetary theory: is there any added value?
Malcolm Sawyer
167
The significance of MMT in linking money, markets, sector balances and aggregate demand
Alan Shipman
180
The political economy of modern money theory, from Brecht to Gaitskell
Jan Toporowski
194
Board of Editors, past contributors, submissions, etc. 203

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BE STILL AND KNOW LIFE-VALUE ONTO-AXIOLOGY – A collection of essays by Prof. John McMurtry | globalresearch.ca

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Table of Contents

  • I. THE RIGHTS OF THE “HUMAN” OVER THE “NON-HUMAN”: THE UNDECLARED WORLD WAR OF HUMAN RIGHTS VERSUS CORPORATE RIGHTS
    • Right to Life: From Right-Wing Slogan to Life-Grounded Comprehension
    • Intrinsic Life Worth and Humanity’s Universal Being
    • Projecting Personhood onto the Non-Human to Deprive the Human
    • The Life-Value Onto-Ethic in Contrast
  • II. FINDING THE LOST LIFE-VALUE GROUND AND MEASURE: THE COMMON LIFE INTEREST OF LEGITIMATE RIGHTS AND SOCIAL JUSTICE
    • Capabilities: Regrounding Amartya Sen and Martha Nussbaum in Life Need and Value
    • Individual Differences and the Life-Value Criterion and Measure of Legitimate Rights
    • Thinking Past the Life-Blind Paradigms
    • The Universal Human Life Necessities
    • Universal Life Needs the Basis of All Legitimate Rights
  • III. GROWING THE LIFE GOODS BASE: BEYOND MONEY, IDEOLOGY AND PRODUCTIVE FORCES
    • Why Marx Does not Solve the Problem
    • Predictable Downfall of Human and Planetary Life Until Life-Value Turn
    • From Moral and Legal Philosophy to Marxian Revolution: The Missing Life-Ground
    • The Modern Blind Eye: No Life-Value Standard to Steer Productive Development
    • The First Requirement of Social Justice: Re-Grounding in Universal Human Life Goods
    • Recognising the Human Vocation Above All
    • Right of Access to Universal Life Goods: The Missing Argument
  • IV. THE UNIVERSAL HUMAN LIFE NECESSITIES: THE LIFE GROUND OF ECONOMICS AND HUMAN RIGHTS DEFINED
    • Blocking Out Life Necessity: The Compulsion of High Theory
    • The Universal Life Needs and Goods: Explaining the Base of All Rights and Obligations
    • Beyond the Invisible Hand: Naming Humanity’s Universal Life Necessities and Goods
    • How to Test the Universal Life Goods and Necessities for Validity
    • Sufficiency and Insufficiency of Provision Recognised by Life Capacity Margins
    • Thinking Through “From Each According to Ability, To Each According to Needs”
  • V. RECOVERING THE BASES OF OUR LIVES FROM SILENCE AND OCCUPATION: THE HUMAN VOCATION, THE CIVIL COMMONS AND SOCIAL JUSTICE
    • Being Human: Why We Must Work for Our Own Life Good and Others’ at the Same Time
    • The Civil Commons: Real Economic Base and Social Correlative of the Human Vocation
    • The Corporate-Rich War on Civil Commons to Expropriate and Degrade Them for Profit
    • From Commons-Blind Theory on Both Sides of Class Division to Life-Goods Economy and Justice.
    • Regaining the Lost Bearings of Civil Commons as First Premise of Human Evolution
    • From Corporate State versus Social State to Life-Coherent Rationality
  • VI. EVOLVED CIVIL COMMONS VERSUS CORPORATE GLOBALIZATION: A PERFORMANCE EVALUATION ACROSS UNIVERSAL LIFE GOODS
    • Re-Setting to the Common Life-Ground of Our Existence
    • Economic Advance and Social Justice Both Decided by Universal Provision of Life Goods
    • Atmospheric Goods
    • Bodily Goods
    • Home and Habitat Goods
    • Environmental Integrity
    • Life-Protective Goods of Security and Healthcare
    • Cultural Life Goods
    • The Good of Human Vocation
  • VII: WHY CONTEMPORARY JUSTICE THEORY FAILS: THE MISSING COMMON INTEREST OF HUMAN RIGHTS AND REASON
    • Abstracting Away Everything that Ultimately Matters: Mapping High Theory’s Correspondence to the Life-Blind Ruling System
    • G.A. Cohen’s Egalitarian Rescue Remains Within the Ruling Alibi as First Premise
    • Economic Science and Pareto Optimum/Efficiency Unmasked in Principle
    • Rawlsian Justice as Trickle-Down Myth in Formal Costume
  • VIII. BEYOND EQUIVOCAL EQUALITY AND MASKING MYTHS: GROUNDING JUSTICE IN WHAT WE ALL NEED TO LIVE AS HUMAN
    • From Rational Plan of Life to Human Vocation: The Ultimate Moral Regrounding
    • Life-Ground Ethics Rejects a Career Plan as a Universal Good of Justice or Morality
    • Linking Life Right and Obligation at System-Wide and Historical Levels
    • The Life-Coherence Principle, Civil Commons, and the Human Vocation
  • IX. REGAINING THE REAL ECONOMY FROM THE CANCER SYSTEM: THE CHOICE SPACE FOR HUMANITY’S EVOLUTION OR DESTRUCTION
    • Evolution of Humanity by Rules of Life-Enabling Economy and Justice
    • Progressive or Regressive Meta Pattern of History?
    • The Corporate-State War Against Human Evolution
    • Recovering the Real Economy in Principle and Fact
  • X. THE SOCIAL STATE VERSUS THE CORPORATE STATE: FROM EUROPEAN FASCISM TO GLOBAL MONEY-SEQUENCE ABSOLUTISM
    • Social State Evolution versus Corporate State Growth: The Battle Lines Defined
    • From the Depression, Anti-Fascist War and Decolonisation to the Corporate Occupation
    • The Morality of Corporate Rights: No Rights Except for Private Money Sequences
    • Social Justice and Economic Integrity: The Life Code in Social Defence
  • XI. THE LIFE-AND-DEATH WAR OF RIGHTS SYSTEMS DEFINED
    • Defining the Global Corporate Mechanism in Formal Terms
    • The Age-Old Life Economy of the Civil Commons versus the Corporate-Rights System
    • Holding and Advancing the Life-Ground of Resistance: Clarifying the Civil Commons of Economic and Human Rights Around and Under Us
    • Beyond Amnesiac Despair: The Life Economy and Human Rights Base Already Won
    • The Real Private Sector is the Opposite of Global Corporate For Profit
  • XII. HUMANITY’S EVOLUTION AND THE GREAT REVERSAL: AN ANATOMY OF THE CORPORATE RIGHT COUNTER-REVOLUTION
    • Getting Our Historical Bearings in the Turning-Point Time
    • The Great Reversal
    • The Historic Choice Today
  • XIII. HISTORY’S LONG WAR FOR LIBERATION: RECLAIMING THE LIFE RIGHTS WHICH HAVE BEEN WON
    • The United Nations Universal Declaration of Human Rights
    • Societies’ Life Rights Against Corporate Fascism Across Borders
    • Resolving Confusions of Meaning to See the Historical Pattern Across Generational Time
    • Reclaiming and Moving Beyond the Human Life Rights That Have Already Been Won.
  • REFERENCES

