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Pre-distribution or redistribution? The Piketty moment, the Democrats, and the oncoming elections

[This post began with an exchange in comments at Naked Capitalism; it's a response to a "Distributionist" proposal by contributor Hugh in response to a post by Randall Wray, "Forget Taxes for Redistribution – What to do About Inequality". Popularizing, we could define our terms using short-hand slogans from the New Deal era: "Soak the rich" would stand in for "Redistribution," since redistribution's intent is to reallocate wealth using the tax code; and "New Deal" itself would stand in for "Pre-distribution," since redistribution's intent is to reallocate wealth via government programs and services. ("Predistribute" because, as MMT teaches, government spending can come before the collection of taxes, and does not depend on them.) Note also that "Redistribute" is just a little bit deceptive; granting that we could raise tax rates on the rich effectively, that does not automagically net out positive for those who are not rich. Suppose we raised a trillion new dollars with progressive taxation, and then blew it on a manned space mission that the oligarchs to build Galt's Gulch on Mars? (Trickle-down enthusiasts, the door is to your right.) Or a lottery where all the proceeds went (again) to a winning 1%? --lambert]

* * *

Dear Distributionist:

I've read your proposal to "Soak the rich" -- which I'm all for -- and these are my thoughts.

Ultimately, people support government programs because they deliver concrete material benefits; that's why programs like single payer in Canada or the NHS in the UK or Social Security and Medicare in this country are hard to dislodge, no matter who hard the neo-liberals work to degrade, privatize, and loot them.

And programs that deliver concrete material benefits are hard to dislodge because they develop constituencies and institutions that support them. Show me the enduring constituency for (say) a steeply progressive tax code! There isn't one. And why? No concrete material benefits for voters, that's why. Suppose the Piketty media boomlet turns into a constituency of sorts. Show me why that constituency is going to end up more powerful than a program like Social Security, that sends you a check in the mail (even today), or a program like Medicare, that gets you medical care (even today).

That's why the best course is the one that Wray advocates: Pre-distribution. I'm a big fan of "Show me the money." "Show. Me. The. Money." Pre-distribution shows me the money. Messing about with the tax code does not. I can read about a "tax fight" in the papers, but at the end of the day I have to ask a question: "And I get?" What do I get out of your Distributionist plan? Read it through, and you'll see the answer: Nothing. Zip. Zilch. Nada. A big fat zero. Actually, to be fair, I get the good feeling of having taken revenge on evil-doers (and evil they are!). But feelings don't pay the grocery bills, and a check in the mail does. Show me the money! (You can't, because Federal taxes don't fund spending anyhow). And I get? The only answer is nothing. I read the proposal, and there's nothing in it for me.

* * *

Now let's give some consideration to the whys and wherefores of the Piketty boomlet, and the whole "income inequality" gambit. (Wrong phrase: It's "income inequality"; it's class warfare. Not that you'll ever hear a Democrat say that.)

1) We know that both parties and the political class as a whole are fully committed to a neo-liberal worldview that rejects the public delivery of public services for public purpose in favor of private delivery of public services for private purpose, through rent-seeking intermediaries (hence ObamaCare and not single payer, charters, and on and on and on).

2) We know that "income inequality" and the Piketty book are being pushed by the Democratic nomenklatura and the career "progressives," subsets of the political class above.

3) We know that the Democrats pushing "income inequality" and Piketty got Obama elected and still "have his back," even though he's a con artist who's "the more effective evil".

4) We know that the Democratic 2008 campaign took a massive popular wave of desire for "hope and change" and dissipated it, completely and deliberately (through, for example, closing down OFA).

5) We know that the Democrats, and especially the career "progressives," are expert at devising roach motels for progressive energy.

* * *

So where does that leave us?

Let's assume that a Distributive tax program like yours is the main focus of good-hearted and sincere leftists (like yourself) in the 2014 and 2016 campaigns. (You didn't the Piketty boomlet was happening for any other reason, right?) So let's see how all this is likely to play out.

Leaving aside lots and lots of spam for money and petitions from Democratic operatives paid by the click:

1) Massive "tax fight" in Congress in the Fall of 2014 and the summer of 2015. (There will be lots and lots of stories of wretched excess by the filthy rich, and the Senate may even bestir itself to [gasp] hold hearings, something Democrats could never bring themselves to do when the filthy rich had committed well-documented crimes.)

2) The uproar over "tax reform" will therefore turn out to be another "progressive" roach motel. Real outrage and real desire for reform will be fed with the empty calories of TV images from another Beltway circus.

3) A "tax reform" bill may even, after tremendous labor, be passed into law.

4) In due course, say in a decade or so, the law will be seen to have sadly come to nothing, exactly for the reasons Wray gives. (Even as you accuses Wray of pearl clutching, I notice that your proposal does not address how these taxes are to be collected; Wray claims they cannot.) This will happen more or less unnoticed, since as I pointed out above, there's no constituency for such a law, since it does not deliver any concrete material benefits.

5) Therefore, what the neo-liberals really fear and hate -- public delivery of public services for public purpose -- won't even be "on the table" at all. No "infrastructure program to begin to repair our deteriorating public goods, with the jobs targeted at the working poor" (Wray). No "universal preschool" (Wray). Robin Hood, shouting "Soak the rich!" in a "tax fight" will have sucked all the oxygen out of the room, choking the "New Deal."

6) Democratic nomenklatura to their funders: "Mission accomplished!"

7) Democratic apparatchiks to each other: "BWA-HA-HA-HA-HA-HA-HA!!!! The ol' 'roach motel' play worked again!" They never learn! [high fives, PBR all round]

Obviously, we should tax the rich painfully, to prevent the formation of an aristocracy of inherited wealth, to prevent the rich from buying the government with their loose cash, and for the psychological and spiritual well-being of their children. We also need to see banksters in orange jumpsuits doing the perp walk. Even if the statute of limitations for their crimes in the housing bubble now applies, they have doubtless committed fresh crimes. But let's not bet the farm of delivering concrete material benefits on solving "income inequality" with the tax code. Na ga happen. The American people really need the left to do better, and the Democrats are doing all in their power to prevent that. Sadly, reactions like your proposal play into their hands.

Cordially,

Lambert Strether

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Comments

Submitted by Hugh on

Long before Piketty came along with his book, I had often pointed out that there were 4 ways government could effect redistributions of societal resources: 1) legislation, 2) regulation, 3) spending, and 4) taxation. In respose to the Wray post, I wrote on taxation because his most extreme proposal centered around it. Wray's contention that taxes on the rich don't matter is, of course, a neoliberal's wet dream. But to point out that Wray is carrying water for the neoliberals is considered heresy and has gotten me placed under moderation censorship at Naked Capitalism. So much for its pledge of fearless commentary.

I have consistently promoted a socially conscious approach to economics and politics centered around the kind of society we wish to have and live in, one that is fair, decent, and equitable. So it seems a bit strange that Wray and MMT which have always had difficulties in incorporating the social dimension into the theory should be used against me when the social dimension is the starting point and central focus of my theorizing.

What gets lost is that Wray wants, like most MMT theorists, to keep the present economic system largely intact. He just wants to ease the suffering of those of us in the underclass rather than eliminate the economic system which gives rise to it. If Wray has a centerpiece to his economics, it is the business cycle, and the business cycle means always having an economy rather like the one we have now. I think this is what a lot of people don't get. They read up on some of the principles of MMT and think they are seeing a revolution. But MMT is nothing of the kind. Its theorists don't want a revolution. They want to modify the current system just enough to maintain the underlying status quo.

It's important to understand that my proposals on taxation, and indeed the much larger vision of remaking the current society into one most of us want to live in, are impossible. But then so are Wray's and for the same reason. The rich own the elites and through them control all of our government and public institutions: the executive, the Congress, the courts, the Fed, the regulators, the media, and academia. I call this alliance of the rich and elites against us class war. Real change can not come until we overthrow the dictatorship of the haves which they have created. And we can only do this if we go back to our social origins which are outside the powers centers the rich and elites control. Real change is possible if we come together as a people and act to make it so. After all, we are the source of the wealth and power the rich and elites have usurped.

