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.
Ironically, preventing inflation involves managing the deficit. MMT is more of a religion, because its proponents suggest high spending on faith alone with arguments like "money is deleted when taxed, so it doesn't matter!" "But then it gets printed again to finance the budget." "Yes, but that goes back to the economy." "But more money causes inflation." "Yes, but then it gets deleted when taxed again!" "So, shouldn't the taxes match the amount that is printed, so that inflation is avoided?" "Lulno, because that would mean that no money is in circulation, since you're deleting everything you print." "What? No, the money supply for the economy at large would remain at a net value. It would stay the same." "I... I don't know what you're talking about. You want the management to be perfect? There's always going to be some inflation/deflation." "But you believe that both those things are wrong!" "It is, but your dreaming if you think the economy can be perfectly balanced." "So, you are defeating the point of managerialism. If they aren't perfect, then why not just give a free and austrian market a try? That isn't perfect either, in your mind." "Dude, it's... it's all just really complicated, okay? We need to manage it to be as balanced as possible, because that's how the economy works." "Hmmmm... okay retard." They ignore the numbers that come from this, for all that they want to promote mangerialism.
@@Usammityduzntafraidofanythin But the point is not to completely avoid inflation, it is to keep it at a reasonable level. If inflation gets out of hand, you can try two things: increase production if the problem is on the supply-side, increase consumer taxes if they are on the demand side. We create money out of "thin air" which is the same as "advancing the funds". This advance allows us to accelerate the economy, a mortgage we pay back later.
@@Usammityduzntafraidofanythin yawn … let me respond to you using your kind of logic. You are wrong because I’ve burnt my toast so there ! That’s how cracked you sound. Now is there any other subject you know nothing about that you want to claim is wrong ??? You’re a part of the “Dont look up” movement huh ? 🙄
@@matthewrutters6842 clearly I was taking the piss … derrr !!! “bUt MmT iS a ReLiGiOn”. As said by idiots who have done absolutely 0 research into MMT.
Also the absolute, resolute determination by governments to intervene everytime blown-up asset prices are in danger of coming down. There's no more crass and disgusting action that is so regularly accepted by people. Imagine how those "inequality" figures the left likes to throw around would look like if they allowed the banks to crash, as they should.
Danan Yes that's more the issue. QE is merely filling in the pits on the graph of ftse and assets, preventing deflation, and so they say it doesn't cause inflation. When actually during booms the asset rich win big and become also cash rich, and when it crashes they don't lose because the government inflates to prevent deflation. The old private gains & social losses
@@d4n4nable That's the most maddening thing. Goodie good liberals like to say "rich get richer, poor get poorer," but then, because they're so economically illiterate, continually vote for the same people that make it that way
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.
MMT might be agnostic about the creation of currency at face value, but all the lectures I have seen start with it as a discussion point....and they are wrong. If your fundamental axioms are wrong, your conclusions will be wrong. I havent seen and MMT supporters or theorists make a distinction between frictional vs structural unemployment, though the first question that leads me too is how would the government accurately tell the difference. MMT to me, makes these weird logical leaps that just don't make sense, like for example, ignoring the reason for the underutilisation of production. And likewise, ignoring the problems of immediate demand vs gradual supply and so on. MMT does make some useful observations though, but I feel their conclusions are really just contrived.
.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
For the record because I didn't say this but most people think that full employment should be somewhere around 2 to 3% with underemployment being a similar number
Again a few moments later you say this, but in reality that isn't what's happening, it hasn't happened in Japan or America because until you start printing past full employment you're not going to create significant inflation it just has not happened
Also the idea that there are fixed income groups that would not gain any more money if the government spent money in the economy is true in a couple of cases however some people do this thing when they get money called spending it oh, not everyone but a lot of people.
Oh great 15 minutes and then we finally get to the topic of the video, after you made a thousand and one different incorrect claims and prime the audience to agree with you
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.
The actual existence of a barter economy is unnecessary for the commodity theory of money to work since the emergence of a currency is so obvious that there need be no actual time spent bartering.
@@AcademicAgent A lie. The whole Mengerian theory of money is that the most saleable commodity emerges as money from widespread barter spot trades. Your claim that a "period of barter is not necessary whatsoever for the commodity theory of money to work" is one of the most stupid things you've ever said. Here's Menger's REAL theory of the origin of money, not A.A.'s idiot fantasy world version: socialdemocracy21stcentury.blogspot.com/2012/01/menger-on-origin-of-money.html
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.
@@donedeal8385 It's a description of something that was put in place by force (threat of). There was no stopping the gubberment from implementing it and you can't opt out. It's a description of something immoral.
What I find interesting when it comes to discussing and reading posts on MMT, is that posts quickly fall from a Macro Economic discussion to Micro Economics - this is because most folks are still 'stuck' on Private Sector Economic principles.
@Mark Collins Krugman wrote some shit article about how Trump is causing death and destruction Meanwhile, Democrats released prisoners and told people to hug Chinese...
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!
@@james192599 Under capitalism, why would the man paying for the water and internet conduits want to pay more money to dig the road up twice? The blessings of government spending.
@@joeblogs6598 He wouldn't but clearly he would want to have his company get paid for doing the same work twice. In fact, corrupting the regulators with cash is typically more profitable than inventing or innovating. :)
@@G11713 It's government's fault this sort of thing happens. This is because the government is the one paying to have the road dug up twice. Under capitalism this would not happen because the people paying to have the road dug up are using their own money. Governments do not, as they use taxes.
I can’t explain how upsetting it is that the equation for GDP used X for imports and M for exports. M iMports X eXports What a waste of a perfect variable letter. Oof. 😢
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.
Did not get through. He lost me at the barter myth of how money developed. „Economists“ never seem to bother themselves with a bit of learning from anthropology or sociology. Without watching the video I bet he does not use accounting to support his argument.
Is there a place I can read more about your view? I havent watched the video I just want to learn about monetary policy etc lol. Also is there a place that makes better arguments than this video for the other side?
@@jonathanbauer2988 Not sure how deep your in the whole academic economics discussion. Anyway, at universities around the globe it is a mono culture of neo classic economics. They are also very much a closed shop, not caring what’s happening outside their bubble. So, this video needs to be applauded, bc someone from that camp dared to step outside. More realistic critic of MMT is probably comming from within. So, on money google for Randall Wray. There is a very good entry lecture done by him. Everything from Stephanie Kelton of course. As long as it is about money creation it is pretty much accounting and facts. Not much to argue about, unless you’re an ignorant neo classic. It gets more tricky with employment and foreign trade theory. There is quite some articulate criticism done by Steve Keen. Do more specific searches and you‘ll find more on this. I find the criticism from within the heterodox economics community way more constructive and on point, than this video.
You live in hope. They don't face people who disagree with their MMT because they know their theory will be torn to shreds. They hide from explaining or run away. Just see this where Molser spits the dummy when he can't explain what he previously stated. th-cam.com/video/M7OQ-nVGQ9w/w-d-xo.html Just ask them on their blog to explain. - They can't explain so many of their claims when you present the reality to them.
@@Rob-fx2dw I watched this and not sure how you arrived at your conclusion. It basically seemed that Boldrin was either intentionally or unintentionally misinterpreting warren's ponts and focuses on money as a whole, not the sovereign currency Warren was referring, even clarifying he was referring to that after the first misunderstanding. If you have ever watched Warren discuss this point with someone not being a bhole, you will see he happily agrees that is true and does depend on the government making it that way. Clearly, to me, Warren was frustrated at the fact that Boldrin simply refused to listen and was being kinda a bhole about it too. If you want to see warren have a debate with someone he disagrees with check this out. Similar points being made, but much better debate since it actually follows though: th-cam.com/video/cUTLCDBONok/w-d-xo.html
@@Rob-fx2dw I don't think your attached video proves what you think it does. Mosler's trying to clarify a point to Boldrin who is either obfuscating his point or too dumb to get it.
@@Michael_Peters He is not too dumb to get it. He is too smart to believe such rubbish as private banks being agents of the government. If they were then all people who have a license to operate and comply with a set of rules such as car drivers would be agents of government and plumbers who havea license to operate. Mosler uses concepts and then contradicts what he says depending on who is asking. He previously made a statement and no changes what he said. Clear as that. Do you really think private banks with purely private employees, private managers and directors and owners and in search of private profits and no compulsion by government to actually lend are "agents of the government"?
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?
hoppe is of a similar school of thought to mises and rothbard, who AA draws on extensively. Many of hoppe's big contributions are outside of economics, so in these sorts of videos he pops up less than really foundational figures like mises, but he's probably about as good of a person to learn from about these things as you're likely to find.
@@aidan8578 Cool, thanks for the input, and from little I've read about Mises and Rothbard, it defo seems same/similar. I am self-taught on nearly everything, and I do so by listening to videos/casts/streams while I work or exercise, so it's easier for me to learn from speakers than trying to absorb audible versions of dense academic works.
I hated economics growing up. It always seemed to play politics, rather than teach math or predict future developments. Then, all grown up, I discovered that the only economics we learn in Norway, are keynsianism. But now I love Austrian Economics. Even if they mostly predict developments, and do not trust math.
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.
@JC S There are many odious lies so it's hard to decide which is the worst one, but "Money is the root of all evil" is in the running. It's objectively false on every level and the people who say it don't believe in it either.
Eh. That's the one aspect of this video I'm uncomfortable with. There's quite a lot of research, and many anthropoligists suggest that commerce and monetary exchange really only established itself when governments coined media of exchange. So while I like Mises' explanation (and it's certainly AN explanation of how money COULD arise), I'm not quite sure it holds up to empirical evidence. I could see how a decree ("you have to pay taxes in this currency, or we'll throw you in jail/disposess you/kill you/etc.") could imbue even fiat money with initial value. In my own papers, I started out with the regression theorem as the origin of money but jugged it all out, because the evidence for it is too murky (and it's not really important anyway, imo).
Here is what the archeology says about the origins of money in Middle East: michael-hudson.com/2018/04/palatial-credit-origins-of-money-and-interest/ Frankly I think this is much more convincing than AAs version of Origins of money.
@@d4n4nable It is not murky - even if one treats the regression theorem (of Carll Menger) as history - when actually it was a tool for economic thinking. The history is quite plain - for example silver was used as money (in many parts of the Middle East) for many centuries BEFORE any stare coined money. The terms we use, "Shekel" "Pound" and so on, where once just measures of weight.
@@tomi213 If you do not know that (for example) silver was used as money for centuries before coinage then you really ought to. Perhaps you can explain this simple fact to Dr Hudson - if he really does not already know.
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.
You so wrong. MMT says that money printer is always on, it doesnt advocate much but it explains how printer works all the time. MMT describes doesnt advocate how government should print. MMT exlains how money is printed. YOu just blinded by lies about MMT instead of reading it up yourself. Do you always ask others to find answers for you? To tell you what to think?
Why is it so important to know the theory of why the printer is always on? I mean I guess that is a bit important but if that’s all it is I don’t see why it’s got left wingers so thrilled either.
Once again for the record...LITRALLY NOWHERE in MMT does ANYONE say "Just print more money" for the sake of it. Maybe go out an do your own research rather than watching one very uninformed, and seriously flawed video.
@@danielpincu6030 Because when it comes to helping people and poor those politicians will invoke government debt as a reason not to do what democracy asked them to. They use lies (no money for SS or Medicare benfits) to prevent improoving standard of living for many. But, they will hel rich ones with tax cuts to them. If you know that printer is always on and there is no public debt problem as they claim then the discussion will be completely different. they could not lie to you that government budget is like a household budget. Can houshold print money? If you know that all public debt is repaid with new debt and service is paid with new debt (last 80 years been going on without prblems) would you find that "our grandchildren will have to pay our debts" mantra?
They actually misrepresent the accounting identity. Ignoring imports/exports for simplicity: G - T = S - I Where: G = public spending T = tax revenue S = private saving I = private investment So: government deficits (G-T) are equal to private savings NOT spent on private investments (not just simply all private investments). What does that really mean? If the deficit grows (G goes up, constant T), S-I has to go up by the same amount. They simply assume this will happen by savings going up, while investment remains constant. In reality, savings will stay relatively constant, while private investment will fall (the crowding-out effect they claim doesn't exist). This all comes back to the idle resources fallacy AA described. They believe there's a free lunch to be had. There is not.
@Hairy Pixels Same reason why the 40% plus tax rates exist on employment income. They don't want you to work harder and have surplus income that you could use to repay the mortgage earlier. They want/need you to keep working until you reach pension age, and be happy with what the government leta you keep.
@@d4n4nable lol government spending means the privet is not spending the money. It's simple as that. If government is deficit spending to build road, the people who are using the roads are saving money by not having to pay taxes on fuel or tolls.
@@MrEdrftgyuji 😂 lol you are saying you don't want to make more money because you will be taxed higher? It's pretty funny logic you have here because last time I checked everyone is trying to make more money even though you have to pay more taxes if you make more.
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.
The other day I was listening to the Croatian central bank governor in a talk show where he said that we don't see inflation from expansive monetary policy mainly because consumer goods are produced all around the world today and the sheer omnipresence of competition is enough to prevent these prices from rising, but we do see that inflation in goods the value of which cannot be brought down by international competition, such as real estate. That's the first time that I've heard a confirmation from an MMT economist, let alone a governor of a central bank, that monetary expansion has real world consequences. Unfortunately, he didn't elaborate on that. I wish I could find some resources or opinions that would go into more detail.
That's a really interesting way to look at it. So your CB governor is a self-described MMT advocate? Anyway, given that ALL central banks are printing money like crazy, that seems like a lackluster explanation. Also, even if only one government did so, why don't local input prices rise to the point that businesses can't compete at low price levels and go bankrupt?
Inflation won't really be felt so long as there is enough underlying economic productive activity expanding along with it. In the case of post WW1 Germany, there was excessive printing with no production behind it. It is possible to succeed in spite of inflation, but it is a constant, constant battle that is easier to lose than win (and you'll never really win). The easiest and more direct way to feel inflation outside of a bust with hyper-inflation as the Germans or people of Zimbabwe have seen, is to consider the value of one's savings over time. How much more do you have to work in order to keep ahead of projected inflation to be able to retire? Is that money really a store of value or not?
In practice, all central banks do MMT. Even in the U.S. the Fed admits that they have the power to create money out of nothing. Where do you think the EU got the money for its 3.3 trillion Euros Covid relief package from? The U.S. is already looking at spending 6 trillion USD. They are probably going to spend more. The Chairman of the Fed Ben Bernanke said this a long time ago; "...in March 2009 Mr. Bernanke told Mr. Pelley that the Fed was printing money to fund an earlier bond buying program. “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing,” he said."
@@d4n4nable >So your CB governor is a self-described MMT advocate? Well he never really reveals his personal opinions on the matter, but being a CB governor, MMT is part of the job really. I don't think he would have the opportunity to be where he is if he was publically in the austrian business cycle camp.
I don't think MMT is a theory on how it should work. Rather a theory on how it does work. In Canada our government bails out every business. Our government couldn't care less about deficits. They manage spending from debt to GDP ratio and try to manage inflation. The argument is usually around who should receive the funding.
No- It is faulted theory based on fallacies. First fault - believing that money is from a government monopoly and can only come from the government. The realty is Private banks create most of the money in the economy when they lend. Those private banks are NOT government agents as MMT claims because they do not get money from the government which does Not restrict the amount of money they create (the Federal reserve bank lending to deposit ratio is a thing of the past) . Second fault - Claiming the national debt does Not have to be paid back when the reality is the Treasury bonds which created the debt eventually mature and must be paid off and the taxpayer is the only entity who pays that off. Third fault - claiming taxes do not fund government spending when they are the main source of funds for government spending every year and there could Never have been a Federal budget balance or a surplus without them. .
Have you any credibility at all ? No ! Your statement:- "In Canada our government bails out every business". So you never have any business going into bankruptcy ? Unbelievable that you would make such a claim which if true every international business in the would be based in Canada and go broke every year and get bailed out by the government. Like taking candy froma baby.
@@gregorydakin Government supplied some business with support but it was at the cost of other private business and private people. You have to understand that government's income is by taxing others. There is ultimately no other government income.
