Responses to MMP Blog #47: The JG / ELR and Real World Experience

By L. Randall Wray

Before we get underway, I have two appeals.

Appeal #1: About twenty years ago Don Roper and Ric Holt created the PKT (Post Keynesian Theory) internet discussion group. It was the first such group I’d ever come across. All the “top” heterodox economists participated. The discussions were interesting and important. You might still be able to access some of them.

However, the list was destroyed by frackers.

I won’t go into all the details but here is the basic problem. Every couple of weeks some pseudo Austrian would come along with the free market /anti government ideology posts. That was not really the problem—which was two-fold. First these people had no understanding of heterodox economics—they never read previous posts and were congenitally lazy (and, it appears, dense).

Further, they had no interest in learning anything. They were selling, not buying. They were self-appointed evangelists for the Austrian cause. Now, in truth they had no understanding of Austrian economics, either—which is why they were pseudo. I gather they spent most of their time in their mothers’ basements alternating between (how shall we put this?—as delicately as possible!) fracking themselves and fracking progressive discussion groups.

They would force participants in PKT to begin anew each time, with well-meaning discussants trying to bring the interlopers up to speed by restarting from ground zero. This happened at least once every two weeks. The frackers would divert discussion for a couple of weeks, then move on—back to self-abuse in basements or on to discover another discussion group to disrupt.

Gradually all serious economists left PKT. And then it shut down forever.

We are now on MMP Blog 47 (with a few asides) and very nearly a year into this blog. Our interloping frackers have come and gone over that year. With my long-term experience in discussion groups, I’ve developed a nose for frackers–and an intolerance for them (that has probably not gone unnoticed).

It has been very clear from day one what this particular MMP blog is about: discussing the basics of MMT. From day one it has been about explaining MMT to those who are interested in it. I have no interest in pushing MMT on those who are against it. I have zero interest in debating enemies of MMT, and have zero tolerance for them. This is a primer. Anyone who comes here does so voluntarily. And while I never suffer fools very well, I do not suffer idiot salesmen who come to the MMP at all.

Jerry can sell his wares somewhere else. I’m not buying. You will note the large number of comments by MMPers who have masterfully dealt with every stupid complaint made by Jerry.

These comments in response to Jerry display deep understanding of MMT. But understand this. Jerry, by his own admission, has no interest in understanding MMT. He has a career that began by defrauding government, and now like most pseudo Austrians uses that experience in an attempt to discredit government. This is a well-known psychopathic behavior.

But more importantly for our purposes, his self-described career aims to destroy MMT. I presume he means he is paid to do so—and I’ve got my suspicions about who is paying him (hint: a new website was set up with six-figure funding to hire individuals to do just that). Now, to be clear, I am not worried about that. Heck, the well-funded Vatican could not destroy Galileo. MMT is correct and it will win out—no matter how much funding is against it, and no matter how many career flackers attempt to destroy it. Truth is on our side. The liars cannot win.

But here’s the appeal. Ignore the frackers. They will go away much more quickly if they illicit no response.

Appeal  #2. As usual I’m way behind the technological frontier. My colleague Stephanie Kelton is apparently a champion Twitterer. I have no idea what that is, but I presume it is important. So I got an Ipad. And Twitter was sort of already on it.

(I will not go into the details of trying to get the Ipad set-up. I wince whenever I hear anyone say that Apple is “more intuitive” than Microsoft. Yeah, right. To get the damned thing to do anything I had to answer 25 questions of increasing difficulty, ranging from the first girl I kissed (isn’t that a bit presumptive?), to my favorite color and automobile, on to the occupation of my third cousin on my mom’s side, and finally to the names of the six people who separate me from Kevin Bacon. And the most frustrating thing about it was that the Ipad kept correcting me. Somehow Steve Jobs knew a lot more about me than I did. And he was arrogant about it, to boot.)

So I was all set to Twit and Twat, but Twitter informed me I have no friends and no followers. Isn’t that sad? How humiliating after all the effort.  I have no idea how to get some. I emailed Kelton but she is off, apparently, dining with the Princess of Monaco.

My Twit address, I think, is GLF530619. I need friends and followers.

OK on to comments. Since most were correcting Jerry, there is not much for me to respond to. Here are a few comments.

1. Taxes and threat of violence. Look, this always comes up by those who want to argue MMT is fascism. Forget it. The reality is that States impose taxes—even the most democratic ones. They do not make tax payment voluntary, for obvious reasons. They are not running charities. In democracies, the citizens approve the taxes—either directly or through representatives. But they still want penalties for nonpayment. Anyone who opposes this lives in LaLa land. Good luck with that. MMT lives in the real world. Where taxes drive money. And that is the ultimate justification for them: they allow a monetary system that moves real resources to the public sphere. For the benefit of the public, in the democratic system. Is the US (or anywhere else) an ideal democracy? No. Democracy always means holding the feet of representatives to the fire of the indignation of the 99%. I’ll take that over some utopian anarchy any day.
2. JG and efficiency. Look, efficiency is the most over-used and most misunderstood notion in economics. Neoclassical economics has a definition that cannot be applied in the real world. It is somewhat based on an engineering definition—to minimize inputs relative to outputs. But that plays almost no role in real world economies. To put it very simply, in a monetary economy (“capitalism”) the only thing that matters is money: so it is all about trying to minimize money inputs and maximize money receipts. But that has nothing to do with the engineering definition—which is in real terms. No megacorp (financial or nonfinancial) ever pursues an engineering strategy. In truth, the most profitable strategy usually involves constraining the OUTPUT. In any case, neither of these definitions have much to do with social costs and benefits—which from the public policy perspective is what matters. I’ll come back to this in a later MMP blog.
3. Volunteer work vs JG paid work. Nathan’s view is close to my own. Note that all rich people engage in substantial charity “work” (usually, donating money), and get all sorts of things named after themselves (parks, schools, bridges, charities). That’s nice. Most people would like the same—but cannot afford it. Indeed, most people are so busy struggling to make a go of life that they do not find the time and energy to do a lot of volunteer work—in some sense, that is a “luxury” they cannot “afford”. By the same token, except for the Red Carpet crowd, volunteer work does not provide the same access to social and political networking that jobs generally do. And even if we provided sufficient hand-outs so that even the poor could do all the volunteer work they’d like to do, they are still stigmatized by the hand-outs. Capitalist societies expect much or most of income to come from “work” and those that do not receive their income that way are penalized in numerous ways—some overt and objective, others are subtle and subjective. Why not give the jobs, and then let people choose whether and how much they will volunteer? This is not either-or. As I have insisted all along, the JG is “add on”, not a replacement. It is a diversion to pose volunteer work to the JG. Most Americans have jobs and then decide whether to volunteer. Let’s give everyone that choice. However, let me disagree with Nathan about the Jefes experience. The networking was because the women worked together; putting them onto welfare did not completely destroy that network. But if they had not first had Jefes, they never would have had the network. Working together is fun!
4. The JG and MMT: Next week I’ll get into the necessary (?) links, and the inflation issue.

Thanks for the comments!