Wray comes across to me like all liberal Establishment thinkers. Intellectually they are a mishmash. They have some good ideas and some that are dead wrong. And they have no overarching philosophy or vision to distinguish between the two. Put simply, they can not square their allegiance to the Establishment, the status quo, and the elites to which they belong with what (in however a murky way they see it) needs to be done. They simply spawn ideological debates that are doomed by a myriad of internal contradictions
to go nowhere. We should be and need to be beyond this point. Liberal economists: Krugman, Stiglitz, Wray, Mosler are not on our side. They can not be on our side and still champion and belong to the very system that loots and immiserates us. Trust us, we want a system that will loot and abuse you a little less is not slogan or a movement I want to be any part of.

Submitted by lambert on

Quoting Hugh:

[1]Long [2]before [3]Piketty [4]came [5]along [6]with [7]his [8]book, [9 ]I [10]had [11]often [12]pointed [13]out [14]that [15]there [16]were [17]4 [18]ways [19]government [20]could [21]effect [22]redistributions [23]of [24]societal [25]resources: [26]1) [27]legislation, [28]2) [29]regulation, [30]3) [31]spending, [32]and [33]4) [34]taxation. [35]In [36]respose [37]to [38]the [39]Wray [40]post, [41]I [42]wrote [43]on [44]taxation [45]because [46]his [47]most [48]extreme [49]proposal [50]centered [51]around [52]it. [53]Wray's [54]contention [55]that [56]taxes [56]on [57]the [58]rich [59]don't [60]matter ...

That's not what Ray says. He doesn't say taxes on the rich "don't matter." Quoting him:

[A]Trying to punish them with taxes is a fool’s errand. They’ll just raise their compensation package and buy tax exemptions from Congress.

[B]And, as we know, Uncle Sam doesn’t need any stinking taxes to “pay for” jobs and income and healthcare and decent retirements for the poor. [C] If you have unemployed resources, free lunches abound! Just put the resources to work, and you’ve got Bernstein’s wish list filled.

Claim [A] is a claim that raising taxes on the rich won't work to reduce "income inequality." Agree or disagree, that's not a claim that taxes "don't matter."

Claim [B] is the MMT truism that Federal taxes don't "pay for" spending. [Truly interested readers, we'll explain this amazing assault on conventional wisdom again, on request.] Agree or disagree, that's not a claim that taxes "don't matter."

Claim [C] is the MMT truism that real resources limit what we as a society can do, not tax money. This again is an MMT truism [Readers: Same as above.] Agree or disagree, that's not a claim that taxes "don't matter."

This basic stuff that I would expect any attentive reader -- let alone a putatively serious analyst -- of MMT to get right. Agree or disagree, but when you're stating your interlocutor's position, try to get in the same ballpark with what they really said, at least. This is verging on "any stick to beat a dog" territory.

No point my going any further with the comment, with a glaring error like this right at the beginning.

transcriber's picture
Submitted by transcriber on

... is, of course, a neoliberal's wet dream. But to point out that Wray is carrying water for the neoliberals is considered heresy and has gotten me placed under moderation censorship at Naked Capitalism.

Did it really? On what grounds?

Submitted by lambert on

I'm not going to get into who gets moderated for what at NC. That's not my information to disclose and I'm not going to confirm or deny what Hugh says.

However, on this blog, falsehoods (see above) and "any stick to beat a dog" posting is grounds for banning; see the Moderation policies up top.

Wray is not a neo-liberal for at least two reasons. It's therefore a falsehood to say he is.

1) From an intellectual history standpoint: Wray is not a member of the "neo-liberal thought collective." There's a heritage here, and AFAIK, Wray isn't part of it. He's not at a think tank funded by guys who believe in Hayek or Freidman; he's at the Levy Institute, a different kind of economics entirely. Many other MMTers are out at UMKC, far from Harvard, Yale, Princeton, and MIT, where the stone neo-liberals live.

2) From an ideological standpoint: The "thought collective" articles show that the neo-liberals aren't all that consistent ideologically; the argument is that they are Flexians who seek power rather than ideologues; they will, at least, trade ideology for power. Therefore, because neo-liberal is such a Protean term, it's always possible to point to this or that aspect of any writer's work, shorn of context, and say "They're a neo-liberal!" That said, my working definition of neo-liberalism is in the post, underlined here:

1) We know that both parties and the political class as a whole are fully committed to a neo-liberal worldview that rejects the public delivery of public services for public purpose in favor of private delivery of public services for private purpose, through rent-seeking intermediaries (hence ObamaCare and not single payer, charters, and on and on and on).

MMT is, among other things, about public purpose, so Wray doesn't fit; and Wray's advocated public delivery of IIRC schooling as well, so he doens't fit there, either.

Wikipedia gives another definition:

Neoliberalism is a form of economic liberalism whose advocates support laissez faire, free trade and open markets, privatization, deregulation, and enhancing the role of the private sector in modern society.[1][2][3]

Given that the Jobs Guarantee implies an increase in the role of the state, Wray is hardly a neo-liberal.

It's just bogus, like so much else in the comment above. It's got nothing to do with dogmatism; it's got to do with crap arguments, not backed by evidence, and relentlessly repeated. I'm not about to reward such tactics. It's bad for the blog.

transcriber's picture
Submitted by transcriber on

I thought it was U of Chicago. Show's you how much I don't know.

(is carrying water for X the same as being X?)

Look, I think Hugh is wonderful, I think you are wonderful, and I think a blowup debate between you two articulate two is wonderful. A Naked Capitalism post with over 200 comments? Something big's getting thrashed out there. Not that I read it, but I thought, if I have the time, mmm, that's where I can finally learn about mmt from all sides. Sometimes mmt and jobs seems like a nice idea, and I am thinking Sandra Bullock in Miss Congeniality thinking world peace would be a good idea, like, why don't we, and sometimes I think it's a nice fairy tale, as in poof, it blew away. I don't see a job anywhere.

As for secret policies, I hate em in my government, what could be a more perfect fail. I know, I know that blogs are monarchical private property, except I'm stuck on thinking of the ones I participate in as a commons to which I belong, so when people get thrown out I think of segregated lunch counters and how civil rights law put a stop to that. It's just where my mind goes, with love to all.

Here's the thing. If this is the case (and what do I know, it's a secret), all these snarls that you maybe seem to want to snip out of your smoothly flowing skein, I think they're gifts you're maybe not recognizing. If you have the better argument, what a perfect place to shine decisively. You WANT that! On the other hand, if the snarl stops your free-flowing error, well thank goodness for your friends the snarls. You want that too.

Stepping back and fessing, I haven't read Wray, haven't read Hugh, haven't read you, not very far, in this case. Sorry, I've been busy. It's just distressing to drop in and see y'all going for each other's throats. Still, it's your business and I'm butting out. But I do have a suggestion for NC, which is that in those long threads, if there was a "parent" button to click that would jump you up to the comment being replied to, that would be heaven. Could help keep things together and not devolving. I mean I started with your comment that you linked to and could hardly find what you were replying to. Must be a better way to run a debate.

Best wishes.

Submitted by lambert on

East Coast bias.

Frankly, the thread reminded me of playing whack-a-mole on WMDs, back in the day. The bottom line here is that people don't get to make shit up. Wray doesn't say things that Hugh says he did, there and here. And challenged to put up or shut up, Hugh doesn't deliver. I like Hugh's work a lot, but I can't permit that; the moderation rules are to protect the blog against that.

If Hugh wants to get his own blog, then he can; it's a big Internet. But in this house, the rules are clear. The rules at NC are different, but they too are clear. When Hugh gets his own house, he is free to say whatever he likes.

danps's picture
Submitted by danps on

Yet all three perform a similar function:

A: Don't even think about raising taxes.
B: Taxes don't fund popular programs.
C: Taxes play no role in what society can do.

Notice the common thread? Wray is very forcefully advocating that people not consider tax policy. He is making the case, without explicitly saying as much, that tax policy is trivial. But don't say that means he thinks taxing the rich (or anyone!) doesn't matter. He just disparages the concept at every opportunity, that's all.

