I’ve been thinking about responding to this article, Internet Marxists Who Are More Austrian than Neoclassical), but I don’t want to repeat myself, so let me try a different tack. I don’t guarantee MMTers will understand my argument. In fact, I don’t think they care about my argument. But, in any case, here goes:
The essential paradox of Modern Money Theory is not that it is wrong, but that it is wrong because, essentially, it is right.
The writer appears to believe that any opposition to MMT policies must result from the belief, “that a state currency not ‘backed’ by gold must surely have zero value or, at the very least, command a level of acceptance likely to crumble at any moment.”
Let me assure the writer that, at least in my argument, this concern is misplaced. I do not oppose MMT policies because fiat currency is subject to depreciation. Nor am I a gold-bug or what he calls an “Austrian Marxist”. In fact, communists were advocating a non-commodity means of exchange while bourgeois neoclassical theory was still in its infancy. Further, the Soviet Union and all socialist experiments of which I am aware, had no commodity money at all.
Thus, to understand why I oppose MMT we have to begin with its core assumptions — assumptions that I think are entirely valid. Read the rest of this entry »