@@Rob-fx2dw I get MMT is not a foolproof understanding of the economy. Its a very complicated industry with millions of cogs in the wheel. But literally thinking taxes pay for spending makes no sense. Its way more complicated than that. There's legal perspectives, accounting perspectives, economic and human behaviour. And our current financial system is a mix of it all.
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.
A lot of Graeber's arguments on the origin of money jive pretty well with the MMT idea that governments create money and taxes are what ultimately give it value.
I agree with AA's criticism on MMT but not on AA's criticism of Keynes. He completely ignored the concepts of structural, frictional and cyclical unemployment, instead just using the word "unemployment" to erroneously graph them which is ironic for someone that opposes Keynes. The fact is that there will always be some frctional unemployment within the economy, however Keynes emphasises an opposition to cyclical unemployment as opposed to Lewis's argument that claimed "temporary unemployment disproves Keynes". This is nonsense as this is not what Keynesian theory adresses. Moreover AA completely ignored who is or is not considered part of the labour force. To use Lewis's example, a store clerk retraining himself to become an engineer is infact not apart of the labour force just as a student educating himself to get a degree is also not part of the labour force. Lewis also claims that an unemployed engineer would be better off looking for an engineering job rather than a store clerk job, which is fair enough until you consider two things. First is the supply and demand of labour which is infact central to Keynesian theory. In that within this case as funny as it may sound there may be an overabundance of engineers and a critical shortage of store clerks. And so because of this would this person not provide a greater economic service by becoming a store clerk in a working class job even though he was trained to be an engineer? And secondly and probably more importantly, would it not make more sense for an unemployed engineer to start work as a store clerk and look for an engineering job while being employed as a store clerk!? This becomes even more blatantly obvious because in the very next sentence Lewis uses the example of a job agency!!! Do I need to spell this out? You do not need to be unemployed in order to get a job agency to look for a job! It may sound obvious but this completely burries Lewis supposed "debunking" of Keynes.
You can print a lot of money and invest it in productive capacity. The "printing a lot of money" is irrelevant. The issue that matters is: where are you in the cycle, what is the standard of living, and levels of employment, and what is the asymmetry that is displayed in the productive sector of products whose prices are eroding the purchasing power of the working class. To say "they print a lot of money" is to say "I do not know why inflation happens"
@Dewaldt no, if you have a population of 50m in 1800's America vs 330m in 2020. You can print to expand or contract for deaths, births and immigration.
@Dewaldt mmt is not about printing endless money - ridiculously irresponsible. Deficit spending MUST go into infrastructure, and education, increasing factors of production and productive capacity. This means when there is more money in the economy inflation won’t be a problem as firms can increase capacity from the benefits of government spending, reducing inflation risk
@Dewaldt Fair point - in reality debt is never paid off. Here in the Uk and everywhere else debt is just recycled with more gilts - if there ever is a time where debt absolutely has to be paid back we can pay it back without any effect - just credit the account of the lender Inflation is the money supply relative to the amount of goods. If there is more money AND more goods, the proportion of money to goods remains the same - inflation doesn’t change A deficit is also necessary as its provides the private sector with more money (not ridiculous amounts enough to cause inflation) but can act as fuel to drive upward growth and prosperity. Running a surplus is effectively removing money from the economy and has caused a depression every time it has been done in the usa
I think the issue is fractional reserve system rather than gold vs fiat. If you could issue 10 1 ounce gold notes for every ounce in custody you could could do the same thing. I think people who want gold backed currency just also hate the idea of fractional banking so it's more associated with fiat.
That argument fundamentally misunderstands the difference between 1) economically inefficient money printing/creation by a central bank unsupported by an increase in productivity, goods, and services; and 2) money creation by private banks lending in a fractional reserve system in which apolitical profit-seeking bankers make much better capital allocation.
@@capt3z4w3e4i lol. I can’t believe you still believe this considering the fact that we’ve lived through a series of bank crashes & government bailing out banks. But whatever, the point is that banks need government issued dollars to stay solvent, just like you do. We use government issued dollars to pay our banks back. If you can’t pay your bank back, you go broke. You really need to stop hating your government issued dollars and loving banks so much. It’s just weirdly masochistic
No. It’s that a gold standard knee caps government spending in favor of bank lending But since banks rely on government issued currency to stay solvent, they rely on our ability to pay our banks back using government issued 💵 If you don’t have 💵 to pay your bank back, you go broke If lots of people don’t have enough 💵 to pay their banks back, banks go broke.
can you walk me through what you said it is late and I just dont understand all the big words lmao. I am wanting to learn more about the topic but where do I look?@@capt3z4w3e4i
Bless the bond markets for they are the free lunch for the wealthy. Too many simple minds here who can't understand the modern monetary system and can't even spell.
I just saw a woman promote MMT in a TED Talk and it was interesting. I'm not educated in economics but there seemed to be some merit to the arguments but I wasn't entirely sold on the idea. I do agree that the idea that a household or a business is anything like a government is ludicrous. What I object to in government is Republicans increasing debt by giving huge tax breaks to billionaires and then claiming debt must be paid down by defunding programs that help the public.
@@thealienrobotanthropologist I kind of understand it from that perspective. Make all the fools think they're rich by inflating away the nominal value of their assets; that way you can quietly buy things of real value at a discount while everyone else is distracted investing in nonsense. The problem is that when this drags on for too long, the 'fools' end up actually taking control of governments and money printers and end up forcing everyone to play the game according to their own dirty rules. Then innovations like Bitcoin and cryptocurrencies start popping up in a desperate attempt to provide life-rafts to protect people from the ubiquitous stupidity which is flooding everything around them; then all we can do is hope that the 'fools' who run the show don't start getting clever and start popping our life-rafts... Then they can drown us all in their 'stupidity'. That said, these days I don't buy the saying "Never attribute to malice that which can be explained by stupidity". I think that, at a global scale, all stupidity has a grain of evil genius at its core... If someone somewhere knows what's going on and has the power to benefit from it, they will take advantage of it... They will hire the necessary useful idiots to be the face of the project and to do the dirty work.
Just saying that contrary to the pervasive myths about MTT, NO WELL KNOWN MMT ECONOMIST SUPPORTS massive unrestrained spending, esp are against putting it mostly in asset bubbles as if done today on a massive scale. That is a myth. I'm prerty sure they consider that inflationary, because prices connected to a property asset then rise. Every single one I have ever heard from. I will send you $100 if you can prove me wrong from the 8 MMT Economists inc the founders. MMT is only an attempt of a description of have a Fiat currency works starting with the facts of actual monetary operations instead of ideologies or abologies which don't fit how the system works. Some obvious policies flow from that. "Just print more money no inflation" & esp "put it all in asset bubbles instead of real work & value" is NOT one of them. That totally contrdicts basic MMT or the MMT Econonists. There is SO MUCH false info about MMT that a simple Bing search shows to be wrong, yet the fearful myths continue.
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.
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.
So maybe having the government push these things onto people doesn't actually help make it more available in the longrun, it's essentially just redistribution in the moment with an effect that last a little longer, that is interesting isn't it?
@@lordpisces5019 No, data will not be available because you can't truly separate one factor out from the other factors over the longterm in economics and since we can't do experimental tests then it's impossible to show this at this point in time. You can however deduce this factoid through logic.
That's the reason these shitty theories won't die. As long as there's demand for such theories, the academia pumps out these economists who's only job is to affirm every politician's whim on the economy.
Er, what politicians are doing this? And for the record MMT is NOT KEYNESIAN economics...yet another thing wrong in the above video. Mostly, they go around utterly blind to how their own monetary and economic system works. US Senate recently tried to pass a resolution condemning MMT and Japan was falling over itself denying MMT....just hilarious...they don't even understand it and try and deny it...particularly funny when MMT accurately describes the monetary system. Pathetic.
It's not a coincidence that these people so often abhor simplicity. There is even a common tendency among them to use "simplistic" as a derogatory term. The "simple" reason is that such a theory's translation into common everyday languageor intelligable academic language alike would reveal its many redundancies and stupidities One comes to realize that most left-wing thought, and perhaps political thought in general, adds up to little less than social pretense and creative imagination. "Here is a convaluted justification for our confused belief. Either accept it or expect a punishment of emotional blackmail and ridicule"
Simplicity offers little room for obfuscation or sophistry. That doesn't mean that the simple answer is always true despite what the old axiom says but that needless complexity is a great tool to hide BS.
@@user-hu3iy9gz5j It’s pretty simple: Our government issues our currency that you use to shop, pay your bank back, pay tax, net save & buy treasury bonds. You’ve just been indoctrinated into despising your government issued 💵 and loving your bank issued credit 💳 Our elites think you’re absolutely adorable
It isnt that complicated lol. The first point of understanding comes from the fact that money is credit… it always has been credit… and never was anything close to gold. Even when we were on the “gold standard” it would come and go whenever it became inconvenient… the gold standard was just an occasion political tool to help the rich. Second, governments have to spend first before they can tax… not the other way around.
@@user-hu3iy9gz5jWell, sometimes the value of money is more complicated than being purely a function of how much there is in circulation as monetarists suggest.
@@alidaraie People who criticize capitalism are really criticizing Keynesianism, and they don't know it And when they call for more government regulation they may as well be calling for more Keynesianism
Seems to me that the main contention is the issue that extra money creation doesn't cause inflation unless productive capacity has been reached. I look at it like an arcade. If the arcade is mostly empty most of the time, there is extra capacity. Increasing the number of tokens will allow more of that capacity to be used - people play more games and stay longer. You can increase the number of tokens by giving them away, making them cheaper, or some other promotional gimmick. No increase in the price of games is needed, they'll cost the same number of tokens as before. However, once the place is packed you are now at productive capacity. If you add more tokens beyond this point, people will be lining up to play games. In the the free market world, they would be bidding up the price of games which is inflation. In order to remove the lines, you either bring in more games (increase productive capacity) or you increase the price of games - inflation. In other words, there will be inflation or unless the money supply is matched with increased productive capacity. Of course in a real arcade, not all games are created equal and some games will experience inflation over others. Now, use the arcade example for factories, farms, labor, etc. Its hard to argue for higher wages when there's lots of unemployed people in your profession. Its hard to increase prices in your restaurant most restaurants in the area are empty most of the time. Its hard to sell products at a higher price when retails have excess inventory and manufacturers have machines turned off most of the time.
Applying your arcade example to the real world, would if be fair to say that we are currently living in a time of excess games and not enough demand? As you said, there are certain games that are going to experience more inflation than others. That is just a fact of life at the arcade. But if there are lineups at a handful of games and no lines at the others, then increasing the number of tokens in circulation would likely increase the usage of the other games. If I only have 5 tokens, and the popular game costs 4 tokens, then I'm not going to waste my time and tokens playing the other games. If I have 10 tokens on the other hand, then I am more likely to play the other games and spread my tokens around. And you could argue that if you increase the tokens in circulation then it would increase the cost of the popular game, but if the cost of the popular game goes up to 6 tokens then maybe I don't want to wait in line and play it at that price, so I take my tokens elsewhere. If your concern is that the new tokens would increase the lineups at the popular game, then couldn't you just add more of the popular game to spread out that lineup? So in the real world, if I make $1000 per month and rent costs $800 per month, that only leaves me with $200 to spend in the rest of the economy. But if I make $1500 per month, then I am left with $700 to spend and that helps all of the other businesses that are not my landlord. My landlord could raise the rent to $1300 if he wanted, but then I could just go find a cheaper place to rent and my landlord would be stuck with a product that nobody will buy at that price. My landlord is therefore not a price setter. The price is set by the competition in the market. If there is not enough competition in the market, then the government could just create more competition which would bring down the prices.
This is one of the many "debunking MMT" narratives that refuse to even engage with the actual theory and instead focus on bringing down a strawman version of economic policies which MMT-influenced scholars support. MMT is a theory of money, not an economic programme. It informs a variety of economic policies but it alone describes how money works. What you do with it is a completely other discussion.
Near the beginning of this video there is conflation of the origin of money as a social phenomenon (of which AA's description is correct) and the origin of the actual money which you use to pay your taxes - which does come from the state. No-one claims, as AA suggests they do, that "all money is fiat money". Rather the claim is that fiat money is fiat money, which the governments of monetarily sovereign nations create when they spend. Now clearly, increasing the supply of this fiat currency relative to the supply of real goods and services will cause inflation. But if the spending increases the amount of goods and services in the economy, (because you pay people to do productive labour) then it balances out and inflation does not occur.
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And how would the government know what is productive work? That is subjective and is defined by demand.
Eoghan Connolly I really like what you wrote here and I mostly think it’s true. However, governments have been trying to get people to be productive for generations. It turns out that tons of people are just not very productive at all (for many reasons).
@@soulfuzz368 Sure some people aren't very productive. But other people want jobs - want to work in return for money. And the government could employ them to build houses or windfarms or whatever there is a social need for. Edit: to be clear, by "productive labour" I don't mean that the people will be über-efficient, I mean that they will produce something.
So the theory is that there is some quantity of unused resources that the government can bring into productive use by printing money? And since the unused resources are added to the economy the government has in fact created wealth by creating money. This theory seems somewhat similar to a command economy; in that experts see resources poorly used by the populace and believe they could put them to better use. Does this theory assume that workers and materials will be brought out of disuse rather than redirected from other uses? This theory may also fall apart between the printing of money and the completion of the government-funded goods. Supposing a dam is funded as you describe, the workers will be spending their printed money in the economy; thus lowering the value of money and becoming a hidden tax on people's savings. If the dam is a failure in some way(as many government projects are) then the value of money is reduced, inflation caused, and no value-added. The above situation is the same as any other means of funding the government, except it takes from peoples spending power in a way harder to detect. It seems to me this devolves to every old argument in economics between government vs private spending and monetary policy.
Ok. I'll be honest, I'm not an economist and I'm not a TH-cam educator, but as a viewer I think I can give you some advice: Quotes from experts are good because they give your points an air of legitimacy, but after you read the quote you have to explain what it means maybe with a simple example. Your audience isn't made up of business majors. We can't hear a quote from an expert and just immediately understand what they're saying. Take the channel Wisecrack for example. They often use quotes, but then they take the time to explain what the quote means in a simplified way so their audience understands the point they're making. Also, if all you ever do is read out the quote then move on, it feels like an appeal to authority. Like, you can't actually address the arguments and points of the people you are criticizing, so you just say, "Look! This smart guy agrees with me." I don't know if that's what you're doing or not (I did find it kind of hard to follow a lot of your points), but even if it's not, don't even give your opponents the chance to make that criticism. If you rely on quotes to much, that's what people will think you're doing regardless.
this isn't really debunking so much as saying this view conflicts with my own. and isn't the notion that barter systems were widely used systems of exchange largely discredited now....
This could have been better and might have been as it's 3 years old. Presenting the opposite view themselves would have presented it is much more honest and devastating when you pick it apart. The argument from "everybody knows" is not working in your way at all, quite the opposite.
So, does the redistributive effect of increasing the M1 money supply tell us more about who those advocating it wish to benefit, rather than "saving the economy"? They certainly shy away from giving it directly to the workers/consumers anyway. Even the US stimulus 4 bill vastly benefits corporations (many of whom seemed to be failing even before the current crisis).
Not to mention that over 70% of PPP loans were fraudulent and ended up mostly being spent on new expensive cars and vacations for the business owner rather than funding employee payrolls like they were legally required to be used for.
Having read The Deficit Myth by Stephanie Kelton there seemed to be a lot of holes in the MMT argument and this video explains them much better. One MMT argument seems to be “Well we can simply write off the debt because the government being a currency issuer can do it “ . Erm….what about all the non national holders of aforesaid debt ? A quarter of that is currently held by non UK bodies . Debt is like a shackle .
If you use your government issued 💵 to buy a treasury bond, you get paid some interest. When China sells us stuff & gets some 💵 they can buy some treasury bonds & earn interest We only ever owe China interest on their Treasury bonds Do you understand this?
MMT is just a rehash of older theories that suggested the price level can be controlled with fiscal policy. I studied the fiscal theory of the price level over 10 years, every econometric model suggesting it could be done was rubbished by better economists. I am surprised the idea is back.