And since we're word counting, how about the title of Wray's post? Forget [1] Taxes [2].

danps's picture
Submitted by danps on

He just wants to ease the suffering of those of us in the underclass rather than eliminate the economic system which gives rise to it.

Spoken like a true revolutionary.

Easing the suffering of those who are worst off strikes me as a pretty compelling argument in its favor.

tarheel-leftist85's picture
Submitted by tarheel-leftist85 on

It's posts like these - and Wray's on NC - that make me grateful for eschewing teh teebee and "news" altogether.

I think a similar argument exists for "more regulation." How have the increasing layers - self-licking ice cream cone - of "regulators" worked out in thwarting and remedying bankster criminality? If firms are too big and/or complicated to "regulate" - with 'somehow' the regulated parties always managing to stay two steps ahead - then they're too big/complex to exist. This realization, i think, has two upsides: (1) actually thwarting bankster criminality, and (2) appealing to limited* government proponents.

* Limited government and small government are too often conflated. Government can be viewed in at least three dimensions with the following axes: (1) big-/small-spending (printing), (2) limited/unlimited power, and (3) public/private purpose. Right now, of course, our government sits in space along big-spending/printing, unlimited power, and private purpose (particularly for Obie's FIRE sector brahs). Is it not possible to have a government that's big-spending/printing (with functional constraints of price stability and full employment), with limited power, and for the public purpose? For example, i could see a large cash infusion for a permanent full employment program with large-scale national projects and locally-designed/decided projects.

"More regulation" has become another Dembot roach motel in my reckoning.

I suspected Picketty's sudden celebrity was somehow attributable to Dembots, but knowing that his a total Obot is all the more affirming.

danps's picture
Submitted by danps on

This is one of the best posts you've written, lambert.

One quibble: "Democrats pushing 'income inequality'"? The big push I've noticed from Democrats has been $10.10 minimum wage. If that's what you're referring to then fine, although 1) the connection to income inequality is peripheral at best and 2) this would seem to be precisely the kind of "show me the money" policy approach you are so emphatically in favor of.

One other thing, a bit larger than a quibble, but I need to develop my thoughts on it. Probably in next week's post. :)

But: just quibbles. This is a tremendously well argued post.

Submitted by lambert on

... is one I've never written and should probably research. I mean, why not round it up to the whole quarter?

We probably read different sourcing. Where I read, the minimum wage stuff fell off the screen long ago (since after all it can't be passed) whereas Piketty is all over everything like kudzu.

I sure hope those MacDonald's workers are asking for $15.....

Alexa's picture
Submitted by Alexa on

per Senator Tom Harkin on C-Span's "Newsmakers" -- it is the exact amount required to put someone (don't remember if he was citing "an individual" or "a family") JUST ABOVE the federal poverty line.

IOW, Democrats were too "cowardly" to want to actually be called upon to defend a "living wage."

Of course, his weasel words won't affect him, since he's leaving (I'm guessing) for a cushy finance or insurance lobbyist position when he retires. I've lost track of the "awards" he has received since he proposed his USA Retirement Fund Proposal.

BTW, this is not the type of retirement vehicle normally (or wisely) recommended for lower income Americans.

tarheel-leftist85's picture
Submitted by tarheel-leftist85 on

The minimum wage "increase" is also another ruse. It really doesn't matter whether or not the minimum wage gets raised to $xx.xx.

(1) There are no concrete material benefits for the people who most need it - the disemployed.

(2) Employers will use the "increase" to shift to more part-time/temp work arrangements (more than) offsetting increased wage expenses and funneling more victims into the individual junk insurance market.

(3) The "increase" will inevitably be an exercise in strategic hate management. "Both" parties want the "debate" to be racialized - in the manner of other economic "debates."

(4) Whatever "increases" might be realized will be sucked up promptly by rent-seekers (higher rents for PE-owned junk housing, higher premiums for junk insurance, higher state/local taxes, more bankster fees for vanilla accounts, etc ad infinitum).

(5) People making slightly above the new minimum wage, if they aren't denied full-time status will see their wages converge toward the new minimum (this is where #3 will find resonance).

The way to effect upward pressure on wages is through full employment. If everyone that wants work can find a job, they are

(1) likelier to be offered more than one job;

(2) likelier to pick the job that pays them more, ceteris paribus;

(3) such that when people's decisions are aggregated effects upward pressure on wages.

letsgetitdone's picture
Submitted by letsgetitdone on

Hugh says:

What gets lost is that Wray wants, like most MMT theorists, to keep the present economic system largely intact. He just wants to ease the suffering of those of us in the underclass rather than eliminate the economic system which gives rise to it. . . .

I refrained from commenting very much, if at all (can't remember now), on claims you made at the giant NC thread on Randy's post, and instead preferred to engage with Dan Kervick in the interests of time. But I do have problems with your point of view on MMT. My main problem comes from your central claim just above. After some years of reading and blogging MMT, I now consider myself one of the MMT writers, immersed in the MMT community, if not yet an MMT scholar or part of the core group of MMT authorities. Yet, from my perch, which includes frequent contacts with central MMT figures, I cannot agree that either Wray, or most MMT theorists, want to keep the current system intact, if by that you mean that they would like to maintain the current neoliberal order in political economy. In fact, I think MMTers are generally pretty implacable foes of that order.

There are differences among them, of course, and I think that Bill Mitchell, Randy, Stephanie Kelton, Pavlina Tcherneva, and Bill Black may be somewhat more implacable than Warren Mosler and Scott Fullwiler (though they may disagree with this assessment, since it's mostly based on the tone of their writing, rather than on any personal discussions). However, that may be, if one looks at the main tenets of neoliberalism and the Washington Consensus as I did here, then what do you see that MMT writers don't oppose and would not change if they could?

And when it comes to institutional change, don't MMTers want the Fed be folded into Treasury? Don't they want a much smaller role for monetary policy, and a much larger role for fiscal policy? Don't they want permanent zero interest rates? Don't they want much more thoroughgoing regulations accompanied by comprehensive prosecutions of all who commit fraud? Don't they want a much more comprehensive social safety net including Medicare for All, a Job Guarantee at a living wage with full fringe benefits, much more liberal retirement benefits, write-downs of mortgage principles, free university education, and huge resources devoted to pre-school through 12 education? Don't most of them want a huge infrastructure program, and also comprehensive programs directed at climate change and renewable energy? I think they want all of these things, and, if so, isn't it clear to you that, taken together, these changes would not leave the present neoliberal system intact, but would overturn it completely?

In short, I see you constantly complain about MMT being oriented toward saving the preseent system and just ameliorating the sufferings of the people. But I don't see that. I see MMTers advocating for the public purpose and a willing to entertain any changes that would fulfill public purpose as defined by the public. That's what I see in their writings. If you see something different, then I think you should document your charges with quotations from the writings of the people I've named above. I've never seen you do that. What I see instead is you labeling the MMTers and making assertions about what they're for without the slightest attempt to support your conclusions with quotes. Time to stop the BS and start quoting to back up your conclusions.

Submitted by Hugh on

And just how are any of these MMT changes going to happen? Oh, they can't under the present political system. What are MMTers doing about that? Besides some pearl clutching, nothing.

When I talk about social purposes I see them as expressions of an all encompassing social philosophy (the kind of society we want to live in) which can be used to focus and organize us in order to overthrow the current order of crooks and parasites. When MMTers talk about public purposes they are talking about add-ons to an economy and maybe a political process both of which are set up for largely other purposes. For me, neither government nor the economy have any other purpose than in so far as they build and maintain the society we want. They are not autonomous from us. They are of and for us or they are nothing.

MMT theorists revel in their obfuscatory jargon and counter-intuitive ideas and they are utterly dogmatic in them and hostile to any challenge or criticism of them. These are hallmarks of elitism. That MMT theorists are at odds with other and more privileged factions in the elites in no way lessens their own elitism. They are not inveighing against it, just their place in is pecking order.

