Sunday 24 February 2019

Parallel Lives.

(Right-click to open in a separate tab)

I think it fair to say that as recently as last year, Modern Monetary Theory (MMT) was largely a preserve of a few respected but otherwise obscure academics outside of the mainstream. Active on social media, the founders (for lack of a better word) over time gathered a growing band of online enthusiasts, a few of them extremely qualified and talented[*], a great majority merely vocal, and another minority equally loud and barely distinguishable from the majority, except in one respect: their interest in self-promotion.[$]

Nothing of that involves a judgement on the theoretical merits (or lack thereof) of MMT. Frankly, that’s well above my pay grade. Rather, that’s a statement of fact, however simplified, general, or blunt: fairly or not, MMT was at the fringe, generally ignored by mainstream pundits, to say nothing of economists. Worse, whenever that unspoken rule was broken and MMT was at all mentioned, it was with a sort of condescending dismissal.

During this wilderness period, enthusiasts understandably start showing signs of concern and dissent. A frequent worry was how to best sell MMT. Say, should the -- in their opinion -- then controversial Job Guarantee, integral to MMT in the opinion of the founders, be dropped to make the rest more palatable? Would MMT be best served by relegating some founders because of their more radical rhetoric and combative style of engagement? Is international trade -- unpopular with sections of the public -- really a good thing, as theoreticians claim? While they never presented those questions in terms of who was the natural “customer” for MMT (policy wonks? the wider public?) that’s what that boiled down to.

At any event, MMT’s situation started to slowly change a few years back with the occasional media article appearing -- to MMTer’s delight -- expressing some praise, however qualified. Its first break in the US, however, at least within policy circles (if not necessarily with the public at large) came with a political event: the Bernie Sanders 2016 presidential nomination campaign, which hired the highly articulate and charismatic Stephanie Kelton (one of the acknowledged founders) as economic advisor.

But it was with another political event that MMT really took off as a subject of frantic public debate, as the opening chart shows: the election of Representative Alexandria Ocasio-Cortez (D-NY) and her public endorsement of MMT.

So, from being ignored MMT suddenly became the unavoidable topic everybody who is somebody had to write about. The downside is that an avalanche of criticism was directed against MMT, ranging from the respectful, thoughtful and honest to the grotesquely malicious and dishonest.

That’s where we are today. How will that end? MMT triumphant or buried?

I don’t know. That’s not why I wrote this.


Although I have more than a little respect for MMT and its founders (and a few of the “second generation” MMTers), I ain’t no MMTer. I also hate bullies, viscerally (including those of the Dunning-Kruger variety) and I think we are witnessing a kind of collective intellectual bullying. Those two things, however, don’t compel me to write. Others, better qualified, can defend MMT: that’s their battle, not mine. I’m a Commie.

What makes me write is that this episode has helped me understand another much earlier and, in my opinion, much more transcendental one. Almost like seeing, in real time, events that I learned from books. Think of a modern reboot of an old movie franchise: a different cast, with a somewhat different script, re-enacting a familiar story with details slightly changed to justify a new movie ticket.

Evidently, Marxism and MMT aren’t the same. Marxism’s founders aren’t identical to MMT’s founders. Still, if readers think about the workers’ movement in Europe during the late nineteenth century and re-read this post, they will recognise the thinkers studiously ignored and the explosion of improvised hostile criticism once their ideas seem about to achieve a political critical mass together with the “friendly” critics’ half-baked challenges; the upstarts believing themselves ready to replace the “oldsters”; the recurring temptation among some supporters to pick and choose those morsels of theory they prefer (or are politically expedient) and ignore those they dislike, their readiness to berate theoretical consistency and principle as dogmatism and the anxiety to make their beliefs acceptable to the powers that be.

Personally, I’d recommend Marxists to pay MMT closer attention. It has plenty to teach us.


Marx and Engels (and old Hegel) were onto something: history has a funny way of repeating itself.


[*] I would have used the term “serious” to qualify both groups, but I banished that word from my vocabulary, at least as a term of praise. Thanks Paul Krugman.

[$] To avoid controversy, I’ll abstain from naming names, unless strictly necessary.

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