In the first place, mmt does not say that all money derives from governments. The concept says that many modern governments have set up a system where a particular form of currency can only be derived by them. Also I don't think that any proponent of mmt would disagree with your argument that inflation is caused by an increase in the amount of money. If you doubt me, you could check out the wikipedia page on the subject, or there's a bunch of videos on youtube; I just did a youtube search and found one called "MMT Is Misunderstood" by Money & Macro Talks to double check these points. So based on that, I'll give you the same treatment that you seem to be giving to mmt regarding economics: right from the start, you're not talking about something that I would describe as mmt, so your arguments regarding it aren't particularly valid. Honestly I don't understand why you don't actually link a proponent of mmt or the wiki page in your references... it's like your goal here is disinformation.
Try paying your taxes in bitcoin or any crypto; not possible. QE is an asset swap, it's not even stimulatory and is actually generally deflationary as it swaps high yielding asets into low yielding assets.
Why is it that whenever someone criticises MMT there is some wannabe fanboi claiming the person wouldn't understand MMT but also *never* goes into what would actually be wrong?
@@cyrusol i don't think mmt it very relevant. I also don't think its theory of inflation is entirely correct. But academic agent's take is incredibly uninformed, as expected. I'll just talk about the first few minutes. No, mmt doesn't say that all currency arised out of a government requiring taxes to be paid in this currency. That happened frequently, but sure doesn't apply in all cases. That's not the point mmt is making. The point is solely that the state requiring taxes to be paid in its currency secures a certain demand for it. His take on inflation is even weirder: no, it's not true that all inflation was caused (only) by an increase in the money supply. Hyperinflation is often caused by a sudden decrease in supply following war or famine. He could have read any one of the 10.000 mmt papers about venezuela and the weimar republic before claiming they disprove anything. Even if all inflation was caused by increases in money supply, it would not follow that all increases in money supply would be inflationary. A => B doesn't imply B => A. Mmt realizes that increases in money supply CAN be inflationary. It only claims that they aren't as long as there is unemployment. Agent could have tried to engage with this argument. No, the fact that some unemployment is sometimes necessary doesn't disprove keynes, who showed that the market often produces LONG TERM unemployment that only prevents growth. No, 'you can't increase wealth by printing money' doesn't disprove keynes, who showed that you actually can. Agent's argument against keynes is literally 'here is some guy that said keynes is wrong'. But what to expect from a guy that went to a public debate about the labour theory of value without having ANY idea what is says.
In your first point you are simply conflating two meanings of the word "origin" (how the idea of money acme about in the past vs. how money is created today), You state your view and the MMT view well enough, but they are not even contradictory. How you don't see this is amazing!
Government debt being necessary for private savings is painfully obvious. Abstract it all you want...but where does currency come from? If currency comes from the government (spoiler alert...it does), then saving any currency requires government debt. It's basic accounting. At 17 minutes in, I've heard nothing about where currency comes from. You're arguing against a strawman. Argue against a single, actual premise of MMT if you want to argue.
Currency can be minted from a hard source like gold or silver. In fact over most of history currency was related to something with perceived tangible value not just because “muh government says so”. Units of account and stores of value exist without government fiat also. If I save tens of thousands of rounds of ammunition in a common regional calibre, I know I have a unit of account, medium of exchange and store of value in the event of an economic catastrophe.
When an egg cost a penny , you have to lay an egg to earn a penny. Money is a means of exchange, production, saving and practical consumption are economic tools. Investment is a bet. Betting is at its best when you bet part of what you have won gambling. Consumption for the sake of stimulating production seems like a dead end.
I'm two minutes in and I have to say there is no indication that money emerged the way you described it. I was even going back to my history books and sources. There is no proof of money emerging as a natural progression from the barter system. After humans develop semi-civilized soceities it was more a planned and distrubtion economy with the simultaneous emergences of gold, silver, copper and iron as valued trade goods for which high prices could be achieved. As soon as long distant trade started these metals were used for buying stuff on the other side (with bars often stemp by governments): Again there is no historical indication that the theory (thought of by economists) barter --> metals --> money is a natural progression. We don't have any indication for that.
Prior to the emergence of semi-civilized society, what was the standard currency? Metals. You're attempting to posit that currency cannot exist independently of government, but the Bitcoin folks would say you're wrong. Hold Bitcoin as your preferred lingua franca, and when if the taxman wants to be paid in dollars while you stand on your head and sing the national anthem backwards, on tax day buy some dollars with Bitcoin, and stand on your head and sing the national anthem backwards. Demanding payment in dollars as opposed to goats doesn't make any difference at all.
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.
You think you believe 😂 words have meaning my friend also the first human writing system started in Sumer to record the debts of the people to the authorities at the time 😮
MMT holds that the money supply increases as a result off the choices made by the monopoly issuer of the currency. Monopolies always set the value of what they produce.
@@AcademicAgent And note that for a government currency, the government has an immense amount of control over that customer's spend/hold preference. The imposition of tax liabilities takes away value from the private sector. The government can then purchase from the private sector using its currency exchanging it for what it wants from the private sector. The private sector is then able to clear its tax debt with the government. It would be cruel and inhumane for a government, in this situation, to impose a tax liability that is too high. If it is higher than its spending, or even equal to its spending, then there will be people unable to acquire the currency and clear their tax liability. The reason this happens in the case of a balanced budget is that there is a propensity to save the government's currency.. It makes sense, in this case, for the government to employ those remaining unemployed, and lower the tax so that next time there will be fewer left involuntarily unemployed. So that describes an earlier simpler economy where a currency system is created. Fast forward to now where we currently have unemployment.in a more complex financial system. But this still holds. If the government's tax causes more unemployed than it is ready to purchase, they are left unemployed. Correct this by hiring them temporarily and either lower the tax and/or increase spending so that in the future there will be fewer people left unemployed. In the meantime, an employer of last resort program can help correct things and transition the unemployed to private sector employment.
@@ernestjones1038 Or... just stop taxing so much. That might be a better idea. BTW, governments are not monopolists even of currencies. They can only impose such a monopoly in their borders but even then the power is not absolute and they are in competition with other issuers of currencies.
@@lolcat5303 are you sure that governments are not monopolists of their currencies? How do you figure? Who, other than the US government produces US dollars? Please provide an example of some non monopoly currency issuing government
The term "origin of money" is misleading. What Austrians mean by origin of money is less of how it historically has been issued but the nature of money, the societal function of it, how human beings treat it. When Austrians say things like money emerges from barter (the wording can vary), it doesn't mean that there was a time in history when everything was pure barter, but it sheds light on the nature of exchange and how the concept of money necessitates from that. Also when Austrians say money emerged from commodity it really means (though there are observable real life examples) that people treat money in they everyday dealings as if it was a commodity of that nature, whether it's real gold or fiat currency or anything inbetween.
@@nunterz money emerges with credit, which is as old as agriculture at least. hunter gatherer societies invent fiat currencies. The Austrian philosophy is stuck in 19th century myths about human nature.
@@davidguerrero1636 Ok, articulate one of those myths about human nature and tell me how it really is instead. Also, name some of those hunter-gatherer societies that invent fiat currencies. I hope you aren't just making up BS.
Anyone watching this and wondering whether to take this guy seriously should stop watching this video, and instead go and watch the debate between Warren Mosler and Robert Murphy entitled "MMT vs. Austrian School Debate" in which Murphy *acknowledges* that Austrian economists don't deny that their model of currency has never actually existed, but simply say that just because it hasn't existed, doesn't mean that it couldn't!! When you see someone taking Rothbard seriously, they're usually too far gone to discuss anything rationally, so the actual author of this video is a lost cause, but this is just a PSA for anyone stumbling across this video and thinking that maybe he's onto something: he's not.
You don’t understand Austrian economics at all. There’s no such a thing as “Austrian economics” money or currency. Money and currency is a emergent property of NATURE, not a forced imposed rule of law of governments. Government money or currency only have value because of it’s scarcity. MMT literally removes the scarcity of money. It have been proved wrong for ages and ages it’s just a rebrand to fool the uninformed into giving governments more power then it should have
MMT seems to’ve been enthusiastically embraced through decades of limitless military spending, & corporate subsidies & bailouts, etc. It’s when we try to apply MMT to solving the problems of the less-than-posh that we start to see spending as inflexibly finite.
I love how they got to an equation with a clear meaning: “All value created by government deficit comes from net private savings” and they managed to get the relation all wrong
If you’re saying MMT is wrong then it’s only because someone just told to believe it and it’s easier just to believe someone without researching for yourself.
@@roughhabit9085 From creating the currency to setting market rules to having a court system where the wealthy run to if they feel they’re being ripped off. That is reality. Now where do you fit in, in relation to reality? I’m not seeing you anywhere.
11:11 changing wealth distribution is an interesting way to look at this. Instead it could be seen that early beneficiaries are advantaged because they can utilise the money while the resources are still available to be utilised. Beyond that point, late beneficiaries will experience supply shortages and have to spend more money to be prioritised. Therefore, it more matters “who” the early beneficiaries are. Wealth distribution can therefore occur by setting policies to specifically target certain people.
@@marcuschamp9881 LOL, oh? How so? No more pathetic than saying you've found a way of printing unlimited money without it causing inflation, "because". If it worked, everyone would be doing it. Point is, you don't need to be an economist to see that it's snake oil.
Have you read this paper. MMT states that loans create deposits so printing money does not result in hyperinflation: www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy "Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. The reality of how money is created today differs from the description found in some economics textbooks: • Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits. • In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money ‘multiplied up’ into more loans and deposits."
MMT explains monetary systems and is backed by accounting and is stock-flow consistent. Anti MMTers just think MMT is about how people feel things work. 🙄
It claims to be both in every way which is just absurdity. It claims taxes drive the value of money and then says you don't need taxes. Then it says a government deficit creates a 'surplus' for the private sector which by a switch in language suddenly in their narrative becomes a' saving' for the private sector when in reality savings only occur by people spending less than they earn. Funny how the deficits in the private sector is not seem by the MMTers as a saving for the government.
@@Rob-fx2dw You don’t need taxes to fund spending. You left part out of your silly reply. If making up fake strawmen is you thing then good for you - everyone else will see through your idiocy. Haha you don’t even understand a zero sum game.look I know you had a rough time in jail and some people did things some bad things to you. But that’s over now, try and get the help you need instead of waffling on the net. Your stories keep changing and it shows that in the mental department, that you aren’t all there.
At 1:20 you mentioned money arose from the inconvenience of barter. There seems to be fairly general acceptance that barter economies existed. I want to learn more about how that worked in practice but i can’t find any examples of barter based economies. Which historical economies are examples of barter economies?
MMT says 'Government spending equals private sector saving" . It total bollocks since saving in the private sector only comes from spending less than one earns. No other thing at all but they confuse savings with changes in the sectoral balance. Also it is wrong for other reasons including the fact that if changes in the sectoral balance benefit the private sector when the government borrows more than their income and spend by deficit budgets then the opposite would be so and government would benefit from private sector borrowing excessively. But MMT is mainly silent on the issue of private sector debt benefiting government (by their own sectoral balance faulty reasoning) and some even condemn excessive private sector debt. The MMT economists such as Steve Keen pushes the sectoral balance idea and also is one who condemns excessive debt in the private sector. He and praises the government sector's excessive debt while condemning private sector debt. It is hard to imagine such a bias exists in anyone who calls himself a serious economist.
"MMT says 'Government spending equals private sector saving" . It total bollocks since saving in the private sector only comes from spending less than one earns. " And where does that "more" come from you dimwit? Venus?
@@Stewiehleba You can't see past your nose. Since when is increased saving anything to do with increased amounts of new fiat money is the system? Did people in the Weimar republic have plenty of new saving when the currency was expanded and government spent that new currency before anyone else got to spend it. Did you get plenty more saving when the currency was expanded in the GFC? Does the private sector have plenty more savings since the 1990's after the currency expansion instead if increased debt ? Try thinking before replying with some half thought out abusive comment. Where is your answer? Who is the dimwit now?
@@Stewiehleba The real Dimwit . - The ' more' comes from the increased value created by increased investment rather than consumption. The 'More' in real wealth terms only comes from investment and nothing else. But you might have some other fantasy idea of how more wealth is produced instead on more units of money. Enlighten us with your brilliance if you can !!. Just tell us where any new wealth came from if not investment of real resources to produce the same or more efficiency which in turn made more wealth.
You right away get your definition wrong, so that does not bode well for the rest of the video. MMT does not declare that all money is fiat currency controlled by the government. Rather, MMT only applies in countries where that is the case. If you live in a country that is not monetarily sovereign, then MMT does not apply there.
QE did cause inflation. It was designed to inflate asset prices. The Bank of England were quite open about this. Why do you think the stock market and bond market increased in price so much between 2011 and 2020. QE
@@AcademicAgent Hmmm, I am not a Economist, so what does that actually mean? I think that those that use acronyms and/or technical jargon are not really being forthright. Did a quick search and it looks like M3 money supply includes both M1 and M2.
Money is not a commodity though, dude needs to learn some history. I'd recommend David graebers book debt on the origin of money. It's a historical account written by an anthropologist.
No, it would be a massive waste of time. Debates are just team sports, even Adam/Sitch admit this. People change their own minds. This video response that 2010 TH-cam had is actually a lot better than bloodsports if your goal is truth. Besides I've watched enough of Adam/Sitch to know that Adam would just just end up calling AA a Fascist, he's led by his elephant too much. As evidenced by the streams on his own channel, his bestiality debate with Sargon.
This video did a wonderful job of convincing me that MMT is correct. It is scary that people that think like this narrator are so prominent in our economy. So simple to poke holes through the reasoning the entire way through.
This is perhaps the most misguided discussion of MMT I’ve read. The individual has not read anything about modern money that wasn’t misconstrued or misinterpreted or misunderstood. There is so much misinformation here I don’t know where to begin.
I do not want to suggest that anything you have said is incorrect. You are completely correct about everything. However, I have a different way of thinking about this. The thing is, if you spend more than you earn, if you consume more than you produce, your wealth reduces. If you produce more than you consume, you become more wealthy. Money is not wealth and wealth is not money. The difference between production and consumption is wealth. If the government prints money and doubles the amount of money in circulation, the wealth of the country stays the same. The value of the currency simply halves.
Gov: Pay me taxes.! Me: Can i pay you the equivalent sum in Canadian dollars or silver bars? Gov: What? No! Me: Why not? Gov: Because allowing alternative currency would create competition and people may end up preferring money that derive their value from real things and not the bs fiat currency we coersed you into using. Me: What? Gov: ehm... MMT is legit and having a growing finansial industry is much better than actually producing stuff.
There used to be such a time in the US, imbecile. Every bank had its own banknotes. Guess how well that worked! There were bank runs and failures all the damn time. People were uncertain of the value of each of those banks' notes in different towns. It was a fucking mess.
@@c.k.roberts3221 I forgot I made that comment lol. But basically the argument is that competition of goods is a good thing and as such competition of different currencies is a good thing.
I agree with much of this explanation, but I need to add one more point. That is that the better infrastructures that government spending provides, means that the land becomes more productive and more valuable, and this enables it owners to charge more rent. This greater rent affects both producers and householders and it is one added cause why the huge gap between the rich and the poor is growing. Goods prices are raised due to the increased production costs, whilst the population of consumers has less spending power. We need to tax land values not good and services and earnings, in order to make our nation more ethically balanced in how it really controls the use of money.
I recently stumbled on MMT and was fascinated how logic it is. Since then I am trying to find counterarguments because I want to understand why so many people are against it. But everytime I read or listen to the counterarguments it just turns out that those people against it havent understood MMT like you which makes me believe it really is the truth about how modern money works
MMT claims most inflation in countries was caused by things other than excessive money supply even for Zimbawe where the money supply in one year alone increased by hundreds of thousands of a percent to pay for government spending. That is just so wrong and proven to be so because they make those claims about many countries hwer massive inflation occurred. This is true for every situation where massive inflation occurred in 30 or more countries over the past 70 years. Also such other absurd claims like taxes put a value into and acceptance of money when the factual evidence is that in a every instance of massive inflation in the last 70 years where inflation ruined the sovereign money there were taxes which did nothing at all to get acceptance of or put a value into the money. Even their own governments rejected their own money. More foolish claims like saying sectoral balance shows government deficits are a saving for the private sector when the idea is a sham that ignores the debt it creates for the private sector to pay of. Just another thing that MMT economists don't address when asked about it for fear of being shown as their theory being totally wrong. More absurdly idiotic claims like saying the national debt does Not have to be paid off when the reality is the bonds that fund the national debt actually mature throughout every year so the private sector taxes are then used to pay them out. They are not errors but are deliberate lies that no MMT pusher even dares to address. The economic worries of the US that MMTers claim their policies will fix are not going to be fixed by more government involvement in the economy by spending more because government don't invest for increased efficiencies but do it for increased political motives that are primarily purely politically driven and do it at the expense of the private sector whose investment potential is reduced by the very taxes that fund government investments.