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A Manifesto

In the capitalist system, the prime directive enshrined in law is to maximize profit for the shareholders, and not to optimize benefits for all stakeholders, inclusive of workers, customers, communities and our planet.  These are treated as externalities so as to privatize the gains and socialize the losses.

In this system, workers are seen as a cost (a liability) and if the capitalists can automate what workers do, and thus bring the cost of “labour” to zero, they would do that readily to maximize profit gains.  Also having a bumper stock of unemployed people keeps the price of labour low (according to market supply-demand principles), hence the manufacturing of poverty and economic refugees, which can be stopped in a heartbeat if there is the local and global political will to end tribal “wars” and destabilizations within and without……

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‘Overpopulation’: A Cover Story for the Money Cancer System | Prof John McMurtry

It is not “the rising tide of human numbers” simpliciter that loots, pollutes and destroys the life carrying capacities of the planet. It is what all over-populationists conveniently ignore:

(1) the much still exponentially self-multiplying tides of private money demand on the earth’s resources that drives every degenerate trend in the planet’s life carrying capacities, and

(2) its ultimate driver of limitlessly self-maximizing private profit to the top which now puts more demand on the earth’s resources by a few plutocrats than by 90% of the population .

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Nobody left behind: maximising the health benefits of an inclusive local economy

This report makes explicit the links between health and the local economy, their interdependence, and the action that local authorities and their partners can take to ensure that health and wellbeing are key considerations in local and regional economic development strategies.

Public health
06 Feb 2019

Ensuring that the local economy benefits everyone – sometimes known as ‘inclusive growth’ – is a priority for local government.

The concept of inclusive growth was originally developed by economists working in developing countries, when organisations such as the World Bank realised that economic growth was not always resulting in the reductions in inequality and increases in living standards that had been expected.

