Debunking Modern Monetary Theory (MMT)

Old wine in new bottles, and it never tasted good.

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[peterbrisbane]

Inflation is literally the only thing that matters according to MMT, that is the real constraint rather than a balance sheet. The deficit only matters because of the inflationary potential not because red numbers are bad.

[injinii]

Thanks for helping me understand how the anti-MMT folks are confused!

There's a lot of easily found holes and contradictions here. It's great material for critical listening.

[BensWorkshop]

"The redistribution from late receivers to early receivers" goes a long way to explaining why the asset poor were made poorer by quantitative easing.

[SacredCowStockyards]

Two common historical misconceptions:

1) barter has never been widely used anywhere because it's so hilariously inefficient. Socialists will call what we had before money a "gift economy" because they're idiots with no sense of context. What we *actually* had before money was essentially an IOU ledger. You needed something from me, I'd provide it in exchange for a future good or a future favor. This worked originally, because social groups were very small initially, often tribes of 100 or fewer people. Everyone knew each other. As society grew and we came into contact with more and more people we didn't know or trust, we needed to have a standard means of exchange so we could trade with strangers, and this became early currency.

2) I've seen economists argue that societies used rocks and shells for money, but that has no archaeological evidence backing it, nor makes any sense since such things would have little value. Instead, early money took the form of fungible commodities that everyone needed, such as grain or salt. This is because if you took payment in salt or wheat or barley, you knew that even if you didn't need it, someone else would and would gladly take it when you offered it as payment. In fact, the first specie money ever recorded, the Babylonian shekel, was offered at a standard rate where 150 grains of barley were equal to 115 grains of silver (yes, that means barley was nearly worth its weight in silver then). In fact the pound emerged as a means of weighing grain and precious metals -- one pound is equal to 7000 grains of barley exactly.

[rawcorporation]

From what I understood, MMT simply describes the system of money we have now and it's advice is based upon that system. It's not arguing that their "system" (which is actually just a framework to view current day fiat economy) is the solution, simply that the current system operates this way. Mosler says the government is the monopoly for money (taxes can only be paid in their currency of choice or making) so things will behave as if in a monopoly.

[zachp]

.3:10 "everyone knows in Venezuela they experienced hyper inflation because they printed loads of money" this is kinda true but you're missing something, they kept printing loads of money even after their economy started to tank because of the cost of oil going down in other places, this decreased demand for the Venezuelan heavy crude which is hard to refine and ergo more expensive to use. This actually proves what mmt is saying, when the economy begins to get smaller [IE] less is produced, the money supply should not be grown because if it is it will cause inflation. That's what MMT says. You even cover this later

3:24 "inflation is always caused by an increase in the money supply" not true in the slightest, where is our 08 stimulus inflation, why isn't Japan inflating, why is it that America has been running huge deficits without hitting 3% inflation. Mmt answers this, can you?

3:40 "in the 1840s the California gold rush-" ima stop u right there chief mmt, in all of its major academic pieces says it only applies to countries who print their own fiat currency, no body prints gold, it isn't covered by mmt

4:33 "qe" in glad you said this, people who wrote about mmt say this all the time, from the very beginning but the us has been spending deficit even without the qe


7:50 to 8:10, I have a number of problems with what you're doing here first you introduced a quote by him where he didn't say why trying to hit full employment would result in the bad thing he was talking about. Then you introduced another quote that did the same thing. Then another quote, in this one he seems to try to make a point, he said something along the lines of it can't happen because it would distort the market, he doesn't justify anything in this however nor does he show his reasoning.
He also seems to assume that when someone says full employment they mean 100% which is simply not the case.
Then the question about the engineer. You can help facilitate both and get the best of both worlds. I mean I simply don't understand his larger point here, and it seems to be attacking a strawman that says "everyone should always be employed and never leave their job" instead of the actual point of "we can add money to the system to allow for people who want to have a job to have a job and subsequently have a stronger economy by allowing more transactions to take place" also even with this straw man he's blatantly wrong, if there is an engineer who cannot find an engineering job and they are unemployed the economy would be more productive if they got a job at a grocery store. And then he makes a point about helping people get jobs and that providing more money for the economy, and yes that's true and good. Pt 1 cause this is nauseating

[rodsheaff]

The arguments presented here conflate frictional unemployment (with which MMT and Keynes see as not problematic) with structural unemployment (long term, not due only to technical or other short-term re-adjustments, and problematic at least for the unemployed). Also it conflates the question of the historical origins of money in general (about which MMT and Keynes are agnostic) with that of the specific origins and mechanisms by which fiat currencies work (MMT is of course non-agnostic about that). As the presentation says, MMT also agrees that once an economy works at the fullest capacity it can (which might be a low one), creating more money *is* inflationary. Neither does MMT claim to be a complete theory of relative or 'real' prices. As for G-T=S-1, 'of course they're not saying exactly that ...'. By all means criticise MMT on empirical grounds, but MMT not a straw person.