I’d argue inflation is more influenced by money velocity than money supply. The US for example has experienced very little inflation from 2009 - current day even though the money supply has exploded. Money velocity, on the other hand, has seen a steady decline over the past decade or so.
I dont think MMT is arguing that inflation isn't caused by increases in the money supply. Also, its pretty obvious that increasing money supply isnt the only driver of inflation. Firms are free to increase prices at will the only thing stopping them is price competition which is eroded by monopolies on products.
"modern monetary theory" is a contradiction in itself. It should be "modern currency theory" there is a world of difference between currency and money.
@Ring-a-ding-ding baby tell me an example of money and then tell me an example of currency. Is the usd "money" and a 300ad denarius "currency" Also how does one store value but the other does not?
@@Dominic-fd2wz I'm not the one who started the language game. Bo Started the game by asserting that money and currency are in fact different things. This is extremely odd to me so I'm *STILL* waiting for someone to actually explain the difference to me with a real existing example of money and a real existing example of currency.
@@shaunpatrick8345 thank you for actually explaining :). We can't have a qualitative discussion without understanding each other. I assume the reason why people are so concerned about this difference (for the average member of society it isnt. The use is identical) because they pine for the gold standard?
And imagine me thinking I was going to get a real 'debunking' because the site is named 'Academic Agent'. Of course, instead I get a pseudo-'economic' diatribe about 'real' this and 'real' that, with no apparent understanding of what money, true economics or MMT acrually are, or their meaning in the valuation systems humans operate under now, and how the past has influecned those current systems. Here's a hint. It's all 'fiat money', always has been.
A couple of things you have to ask yourselves is why MMT may not be practical for us, since if no answer can be found, it is a sound path to embark on. MMT's core fundamentals derive in part from Keynes' theories, which many would argue were an ideal set of monetary & fiscal policies that could help revive economies that collapsed due to a decrease in aggregate demand. However, Keynes himself argued that his theories where to be applied only under specific circumstances where AD fell and AS (aggregate supply remained constant) in which case the Government should increase their spending and create a fiscal deficit to consume the extra surplus in supply that would remain available in the economy in order to cut the bottom & later on the top from the business cycle. In order to do this, Keynes argued that governments should run a fiscal surplus during the boom years, reducing the monetary supply in the economy that had been introduced during the bust period. This is of course a huge oversimplification of his theories, however, few economists outside of the classical schools of economic thought found much issue in these recommendations, for which they were implemented by governments all over the world. The issue of course was that economic assumes that people are rational, at least to some extent, and that politicians want the best for their country, but as we all know, it is not from the goodness of the butcher's heart that we get meat to eat for dinner, it is due to their own self-interest. This meant that nations all over the world took Keynes idea's and kept only the part that was politically profitable, at the end of the day, who cared about the business cycle when elections creeped up in the corner, right? This has led nations all over the world to create huge fiscal deficits that they will never pay off. This has created different consequences for different nations since each situation is different. For those that borrowed in other country's currencies, the risk of default grew exponentially, causing many economical collapse along the years. For others, welfare states where implemented with the best of intentions to ensure that the people found themselves better off regardless of their faith, & slowly but surely these nation's cultures and motivations to continue innovating, continue growing (in terms of REAL GDP) and continue prioritizing their liberties over their paper money has subsided. Now, where could MMT fail in the US? Let me start off by being clear, I am not sure whether it would work or not work, I am not sure whether it is desireable or not desireable, frankly, each individual's morality & ideology will lead them to a different conclusion, but I am sure that it is essential to question any theory or economical current that one seeks to adopt BEFORE doing so. Firstly, for MMT to work the Federal Reserve would need to be politically independent in order to act in response to the levels of inflation and not to the demands of a president or congress seeking re-election. We know that on paper they indeed find themselves in this position, however, just a quick look at present times and at what has been historically done to Keynes' ideas can tell you that this is largely an idealistic utopian belief. Secondly, The Federal reserve would need to have real time, exactly precise data on what the current monetary supply IN CIRCULATION is, the actual rate of price inflation in EACH AND EVERY INDUSTRY AND REGION since bubbles can form in all asset classes as well as all cities in the country, and one number reflecting all states and cities would not accurately do justice to the real situation on the ground. It would also have to find a way to inject or retrieve money from certain sectors of the economy and certain regions of the country without necessarily impacting all others, which would prove excruciatingly difficult in this era of special interests. Thirdly, the individuals at the federal reserve would not only have to have even more power than they currently do, they should be expected to exercise this power absolutely perfectly, making all the right decisions at the exact right time with no margin of error whatsoever. Fourthly, the currency value of the currency in foreign exchange markets would be expected to be analysed and controlled heavily to ensure that the country's exports remain competitive in the global outlook to ensure that more productive, supply generating companies and jobs are not lost as a result of government intervention, which would be considerably difficult since our currency follows the laws of supply and demand similarly to all other goods and services. Even more points: Unelected officials will be given the remote control to our economy not only with the ability to create money like they currently do, but with the ability to decide or directly guide the taxation imposed upon the population regardless of the will of the people, since imposing taxes is vital in MMT's regulation of Inflation. - In the event of that a given good's supply is reduced substantially, say Cars, the Fed would have to ensure that none of the money being introduced in the economy be directed towards the purchase of cars, since doing so would inherently become inflationary quite rapidly, for which they would have to greatly reduce the freedom independent adults have on what they want to do with the product of their work, going far beyond what we now consider the role of a government that believes in democracy and the will of the people. - In the event that a mistake is made and inflation arises, taxation will have to be increased to levels much higher than what we currently consider reasonable, which will decrease motivation of production in the private sector thereby reducing aggregate supply of goods and reducing the amounts of goods available in the economy for money to purchase, creating more unemployment and either worsening inflation if people are subsequently employed by the job guarantee that MMT's superstars prescribe only to bid up the prices of these goods which are collapsing in supply, or creating mass suffering amongst people who have no job, have no money, have high demand for money since their tax obligations are high and are forced to see prices rise around them. Many more things can be said about the theory but I've gotten quite tired as is. Again, I do not claim that these points are inherently valid or that MMTers cannot provide me an answer for them, as a matter of fact, that is exactly what I hope will happen as the reason I post this comment is to get some insight as to how you would combat these issues if MMT were to be implemented. Personally I find many elements of MMT really insightful and extremely useful, whereas I struggle to grasp other elements of the theory like any other theory out there. Apart from the Job Guarrantee, I attempted to leave out policy prescriptions since they are for the most part absolutely appalling from my point of view, and it serves no purpose discussing them until we have reached a consensus on how MMT would actually work. Whoever you are, & I plan to comment this on multiple videos to get more insight, I highly encourage to write your thoughts and comments on what I have just laid out, as well as any concern or alternative you have for the theory, please keep comments civil so we can learn and grow together, thank you!
It's not prescriptive, it's descriptive. The economy already works as MMT describes. The question is whether we act like it or pretend like we have to tax before we spend or that government liabilities don't find their counterpart as private sector assets.
Full employment isn't a must in MMT. Fighting inflation, on the other hand, is. Besides, MMT isn't even a theory, but a fairly consistent description on how fiat money works. We can't pretend we're still living in the gold standard era anymore. Therefore, we should dump all macroeconomics based on neoclassical handbooks as well.
MMT is purely descriptive in that it observes the mechanisms that operate from government / central bank / the economy - you need to understand that first - it is not prescriptive in that it automatically affects policy decisions, but you are in a better position to form policy decisions if you understand the mechanisms without preconceived notions getting in the way, which most people have and AA definitely does
I think an important part of the video was the exploration of precisely how the descriptive aspects of MMT is absolutely bogus. Basing policies on MMT - that is, the descriptions supplied by the observations made through the principles of MMT - is madness, and I'd argue that you're likely better off if you form policy decisions without considering MMT models. You're absolutely not in a better position to form policy after "understanding the mechanisms" as explained by MMT, because MMT doesn't understand them to begin with.
From my admittedly naive view the central tenet of MMT is that money is debt of the state held by a private individual. It is essentially a coupon for paying tax. You do seem to have addressed this at all?
I was trying to break this down in my head not three days ago, you've got much better words to explain it than I do. Plus you don't have to do it at 3 AM, high on caffeine and still at work.
I don't think you understand mmt. 1. modern money is literally demanded by the government for taxes. mmt policies can not be applied to antiquated ideas of money or mediums of exchange in the absence of govt. 2. tax cuts, limited govt and deficit spending are perfectly fine (that's a political decision) 3. deficit spending should only be limited by inflation or the price of govt debt 4. money should not be used as a store of wealth, use govt debt or private sector instruments.
You contradict yourself when you say "deficit spending should only be limited by inflation or the price of govt debt". Then say " money should not be used as a store of wealth, use govt debt or private sector instruments. ". The reality is deficits are funded by borrowing which is debt creation so how would you fund deficits if not by borrowing?
MMT makes way more sense than,” one day, when our deficit reaches I don’t know what amount of money, and I don’t know what date, our children will bare the burden, which I don’t know what burden.”
Ignoranxe beater: Just saying that contrary to the pervasive myths about MTT, NO WELL KNOWN MMT ECONOMIST SUPPORTS massive unrestrained spending, esp putting it mostly in asset bubbles. That is a myth. Every single one I have ever heard from. I will send you $100 if you can prove me wrong from the 8 MMT Economists inc the founders. MMT is only an attempt of a description of have a Fiat currency works starting with the facts of actual monetary operations instead of ideologies or abologies which don't fit how the system works. Some obvious policies flow from that. "Just print more money no inflation" & esp "put it all in asset bubbles instead of real work & value" is NOT one of them. That totally contrdicts basic MMT or the MMT Econonists. There is SO MUCH false info about MMT that a simple Bing search shows to be wrong, yet the fearful myths continue.
Sure, go critique MMT. It doesnt have all the answers. But note that most critiques start off by basic misrepresentation. Did you know that? AOC and other left wing crazies encoruage this, maybe this is partly why it happens. Do you realize that if the masses undertand MMT PROPERLY amd not misinformed on it, then it follows logically the most powerful people in the world lose their power? That could also be it.
@@pebblepod30 This is a rather superfluous statement. It's reminiscent of how the left always says "true" communism/socialism will work, and all the examples of failings were always due to it not being "true" communism. People seem to have a very flexible idea about what something really means or is about, especially if there are flaws in their ideas or concepts. I've had many such conversations before, where people keep saying it's something else - something they think, nay, are convinced it means, that I know such debates go nowhere. So let me cut it loose from the start: I'm critiquing MMT in this forum AS it is represented in the video. Not as it might or might not be presented on some website or in someone's head. Furthermore, as long as the core tenets of MMT are, indeed, as they are noted in this vid, my critique stands, even when all the rest would be different. The problem with MMT does not lay in the details, but in its basic premises, after all.
First time I heard about this, my initial thought was that it should be renamed Modern Marxist Theory. Like everything related to Marx, it only looks good when you glance at the surface, willfully ignoring the sinkhole that is forming below.
@@Neetje42everseeing as Marx has been proven correct time and again in his analysis of how capitalism functions, I doubt you’ve actually read anything from Marx other than just quote mining to take things out of context.
So... MMTers are right in the absolute most sophistic way imaginable that deficit equals demand for savings. If the government spends at a deficit, then it's borrowing money. Someone needs to lend it that money. That's demand for savings, in the same way credit cards create demand for savings. The real failure of GDP as a metric, however, is that government spending double-counts economic output, in terms of both consumption and investment. This is because government spending is not a separate category from either of these things. If a government builds a road, that is a capital investment. If the government disburses a Medicare check, that is consumption.
Wasn't that the point of the Keynesian multiplier? That the government could spend a certain amount of money and it will be multiplied to some extent that people consume it so GDP increases more than only by the amount of initial government spending? So it's not really a bug that it gets counted twice, it's a 'feature'.
@@reilysmith5187 yes you are correct. Most people in this comment section have never taken an introductory economics class and thus have no context as to the strawmen being thrown up in this video.
At the end, you simply misunderstand what MMT-ers are saying. Theyre not saying that the REAL VALUE of savings increases with government spending. Theyre simply saying the nominal value of all savings in dollars is equal to the net deficit (modulo foreign exchange, as you say). This is not some tenet of MMT or a claim of causation, it is just true by definition, just something you need to understand to get started.
The anthropological evidence seems to indicate that money tends to emerge as a result of trade between groups with limited trust for one another. In fact we never think of the necessity of money for the doing of household chores, or actually various forms of labor. So using the starting point of the origins of money as some slum-dunk as to why MMT is a nonstarter is misplaced. Why, the origins of even the contemporary money system we have is the resulting emergence of global colonisation in large part. I mean the queen was the face in the currency of over 100 countries at a point. So if you start off why some theory is wrong and base it on some conjecture on the past which has not been even proven, then why should one take this treatment even seriously -- you clearly have not even bothered to look closely at why MMT was even theorised in the first place. Prison's are a very unique circumstance, i do not even understand how this example of bartering in prison is supposed to be compelling for really anything you argue -- apart from its obscurity. In fact, even writing systems are known, as of now, to have first emerged as a means to tally money rather than for other purposes -- so i fail to see how this speaks for or against the plausibility of barter. Furthermore, we are talking about a globe, so finding an example of barter somewhere is insufficient. And i can already tell you why most countries now have the monetary systems they have now without appealing to plausible conjectures of history -- and thats colonisation. And MMT actually is amenable to this very reality, and it can be centralised in such a theory as they distinguish those who are currency sovereign from those who are not. The very fact of the matter that you claim that this is not the economy as you recognise it is more so an indictment to how you recognise and conceive of the economy. I love how you distinguish "natural" versus "unnatrual" markets. this to me sounds like none-sense. What even is nature, your whole ontological world view will tie you up into knots here needlessly. How is somalia a "natural" market when it is in the midst of war, how is a prison a "natural" market when the inmates are incarcerated. this is an outright joke. Zimbwe's hyperinflation did not happen simply because they printed too much money. Of course such a stupid narrative of african affairs gains so much stock because of the deep racism toward africans -- implication they (the Zimbabweans) were so stupid they did not know that printing money would cause inflation. No systematic analysis of the matter -- you already start of with the assumption that such a reductive analysis of too much money being printed is the problem -- you already arrived to your conclusion and solely looked at the thing that could confirm it -- rather than adequately considering disconfirming evidence like sanctions, or the drop in production. In fact, if you analyzed those matters you would see the inflation started before the money printing, and the money printing was in response to -- rather than the cause of-- inflation. In fact, this social scientific analysis is not scientific, you already follow from your definition of inflation to the conclusion that the problem is too much money. You never spoke of the sanctions levied to zimbawe, the drought etc. People should not take your analysis seriously in this respect as you are clearly more clueless than you let on, and the people are impressed by your accent and your academic bonafides. But you are just wrong, and there are many people telling you that you are wrong. I studied economics at an undergrad and grad school level hoping to understand the world better, and I realised most of the questions i had were not answered and were actually unanswerable using the tools i was taught. Then I read the policies from the US federal reserve for the last 4 years, then went back to their reports from the 80s onwards and realised MMT is correct and the modus operandi of the federal reserve. What do you have to say to this? MMT is actually solely concerned with the real economy, not some David Ricardo inspired theory of comparative advantage. Why care about comparative advantage when i can colonise you and pay you subsistence and say I am benevolent because i did not shoot you? I urge you to at the very least read the federeal reserves bi-annual reports from 1980-2022, then you will see MMT is right about a lot of things.
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.