These theorists have no interest in seeking to convince ordinary people or casting their ideas in language they can understand or accept. With MMT, it is always your way or the highway. Wray embraced a stupid, wrongheaded position on taxing the rich because of the ideological dictates of MMT and it got rejected by the Naked Capitalism commentariat, a place where many accept the principles of fiat currency. Wray embraced a neoliberal tenet and he got called on it. It may fly within MMT circles that its practitioners are not neoliberal because they have defined themselves as not being neoliberal but that kind of reasoning doesn't cut it out here in the real world. MMT remains marginal even in elite circles and isn't even a blip on a blip in the awareness of ordinary Americans, despite their cynicism and discontent with things as they are.

What you guys don't get is that it is up to you to make the case for MMT to the rest of us, and you haven't. We its critics, even those of us who use fiat money principles in our work, point out the flaws, errors, and contradictions, and all we get is the standard "Go and read everything ever written by MMT's theorists, agree with it" and then get back to us or you try to shut us down as with my censoring at Naked Capitalism. That you create more critics and skepticism of MMT with such tactics, that you simply reinforce MMT's marginality, never seems to register with you. As I said over at Naked Capitalism before my censoring, the most devastating critique of MMT comes from just letting its theorists and defenders talk, and do what you do. You make our case for us. You and yours have no conception how offputting your dogmatic rigidity and postal reaction is to any criticism of even your wackiest ideas. You do everything in your power to ensure you remain marginal and then rail against your marginality. Go figure.

Submitted by lambert on

Clue stick: Politics. Which I address, and Wray addresses. Maybe you addressed it in the balance of your first comment, but as I said, I stopped reading after the first howler.

* * *

I refuted the nonsense about "add-ons to an economy and maybe a political process" taking 5 minutes to navigate the MMT primer and quoting it, responding to one of your comments. Quoting Wray:

the economy is always embedded in the social organization as a whole, affecting and affected by culture, politics, and social institutions.

As so often, MMT gives you what you claim to want. Why can't you take yes for an answer?

* * *

Next, I know from personal experience that this statement of yours is false:

These theorists have no interest in seeking to convince ordinary people or casting their ideas in language they can understand or accept.

Joe, on this blog and elsewhere, has made an enormous effort to "convince ordinary people" in "language they can understand.' Your statement, besides being false, is also insulting to him; Joe is too nice to say that; I'm not.

This blog, perhaps before you came, was also key to organizing an MMT conference in DC, scheduled against a Pete Peterson conference, something no "progressive" organization even attempted to do. Your statement, again besides being false, is, though you may not know it, also personally insulting at least to me and to Joe again.

* * *

The last refuge of a troll is to cry "censorship." Hence, your cry is totally predictable, and also well earned, by a combination of prolixity and falsehood. "The dogs bark, and the caravan moves on." .

transcriber's picture
Submitted by transcriber on

And I really do want world peace.

On a postcard that a person not likely to go back and read the whole predecessor to this knockdown dragout can understand, what is the nut of your point and what do you say is the nut of Hugh's point? The rock and the hard place? Is there something substantive here or is it all about personalities and untested theories?

I'm needed elsewhere but I could read a postcard. Would also understand being brushed off as out of place. Thx

letsgetitdone's picture
Submitted by letsgetitdone on

My post card is that:

1) Hugh claims that MMT says various things

2) He never quotes particular passages from MMT writers to document his claims

3) When this is pointed out, he changes the subject (i.e. the request for quotes to prove is points), and just repeats his charges in other forms and also shifts into attacks on MMTers as dogmatic censors victimizing him.

This isn't about disagreements over substance in the first instance. It's about disagreement over what MMT people are saying with one side (Hugh) refusing to offer proof of his interpretation of MMT texts. Simple enough I think.

Submitted by hipparchia on

while i agree with some of the tenets of mmt, and i'm happy to have contributed in some small way to the teach-in a while back, and i learned a lot from that... basically it looks to me like mmt, or the warren mosler brand of it at least, consists of two parts leave the rich people alone! and a kindler, gentler penury for the little people.

Submitted by lambert on

... what he best way to take wealth away from wealthy people is. That's what predistribtion vs. redistribution is about.

I hardly see how that's "leaving the rich people alone." It's not my problem that the Democrats want to lead you, and Hugh, and others, into another roach motel -- and, near as I can tell, are successfully doing so.

Submitted by hipparchia on

I was not commenting on your post. I was noting that some of hugh's perceptions of mmt and mmt-ers parallel some of mine.

Submitted by lambert on

In what sense is your claim:

leave the rich people alone! and a kindler, gentler penury for the little people.

not a comment on the post? It fits exactly into the pre-distribution vs. redistribution frame.

In any case, we all have "perceptions." So what?

letsgetitdone's picture
Submitted by letsgetitdone on

Go back to your own transcripts of the fiscal sustainability conference. Is that really all you see?

Submitted by hipparchia on

Is that really all you see?

no, and especially not in those transcripts, which are the "public face" of mmt.

the subtexts of many mmt-ers more casual, less scripted remarks, though, come across as more Bismarck and ford and not so much lbj.

i'll retract the "penury" part of my earlier statement and substitute something fuzzy about "widespread middle class prosperity that supports an overclass of kindler, gentler Great Capitalists."

letsgetitdone's picture
Submitted by letsgetitdone on

And just how are any of these MMT changes going to happen? Oh, they can't under the present political system. What are MMTers doing about that? Besides some pearl clutching, nothing.

You're changing the subject. You asserted that Randy and other MMTers we're neoliberal based on what they write. ? Now, when I call you out on that and ask for quotes, you raise the issue of how the changes they advocate will happen. That's a separate issue, and whether or not MMTers are good political strategists or not has nothing to do with whether they're advocating neoliberal economics or policies. Of course, they're not. Are you just too dishonest to admit it? Produce the neoliberal quotes or admit that you were wrong! Stop dissembling and stop changing the subject.

When I talk about social purposes I see them as expressions of an all encompassing social philosophy (the kind of society we want to live in) which can be used to focus and organize us in order to overthrow the current order of crooks and parasites. When MMTers talk about public purposes they are talking about add-ons to an economy and maybe a political process both of which are set up for largely other purposes. For me, neither government nor the economy have any other purpose than in so far as they build and maintain the society we want. They are not autonomous from us. They are of and for us or they are nothing.

Well, I agree, and for me social purposes are not an add-on; they are what Government and the economy are for. I think that other MMTers believe the same thing. So, I say once more. if you think I'm mistaken about this, then let's see your quotes proving they don't believe this.

MMT theorists revel in their obfuscatory jargon and counter-intuitive ideas and they are utterly dogmatic in them and hostile to any challenge or criticism of them. These are hallmarks of elitism. That MMT theorists are at odds with other and more privileged factions in the elites in no way lessens their own elitism. They are not inveighing against it, just their place in is pecking order.

Again. I call for quotes. The obfuscatory jargon charge is just bull crap. MMT writing is no more jargon filled than your own and less jargon-filled than most of the writing of other economists. And charging "dogmatism" is just more of the same. MMT is offering a new approach to economics in contrast to neoliberalism. So, naturally it gets criticisms from neoliberalism and also from other post-Keynesians whose views are similar, but differ from the MMT paradigm. MMT analysts reply to those criticisms, as might be expected. Why should they reply? Is it dogmatic to differ with the criticisms? Is it dogmatic to reply with carefully developed reasoning. What's going on here is just debate among economists and policy analysts who disagree. It remains to be seen whose views will prevail; but one thing is certain. The outcome of such conflicts is not decided by meta criticisms of who is being dogmatic. It is decided by other factors, including hopefully, whose views accord more closely with human experience.

These theorists have no interest in seeking to convince ordinary people or casting their ideas in language they can understand or accept. With MMT, it is always your way or the highway. Wray embraced a stupid, wrongheaded position on taxing the rich because of the ideological dictates of MMT and it got rejected by the Naked Capitalism commentariat, a place where many accept the principles of fiat currency. Wray embraced a neoliberal tenet and he got called on it. It may fly within MMT circles that its practitioners are not neoliberal because they have defined themselves as not being neoliberal but that kind of reasoning doesn't cut it out here in the real world. MMT remains marginal even in elite circles and isn't even a blip on a blip in the awareness of ordinary Americans, despite their cynicism and discontent with things as they are.

