By William K. Black
The failures of theoclassical economists and economics are total and myriad. Many of their theories are long-falsified dogmas. Their methodological preference is econometrics – which gives the worst possible results in bubbles and when accounting control fraud epidemics occur. Theoclassical policies are intensely criminogenic, anti-democratic, and grotesquely unfair. Their proudest creations – their risk and price models – proved to massively understate risk and overstate asset values. They betray the scientific method that they purport to exemplify because they are overwhelmingly mono-disciplinary, in thrall to their dogmas, driven by self-interest, incapable or unwilling to follow logical standards of internal consistency, and intellectually dishonest. They award Nobel Prizes to economists who fail what economists claim is the decisive test of truth and success – predictive ability. Theoclassical economists are infamous for their arrogance, praising their field as the only social science worthy of the term “science” and celebrating its “imperial” nature while ignoring work in other fields that has proven to have far superior predictive success. Theoclassical economists are infamous for their lack of altruism.
By J.D. Alt
A principal dilemma of the theory of modern fiat currency (MMT) is the question of how the state spends the money it issues: who decides, and by what process? It may be frustrating to watch U.S. Congressmen and Senators bicker and behave as if their national government has run out of dollars, but it is sobering to consider what would happen should these legislative prodigies suddenly realize that, in fact, there are no currency constraints on their spending at all. It is hard to imagine who, or what, would step in to impose some kind of discipline and planning for the spending spree that would ensue. I suspect that many who actually understand fiat currency are hesitant to overtly embrace it for precisely this reason—because they are unsure what structure exists, or could be put in place, that would rationally manage the remarkable levels of sovereign spending MMT makes possible.