Ironically, preventing inflation involves managing the deficit. MMT is more of a religion, because its proponents suggest high spending on faith alone with arguments like "money is deleted when taxed, so it doesn't matter!"
"But then it gets printed again to finance the budget."
"Yes, but that goes back to the economy."
"But more money causes inflation."
"Yes, but then it gets deleted when taxed again!"
"So, shouldn't the taxes match the amount that is printed, so that inflation is avoided?"
"Lulno, because that would mean that no money is in circulation, since you're deleting everything you print."
"What? No, the money supply for the economy at large would remain at a net value. It would stay the same."
"I... I don't know what you're talking about. You want the management to be perfect? There's always going to be some inflation/deflation."
"But you believe that both those things are wrong!"
"It is, but your dreaming if you think the economy can be perfectly balanced."
"So, you are defeating the point of managerialism. If they aren't perfect, then why not just give a free and austrian market a try? That isn't perfect either, in your mind."
"Dude, it's... it's all just really complicated, okay? We need to manage it to be as balanced as possible, because that's how the economy works."
"Hmmmm... okay retard."
They ignore the numbers that come from this, for all that they want to promote mangerialism.
@@Usammityduzntafraidofanythin But the point is not to completely avoid inflation, it is to keep it at a reasonable level. If inflation gets out of hand, you can try two things: increase production if the problem is on the supply-side, increase consumer taxes if they are on the demand side. We create money out of "thin air" which is the same as "advancing the funds". This advance allows us to accelerate the economy, a mortgage we pay back later.
@@Usammityduzntafraidofanythin yawn … let me respond to you using your kind of logic.
You are wrong because I’ve burnt my toast so there !
That’s how cracked you sound.
Now is there any other subject you know nothing about that you want to claim is wrong ???
You’re a part of the “Dont look up” movement huh ? 🙄
@isawaturtle Yawn. Very convincing argument 🙄
@@matthewrutters6842 clearly I was taking the piss … derrr !!!
“bUt MmT iS a ReLiGiOn”.
As said by idiots who have done absolutely 0 research into MMT.
"The redistribution from late receivers to early receivers" goes a long way to explaining why the asset poor were made poorer by quantitative easing.
It's a very good observation.
Also the absolute, resolute determination by governments to intervene everytime blown-up asset prices are in danger of coming down. There's no more crass and disgusting action that is so regularly accepted by people. Imagine how those "inequality" figures the left likes to throw around would look like if they allowed the banks to crash, as they should.
Danan Yes that's more the issue. QE is merely filling in the pits on the graph of ftse and assets, preventing deflation, and so they say it doesn't cause inflation. When actually during booms the asset rich win big and become also cash rich, and when it crashes they don't lose because the government inflates to prevent deflation. The old private gains & social losses
@@d4n4nable That's the most maddening thing. Goodie good liberals like to say "rich get richer, poor get poorer," but then, because they're so economically illiterate, continually vote for the same people that make it that way
It's called the Cantillon effect.
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.
MMT might be agnostic about the creation of currency at face value, but all the lectures I have seen start with it as a discussion point....and they are wrong.
If your fundamental axioms are wrong, your conclusions will be wrong.
I havent seen and MMT supporters or theorists make a distinction between frictional vs structural unemployment, though the first question that leads me too is how would the government accurately tell the difference.
MMT to me, makes these weird logical leaps that just don't make sense, like for example, ignoring the reason for the underutilisation of production. And likewise, ignoring the problems of immediate demand vs gradual supply and so on.
MMT does make some useful observations though, but I feel their conclusions are really just contrived.
.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
For the record because I didn't say this but most people think that full employment should be somewhere around 2 to 3% with underemployment being a similar number
Ok back at it at 9:32, if what you say is true why is it that Japan and America and pretty much every other country are seeing almost no inflation
Again a few moments later you say this, but in reality that isn't what's happening, it hasn't happened in Japan or America because until you start printing past full employment you're not going to create significant inflation it just has not happened
Also the idea that there are fixed income groups that would not gain any more money if the government spent money in the economy is true in a couple of cases however some people do this thing when they get money called spending it oh, not everyone but a lot of people.
Oh great 15 minutes and then we finally get to the topic of the video, after you made a thousand and one different incorrect claims and prime the audience to agree with you
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.
The actual existence of a barter economy is unnecessary for the commodity theory of money to work since the emergence of a currency is so obvious that there need be no actual time spent bartering.
@@AcademicAgent I agree, entirely. I'm just being pedantic.
Surely you of all people can appreciate that.
@@AcademicAgent A lie. The whole Mengerian theory of money is that the most saleable commodity emerges as money from widespread barter spot trades. Your claim that a "period of barter is not necessary whatsoever for the commodity theory of money to work" is one of the most stupid things you've ever said.
Here's Menger's REAL theory of the origin of money, not A.A.'s idiot fantasy world version:
socialdemocracy21stcentury.blogspot.com/2012/01/menger-on-origin-of-money.html
You: A wall of text explaining some fascinating history
Me: Haha Shekel
Aleksei Carrion, I enjoyed reading that.
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.
I agree. When you hear someone telling you it's bad as if it's a mandate or regime, they are lying. It's just a description.
@@donedeal8385 It's a description of something that was put in place by force (threat of). There was no stopping the gubberment from implementing it and you can't opt out. It's a description of something immoral.
Um, no. It absolutely doesn't explain the system we have now, not even close. It attempts to, but it's predictions have never once been right
The current system does not "operate(s) this way." No matter who creates money increases in money distort market prices and misallocates resources.
What I find interesting when it comes to discussing and reading posts on MMT, is that posts quickly fall from a Macro Economic discussion to Micro Economics - this is because most folks are still 'stuck' on Private Sector Economic principles.
Hahaha, my advert before the video started, was for a Paul Krugman how the economy works.... LOL
chiina
Every billionaire came into his own by reading Krugman and doing the opposite.
@Mark Collins Krugman wrote some shit article about how Trump is causing death and destruction
Meanwhile, Democrats released prisoners and told people to hug Chinese...
BourbonChicken ayyy
Paul Krugman actually used to shit MMT idiots, not too long ago. But recently, in perfect Krugman manner, he implicitly repeats all their points...
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!
The blessings of government spending.
@@N0Bo1991 the blessing of capitalism you mean.
@@james192599 Under capitalism, why would the man paying for the water and internet conduits want to pay more money to dig the road up twice?
The blessings of government spending.
@@joeblogs6598 He wouldn't but clearly he would want to have his company get paid for doing the same work twice. In fact, corrupting the regulators with cash is typically more profitable than inventing or innovating. :)
@@G11713 It's government's fault this sort of thing happens. This is because the government is the one paying to have the road dug up twice.
Under capitalism this would not happen because the people paying to have the road dug up are using their own money. Governments do not, as they use taxes.
I can’t explain how upsetting it is that the equation for GDP used X for imports and M for exports.
M iMports
X eXports
What a waste of a perfect variable letter. Oof. 😢
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.
Did not get through. He lost me at the barter myth of how money developed. „Economists“ never seem to bother themselves with a bit of learning from anthropology or sociology. Without watching the video I bet he does not use accounting to support his argument.
It was a nice strawman he laid out. The arguments were so weak that I can't help but wonder if this is a troll
@@randeepwalia1507 I strongly doubt it's a troll. Just a person with more fear and identity invested in their perspective than sense.
Is there a place I can read more about your view? I havent watched the video I just want to learn about monetary policy etc lol. Also is there a place that makes better arguments than this video for the other side?
@@jonathanbauer2988 Not sure how deep your in the whole academic economics discussion. Anyway, at universities around the globe it is a mono culture of neo classic economics. They are also very much a closed shop, not caring what’s happening outside their bubble. So, this video needs to be applauded, bc someone from that camp dared to step outside. More realistic critic of MMT is probably comming from within. So, on money google for Randall Wray. There is a very good entry lecture done by him. Everything from Stephanie Kelton of course. As long as it is about money creation it is pretty much accounting and facts. Not much to argue about, unless you’re an ignorant neo classic. It gets more tricky with employment and foreign trade theory. There is quite some articulate criticism done by Steve Keen. Do more specific searches and you‘ll find more on this. I find the criticism from within the heterodox economics community way more constructive and on point, than this video.
How about a conversation with Warren Mosler or Stephanie Kelton? If you purport to debunk MMT, let's have an honest exchange.
WM and SK probably have more interesting people to talk to.
You live in hope. They don't face people who disagree with their MMT because they know their theory will be torn to shreds.
They hide from explaining or run away.
Just see this where Molser spits the dummy when he can't explain what he previously stated. th-cam.com/video/M7OQ-nVGQ9w/w-d-xo.html
Just ask them on their blog to explain. - They can't explain so many of their claims when you present the reality to them.
@@Rob-fx2dw I watched this and not sure how you arrived at your conclusion. It basically seemed that Boldrin was either intentionally or unintentionally misinterpreting warren's ponts and focuses on money as a whole, not the sovereign currency Warren was referring, even clarifying he was referring to that after the first misunderstanding. If you have ever watched Warren discuss this point with someone not being a bhole, you will see he happily agrees that is true and does depend on the government making it that way. Clearly, to me, Warren was frustrated at the fact that Boldrin simply refused to listen and was being kinda a bhole about it too. If you want to see warren have a debate with someone he disagrees with check this out. Similar points being made, but much better debate since it actually follows though: th-cam.com/video/cUTLCDBONok/w-d-xo.html
@@Rob-fx2dw I don't think your attached video proves what you think it does. Mosler's trying to clarify a point to Boldrin who is either obfuscating his point or too dumb to get it.
@@Michael_Peters He is not too dumb to get it. He is too smart to believe such rubbish as private banks being agents of the government. If they were then all people who have a license to operate and comply with a set of rules such as car drivers would be agents of government and plumbers who havea license to operate.
Mosler uses concepts and then contradicts what he says depending on who is asking.
He previously made a statement and no changes what he said. Clear as that.
Do you really think private banks with purely private employees, private managers and directors and owners and in search of private profits and no compulsion by government to actually lend are "agents of the government"?
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?
hoppe is of a similar school of thought to mises and rothbard, who AA draws on extensively. Many of hoppe's big contributions are outside of economics, so in these sorts of videos he pops up less than really foundational figures like mises, but he's probably about as good of a person to learn from about these things as you're likely to find.
@@aidan8578 Cool, thanks for the input, and from little I've read about Mises and Rothbard, it defo seems same/similar. I am self-taught on nearly everything, and I do so by listening to videos/casts/streams while I work or exercise, so it's easier for me to learn from speakers than trying to absorb audible versions of dense academic works.
I hated economics growing up. It always seemed to play politics, rather than teach math or predict future developments. Then, all grown up, I discovered that the only economics we learn in Norway, are keynsianism.
But now I love Austrian Economics. Even if they mostly predict developments, and do not trust math.
@LöneWúlf I certainly love his lectures!
@@haraldbredsdorff2699 I hear you friend
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.
@JC S There are many odious lies so it's hard to decide which is the worst one, but "Money is the root of all evil" is in the running. It's objectively false on every level and the people who say it don't believe in it either.
Eh. That's the one aspect of this video I'm uncomfortable with. There's quite a lot of research, and many anthropoligists suggest that commerce and monetary exchange really only established itself when governments coined media of exchange. So while I like Mises' explanation (and it's certainly AN explanation of how money COULD arise), I'm not quite sure it holds up to empirical evidence. I could see how a decree ("you have to pay taxes in this currency, or we'll throw you in jail/disposess you/kill you/etc.") could imbue even fiat money with initial value. In my own papers, I started out with the regression theorem as the origin of money but jugged it all out, because the evidence for it is too murky (and it's not really important anyway, imo).
Here is what the archeology says about the origins of money in Middle East:
michael-hudson.com/2018/04/palatial-credit-origins-of-money-and-interest/
Frankly I think this is much more convincing than AAs version of Origins of money.
@@d4n4nable It is not murky - even if one treats the regression theorem (of Carll Menger) as history - when actually it was a tool for economic thinking. The history is quite plain - for example silver was used as money (in many parts of the Middle East) for many centuries BEFORE any stare coined money. The terms we use, "Shekel" "Pound" and so on, where once just measures of weight.
@@tomi213 If you do not know that (for example) silver was used as money for centuries before coinage then you really ought to. Perhaps you can explain this simple fact to Dr Hudson - if he really does not already know.
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.
AA: Makes this video.
MMT Advocates: Money printer go brrr
You so wrong. MMT says that money printer is always on, it doesnt advocate much but it explains how printer works all the time. MMT describes doesnt advocate how government should print. MMT exlains how money is printed. YOu just blinded by lies about MMT instead of reading it up yourself. Do you always ask others to find answers for you? To tell you what to think?
Why is it so important to know the theory of why the printer is always on? I mean I guess that is a bit important but if that’s all it is I don’t see why it’s got left wingers so thrilled either.
Once again for the record...LITRALLY NOWHERE in MMT does ANYONE say "Just print more money" for the sake of it. Maybe go out an do your own research rather than watching one very uninformed, and seriously flawed video.
@@danielpincu6030 Because when it comes to helping people and poor those politicians will invoke government debt as a reason not to do what democracy asked them to. They use lies (no money for SS or Medicare benfits) to prevent improoving standard of living for many. But, they will hel rich ones with tax cuts to them. If you know that printer is always on and there is no public debt problem as they claim then the discussion will be completely different. they could not lie to you that government budget is like a household budget. Can houshold print money?
If you know that all public debt is repaid with new debt and service is paid with new debt (last 80 years been going on without prblems) would you find that "our grandchildren will have to pay our debts" mantra?
@@jurejordan1361 So it's not economics, it's political wishlisting masquerading as such. Gotcha.
Ugh, I got a Paul Krugman commercial. If anything has put me off Masterclass, it was him.
18:20 all my life I thought that preventing saving was the whole point of such schemes because of the "spending=growth" axiom they believe in
it is, isn't it? That last thing governments want is for us to be sitting on money and saving it for later.
They actually misrepresent the accounting identity. Ignoring imports/exports for simplicity:
G - T = S - I
Where:
G = public spending
T = tax revenue
S = private saving
I = private investment
So: government deficits (G-T) are equal to private savings NOT spent on private investments (not just simply all private investments). What does that really mean? If the deficit grows (G goes up, constant T), S-I has to go up by the same amount. They simply assume this will happen by savings going up, while investment remains constant. In reality, savings will stay relatively constant, while private investment will fall (the crowding-out effect they claim doesn't exist). This all comes back to the idle resources fallacy AA described. They believe there's a free lunch to be had. There is not.
@Hairy Pixels Same reason why the 40% plus tax rates exist on employment income. They don't want you to work harder and have surplus income that you could use to repay the mortgage earlier. They want/need you to keep working until you reach pension age, and be happy with what the government leta you keep.
@@d4n4nable lol government spending means the privet is not spending the money. It's simple as that. If government is deficit spending to build road, the people who are using the roads are saving money by not having to pay taxes on fuel or tolls.
@@MrEdrftgyuji 😂 lol you are saying you don't want to make more money because you will be taxed higher? It's pretty funny logic you have here because last time I checked everyone is trying to make more money even though you have to pay more taxes if you make more.
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.
The other day I was listening to the Croatian central bank governor in a talk show where he said that we don't see inflation from expansive monetary policy mainly because consumer goods are produced all around the world today and the sheer omnipresence of competition is enough to prevent these prices from rising, but we do see that inflation in goods the value of which cannot be brought down by international competition, such as real estate.
That's the first time that I've heard a confirmation from an MMT economist, let alone a governor of a central bank, that monetary expansion has real world consequences. Unfortunately, he didn't elaborate on that. I wish I could find some resources or opinions that would go into more detail.
Good point. Food is cheap so don't worry about needing a 30 year mortgage to own a home.
That's a really interesting way to look at it. So your CB governor is a self-described MMT advocate?
Anyway, given that ALL central banks are printing money like crazy, that seems like a lackluster explanation. Also, even if only one government did so, why don't local input prices rise to the point that businesses can't compete at low price levels and go bankrupt?
Inflation won't really be felt so long as there is enough underlying economic productive activity expanding along with it. In the case of post WW1 Germany, there was excessive printing with no production behind it. It is possible to succeed in spite of inflation, but it is a constant, constant battle that is easier to lose than win (and you'll never really win).