Well, first, I know for a fact, that MMTers are profoundly in spreading MMT insights to the broader public. That's why Warren Mosler wrote 7 diff, and why Randy wrote his primer. It's why Bill Mitchell and Randy are writing a textbook. It's why Stephanie appears on radio and television as much as she can. It's why we're all blogging and why MMT's academics have taken time away from academic work to try to popularize their thinking. This charge of your flies in the face of the facts.

As for the rest of the above paragraph, it's just labeling and unsupported assertion. You can't show that Randy's position decoupling social spending from taxing the rich is wrong, so you say he's wrong-headed. Why is he wrong-headed? Isn't it so that it may be easier to get social programs passed without passing "pay-fors" than it will be to pass both at once? This point of view may be wrong, but it is not unreasonable, and so it is neither dogmatic nor wrong-headed. Nor has Randy, embraced a neoliberal tenet by saying that taxing and spending are functionally distinct. The neoliberals believe the opposite. They believe that whatever the Government spends it needs to be paid for by taxing. You appear to believe that too. But Randy doesn't, so, apparently, you are more of a neoliberal than he is by far.

Your comment about MMT being marginal is true at present, but is irrelevant to your charge that MMTers are neoliberals. The marginality of MMT is due only to the relative newness of the approach. It relates not at all to its merits or it's closeness to the truth.

What you guys don't get is that it is up to you to make the case for MMT to the rest of us, and you haven't. We its critics, even those of us who use fiat money principles in our work, point out the flaws, errors, and contradictions, and all we get is the standard "Go and read everything ever written by MMT's theorists, agree with it" and then get back to us or you try to shut us down as with my censoring at Naked Capitalism. That you create more critics and skepticism of MMT with such tactics, that you simply reinforce MMT's marginality, never seems to register with you. As I said over at Naked Capitalism before my censoring, the most devastating critique of MMT comes from just letting its theorists and defenders talk, and do what you do. You make our case for us. You and yours have no conception how offputting your dogmatic rigidity and postal reaction is to any criticism of even your wackiest ideas. You do everything in your power to ensure you remain marginal and then rail against your marginality. Go figure.

It takes a long time for a new paradigm to become widely accepted. We know it's up to us to make the case, and we're making it. Every year we make gains. We get on more TV and radio! our books sell more widely and mainstream economists feel it necessary to critique us. So, from where we sit, we're gaining ground. As for your claim that we ignore your critiques, I don't think there's merit to that either. I've called you out any number of times about your mis-characterizations of MMT on various blogs. I've asked you to prove your charges by quoting MMT writers. But you refuse to do that and instead prefer to slip by questions, shift your ground and pile on charge after undocumented charge. So, of course, people are starting to ignore you and to view you as a troll. Why would they not? When they ask you to prove what you say by quoting, you just ignore them. So, why shouldn't they ignore you in return.

About censorship at NC I can say nothing. I don't moderate that site and only occasionally cross-post there. So, complain to Yves or Lambert about that not me or the MMTers. We have nothing to do with that!

Submitted by Hugh on

You guys just don't get it. Wray embraces a major plank of neoliberalism, not taxing the rich. I don't care what he calls himself that's neoliberal and pro-kleptocratic. No amount of lipstick is going to improve that pig. And if you read through that Naked Capitalism thread, the commenters didn't buy what Wray was selling.

MMT is not a robust, coherent theory. We its critics have told you this dozens of times, now over a course of years. We have listed the reasons it isn't and have even suggested fixes for it. This has all fallen on deaf ears. The contradictions and structural problems remain. And then on top of that we get leading MMT theorists like Wray coming up from time to time with some truly crazy proposal followed by the spectacle of MMT's acolytes and koolaid drinkers twisting themselves into pretzels and using sophistries that they would be the first to slam in any other context. I mean if Rogoff or even Krugman had come up with this nuttery just think of how quick and how sharp the knives would have been to cut it to pieces.

One part of Wray's criticism of taxing the rich was that it wasn't possible. They owned the politicians. Then he came up with his jargonese "predistribution", a concept which I would call spending for social purposes and have advocated for a long time. I would say that both taxing the rich, delivering services to the rest of us, and many other things besides are necessary to get us to our goal of the society we want. But he dissed the first and embraced the second, ignoring that his choice was equally politically impossible at this time. So if this is to be something other than a theological debate, MMT does need to address how it means to do what it says it needs done. I have several times laid out my own blueprint for the creation of a social movement, its program, and its transition into power. From the MMT side, I have seen nothing.

The bottomline is that MMT has not made its case. And if it can't make its case to even people like me who actually use principles of fiat money, then the possibility of it doing so to the wider public is zero. Rather than recycling all the standard dodges we see everytime one of these debates blows up, essentially that if we had read and agreed with everything written on MMT by its main theorists, we too would believe in its power and glory, and that if we decline to, then we should just shut up, you could use some of that energy to reexamine MMT in a really critical way, its origins, premises, consequences, and overall theoretical structure. You won't because you haven't even though you have had years to do it. Instead we will get more of the same: dogmatism dressed up as pragmatism (unless challenged in which case the claws come out) and the occasional invitation, as with Wray's position on taxation of the rich, to disbelieve our lying eyes.

I used to believe in the Democrats, but nothing ever changed with them and eventually I saw through them. Same with the liberal economists like Krugman and Stiglitz. Same with MMT. I've moved on. My advice to you is to move on as well. Take a few of the ideas that worked in MMT, incorporate it in your work, and leave the rest to rot in its narcissistic pretensions.

transcriber's picture
Submitted by transcriber on

I have several times laid out my own blueprint for the creation of a social movement, its program, and its transition into power.

Is it short and simple? Can I understand it? Can you post a link?

MMT is not a robust, coherent theory. We its critics have told you this dozens of times, now over a course of years. We have listed the reasons it isn't and have even suggested fixes for it. This has all fallen on deaf ears. The contradictions and structural problems remain.

Postcard please? Same question I asked Lambert below, what is the nut of your point and what do you say is the nut of Lambert's point? The rock and the hard place here, in your words, about MMT theory. If it's not out of place for a surferby to ask.

Thx.

Submitted by lambert on

... but of behavior. I'm fed up to my back teeth with it.

As far as "we, the critics," lets points to Hugh's consistent refusal to quote material. There's no critique here. There's an ever-shifting array of unsubstantiated talking points that are dropped when refuted, or repeated on the next thread, after refutation, as if no good faith effort was made to respond to them.

Submitted by Hugh on

The principles are not hard. As I wrote back in December 2012,

"Even when we get clear of the shadow of the two parties to movements like Occupy or to Jill Stein the amount of fuzzy, ineffectual thinking astounds me. It is like watching people struggling to reinvent the wheel. We have a 150 year history of organizing and mass movements to draw upon from the abolitionists to the suffragettes to the unionists to the Prohibitionists to civil rights. The keys have always been to organize, educate, and act. To have a clear program and to vote for no one who does not embrace that program and fight for it.

In the present case, we need to build a mass movement. It must have a clear message, both what it opposes and what it is for. It must constantly build on itself. It must bring one group particular onboard, working and middle class white males, not by pandering to them, but by addressing their concerns. It must create a spirit to the movement that everyone can get in on and get strength from. Movements are inherently spiritual activities. And it must convert its movement power into political and electoral power. It must be willing to challenge the system even as it is taking it over and remaking it. None of this is rocket science. None of it is new. The first step in creating a new world is breaking with the old. It starts with us. Not DeLong, the MMTers, the Tea Party, the elite left, or the unions. Almost none of these has broken with the past. None is using what bully pulpit they have to build the future. So if it is to begin, it must begin with us."

I would add that a social movement is necessary because it can be created outside of the regular public institutions (the parties, the media, the government, and academia) which we the people no longer control and which work against our interests. Its spiritual vision and the experience of participating in a common enterprise can not only unite us and give us hope, but also keep us honest by acting as a scorecard to how well we are accomplishing our goals. People will sacrifice and die for ideas, for something better. We owe them to make sure that their and our sacrifices were worth it.

