Marx + MMT

(Last updated: 04-03-2016)

MMT is seen as indisputably associated to post Keynesianism, however tenuous or even dubious the association might be (since (1) Keynes was deadset opposed to Abba Lerner's functional finance; (2) leading MMT proponents have explained that "MMT is useful for economists of all persuasions", including arch-conservatives and Austrians, and (3) many leading post Keynesians seldom express their views on MMT).
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Regardless, beyond saying that amateur Internet pseudo-scholarship by cheap charlatans and sycophants of the rich may have something to do with that, we are not dwelling here on the reasons for this phenomenon.

At any event, eminent MMT proponents have written about the relationship between MMT and the thought of Karl Marx, which suggests that Marxist economics is not fundamentally incompatible with MMT, although to extend that to post Keynesianism would be a stretch.

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In his 2005 paper "Taxation and Primitive Accumulation: The Case of Colonial Africa" (Research in Political Economy, 22, pp.51-64: paywalled, freely available; my own take) Mathew Forstater explains how taxation imposed on colonial subjects and "natives" played the simultaneous roles of (1) creating a mass of workers "free" to sell their labour power and "free" from the means of production (hence, Forstater's reference to the Marxist primitive accumulation), in (2) "the monetization and commodification of African economies", and in (3) "the rise of peripheral capitalism". Prof. Forstater has also spoken about this.

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In his 1999 paper "Theories of Value and the Monetary Theory of Production" (in print in the 2012 two-volume Theories of Money and Banking, freely available; my own take), L. Randall Wray argues "that two theories of value are needed for analysis of a monetary production economy: the labor theory of value and the liquidity preference theory of value". Considering that some post Keynesians believe that "profits are produced by specific macroeconomic flow of funds" to the exclusion of everything else, Prof. Wray may have some difficulty persuading post Keynesians.

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Bill Mitchell often writes favourably of Marx, acknowledging his contributions, and advising his readers that "We Need to Read Karl Marx" (Aug 30, 2011). One of Marx's ideas Prof. Mitchell has echoed is that "there has to be a surplus created and expropriated by the owners of capital" ("The Existential Crisis of Labour-Type Political Parties", May 12, 2015; my own take).

By itself that would make of Prof. Mitchell a very unusual, but not unique, post Keynesian: a few post Keynesians (depending on the definition of post Keynesianism) sometimes pay lip service to some of Marx's ideas, particularly the notions of surplus/exploitation.

However, in addition to that, Prof. Mitchell is known for scolding ignorant anti-Marxist propagandists ("There is Nothing New Under the Sun", July 29, 2013) in terms astoundingly precise and applicable, given current circumstances (an example):
"They [anti-Marxist jihadists] always reveal their grunt ignorance when they retaliate with the socialism card. It shows they neither have read Marx nor the derivative literature (and if they tried they gave up because it was above their intellects) nor appreciated the historical record." (My emphasis)
If for argument's sake one accepts that MMT is part of post Keynesianism, that would make of Prof. Mitchell unique among post Keynesians.

But there is something else perhaps more important that makes of Prof. Mitchell an outlier among post Keynesians: if kowtowing abjectly before The Lord is a requisite for admission in the Keynesian church -- as it seems to be -- Prof. Mitchell may risk excommunication, for he has written critically on  Keynes (as the above link on Lerner, for one, shows).

Not only that, Prof. Mitchell wrote about Keynes' spurious image of patron saint of the demagogic pseudo-Left ("MMT is not Conservative Thought", Aug 12, 2014; my own take):
"We used to talk about the 'Keynesian Revolution', in the context of his debunking of the perceived classical thinking at the time (1930s) but it was replacing a flawed theoretical structure with a conservative set of ideas based on reality. Hardly revolutionary."
That willingness to swim against the flow and to show independent thought argues against Mitchell's membership in the Keynesian cult: intellectual honesty and personal courage are not usually associated to Keynes' epigones and minions.

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Australian economist Peter Cooper describes himself as heterodox and Marxist. He also acknowledges the influence of MMT, Kalecki and the TSSI approach. Personally, I have never seen him referring to himself as post Keynesian, although this may be only an accident; more importantly, I cannot speak on his behalf.

At any event, he does believe MMT and the Marxist approach, as represented by TSSI, are compatible. Since last November Peter has posted an extraordinary series expounding on Marx and MMT:

PART 1 – Three Kinds of Macro Variables

PART 2 – A Connection Between the Markup, Exploitation, Currency Value and MELT

PART 3 — Finer Points of Marx’s Conception of Labor and His Aggregate Equalities

PART 4 – The TSSI and Marx’s Aggregate Equalities

PART 5 – Why a Single System & What Did Marx Say?

PART 6 – The Temporal MELT

Musing on Labor as the Source of Value

Why Ask Why – Labor as the Sole Source of Value

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It seems even a grunt like yours truly can actually contribute something comparatively original: "Marx, Fiat Money and a Simple Business Card Economy" (Feb 28, 2016). Whether this speaks more of my own astounding capabilities or those rather poor of the British internet "intelligentsia and educated bourgeoisie" and their online toadies is for you to decide.


Image Credits:
[A] "A family tree of the Post-Keynesian school of economics". Author: "Lord Keynes" (from beyond the grave). "This file is ineligible for copyright and therefore in the public domain because it consists entirely of information that is common property and contains no original authorship". Source: Wikimedia.

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