The easiest and more direct way to feel inflation outside of a bust with hyper-inflation as the Germans or people of Zimbabwe have seen, is to consider the value of one's savings over time. How much more do you have to work in order to keep ahead of projected inflation to be able to retire? Is that money really a store of value or not?
In practice, all central banks do MMT. Even in the U.S. the Fed admits that they have the power to create money out of nothing. Where do you think the EU got the money for its 3.3 trillion Euros Covid relief package from? The U.S. is already looking at spending 6 trillion USD. They are probably going to spend more. The Chairman of the Fed Ben Bernanke said this a long time ago;
"...in March 2009 Mr. Bernanke told Mr. Pelley that the Fed was printing money to fund an earlier bond buying program. “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing,” he said."
@@d4n4nable >So your CB governor is a self-described MMT advocate?
Well he never really reveals his personal opinions on the matter, but being a CB governor, MMT is part of the job really. I don't think he would have the opportunity to be where he is if he was publically in the austrian business cycle camp.
I don't think MMT is a theory on how it should work. Rather a theory on how it does work. In Canada our government bails out every business. Our government couldn't care less about deficits. They manage spending from debt to GDP ratio and try to manage inflation. The argument is usually around who should receive the funding.
No- It is faulted theory based on fallacies. First fault - believing that money is from a government monopoly and can only come from the government. The realty is Private banks create most of the money in the economy when they lend. Those private banks are NOT government agents as MMT claims because they do not get money from the government which does Not restrict the amount of money they create (the Federal reserve bank lending to deposit ratio is a thing of the past) .
Second fault - Claiming the national debt does Not have to be paid back when the reality is the Treasury bonds which created the debt eventually mature and must be paid off and the taxpayer is the only entity who pays that off.
Third fault - claiming taxes do not fund government spending when they are the main source of funds for government spending every year and there could Never have been a Federal budget balance or a surplus without them. .
Have you any credibility at all ? No ! Your statement:- "In Canada our government bails out every business".
So you never have any business going into bankruptcy ? Unbelievable that you would make such a claim which if true every international business in the would be based in Canada and go broke every year and get bailed out by the government. Like taking candy froma baby.
@@Rob-fx2dw it's hyperbole. But our government provided a lot of businesses with support during the pandemic.
@@gregorydakin Government supplied some business with support but it was at the cost of other private business and private people. You have to understand that government's income is by taxing others. There is ultimately no other government income.
@@Rob-fx2dw I get MMT is not a foolproof understanding of the economy. Its a very complicated industry with millions of cogs in the wheel. But literally thinking taxes pay for spending makes no sense. Its way more complicated than that. There's legal perspectives, accounting perspectives, economic and human behaviour. And our current financial system is a mix of it all.
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.
A lot of Graeber's arguments on the origin of money jive pretty well with the MMT idea that governments create money and taxes are what ultimately give it value.
I agree with AA's criticism on MMT but not on AA's criticism of Keynes. He completely ignored the concepts of structural, frictional and cyclical unemployment, instead just using the word "unemployment" to erroneously graph them which is ironic for someone that opposes Keynes. The fact is that there will always be some frctional unemployment within the economy, however Keynes emphasises an opposition to cyclical unemployment as opposed to Lewis's argument that claimed "temporary unemployment disproves Keynes". This is nonsense as this is not what Keynesian theory adresses.
Moreover AA completely ignored who is or is not considered part of the labour force. To use Lewis's example, a store clerk retraining himself to become an engineer is infact not apart of the labour force just as a student educating himself to get a degree is also not part of the labour force.
Lewis also claims that an unemployed engineer would be better off looking for an engineering job rather than a store clerk job, which is fair enough until you consider two things. First is the supply and demand of labour which is infact central to Keynesian theory. In that within this case as funny as it may sound there may be an overabundance of engineers and a critical shortage of store clerks. And so because of this would this person not provide a greater economic service by becoming a store clerk in a working class job even though he was trained to be an engineer? And secondly and probably more importantly, would it not make more sense for an unemployed engineer to start work as a store clerk and look for an engineering job while being employed as a store clerk!? This becomes even more blatantly obvious because in the very next sentence Lewis uses the example of a job agency!!! Do I need to spell this out? You do not need to be unemployed in order to get a job agency to look for a job! It may sound obvious but this completely burries Lewis supposed "debunking" of Keynes.
You can print a lot of money and invest it in productive capacity. The "printing a lot of money" is irrelevant. The issue that matters is: where are you in the cycle, what is the standard of living, and levels of employment, and what is the asymmetry that is displayed in the productive sector of products whose prices are eroding the purchasing power of the working class. To say "they print a lot of money" is to say "I do not know why inflation happens"
@Dewaldt no, if you have a population of 50m in 1800's America vs 330m in 2020. You can print to expand or contract for deaths, births and immigration.
@Dewaldt not if u increase productive capacity
More money chasing more goods means currency stays the same
@Dewaldt mmt is not about printing endless money - ridiculously irresponsible. Deficit spending MUST go into infrastructure, and education, increasing factors of production and productive capacity. This means when there is more money in the economy inflation won’t be a problem as firms can increase capacity from the benefits of government spending, reducing inflation risk
@Dewaldt Fair point - in reality debt is never paid off. Here in the Uk and everywhere else debt is just recycled with more gilts - if there ever is a time where debt absolutely has to be paid back we can pay it back without any effect - just credit the account of the lender
Inflation is the money supply relative to the amount of goods. If there is more money AND more goods, the proportion of money to goods remains the same - inflation doesn’t change
A deficit is also necessary as its provides the private sector with more money (not ridiculous amounts enough to cause inflation) but can act as fuel to drive upward growth and prosperity. Running a surplus is effectively removing money from the economy and has caused a depression every time it has been done in the usa
@@aaravshah7588 clearly you have never worked in the public sector.
One of the fiat money arguments is that gold standard actually lowers production, because banks can't issue loans nearly as quickly.
I think the issue is fractional reserve system rather than gold vs fiat. If you could issue 10 1 ounce gold notes for every ounce in custody you could could do the same thing. I think people who want gold backed currency just also hate the idea of fractional banking so it's more associated with fiat.
That argument fundamentally misunderstands the difference between 1) economically inefficient money printing/creation by a central bank unsupported by an increase in productivity, goods, and services; and 2) money creation by private banks lending in a fractional reserve system in which apolitical profit-seeking bankers make much better capital allocation.
@@capt3z4w3e4i
lol. I can’t believe you still believe this considering the fact that we’ve lived through a series of bank crashes & government bailing out banks.
But whatever, the point is that banks need government issued dollars to stay solvent, just like you do.
We use government issued dollars to pay our banks back.
If you can’t pay your bank back, you go broke.
You really need to stop hating your government issued dollars and loving banks so much. It’s just weirdly masochistic
No.
It’s that a gold standard knee caps government spending in favor of bank lending
But since banks rely on government issued currency to stay solvent, they rely on our ability to pay our banks back using government issued 💵
If you don’t have 💵 to pay your bank back, you go broke
If lots of people don’t have enough 💵 to pay their banks back, banks go broke.
can you walk me through what you said it is late and I just dont understand all the big words lmao. I am wanting to learn more about the topic but where do I look?@@capt3z4w3e4i
It's not just physics - in ecomincs there's no such thing as a free lunch.
*free
Hahahahahahahaha How The Fuck Is Lunch Not Free Hahahaha Nigga Just Plant The Seeds In The Ground Like Nigga Go Fishing Haha
@@an2qzavok Can't tell if you're being ironic...
@@niicopanda i can't tell myself tbh
Bless the bond markets for they are the free lunch for the wealthy. Too many simple minds here who can't understand the modern monetary system and can't even spell.
I just saw a woman promote MMT in a TED Talk and it was interesting. I'm not educated in economics but there seemed to be some merit to the arguments but I wasn't entirely sold on the idea. I do agree that the idea that a household or a business is anything like a government is ludicrous.
What I object to in government is Republicans increasing debt by giving huge tax breaks to billionaires and then claiming debt must be paid down by defunding programs that help the public.
The pain in his voice as he lays out that equation, like "I can't believe I need to pretend that this makes any sense at all" lol
@@thealienrobotanthropologist I kind of understand it from that perspective. Make all the fools think they're rich by inflating away the nominal value of their assets; that way you can quietly buy things of real value at a discount while everyone else is distracted investing in nonsense.
The problem is that when this drags on for too long, the 'fools' end up actually taking control of governments and money printers and end up forcing everyone to play the game according to their own dirty rules.
Then innovations like Bitcoin and cryptocurrencies start popping up in a desperate attempt to provide life-rafts to protect people from the ubiquitous stupidity which is flooding everything around them; then all we can do is hope that the 'fools' who run the show don't start getting clever and start popping our life-rafts... Then they can drown us all in their 'stupidity'.
That said, these days I don't buy the saying "Never attribute to malice that which can be explained by stupidity". I think that, at a global scale, all stupidity has a grain of evil genius at its core... If someone somewhere knows what's going on and has the power to benefit from it, they will take advantage of it... They will hire the necessary useful idiots to be the face of the project and to do the dirty work.
Just saying that contrary to the pervasive myths about MTT, NO WELL KNOWN MMT ECONOMIST SUPPORTS massive unrestrained spending, esp are against putting it mostly in asset bubbles as if done today on a massive scale. That is a myth. I'm prerty sure they consider that inflationary, because prices connected to a property asset then rise.
Every single one I have ever heard from. I will send you $100 if you can prove me wrong from the 8 MMT Economists inc the founders.
MMT is only an attempt of a description of have a Fiat currency works starting with the facts of actual monetary operations instead of ideologies or abologies which don't fit how the system works. Some obvious policies flow from that.
"Just print more money no inflation" & esp "put it all in asset bubbles instead of real work & value" is NOT one of them.
That totally contrdicts basic MMT or the MMT Econonists.
There is SO MUCH false info about MMT that a simple Bing search shows to be wrong, yet the fearful myths continue.
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.
Great cozy econ viewing whilst enjoying my eggs on toast.
What was the price of the eggs you bought expressed in TV sets?
Archaeology Decline and fall of my hair line why are you lying? Don’t lie!
Except this isn't econ, and pretty much just fantastical thinking based on no actual historical evidence
And now we're experiencing it!
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.
So maybe having the government push these things onto people doesn't actually help make it more available in the longrun, it's essentially just redistribution in the moment with an effect that last a little longer, that is interesting isn't it?
If that is true, the data proving it would probably be the most valuable data any conservative could have. Do you know a source?
@@lordpisces5019 No, data will not be available because you can't truly separate one factor out from the other factors over the longterm in economics and since we can't do experimental tests then it's impossible to show this at this point in time.
You can however deduce this factoid through logic.
@@j.greenriver6293 I meant being able to afford less university and healthcare as opposed to other goods. What are you referring to?
That's a very good observation.
No wonder every politician seems to be pushing keynesian economics, it basically says "vote for me and i'll make you magically rich".
That's the reason these shitty theories won't die. As long as there's demand for such theories, the academia pumps out these economists who's only job is to affirm every politician's whim on the economy.
I have 20 million Weimar Marks in savings
These MMT-idiots like to pretend they're "at war" with the "rightwing" Keynesian mainstream. They're utter morons.
Keynes is right wing eh? Like National Socialism. What a tangled web they weave
Er, what politicians are doing this? And for the record MMT is NOT KEYNESIAN economics...yet another thing wrong in the above video. Mostly, they go around utterly blind to how their own monetary and economic system works. US Senate recently tried to pass a resolution condemning MMT and Japan was falling over itself denying MMT....just hilarious...they don't even understand it and try and deny it...particularly funny when MMT accurately describes the monetary system. Pathetic.
You know there's something wrong when your economic theory is about 100 times more complicated than it needs to be.
It's not a coincidence that these people so often abhor simplicity. There is even a common tendency among them to use "simplistic" as a derogatory term. The "simple" reason is that such a theory's translation into common everyday languageor intelligable academic language alike would reveal its many redundancies and stupidities
One comes to realize that most left-wing thought, and perhaps political thought in general, adds up to little less than social pretense and creative imagination. "Here is a convaluted justification for our confused belief. Either accept it or expect a punishment of emotional blackmail and ridicule"
Simplicity offers little room for obfuscation or sophistry. That doesn't mean that the simple answer is always true despite what the old axiom says but that needless complexity is a great tool to hide BS.
@@user-hu3iy9gz5j
It’s pretty simple:
Our government issues our currency that you use to shop, pay your bank back, pay tax, net save & buy treasury bonds.
You’ve just been indoctrinated into despising your government issued 💵 and loving your bank issued credit 💳
Our elites think you’re absolutely adorable
It isnt that complicated lol. The first point of understanding comes from the fact that money is credit… it always has been credit… and never was anything close to gold. Even when we were on the “gold standard” it would come and go whenever it became inconvenient… the gold standard was just an occasion political tool to help the rich. Second, governments have to spend first before they can tax… not the other way around.
@@user-hu3iy9gz5jWell, sometimes the value of money is more complicated than being purely a function of how much there is in circulation as monetarists suggest.
I assume that this is going to be about Keynesian economics?
MMT is Keynesian on steroid and crack
@@alidaraie People who criticize capitalism are really criticizing Keynesianism, and they don't know it
And when they call for more government regulation they may as well be calling for more Keynesianism
@@Chud_Bud_Supreme That's the sad self fulfilling prophecy of these central planners, isn't it?
Ali Ive always said MMT is the crack cocaine of economics
why do people pick videos and comment on the title befoe even watching?
Seems to me that the main contention is the issue that extra money creation doesn't cause inflation unless productive capacity has been reached.
I look at it like an arcade. If the arcade is mostly empty most of the time, there is extra capacity. Increasing the number of tokens will allow more of that capacity to be used - people play more games and stay longer. You can increase the number of tokens by giving them away, making them cheaper, or some other promotional gimmick.
No increase in the price of games is needed, they'll cost the same number of tokens as before. However, once the place is packed you are now at productive capacity.
If you add more tokens beyond this point, people will be lining up to play games. In the the free market world, they would be bidding up the price of games which is inflation. In order to remove the lines, you either bring in more games (increase productive capacity) or you increase the price of games - inflation. In other words, there will be inflation or unless the money supply is matched with increased productive capacity.
Of course in a real arcade, not all games are created equal and some games will experience inflation over others.
Now, use the arcade example for factories, farms, labor, etc. Its hard to argue for higher wages when there's lots of unemployed people in your profession. Its hard to increase prices in your restaurant most restaurants in the area are empty most of the time. Its hard to sell products at a higher price when retails have excess inventory and manufacturers have machines turned off most of the time.
Applying your arcade example to the real world, would if be fair to say that we are currently living in a time of excess games and not enough demand?
As you said, there are certain games that are going to experience more inflation than others. That is just a fact of life at the arcade. But if there are lineups at a handful of games and no lines at the others, then increasing the number of tokens in circulation would likely increase the usage of the other games.
If I only have 5 tokens, and the popular game costs 4 tokens, then I'm not going to waste my time and tokens playing the other games. If I have 10 tokens on the other hand, then I am more likely to play the other games and spread my tokens around.
And you could argue that if you increase the tokens in circulation then it would increase the cost of the popular game, but if the cost of the popular game goes up to 6 tokens then maybe I don't want to wait in line and play it at that price, so I take my tokens elsewhere. If your concern is that the new tokens would increase the lineups at the popular game, then couldn't you just add more of the popular game to spread out that lineup?
So in the real world, if I make $1000 per month and rent costs $800 per month, that only leaves me with $200 to spend in the rest of the economy. But if I make $1500 per month, then I am left with $700 to spend and that helps all of the other businesses that are not my landlord. My landlord could raise the rent to $1300 if he wanted, but then I could just go find a cheaper place to rent and my landlord would be stuck with a product that nobody will buy at that price. My landlord is therefore not a price setter. The price is set by the competition in the market. If there is not enough competition in the market, then the government could just create more competition which would bring down the prices.
This is one of the many "debunking MMT" narratives that refuse to even engage with the actual theory and instead focus on bringing down a strawman version of economic policies which MMT-influenced scholars support. MMT is a theory of money, not an economic programme. It informs a variety of economic policies but it alone describes how money works. What you do with it is a completely other discussion.