There needs to be both a positive and negative program. We need to agree on what must be done away with and who must be punished but we must not let a search for justice devolve into revenge or take our eyes off the prize, the goals of our positive program, a society we all can live and wish to live in together. We need to start going out and discussing with our friends and neighbors: Is this the society/country you want? What kind of a country do you want? And use these as entry points to ask, wouldn't you want to live in a country where you knew that the rest of us had your back and that in return what we are asking is that you have ours? A social movement must be open to its members and uncompromising with its opponents. As one of my favorite political activists John Jay Chapman (late 19th century) put it, compromise discredits you in the eyes of those you are trying to win over (you stand for nothing) and it weakens you in the face of your opponents (they know you can be bought for a price). Once the movement has achieved a critical mass, it creates a political party recruited from and chosen by its membership. The program is clear. They either fight for it tooth and nail or they are dumped, no exceptions. the movement can work on the outside even as the party electees work on the inside. How fast and how large the movement gets would determine its course of action. A half dozen movement Senators could bring the Senate to a standstill. Ten million people could do the same for the country. We have to be willing not only to fight but explain our fight and identify who and what we are fighting for and against. Wray and MMT could not be further from all this if they lived on another planet. They are at best irrelevant, at worst a distraction. In no case do they help us get where we want to go. We should stop wasting time on them.

letsgetitdone's picture
Submitted by letsgetitdone on

Thanks, Hugh. I certainly agree with most of this. But, I don't know what it has to do with your criticism of Randy's piece for proposing that predistribution will be a more successful focus for those seeking change rather than redistribution. Let's grant that all of us think that lasting change won't happen with social movements that result in major changes in the political system. So what? Does this mean that Randy's recommendation is wrong because he leaves it to others to start such a social movement? Somehow I don't think so. I think it means that you and he have different concerns and you'er angry at the MMTers because they don't write about your concerns. I think that's just silly. MMTers have the right to focus on their area of expertise and concern, and you have the same right.

The fact, still remains however, that you've failed to document your many mis-characterizations with quotes from MMT texts, and the claim that MMT doesn't say anything to us about how to build a social movement that might bring enough change to implement MMT-based and other policies that will create social justice, while obviously true, clearly falls flat because doing this is just not within the scope of MMT as it defines itself.

transcriber's picture
Submitted by transcriber on

Hugh, you wrote:

The principles are not hard. As I wrote back in December 2012,

"Even when we get clear of the shadow of the two parties to movements like Occupy or to Jill Stein the amount of fuzzy, ineffectual thinking astounds me..." Etcetera.

Found it: http://www.nakedcapitalism.com/2012/12/links-123012.html#comment-990901

Why not just link to it, so I could get the context? Seems to be a lot like here. First reply Aquifer:

Hugh – all your “prescriptions” seem rather “fuzzy” to me – you say what we “must” do, but when some, like Stein, attempt it, you say “No!” without expounding on why “No”. I have asked you before about this and you have not answered – explicitly and precisely.

(do I hear Lambert?) ) )

You say we need a movement, a clear movement (mostly unspecified), one that shows no mercy to opponents, no weakness, no compromise! Must serve interests of working and middle-class white males. And then everybody will get in on this and be strong.

I suppose the second thing I'd say is, Like, why?, and third would be, Like how?, if I could get past the first, which is Grrrrrr.

Not a working middle-class white male, suddenly feeling like I'll be opponent. Down hackles, down.

(And you're saying that's what the suffragettes did?)

And use these as entry points to ask, wouldn't you want to live in a country where you knew that the rest of us had your back and that in return what we are asking is that you have ours? A social movement must be open to its members and uncompromising with its opponents.

All for all except for the half that we hate and punish?

We need to agree on what must be done away with and who must be punished but we must not let a search for justice devolve into revenge or take our eyes off the prize, the goals of our positive program...

These are not my beautiful eggs. These are not my beautiful chickens.

:-(

letsgetitdone's picture
Submitted by letsgetitdone on

You guys just don't get it. Wray embraces a major plank of neoliberalism, not taxing the rich. I don't care what he calls himself that's neoliberal and pro-kleptocratic. No amount of lipstick is going to improve that pig. And if you read through that Naked Capitalism thread, the commenters didn't buy what Wray was selling.

Some commenters, Hugh. Only some. Going further. Second, Randy doesn't say "don't tax the rich." What he says that is that they will make the taxation ineffective as a way of creating greater equality in a very short period of time. Now, I don't agree with him on this point. My own view is that if stringent taxation is passed it will take time for them to get out from under it, and that they may never be successful at that if we also pass appropriate pre-distribution measures limiting their total compensation to a certain ration to the total compensation of their least well paid worker.

Even if I'm right about that and he's wrong, however, I also think his view that we can more easily reduce inequality through pre-distribution methods including fiscal policies lifting most of the population relative to the 1%, than we can through taxation is right. The point he raises is that taxing the rich isn't necessary to lift the 99% or to control their future accumulation of financial wealth, and to insist on legislation that both predistributes and taxes is simply to increase the chances that one's proposed legislation will fail. So, he proposes predistributing and decoupling that kind of legislation from new tax measures. Now I don't see why you say that's neoliberal. And I don't see why you look at his position on taxation and say that makes him a neoliberal. I left a link to the major tenets of neoliberalism in my last comment. I don't know a single tenet listed there that Randy agrees with. So, I think you have no justification at all in characterizing either he and other MMTers as neoliberal.

Btw, here's a recent conversation Stephanie Kelton had with Sam Seder on his talk show. The conversation is very extensive, but towards the end, if I recall correctly, they discuss taxes, and Stephanie is very clear about on the point that there are many good reasons to tax including taxing the rich, but that "paying for" things isn't one of them, and there is no need to wait for new taxes to be passed before passing deficit spending legislation.

MMT is not a robust, coherent theory. We its critics have told you this dozens of times, now over a course of years. We have listed the reasons it isn't and have even suggested fixes for it. This has all fallen on deaf ears. . . .

Well, first, you've never made a coherent criticism of MMT Theory as far as I can see. If you or others have one or more then where are they? Where are the links? Where are the quotes? Krugman doesn't have one. Murphy doesn't have one? Delong doesn't have one! Ezra Klein doesn't have one! Marc Lavoie doesn't have one! Steve Keen doesn't have one! There are none in your reply. These are just more unsupported claims from you with no documentation.

. . . The contradictions and structural problems remain. And then on top of that we get leading MMT theorists like Wray coming up from time to time with some truly crazy proposal followed by the spectacle of MMT's acolytes and koolaid drinkers twisting themselves into pretzels and using sophistries that they would be the first to slam in any other context. I mean if Rogoff or even Krugman had come up with this nuttery just think of how quick and how sharp the knives would have been to cut it to pieces.

Hugh, as should be obvious to everyone, the above is just name-calling and bull crap. Nor am I using sophistry. I'm calling you out directly and asking for documentation of what you say. You have yet to produce it, as I hope every reader will please note carefully.

One part of Wray's criticism of taxing the rich was that it wasn't possible. They owned the politicians.

He didn't say it wasn't possible. He said that they would undermine new taxes by having the politicians pass loopholes. There's strong historical basis for saying this, specifically the period from 1950 - 1980. During this period high progressive tax rates existed; but the effective tax rates on them were not 90% or 70% but more like 30% or sometimes nothing at all if they invested in municipal bonds. Now, as I said above, I don't agree with Randy about the futility of legislating and enforcing new taxes; but, of course, their effectiveness presupposes changing the current political climate and the composition of Congress drastically.

Now, I'm all for that; but, that said, it seems clear to me that as these political changes are taking place, it will be the case that political support sufficient for predistribution measures will appear long before support for new, comprehensive, and enforceable taxation appears. So, again, I think Randy is right to point out that creating greater equality through increased deficit spending need not wait for new, significant taxation.

Then he came up with his jargonese "predistribution", a concept which I would call spending for social purposes and have advocated for a long time.

Actually, it was Rick Wolff, a non-MMT post-keynesian, who used that terminology before Randy. And Randy and Rick use it to emphasize the difference between redistribution and predistribution. Personally, I think the contrast is a good meme. I have nothing against spending for social purpose, but don't see the strong distinction between that and MMT's spending for the public purpose.

