Friday, 31 May 2019

Getting all Tied Up (4)

This series considers Paul Mason’s “Risks are ‘a Thing’… and so is the Death of Capitalism”, a critique of MMT.

In the previous post I argued that Prof. Tcherneva’s quote doesn’t support Mason’s “finding” of a monetary theory of value native to MMT.

To buttress his case on the alleged differences between MMT and Marxism Mason invokes Prof. Scott Ferguson’s article “Some Remarks on MMT & Marxism”, from where Mason takes this quote, which, in his opinion, sums up neatly said differences:
Marxism assumes that money is a private, alienating, and crisis-ridden exchange relationship that ought to be overcome. Yet MMT holds money to be a boundless public utility that, while by no means untroubled, is well-equipped to actualize radical collectivist ends.
Ferguson’s views on the differences between Marxism and MMT are the subject of this post.

I’m not sure what to think and I certainly have mixed feelings about Ferguson’s article. I’ll try to explain why. Readers are free the make up their own minds.

Against Mason’s argument, MMT developers believe their insights (note the separation between thinker and thought: we’ll come back to this in the sequel to this post) are valuable per se and widely applicable to other schools of economic thought.

As I’ve explained, in some ten years following his blog, I’ve never seen Bill Mitchell -- among the founders, perhaps the most interested in and knowledgeable about Marxism -- ever suggesting there is a philosophically “irreconcilable split” between Marxism and MMT, which is what Ferguson claims. If there was one such split, wouldn’t he had remarked on it? He seems to have had time enough.

And there’s more. After decades spent thinking about MMT, the “underlying rift that cleaves” MMT and Austrian economics -- to give a particular instance of a school of thought founders believe could incorporate MMT insights -- doesn’t seem irreconcilable to Prof. Randall Wray (another prominent founder). Note that Wray refers to what Ferguson seems to call “the technical operations of political economy”.

It isn’t obvious at all -- to me -- why that split, in the case of Marxism, should be irreconcilable. How can one reconcile Wray’s MMT broad applicability thesis with Ferguson’s narrower one where there is at least one “irreconcilable split”: that between Marxism and MMT? Should one assume Austrian economics is philosophically closer to MMT than Marxism? Shouldn’t Austrians have a say on that?

Readers may oppose that much younger thinkers -- especially those with no discernible claim of expertise in economics … or in Marxism -- coming afresh to a field new to them may find fundamental insights that much more experienced developers failed to appreciate properly.

Well, perhaps. It’s quite possible that, among those I call MMT enthusiasts, there are very talented people, capable of correcting the founders. I don’t know much about Ferguson, so he might well be one.

I do know, however, of one extremely talented and qualified enthusiast: Peter Cooper (whom Ferguson, incidentally, mentions next to Bill Mitchell and Mathew Forstater). Cooper not only is a PhD in economics, but also a Marxist and an MMTer and seems to find no irreconcilable split (btw, he scrupulously makes clear his views aren’t binding on the founders).

I guess I can put my doubt in the following terms: I find it problematic Mason representing Ferguson’s views as authoritative. In the absence of an explicit pronouncement by the founders, why pick Ferguson and not Cooper? Neither speak for the founders, although the former, unlike the latter, fails to distinguish his personal views from theirs (something unfortunately common among MMT over-enthusiastic … enthusiasts).


The previous may suggest I believe MMT and Marxism entirely compatible. That would be premature. For that matter, I am not sure I agree with Mason’s own views about what the aims of Marxism are.

This discussion will continue in the next post.

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