Near the beginning of this video there is conflation of the origin of money as a social phenomenon (of which AA's description is correct) and the origin of the actual money which you use to pay your taxes - which does come from the state. No-one claims, as AA suggests they do, that "all money is fiat money". Rather the claim is that fiat money is fiat money, which the governments of monetarily sovereign nations create when they spend. Now clearly, increasing the supply of this fiat currency relative to the supply of real goods and services will cause inflation. But if the spending increases the amount of goods and services in the economy, (because you pay people to do productive labour) then it balances out and inflation does not occur.
And how would the government know what is productive work? That is subjective and is defined by demand.
Eoghan Connolly I really like what you wrote here and I mostly think it’s true. However, governments have been trying to get people to be productive for generations. It turns out that tons of people are just not very productive at all (for many reasons).
@@soulfuzz368 Sure some people aren't very productive. But other people want jobs - want to work in return for money. And the government could employ them to build houses or windfarms or whatever there is a social need for.
Edit: to be clear, by "productive labour" I don't mean that the people will be über-efficient, I mean that they will produce something.
So the theory is that there is some quantity of unused resources that the government can bring into productive use by printing money? And since the unused resources are added to the economy the government has in fact created wealth by creating money.
This theory seems somewhat similar to a command economy; in that experts see resources poorly used by the populace and believe they could put them to better use. Does this theory assume that workers and materials will be brought out of disuse rather than redirected from other uses?
This theory may also fall apart between the printing of money and the completion of the government-funded goods. Supposing a dam is funded as you describe, the workers will be spending their printed money in the economy; thus lowering the value of money and becoming a hidden tax on people's savings. If the dam is a failure in some way(as many government projects are) then the value of money is reduced, inflation caused, and no value-added.
The above situation is the same as any other means of funding the government, except it takes from peoples spending power in a way harder to detect. It seems to me this devolves to every old argument in economics between government vs private spending and monetary policy.
They do actually suggest that as per chartilism.
Ok. I'll be honest, I'm not an economist and I'm not a TH-cam educator, but as a viewer I think I can give you some advice: Quotes from experts are good because they give your points an air of legitimacy, but after you read the quote you have to explain what it means maybe with a simple example. Your audience isn't made up of business majors. We can't hear a quote from an expert and just immediately understand what they're saying. Take the channel Wisecrack for example. They often use quotes, but then they take the time to explain what the quote means in a simplified way so their audience understands the point they're making. Also, if all you ever do is read out the quote then move on, it feels like an appeal to authority. Like, you can't actually address the arguments and points of the people you are criticizing, so you just say, "Look! This smart guy agrees with me." I don't know if that's what you're doing or not (I did find it kind of hard to follow a lot of your points), but even if it's not, don't even give your opponents the chance to make that criticism. If you rely on quotes to much, that's what people will think you're doing regardless.
this isn't really debunking so much as saying this view conflicts with my own. and isn't the notion that barter systems were widely used systems of exchange largely discredited now....
This could have been better and might have been as it's 3 years old. Presenting the opposite view themselves would have presented it is much more honest and devastating when you pick it apart. The argument from "everybody knows" is not working in your way at all, quite the opposite.
So, does the redistributive effect of increasing the M1 money supply tell us more about who those advocating it wish to benefit, rather than "saving the economy"? They certainly shy away from giving it directly to the workers/consumers anyway. Even the US stimulus 4 bill vastly benefits corporations (many of whom seemed to be failing even before the current crisis).
Not to mention that over 70% of PPP loans were fraudulent and ended up mostly being spent on new expensive cars and vacations for the business owner rather than funding employee payrolls like they were legally required to be used for.
Having read The Deficit Myth by Stephanie Kelton there seemed to be a lot of holes in the MMT argument and this video explains them much better. One MMT argument seems to be “Well we can simply write off the debt because the government being a currency issuer can do it “ . Erm….what about all the non national holders of aforesaid debt ? A quarter of that is currently held by non UK bodies . Debt is like a shackle .
If you use your government issued 💵 to buy a treasury bond, you get paid some interest.
When China sells us stuff & gets some 💵 they can buy some treasury bonds & earn interest
We only ever owe China interest on their Treasury bonds
Do you understand this?
MMT is just a rehash of older theories that suggested the price level can be controlled with fiscal policy. I studied the fiscal theory of the price level over 10 years, every econometric model suggesting it could be done was rubbished by better economists. I am surprised the idea is back.
Political polarization, both the right and the left is growing and pushing new ideas out into the mainstream.
Strawman
In the first place, mmt does not say that all money derives from governments. The concept says that many modern governments have set up a system where a particular form of currency can only be derived by them. Also I don't think that any proponent of mmt would disagree with your argument that inflation is caused by an increase in the amount of money.
If you doubt me, you could check out the wikipedia page on the subject, or there's a bunch of videos on youtube; I just did a youtube search and found one called "MMT Is Misunderstood" by Money & Macro Talks to double check these points.
So based on that, I'll give you the same treatment that you seem to be giving to mmt regarding economics: right from the start, you're not talking about something that I would describe as mmt, so your arguments regarding it aren't particularly valid. Honestly I don't understand why you don't actually link a proponent of mmt or the wiki page in your references... it's like your goal here is disinformation.
Try paying your taxes in bitcoin or any crypto; not possible. QE is an asset swap, it's not even stimulatory and is actually generally deflationary as it swaps high yielding asets into low yielding assets.
Minor point: at 15:04, X is usually labelled as exports, M is usually used to represent imports
Why is it that those who try to debunk mmt never have any clue what mmt actually says? It really boggles the mind.
Why is it that whenever someone criticises MMT there is some wannabe fanboi claiming the person wouldn't understand MMT but also *never* goes into what would actually be wrong?
@@cyrusol i don't think mmt it very relevant. I also don't think its theory of inflation is entirely correct. But academic agent's take is incredibly uninformed, as expected. I'll just talk about the first few minutes.
No, mmt doesn't say that all currency arised out of a government requiring taxes to be paid in this currency. That happened frequently, but sure doesn't apply in all cases. That's not the point mmt is making. The point is solely that the state requiring taxes to be paid in its currency secures a certain demand for it.
His take on inflation is even weirder: no, it's not true that all inflation was caused (only) by an increase in the money supply. Hyperinflation is often caused by a sudden decrease in supply following war or famine. He could have read any one of the 10.000 mmt papers about venezuela and the weimar republic before claiming they disprove anything. Even if all inflation was caused by increases in money supply, it would not follow that all increases in money supply would be inflationary. A => B doesn't imply B => A. Mmt realizes that increases in money supply CAN be inflationary. It only claims that they aren't as long as there is unemployment. Agent could have tried to engage with this argument.
No, the fact that some unemployment is sometimes necessary doesn't disprove keynes, who showed that the market often produces LONG TERM unemployment that only prevents growth.
No, 'you can't increase wealth by printing money' doesn't disprove keynes, who showed that you actually can. Agent's argument against keynes is literally 'here is some guy that said keynes is wrong'.
But what to expect from a guy that went to a public debate about the labour theory of value without having ANY idea what is says.
@@Ffkslawlnkn been wondering the same. Like... not even close
In your first point you are simply conflating two meanings of the word "origin" (how the idea of money acme about in the past vs. how money is created today), You state your view and the MMT view well enough, but they are not even contradictory. How you don't see this is amazing!
if you look closely at Venezuela Zimbabwe Germany etc ...you see the economies were also destroyed first
A billion have been brought out of poverty by mmt according to the world bank.
Government debt being necessary for private savings is painfully obvious. Abstract it all you want...but where does currency come from? If currency comes from the government (spoiler alert...it does), then saving any currency requires government debt. It's basic accounting. At 17 minutes in, I've heard nothing about where currency comes from. You're arguing against a strawman. Argue against a single, actual premise of MMT if you want to argue.
Currency can be minted from a hard source like gold or silver. In fact over most of history currency was related to something with perceived tangible value not just because “muh government says so”.
Units of account and stores of value exist without government fiat also.
If I save tens of thousands of rounds of ammunition in a common regional calibre, I know I have a unit of account, medium of exchange and store of value in the event of an economic catastrophe.
When an egg cost a penny , you have to lay an egg to earn a penny. Money is a means of exchange, production, saving and practical consumption are economic tools. Investment is a bet. Betting is at its best when you bet part of what you have won gambling. Consumption for the sake of stimulating production seems like a dead end.
Magic money tree economics.
In all seriousness, the blog "Spontaneous finance" has some great pieces debunking this idiotic school of economics.
link?
I'm two minutes in and I have to say there is no indication that money emerged the way you described it. I was even going back to my history books and sources. There is no proof of money emerging as a natural progression from the barter system. After humans develop semi-civilized soceities it was more a planned and distrubtion economy with the simultaneous emergences of gold, silver, copper and iron as valued trade goods for which high prices could be achieved. As soon as long distant trade started these metals were used for buying stuff on the other side (with bars often stemp by governments):
Again there is no historical indication that the theory (thought of by economists) barter --> metals --> money is a natural progression. We don't have any indication for that.
Prior to the emergence of semi-civilized society, what was the standard currency? Metals. You're attempting to posit that currency cannot exist independently of government, but the Bitcoin folks would say you're wrong. Hold Bitcoin as your preferred lingua franca, and when if the taxman wants to be paid in dollars while you stand on your head and sing the national anthem backwards, on tax day buy some dollars with Bitcoin, and stand on your head and sing the national anthem backwards. Demanding payment in dollars as opposed to goats doesn't make any difference at all.
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.
So they'll give them gold instead?
You think you believe 😂 words have meaning my friend also the first human writing system started in Sumer to record the debts of the people to the authorities at the time 😮
MMT holds that the money supply increases as a result off the choices made by the monopoly issuer of the currency. Monopolies always set the value of what they produce.
They don't actually, even monopolists must face the individual preferences of all consumers. In this case, the consumer preference to spend or hold.
@@AcademicAgent And note that for a government currency, the government has an immense amount of control over that customer's spend/hold preference.
The imposition of tax liabilities takes away value from the private sector. The government can then purchase from the private sector using its currency exchanging it for what it wants from the private sector. The private sector is then able to clear its tax debt with the government.
It would be cruel and inhumane for a government, in this situation, to impose a tax liability that is too high. If it is higher than its spending, or even equal to its spending, then there will be people unable to acquire the currency and clear their tax liability. The reason this happens in the case of a balanced budget is that there is a propensity to save the government's currency.. It makes sense, in this case, for the government to employ those remaining unemployed, and lower the tax so that next time there will be fewer left involuntarily unemployed.
So that describes an earlier simpler economy where a currency system is created. Fast forward to now where we currently have unemployment.in a more complex financial system. But this still holds. If the government's tax causes more unemployed than it is ready to purchase, they are left unemployed. Correct this by hiring them temporarily and either lower the tax and/or increase spending so that in the future there will be fewer people left unemployed. In the meantime, an employer of last resort program can help correct things and transition the unemployed to private sector employment.
@@ernestjones1038 Or... just stop taxing so much. That might be a better idea.
BTW, governments are not monopolists even of currencies. They can only impose such a monopoly in their borders but even then the power is not absolute and they are in competition with other issuers of currencies.
@@lolcat5303 are you sure that governments are not monopolists of their currencies?
How do you figure?
Who, other than the US government produces US dollars?
Please provide an example of some non monopoly currency issuing government
@@AcademicAgent You don't understand MMT at all
That's not an accurate description of the MMT origin of money. It is MMT's description of the origin of modern fiat money, which is correct.
The term "origin of money" is misleading. What Austrians mean by origin of money is less of how it historically has been issued but the nature of money, the societal function of it, how human beings treat it.
When Austrians say things like money emerges from barter (the wording can vary), it doesn't mean that there was a time in history when everything was pure barter, but it sheds light on the nature of exchange and how the concept of money necessitates from that.
Also when Austrians say money emerged from commodity it really means (though there are observable real life examples) that people treat money in they everyday dealings as if it was a commodity of that nature, whether it's real gold or fiat currency or anything inbetween.
@@nunterz money emerges with credit, which is as old as agriculture at least. hunter gatherer societies invent fiat currencies. The Austrian philosophy is stuck in 19th century myths about human nature.
@@davidguerrero1636 Ok, articulate one of those myths about human nature and tell me how it really is instead.
Also, name some of those hunter-gatherer societies that invent fiat currencies.
I hope you aren't just making up BS.
Anyone watching this and wondering whether to take this guy seriously should stop watching this video, and instead go and watch the debate between Warren Mosler and Robert Murphy entitled "MMT vs. Austrian School Debate" in which Murphy *acknowledges* that Austrian economists don't deny that their model of currency has never actually existed, but simply say that just because it hasn't existed, doesn't mean that it couldn't!! When you see someone taking Rothbard seriously, they're usually too far gone to discuss anything rationally, so the actual author of this video is a lost cause, but this is just a PSA for anyone stumbling across this video and thinking that maybe he's onto something: he's not.
You don’t understand Austrian economics at all. There’s no such a thing as “Austrian economics” money or currency. Money and currency is a emergent property of NATURE, not a forced imposed rule of law of governments. Government money or currency only have value because of it’s scarcity. MMT literally removes the scarcity of money. It have been proved wrong for ages and ages it’s just a rebrand to fool the uninformed into giving governments more power then it should have
MMT seems to’ve been enthusiastically embraced through decades of limitless military spending, & corporate subsidies & bailouts, etc. It’s when we try to apply MMT to solving the problems of the less-than-posh that we start to see spending as inflexibly finite.
I love how they got to an equation with a clear meaning:
“All value created by government deficit comes from net private savings” and they managed to get the relation all wrong
that's sort of the problem when you're just working with tautologous equations, really, and not reasoning from fundamentals.
If you’re saying MMT is wrong then it’s only because someone just told to believe it and it’s easier just to believe someone without researching for yourself.
It’s a not so elaborate ruse that the government has a justifiable role in economics, which of course it doesn’t.
@@roughhabit9085 From creating the currency to setting market rules to having a court system where the wealthy run to if they feel they’re being ripped off.
That is reality.
Now where do you fit in, in relation to reality?
I’m not seeing you anywhere.
Your private savings ARE government deficit. Thats the equasion.
11:11 changing wealth distribution is an interesting way to look at this. Instead it could be seen that early beneficiaries are advantaged because they can utilise the money while the resources are still available to be utilised. Beyond that point, late beneficiaries will experience supply shortages and have to spend more money to be prioritised. Therefore, it more matters “who” the early beneficiaries are. Wealth distribution can therefore occur by setting policies to specifically target certain people.
MMT - Magical Monetary Theory
That. Is. Perfect!
Er, no...and what a pathetic response.
@@marcuschamp9881 "How pathetic. Of course we can print wealth." - Marcus Champ
@@marcuschamp9881 LOL, oh? How so?
No more pathetic than saying you've found a way of printing unlimited money without it causing inflation, "because".
If it worked, everyone would be doing it. Point is, you don't need to be an economist to see that it's snake oil.
Have you read this paper. MMT states that loans create deposits so printing money does not result in hyperinflation: www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy
"Whenever a bank makes a loan, it
simultaneously creates a matching deposit in the
borrower’s bank account, thereby creating new money.
The reality of how money is created today differs from the
description found in some economics textbooks:
• Rather than banks receiving deposits when households
save and then lending them out, bank lending creates
deposits.
• In normal times, the central bank does not fix the amount
of money in circulation, nor is central bank money
‘multiplied up’ into more loans and deposits."
I thought MMT sought to explain the system as it is.
MMT explains monetary systems and is backed by accounting and is stock-flow consistent.
Anti MMTers just think MMT is about how people feel things work. 🙄
It claims to be both in every way which is just absurdity. It claims taxes drive the value of money and then says you don't need taxes. Then it says a government deficit creates a 'surplus' for the private sector which by a switch in language suddenly in their narrative becomes a' saving' for the private sector when in reality savings only occur by people spending less than they earn. Funny how the deficits in the private sector is not seem by the MMTers as a saving for the government.
@@Rob-fx2dw You don’t need taxes to fund spending.
You left part out of your silly reply.