I would say that both taxing the rich, delivering services to the rest of us, and many other things besides are necessary to get us to our goal of the society we want.

Well, I'd say that too. I believe in progressive taxation strongly for taking financial assets from the wealthy, so they are no longer a threat to democracy. I also don't think opposition to progressive taxation is a uniform characteristic of MMT thinking. For example, MMT frequently advocates payroll tax holidays both for providing more money to people and also because the payroll tax is regressive. In addition, Warren Mosler, has proposed progressive taxation on real estate based on square footage of homes. As for me, I'm for restoring FDR-like marginal tax rates on income, but without any loopholes.

But he dissed the first and embraced the second, ignoring that his choice was equally politically impossible at this time. So if this is to be something other than a theological debate, MMT does need to address how it means to do what it says it needs done. I have several times laid out my own blueprint for the creation of a social movement, its program, and its transition into power. From the MMT side, I have seen nothing.

MMTers aren't required to specify a proposal for political change to implement their preferred policies, Hugh. MMTers are economists; they don't study how to create social movements, or how to change the political system so their preferred policies can be passed. Their failure to specify proposals for creating political change can't be used to say their policies are BS. It also can't be used to critique Randy's claim that it will be easier to pass predistribution legislation rather than redistribution legislation, and also more effective to concentrate on predistribution. In all the many lines of debate we've had and all your commentary at NC, I have never seen you give reasons for why you disagree with the simple point he's making. I can conceive of situations where both types of legislation can be passed a the same time given a progressive victory of the magnitude of the New Deal during the 30s. But even very substantial changes in Congress, short of that will mean that it will be easier to pass predistribution rather than redistribution measures. Why can't you see this. It seems so commonsensical.

The bottomline is that MMT has not made its case. And if it can't make its case to even people like me who actually use principles of fiat money, then the possibility of it doing so to the wider public is zero.

MMT has made its case. You were just not persuaded. That's fine. Not everyone will be persuaded. But may people are being persuaded. These days it looks like Thom Hartmann is in the MMT corner. It also looks like Erin Ayd at RT News is MMT through and through. And in the conversation with Stephanie Kelton I link to above, Sam Seder gave a very good impression of someone who was entirely down with MMT. We also see MMT perspectives in Chris Hayes's commentaries, and Alexis Goldstein and Jess Myerson coming out of Occupy seem to share many MMT perspectives. So, from where I stand, I'm seeing all sorts of MMT progress and all sorts of people who are persuaded by the MMT case. You will never be I'm sure. But that's all right with me, so long as your careful and truthful in representing MMT positions.

Rather than recycling all the standard dodges we see everytime one of these debates blows up, essentially that if we had read and agreed with everything written on MMT by its main theorists, we too would believe in its power and glory, and that if we decline to, then we should just shut up, you could use some of that energy to reexamine MMT in a really critical way, its origins, premises, consequences, and overall theoretical structure. You won't because you haven't even though you have had years to do it. Instead we will get more of the same: dogmatism dressed up as pragmatism (unless challenged in which case the claws come out) and the occasional invitation, as with Wray's position on taxation of the rich, to disbelieve our lying eyes.

Hugh, that's more BS labeling and name-calling. The fact still remains that none of this is documented with quotes from MMT. Until you do that kind of hard work, your critiques may be picked up by others who share your prejudices, but they will have no hope pf persuading neutral onlookers or MMT writers and economists who have actually read the MMT literature.

I used to believe in the Democrats, but nothing ever changed with them and eventually I saw through them. Same with the liberal economists like Krugman and Stiglitz. Same with MMT. I've moved on. My advice to you is to move on as well. Take a few of the ideas that worked in MMT, incorporate it in your work, and leave the rest to rot in its narcissistic pretensions.

Hugh, you never accepted the MMT point of view. So, you can't say, you've moved on from it. As for myself, I was never limited by or to MMT. I also write on the means to restructure the political system and on many other political subjects. Nevertheless when it comes to economics, I do consider myself to be someone who follows the MMT approach. It complements my political views and my views on the social system as a complex adaptive system very well. I'll move on from MMT when another approach complements my other views in a better way. But to get me to do that I'll need to see some chapter and verse critiques of MMT that I cannot myself knock down.

And, by the way, these can't be critiques that disagree with a particular Randy Wray proposal that predistribution policy should have preference over redistribution policy because the latter isn't likely to work. That's because, first, that judgment isn't part of MMT per se, and second, in making this proposal Randy was stepping over the line between economics and politics, and while I respect his views on what is or is not likely to work in the political system, I trust my own judgment on that more than his, if only because I'm the one with the Ph.D. in political science and the deeper background in interdisciplinary social science including the study of political and social change as well as domestic and international violence.

Submitted by lambert on

I've got an "MMT on a postcard" (a literal postcard) post in the works. I wonder if you'd care to review it?

tarheel-leftist85's picture
Submitted by tarheel-leftist85 on

then they ridicule you, then they fight you, then you win."

Seems like we've advanced beyond the ignore stage, which is good news. When people begin attacking the character of MMT proponents, i'd say we're already at the penultimate stage.

Even a cursory glance at blogs like New Economic Perspectives reveals the sustained effort to provide the public with a working knowledge of the mechanics of MMT. In my experience, the baseball stadium extended metaphors is most convincing and revealing.

But "increasing" the minimum wage and "increasing" taxes on the rich have been ordained "solutions" by the Democratic apparatchiks. And we can't let Sarah Palin win, brah... Hold your nose and sign one more petition from Liz Warren or Bernie Sanders... Their hearts are in the right place...

tarheel-leftist85's picture
Submitted by tarheel-leftist85 on

then they ridicule you, then they fight you, then you win."

Seems like we've advanced beyond the ignore stage, which is good news. When people begin attacking the character of MMT proponents, i'd say we're already at the penultimate stage.

Even a cursory glance at blogs like New Economic Perspectives reveals the sustained effort to provide the public with a working knowledge of the mechanics of MMT. In my experience, the baseball stadium extended metaphor is most convincing and revealing.

But "increasing" the minimum wage and "increasing" taxes on the rich have been ordained "solutions" by the Democratic apparatchiks. And we can't let Sarah Palin win, brah... Hold your nose and sign one more petition from Liz Warren or Bernie Sanders... Their hearts are in the right place...

nihil obstet's picture
Submitted by nihil obstet on

I've been an enthusiastic combatant in enough long-running and heated disagreements here to have some credentials in the "let's fight it out" discussions, which I generally enjoy and learn from. Anyone who wants to make up their own mind about those credentials can just read the comment thread to this post on the 12 point platform back in March. My reactions to this debate may derive from my considered opinion that general popular understanding of MMT will require more time and energy than it's worth. Or maybe it's because I feel so inadequate to the level of precise expression that seems required here.

I am perfectly capable of saying that some things "don't matter" when I have some particular goal in mind, even if they matter for some other things. Every one of my sentences doesn't carry every condition and every nuance. I hope I haven't said anything here so far that is wrong enough standing on its own that you-all stop reading. If so, maybe you could look at context a little (I'm counting on you to have cheated and continued reading despite my howler).

I'm also not always good at putting together a list of details into the shape of a philosophy that the writer intends. When you ask a question like "isn't it clear to you that, taken together, these changes would not leave the present neoliberal system intact, but would overturn it completely?", I have to say, "No, it isn't clear to me." And saying that only a specific quotation is adequate support of a conclusion is like asking critics of making voting more difficult to quote specifically how the supporters of "electoral integrity" want to restrict the franchise.

I really appreciate how much time and obvious thought you-all are putting in this argument. I'd learn more if I saw a sympathetic effort to understand the criticisms and to respond on the level they're made.

Submitted by lambert on

You're seeing the results of a battle that's been raging for months at another site brought over to this one by one of the combatants. I have neither the time nor the energy to invest in relitigating two threads it took me literally two days to moderate in that context in this context as well.

At some point, sympathy ends and the evaluation of claims made begins. I don't see you making that evaluation.

I am long past that point. Another way of putting this is that I am tired of having my own sympathies exploited. My energy is not without limit, and slaying the same zombie arguments over and over again, in whatever context, is not a good use of my time. (Not only this thread, but others. Many others.)