There is increasing evidence that the benefits of wealth and a flourishing economy will not simply ‘trickle down’ to the poorest sections  of society.

Much of the work that Government can do to improve the economic prosperity of a country takes place at the national level. But the way local authorities tackle issues of local economic development can also make a positive difference to the wellbeing of the communities they serve.

Across the country, local authorities, supported by their public health teams, are making valiant efforts, in the face of significant financial constraints, to make this aspiration come true.

The issues discussed here and the many examples of good practice will help ensure that, when it comes to our work of economic development, nobody is left behind.

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The Global Syndemic of Obesity, Undernutrition, and Climate Change: The Lancet Commission report

Obesity is still increasing in prevalence in almost all countries and is an important risk factor for poor health and mortality. The current approach to obesity prevention is failing despite many piecemeal efforts, recommendations, and calls to action. This Commission following on from two Lancet Series on obesity looks at obesity in a much wider context of common underlying societal and political drivers for malnutrition in all its forms­ and climate change. The Commission urges a radical rethink of business models, food systems, civil society involvement, and national and international governance to address The Global Syndemic of Obesity, Undernutrition, and Climate Change. A holistic effort to reorient human systems to achieve better human and planetary health is our most important and urgent challenge.

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The need for a new public administration | James K. Galbraith (2018)

The economic model according to which markets are self-equilibrating rests on a world-view of harmony and stasis that goes back to classical China, and was already fully rejected in all domains of science and also in political economy in the 19th century. Somehow it survives in textbook economics to this day. A new public administration needs to rest on modern scientific habits, recognizing that all biological, mechanical and social systems require effective regulation, not to “reduce externalities” but because otherwise they cannot exist at all. Once this is recognized, the task of government is to make regulation and public provision of services work well, minimizing predation, parasitism, force and fraud.

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There is more than one economy | Neva Goodwin (2018)

Human economies can be understood in more than one way.

  • The private business economy is what economics textbooks are generally about.
  • The public purpose economy consists of governments and their agencies as well as non-profits and international institutions like the World Bank or the United Nations. The public purpose economy is a collection of institutions that are justified by their stated intention to act for some broader good than their own profit or enrichment – though they may differ widely in their definitions of what is “good”.
  • The core economy is where households and communities carry on their internal activities of production, distribution and consumption. The core economy’s justification and purpose is the survival and well-being of its members. It is located in home, family, and neighborhood; places that function as markets for emotional, social, and civic transactions. This paper will consider some distinguishing characteristics of these three economies – in particular: their goals or justifications; what currency they use; what kind of demand they respond to; and how they define and reward work.

The second half of the paper will offer reflections on the harms caused by an excessive dominance of the private business economy over the other two, with thoughts on some of what will be required to redress this balance. It will conclude with an image of a healthier relationship between humanity and our natural environment – a relationship that will inevitably come about, whether we choose to move into it positively, or are forced into it by breakdowns in all of our economies resulting from natural and social disasters.

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The public economy: understanding government as a producer. A reformation of public economics | June Sekera (2018)

In mainstream economics scripting, government is either bumbler or villain. Cast as market fixer, intervenor, enforcer or redistributor, the state cannot but act inefficiently or, worse, illegitimately. Public goods and collective action are called “problems,” the commons a “tragedy.” Even today’s so-called “public economics,” as represented by the “public choice” school, is decidedly anti-public. It was not always thus. More than a century ago, economists theorized the state as a framework of collective agency for public purpose and understood government as a producer meeting collective needs. A cogent concept of “the public economy” guided this nascent field of public economics, long since lost to historic upheavals and repression by proponents of market-centric rational choice theory.

This paper rejects today’s orthodoxy and its artful, but artificial, construct that subverts the ability of the public economic system to produce on behalf of the polity. I call instead for the embrace of a new public economics that returns to lost roots while breaking new ground by taking into account the biophysical imperatives of production. The model offered here takes a systems perspective (as did Quesnay and early 18th- century Physiocrats); recognizes a public economy with distinctive purpose and drivers (as did the “German Public Economics” theorist Gerhard Colm in the 1920’s); and focuses on government as a producer (as did Paul Studenski in the 1930s-50s). Finally, it draws on two centuries of physics and on 21st century systems ecology in recognizing biophysical imperatives inherent to production. Developing and promoting a cogent theory of the public economy system is vital to the effective operation and, ultimately, the survival of the governmental systems by which democratic nation-states function today. The simplistic type-casting of government, the “market-failure” rationalization for state action, the invalid imposition of market axioms and assumptions on the public domain, the disregard of public purpose must all be rejected. It is time for a Reformation of public economics.

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