[niemerow]

How about a conversation with Warren Mosler or Stephanie Kelton? If you purport to debunk MMT, let's have an honest exchange.

[DaveE]

You familiar with the history of debt first 5000 years, he litterally debunks the “money came from barter systes” credit existed before money, money came about because of armies. People not willing to barter with unknown potentially violent people.

[graemeharris]

Governments have historically inflaed their way out of debt.
From memory, the British government finished paying for WW1 in the early 1990s and early in this century.
So governments get kudos from deficit spending and pay it back with less valuable currency.

[progste]

No wonder every politician seems to be pushing keynesian economics, it basically says "vote for me and i'll make you magically rich".

[YizzTheEunuch]

I think most of everything I've been taught in school and by the media about economics is so heavily-steeped in lies that I've had to start over from scratch the last few years to help me sort things out and find truth. I've listened to a lot of Hans Herman Hoppe in the last year, I like a lot of what he has to say. Do you like him or what he has to say AA? others?

[jomellon]

Money was invented as an improvement on the limitations of barter? Anthropologists know exactly how money arose, and David Graeber describes the process in detail in "Debt: the forst 5000 years". Money is invented when promises (debt) become complex and (later) anonymous. It *could* be when someone with lots of wheat wants apples and honey (simple barter): but that is only one example. He maybe wants the apples in six months. Money is about trust and promises: *not* barter.

[kebman]

Some water lines had to be changed, so they dug up the street outside my window. It was about a week of digging and noise 24/7. But when it was done before the weekend, they laid new asphalt and made it look really, really nice. I was relieved! And it looked great too! But on monday morning _the same_ crew started digging up the street _again._ I remember thinking to myself, "Did someone fuck up? Why would they ruin such nice work just after the weekend?" So I asked them, and they told me that they also had an order to fix internet cables (which are in the ground in Norway). I then asked them, "Hey, but you knew about this in advance, right? So why didn't you just do this while you dug the street up the first time?" The guy just laughed and said that he just does as he's told. Naturally, I smelled corruption, so I called the local newspaper about it, where I was _flatly_ refused for this obvious scoop. Turns out the newspaper owner also had owning interests in the constructino company, plus he knows literally everyone with power in the local government. Now _that's_ corruption! But you know, it keeps the diggers digging! <3

[iggyy]

Hahaha, my advert before the video started, was for a Paul Krugman how the economy works.... LOL

[edbop]

Not a fan of MMT but I have to disagree with your conclusion that the chartelists were wrong just because you can find some examples of commodity money. I could just as easily argue that the Metalists were wrong by pointing out the use of tally sticks in England for hundreds of years, which is an example of the Chartelist view of money.

[paulvmarks]

As for history - silver was used as money in the Middle East many centuries before coinage. Silver was just used per weight and purity. On economics - there can be massive inflation AND mass unemployment. And "inflation" need not mean a "rise in the price level" - inflation, for example in the late 1920s. can do terrible harm to the capital structure of the economy without any rise in the "price level" . Creating more money (from nothing) will not get rid of unemployment over time - it will create economic chaos and eventual economic breakdown.

[shaunpatrick]

McDonald's workers can buy more eggs and TVs than in the 1970s, but less of the things the government has helped them to afford, like university and healthcare.

[clarestucki]

The problem with all discussions of MMT is that we have allowed the word "inflation" to be re-defined to be simply synonymous with "rising prices". The original (and true) definition of "inflation" was always, up until the 70's, "Raising the ratio of the amount of money in circulation to the amount of goods and services available (aka GDP)". When we re-defined the word, we lost the true meaning and left ourselves unable to solve it.

[dragonknightleader]

Ugh, I got a Paul Krugman commercial. If anything has put me off Masterclass, it was him.