Put this in another context: In the beginning, the "public option" advocates were no doubt deserving of sympathy. Past a certain point, the nature of the bait and switch operation they were running became clear, and it was time to call out the bullshit and the bullshitters.

Another example would be playing whack-a-mole on WMDs. Once again, at some point, sympathy ends, when enough moles are whacked.

Forget about me. Read letsgetitdone. Do you really see a lack of sympathy there? I certainly don't.

nihil obstet's picture
Submitted by nihil obstet on

Well, I warned you that I'm an enthusiastic combatant in long-running arguments, so you were expecting more, right? Note that my third paragraph kind of expressed my reaction to lets's arguments in much the same way that my second paragraph expressed my reaction to yours -- in other words, I did read his comments here, and followed his link to his post at New Economic Perspectives.

I accept that as far as NC and Corrente are concerned, Hugh has been convicted over and over again of being wrong and his arguments are zombies. I find his comments both understandable and persuasive, but I'm not sure you want to hear my evaluation of the claims. But, hey, that never stopped me.

I have trouble seeing that MMT is more than what its title claims -- a theory of money. I don't see that it carries with it a moral theory. That is, the money created by a government sovereign in its own currency represents a regulation of the real economy, not a balance sheet of taxes and spending. So the government can issue money for social and economic purposes as necessary to carry out those purposes, and can tax to stabilize the society, usually argued as to prevent concentrations of wealth and therefore of power.

The argument that I'm interested in here is first, whether this theory is inherently moral. I don't see that it is. Although it's attractive at the moment as a response to the austerians about how we can afford socially desirable programs, it does not necessarily lead to them. It's just as good a theory to describe how we were able to "afford" a $2 trillion war and a $14 trillion bank bailout while cutting taxes, mostly on the rich. Here the government issued money for the purposes of its owners, but they were very bad, very destructive purposes.

So what's the political position of the MMTers? The Chicago School theory of necessary sacrifices to Baal or the need for Aztec flowery deaths has been so successful at justifying and advancing the looting of the commonwealth that we tend to welcome any competing theory. And most MMTers appear to advocate programs that we on the left support. But that's different from the premise that MMT is necessarily a challenge to the system. And it's very different from the premise that calling any MMTer a whatever-conservative-descriptive-term you want is wrong because most MMTers want liberal programs.

Enough meliorative programs may reach a tipping point of actually changing the system, but it's not assured. In the meantime, calling out someone for using rhetoric that continues to validate a bad system is not only OK, but should be done. Is rejecting the fight to tax the rich giving in to rhetoric that continues to validate a bad system? I think so; that's my evaluation. In any case, I don't see what the level of disagreement is about.

letsgetitdone's picture
Submitted by letsgetitdone on

I've taken the trouble to review the MMT literature and summarize its value foci. Here's my first post on that subject. It takes the MMT idea that economics is for the public purpose and specifies the dimensions of public purpose MMT is concerned with. Now, in my view, it outlines the concerns of a value theory with a moral commitment to public purpose as defined by the people of a particular democracy. Later on I modified the list of value concerns somewhat, based on changes in the MMT literature.

I know that MMTers often like to present their theoretical work as value neutral. But I don't believe in value neutrality for reasons outlined here, and I also believe there is broad agreement among MMTers about their value concerns, so that the theory they are developing is properly characterized as fused fact-value theory, which, in actuality, is the only kind of scientific theory humans are capable of developing, again, for reasons, advanced in the paper I've linked to.

Alexa's picture
Submitted by Alexa on

the difference between "predistribution" and "redistribution?"

I first heard the term described by Chrystia Freeland a little more than a year ago. (I believe that she's been elected to the Canadian Parliament since then.)

I've even gone back and read the NC post (with two hundred plus comments), and the descriptions of these two terms don't appear to necessarily jibe with the usage that I've heard from Freeland.

(She also writes about inequality.)

Thanks!

letsgetitdone's picture
Submitted by letsgetitdone on

Didn't see that is Freeland's book, Alexa. The way I'd define those is that predistribution refers to the process of the government arranging income flows in such a way that the relatively rich can't accumulate excessive wealth over time, whereas redistribution refers to the process of governmental and social arrangements taking wealth and income from one or more groups in the population and distributing it to other groups.

Alexa's picture
Submitted by Alexa on

"redistribution versus predistribution" with several other commentators.

Apparently, the definition under discussion (doesn't appear to) have much to do with MMT.

It does apply to the "Grand Bargain," however.

If I can find the audio file, I may post it here to get expert opinion on "her" opinion. She's a big time internationalist and free trader (attends Davos as a writer, I suppose), etc., and her rhetoric was concerning to me.

Thanks for the definitions as they apply to MMT!

Submitted by lambert on

... this comment thread has now turned into a discussion of whether Hugh is trolling.

There's a reason for that.

That's what trolling does.

nihil obstet's picture
Submitted by nihil obstet on

As I write this, there are 43 comments. A few charge Hugh with malicious intent, but I read the great majority as legitimate questions or opinions on the role of theory, the place of MMT, the relative success or failure of its supporters in explaining it to others clearly and persuasively, and other legitimate issues about political questions.

Hilariously, you can accuse someone of being a troll and then cite your comments as proof that he has turned the discussion into one of whether he's a troll. Now what is it that trolling does?

Alexa's picture
Submitted by Alexa on

than you know! (According to the blurb/link you posted.)

Heard on XM (Tim Farley's show--not sure of name) yesterday, when he interviewed Neera Tanden from The Center For American Progress, that Dems are hatching up (think they send NY Blue Dog Kirsten Gillibrand out to shill about this new "program") another "insurance" program.

This time, you're expected to "self-insure" your "family leave."

They referred to California, so maybe some of you Californians know something about this.

Let's see . . . now we have to self-insure for medical insurance, forced "retirement" plans are in the making, mandatory long-term care insurance is presently being bandied about by a panel, and as if that's not enough, our friends at CAP are pushing to add "family leave" insurance.

All the while, Social Security, Medicare and Medicaid are beginning to be dismantled.

Jeeeeezzzzz!!!!!

When is the Democratic Party Base ever going to wake up?

;-)

Submitted by hipparchia on

yeah, Bismarck... we should be so lucky....

gillibrand/DeLauro version would be paid for from both employee and employer contributions (as of the time these were written, at least):

http://www.hvpress.net/news/126/ARTICLE/13234/2014-01-01.html

http://rhrealitycheck.org/article/2013/12/13/family-act-would-guarantee-...

the California version is paid for entirely by employees:

http://en.wikipedia.org/wiki/Paid_Family_Leave_(California)

it's basically a modest improvement on fmla http://www.dol.gov/whd/fmla/ in that you would get part of your pay, and it would (hopefully, if all went well) be universal, but yeah, you would pay a payroll tax to fund it.

Submitted by Hugh on

This has been a sterile exercise which served no useful purpose. Wray's post exposed the faultlines and deepened the rift between MMT and the rest of us, even those who use fiat money principles in our work. There have been costs however. Yves at Naked Capitalism lost one at least one of her senior commenters (me) and tarnished her brand in the process. To what end? In a fair and open discussion at Naked Capitalism, Wray lost the debate. Yves' attempts to suppress dissent, even from someone like me who spent a lot of time and energy supporting her work, can't change that. It just makes her claim of "fearless commentary" deeply ironic. I think the biggest loser was MMT itself. When MMTers lose a debate, they do not ask themselves why they lost, what they got wrong or could do differently, they throw a tantrum, and the tantrum is proportional to the size of the loss. This one was a lulu so that should tell you something. In one sense, we non-MMTers owe Wray a debt. He has shown us once and for all that MMT is not and will never be an ally in our struggle for social and economic change. So if for nothing else, thank you for that Randy Wray.

letsgetitdone's picture
Submitted by letsgetitdone on

Hugh, you're certainly entitled to your opinion. But mine, of corse, is the opposite. MMTErs did not lose the debate either at NC or here. We showed that your comments had no basis in MMT writings, but were just free-floating charges devoid of grounding or reason!