I think you aren't seeing much about MMT if you aren't paying attention to the finance pundits. If you are paying attention to the finance pundits they're losing their shit more than they did over Bitcoin.
But hey. The pendulum might be swinging from "give money to rich people to make everyone better off" to "give money to poor people to make everyone better off" and from "rich people should keep all their money" to "the government should give money to the poor and middle class" and every time a system changes, there's opportunity in the delta:
- Needless to say, ahead of the announcement, those “in the know” rushed to buy up the paper, which was trading at 5% of its face value or less, in massive volumes. Once again, the well-connected made a fortune, when the paper was exchanged at 33%. Again, the Cantillon effect, and again the objective was achieved: the French state was restored to solvency. And in the process a whole class of nouveaux riches had been conjured into existence, while the rest of the population, especially the middle class, was left much poorer.
Funnily enough, this appears to be the outcome of every historical example of massive monetary printing: a solvent state, a new class of nouveaux riches, and a wiped-out middle class. These examples lead to my second point: MMT cannot be described as a monetary theory. The reason is simple: its proponents do not understand what money is.
Cantillon, by the way, is a trip:
- In 1719, Cantillon left Paris for Amsterdam, returning briefly in early 1720. Lending in Paris, Cantillon had outlying debt repaid to him in London and Amsterdam. With the collapse of the "Mississippi bubble", Cantillon was able to collect on debt accruing high rates of interest. Most of his debtors had suffered financial damage in the bubble collapse and blamed Cantillon—until his death, Cantillon was involved in countless lawsuits filed by his debtors, leading to a number of murder plots and criminal accusations.
On 16 February 1722, Cantillon married Mary Mahony, daughter of Count Daniel O'Mahony—a wealthy merchant and former Irish general—spending much of the remainder of the 1720s travelling throughout Europe with his wife. Cantillon and Mary had two children, a son who died at an early age and a daughter, Henrietta, wife successively of the 3rd Earl of Stafford and the 1st Earl of Farnham. Although he frequently returned to Paris between 1729 and 1733, his permanent residence was in London. In May 1734, his residence in London was burned to the ground, and it is generally assumed that Cantillon died in the fire. While the fire's causes are unclear, the most widely accepted theory is that Cantillon was murdered. One of Cantillon's biographers, Antoine Murphy, has advanced the alternative theory that Cantillon staged his own death to escape the harassment of his debtors, appearing in Suriname under the name Chevalier de Louvigny.
Were any of those actually attempts at Modern Monetary Theory? From what I understand of it, an important aspect of the theory is that inflation should be controlled by removing currency from circulation through taxation. Even the two examples cited from France don't sound like MMT to me. They didn't create money out of nothing, instead they sold something the state already owned to its people to collect money from the public without resorting to excessive taxation. (I do agree with the writers that Modern Monetary Theory is kind of a dumb name. Wikipedia suggests a different name: Neo-chartalism.)previous examples of MMT—Venezuela, Zimbabwe, the Weimar Republic, Revolutionary France
I'm absolutely no economist and I only have a passing familiarity with MMT, but this really does seem more like a neoliberal hit piece than an honest reflection on what MMT's downsides are, right down to the Santa Claus analogy and the example countries. Soooo, I went digging around a bit, and found this article that takes an opposing viewpoint. I'll just paste a relevant section here: "Rock star" monikers aside, this does make sense.Venezuela’s problems are not the result of the government issuing money and using it to hire people to build infrastructure, provide essential services and expand economic development. If it were, unemployment would not be at 33 percent and climbing. Venezuela has a problem the U.S. does not, and will never have: It owes massive debts in a currency it cannot print itself, namely, U.S. dollars. When oil (its principal resource) was booming, Venezuela was able to meet its repayment schedule. But when the price of oil plummeted, the government was reduced to printing Venezuelan bolivars and selling them for U.S. dollars on international currency exchanges. As speculators drove up the price of dollars, more and more printing was required by the government, massively deflating the national currency.
It was the same problem suffered by Weimar Germany and Zimbabwe, the two classic examples of hyperinflation typically raised to silence proponents of government expansion of the money supply before Venezuela suffered the same fate. Professor Michael Hudson, an actual economic rock star who supports MMT principles, has studied the hyperinflation question extensively. He confirms that those disasters were not due to governments issuing money to stimulate the economy. Rather, he writes, “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”
I'm no economist, either. What I will say is that neoliberal hit pieces must outnumber honest reflections at least 50:1 because I've probably read 50 articles hating on MMT and not a single one in its defense. Like I said - the pundits are losing their shit more than they did over Bitcoin. Venezuela's problems have a lot more to do with cronyism than economics; when you fire everyone who knows how to do something and hire someone who's loyal, you end up with a bunch of loyalists who don't know how to accomplish anything. The Soviet Union had similar issues where one's predictability and loyalty to the party had more impact on one's hiring than one's ability to actually, you know, do the job. The printing of currency is more of an effect than a cause. It's not like Venezuela started printing money because things were fine. What entertains me is the exact same pundits who think MMT is anthrax lollipops or some shit are totally 100% AOK with "inflating away the debt" or "declaring a debt jubilee." After all, Argentina did this and things are fine now. Just fine. Meanwhile they're mostly white Republicans in their 60s who sorta go "yeah you know fixed income? It's kinda fucked. And since I make so much more money than I'll ever get out of social security, let's just flush that shit. Inflate it away. Solve the pension problem by making a dollar worth a fifth of a dollar. Then our imports will be great there will be lots of foreign investment and all the old people will be dead sooner rather than later because they won't be able to afford cat food and things will be fine. But say "modern monetary theory" and suddenly they're clutching their pearls about Venezuela. Forbes is apparently kinda serious about a reasonable discussion of MMT. I don't see any real differences between MMT and FDR's New Deal. If people need jobs, make work. End of story. The problem I see is that economies were a lot less entangled back then and a domestic make-work project is very different from injecting cash into the economy, which is about the only prism Republicans can see monetary theory through. I mostly linked to the article because of the observation that whenever the currency is manipulated, those closest to the manipulation benefit while those furthest away tend to get fucked. Wage inflation is going to clobber everyone who can't work, and the 'boomers are in the process of retiring, thanks much.
I guess I'm going to have to find a decent explanation of MMT because I solidly don't get it. Everything I've read has been sketchy on how it works and the people I've talked to who are all for it don't seem to understand what they are talking about. My impression was that it sounded like a recipe for runaway inflation. The fervor, coupled with the vagueness of the people who've told me it's really worth looking into made me think it's the next goofy return to the good standard bullshit that undergrads interupt their professors with.