If making up fake strawmen is you thing then good for you - everyone else will see through your idiocy.
Haha you don’t even understand a zero sum game.look I know you had a rough time in jail and some people did things some bad things to you.
But that’s over now, try and get the help you need instead of waffling on the net.
Your stories keep changing and it shows that in the mental department, that you aren’t all there.
At 1:20 you mentioned money arose from the inconvenience of barter. There seems to be fairly general acceptance that barter economies existed. I want to learn more about how that worked in practice but i can’t find any examples of barter based economies. Which historical economies are examples of barter economies?
MMT says 'Government spending equals private sector saving" . It total bollocks since saving in the private sector only comes from spending less than one earns.
No other thing at all but they confuse savings with changes in the sectoral balance. Also it is wrong for other reasons including the fact that if changes in the sectoral balance benefit the private sector when the government borrows more than their income and spend by deficit budgets then the opposite would be so and government would benefit from private sector borrowing excessively. But MMT is mainly silent on the issue of private sector debt benefiting government (by their own sectoral balance faulty reasoning) and some even condemn excessive private sector debt. The MMT economists such as Steve Keen pushes the sectoral balance idea and also is one who condemns excessive debt in the private sector. He and praises the government sector's excessive debt while condemning private sector debt.
It is hard to imagine such a bias exists in anyone who calls himself a serious economist.
"MMT says 'Government spending equals private sector saving" . It total bollocks since saving in the private sector only comes from spending less than one earns. " And where does that "more" come from you dimwit? Venus?
@@Stewiehleba You can't see past your nose. Since when is increased saving anything to do with increased amounts of new fiat money is the system?
Did people in the Weimar republic have plenty of new saving when the currency was expanded and government spent that new currency before anyone else got to spend it.
Did you get plenty more saving when the currency was expanded in the GFC?
Does the private sector have plenty more savings since the 1990's after the currency expansion instead if increased debt ?
Try thinking before replying with some half thought out abusive comment.
Where is your answer?
Who is the dimwit now?
@@Stewiehleba The real Dimwit . - The ' more' comes from the increased value created by increased investment rather than consumption. The 'More' in real wealth terms only comes from investment and nothing else. But you might have some other fantasy idea of how more wealth is produced instead on more units of money.
Enlighten us with your brilliance if you can !!. Just tell us where any new wealth came from if not investment of real resources to produce the same or more efficiency which in turn made more wealth.
You right away get your definition wrong, so that does not bode well for the rest of the video. MMT does not declare that all money is fiat currency controlled by the government. Rather, MMT only applies in countries where that is the case. If you live in a country that is not monetarily sovereign, then MMT does not apply there.
QE did cause inflation. It was designed to inflate asset prices. The Bank of England were quite open about this. Why do you think the stock market and bond market increased in price so much between 2011 and 2020. QE
Yes, a good point, but my point was that inflation never really hit the real economy or M1 money supply, it was restricted to M3.
@@AcademicAgent Hmmm, I am not a Economist, so what does that actually mean? I think that those that use acronyms and/or technical jargon are not really being forthright. Did a quick search and it looks like M3 money supply includes both M1 and M2.
@@AcademicAgent that's literally wrong lol M1 and M2 fall UNDER M3. Good thing I discovered early on that you're a lying idiot.
@@lunabear6110 No, only m2 falls under m3. But that's only because m2 is hard to pin down.
What nonsense !
QE is swapping reserves for bonds and doesn’t create inflation.
Money is not a commodity though, dude needs to learn some history. I'd recommend David graebers book debt on the origin of money. It's a historical account written by an anthropologist.
Any chance you could discuss this with Adam Friended AA? Maybe go on Sitch and Adams stream some time?
No, it would be a massive waste of time. Debates are just team sports, even Adam/Sitch admit this. People change their own minds.
This video response that 2010 TH-cam had is actually a lot better than bloodsports if your goal is truth.
Besides I've watched enough of Adam/Sitch to know that Adam would just just end up calling AA a Fascist, he's led by his elephant too much. As evidenced by the streams on his own channel, his bestiality debate with Sargon.
This video did a wonderful job of convincing me that MMT is correct. It is scary that people that think like this narrator are so prominent in our economy. So simple to poke holes through the reasoning the entire way through.
This is perhaps the most misguided discussion of MMT I’ve read. The individual has not read anything about modern money that wasn’t misconstrued or misinterpreted or misunderstood. There is so much misinformation here I don’t know where to begin.
Please. Begin. Bullet points? Not even a quick summary? Ok then. Thanks for giving absolutely nothing.
I do not want to suggest that anything you have said is incorrect. You are completely correct about everything. However, I have a different way of thinking about this.
The thing is, if you spend more than you earn, if you consume more than you produce, your wealth reduces.
If you produce more than you consume, you become more wealthy.
Money is not wealth and wealth is not money.
The difference between production and consumption is wealth.
If the government prints money and doubles the amount of money in circulation, the wealth of the country stays the same. The value of the currency simply halves.
Gov: Pay me taxes.!
Me: Can i pay you the equivalent sum in Canadian dollars or silver bars?
Gov: What? No!
Me: Why not?
Gov: Because allowing alternative currency would create competition and people may end up preferring money that derive their value from real things and not the bs fiat currency we coersed you into using.
Me: What?
Gov: ehm... MMT is legit and having a growing finansial industry is much better than actually producing stuff.
sorry to tell ya but the CAD is as fiat as the USD
@@avroarchitect1793 The point was that it's an alternative, not specifically that it's superior.
There used to be such a time in the US, imbecile. Every bank had its own banknotes. Guess how well that worked! There were bank runs and failures all the damn time. People were uncertain of the value of each of those banks' notes in different towns. It was a fucking mess.
@@k-techpl7222 So if it’s better or worse it is an alternative. I’m comforted!
@@c.k.roberts3221 I forgot I made that comment lol.
But basically the argument is that competition of goods is a good thing and as such competition of different currencies is a good thing.
I agree with much of this explanation, but I need to add one more point. That is that the better infrastructures that government spending provides, means that the land becomes more productive and more valuable, and this enables it owners to charge more rent. This greater rent affects both producers and householders and it is one added cause why the huge gap between the rich and the poor is growing. Goods prices are raised due to the increased production costs, whilst the population of consumers has less spending power. We need to tax land values not good and services and earnings, in order to make our nation more ethically balanced in how it really controls the use of money.
I recently stumbled on MMT and was fascinated how logic it is. Since then I am trying to find counterarguments because I want to understand why so many people are against it. But everytime I read or listen to the counterarguments it just turns out that those people against it havent understood MMT like you which makes me believe it really is the truth about how modern money works
MMT claims most inflation in countries was caused by things other than excessive money supply even for Zimbawe where the money supply in one year alone increased by hundreds of thousands of a percent to pay for government spending. That is just so wrong and proven to be so because they make those claims about many countries hwer massive inflation occurred. This is true for every situation where massive inflation occurred in 30 or more countries over the past 70 years.
Also such other absurd claims like taxes put a value into and acceptance of money when the factual evidence is that in a every instance of massive inflation in the last 70 years where inflation ruined the sovereign money there were taxes which did nothing at all to get acceptance of or put a value into the money. Even their own governments rejected their own money.
More foolish claims like saying sectoral balance shows government deficits are a saving for the private sector when the idea is a sham that ignores the debt it creates for the private sector to pay of. Just another thing that MMT economists don't address when asked about it for fear of being shown as their theory being totally wrong.
More absurdly idiotic claims like saying the national debt does Not have to be paid off when the reality is the bonds that fund the national debt actually mature throughout every year so the private sector taxes are then used to pay them out. They are not errors but are deliberate lies that no MMT pusher even dares to address.
The economic worries of the US that MMTers claim their policies will fix are not going to be fixed by more government involvement in the economy by spending more because government don't invest for increased efficiencies but do it for increased political motives that are primarily purely politically driven and do it at the expense of the private sector whose investment potential is reduced by the very taxes that fund government investments.
What's next? Debunking round earth theory?
Are you suggesting that MMT is so solid it's like questioning the earth is round?
I’d argue inflation is more influenced by money velocity than money supply. The US for example has experienced very little inflation from 2009 - current day even though the money supply has exploded. Money velocity, on the other hand, has seen a steady decline over the past decade or so.
That's because you're not factoring in assets.
How is low money velocity causes inflation? In fact, low money velocity should cause deflation, provided that money supply remain constant.
@@crazieeez that's what he said, read it again
I dont think MMT is arguing that inflation isn't caused by increases in the money supply.
Also, its pretty obvious that increasing money supply isnt the only driver of inflation.
Firms are free to increase prices at will the only thing stopping them is price competition which is eroded by monopolies on products.
"modern monetary theory" is a contradiction in itself. It should be "modern currency theory" there is a world of difference between currency and money.
Hmm... what difference?
@Ring-a-ding-ding baby tell me an example of money and then tell me an example of currency. Is the usd "money" and a 300ad denarius "currency"
Also how does one store value but the other does not?
@@Dominic-fd2wz I'm not the one who started the language game. Bo Started the game by asserting that money and currency are in fact different things. This is extremely odd to me so I'm *STILL* waiting for someone to actually explain the difference to me with a real existing example of money and a real existing example of currency.
Money is a ledger, currency is physical tokens. Their terminology is correct.
@@shaunpatrick8345 thank you for actually explaining :).
We can't have a qualitative discussion without understanding each other. I assume the reason why people are so concerned about this difference (for the average member of society it isnt. The use is identical) because they pine for the gold standard?
And imagine me thinking I was going to get a real 'debunking' because the site is named 'Academic Agent'. Of course, instead I get a pseudo-'economic' diatribe about 'real' this and 'real' that, with no apparent understanding of what money, true economics or MMT acrually are, or their meaning in the valuation systems humans operate under now, and how the past has influecned those current systems.
Here's a hint. It's all 'fiat money', always has been.
A couple of things you have to ask yourselves is why MMT may not be practical for us, since if no answer can be found, it is a sound path to embark on.
MMT's core fundamentals derive in part from Keynes' theories, which many would argue were an ideal set of monetary & fiscal policies that could help revive economies that collapsed due to a decrease in aggregate demand. However, Keynes himself argued that his theories where to be applied only under specific circumstances where AD fell and AS (aggregate supply remained constant) in which case the Government should increase their spending and create a fiscal deficit to consume the extra surplus in supply that would remain available in the economy in order to cut the bottom & later on the top from the business cycle. In order to do this, Keynes argued that governments should run a fiscal surplus during the boom years, reducing the monetary supply in the economy that had been introduced during the bust period. This is of course a huge oversimplification of his theories, however, few economists outside of the classical schools of economic thought found much issue in these recommendations, for which they were implemented by governments all over the world. The issue of course was that economic assumes that people are rational, at least to some extent, and that politicians want the best for their country, but as we all know, it is not from the goodness of the butcher's heart that we get meat to eat for dinner, it is due to their own self-interest. This meant that nations all over the world took Keynes idea's and kept only the part that was politically profitable, at the end of the day, who cared about the business cycle when elections creeped up in the corner, right? This has led nations all over the world to create huge fiscal deficits that they will never pay off. This has created different consequences for different nations since each situation is different. For those that borrowed in other country's currencies, the risk of default grew exponentially, causing many economical collapse along the years. For others, welfare states where implemented with the best of intentions to ensure that the people found themselves better off regardless of their faith, & slowly but surely these nation's cultures and motivations to continue innovating, continue growing (in terms of REAL GDP) and continue prioritizing their liberties over their paper money has subsided.
Now, where could MMT fail in the US? Let me start off by being clear, I am not sure whether it would work or not work, I am not sure whether it is desireable or not desireable, frankly, each individual's morality & ideology will lead them to a different conclusion, but I am sure that it is essential to question any theory or economical current that one seeks to adopt BEFORE doing so.
Firstly, for MMT to work the Federal Reserve would need to be politically independent in order to act in response to the levels of inflation and not to the demands of a president or congress seeking re-election. We know that on paper they indeed find themselves in this position, however, just a quick look at present times and at what has been historically done to Keynes' ideas can tell you that this is largely an idealistic utopian belief.
Secondly, The Federal reserve would need to have real time, exactly precise data on what the current monetary supply IN CIRCULATION is, the actual rate of price inflation in EACH AND EVERY INDUSTRY AND REGION since bubbles can form in all asset classes as well as all cities in the country, and one number reflecting all states and cities would not accurately do justice to the real situation on the ground. It would also have to find a way to inject or retrieve money from certain sectors of the economy and certain regions of the country without necessarily impacting all others, which would prove excruciatingly difficult in this era of special interests.
Thirdly, the individuals at the federal reserve would not only have to have even more power than they currently do, they should be expected to exercise this power absolutely perfectly, making all the right decisions at the exact right time with no margin of error whatsoever.
Fourthly, the currency value of the currency in foreign exchange markets would be expected to be analysed and controlled heavily to ensure that the country's exports remain competitive in the global outlook to ensure that more productive, supply generating companies and jobs are not lost as a result of government intervention, which would be considerably difficult since our currency follows the laws of supply and demand similarly to all other goods and services.
Even more points: Unelected officials will be given the remote control to our economy not only with the ability to create money like they currently do, but with the ability to decide or directly guide the taxation imposed upon the population regardless of the will of the people, since imposing taxes is vital in MMT's regulation of Inflation.
- In the event of that a given good's supply is reduced substantially, say Cars, the Fed would have to ensure that none of the money being introduced in the economy be directed towards the purchase of cars, since doing so would inherently become inflationary quite rapidly, for which they would have to greatly reduce the freedom independent adults have on what they want to do with the product of their work, going far beyond what we now consider the role of a government that believes in democracy and the will of the people.
- In the event that a mistake is made and inflation arises, taxation will have to be increased to levels much higher than what we currently consider reasonable, which will decrease motivation of production in the private sector thereby reducing aggregate supply of goods and reducing the amounts of goods available in the economy for money to purchase, creating more unemployment and either worsening inflation if people are subsequently employed by the job guarantee that MMT's superstars prescribe only to bid up the prices of these goods which are collapsing in supply, or creating mass suffering amongst people who have no job, have no money, have high demand for money since their tax obligations are high and are forced to see prices rise around them.
Many more things can be said about the theory but I've gotten quite tired as is. Again, I do not claim that these points are inherently valid or that MMTers cannot provide me an answer for them, as a matter of fact, that is exactly what I hope will happen as the reason I post this comment is to get some insight as to how you would combat these issues if MMT were to be implemented.
Personally I find many elements of MMT really insightful and extremely useful, whereas I struggle to grasp other elements of the theory like any other theory out there. Apart from the Job Guarrantee, I attempted to leave out policy prescriptions since they are for the most part absolutely appalling from my point of view, and it serves no purpose discussing them until we have reached a consensus on how MMT would actually work.
Whoever you are, & I plan to comment this on multiple videos to get more insight, I highly encourage to write your thoughts and comments on what I have just laid out, as well as any concern or alternative you have for the theory, please keep comments civil so we can learn and grow together, thank you!
It's not prescriptive, it's descriptive. The economy already works as MMT describes. The question is whether we act like it or pretend like we have to tax before we spend or that government liabilities don't find their counterpart as private sector assets.
Full employment isn't a must in MMT. Fighting inflation, on the other hand, is. Besides, MMT isn't even a theory, but a fairly consistent description on how fiat money works. We can't pretend we're still living in the gold standard era anymore. Therefore, we should dump all macroeconomics based on neoclassical handbooks as well.
MMT is purely descriptive in that it observes the mechanisms that operate from government / central bank / the economy - you need to understand that first - it is not prescriptive in that it automatically affects policy decisions, but you are in a better position to form policy decisions if you understand the mechanisms without preconceived notions getting in the way, which most people have and AA definitely does
I think an important part of the video was the exploration of precisely how the descriptive aspects of MMT is absolutely bogus. Basing policies on MMT - that is, the descriptions supplied by the observations made through the principles of MMT - is madness, and I'd argue that you're likely better off if you form policy decisions without considering MMT models. You're absolutely not in a better position to form policy after "understanding the mechanisms" as explained by MMT, because MMT doesn't understand them to begin with.
Very questionable analysis of the origins of money, the actual causes of hyperinflation, and what MMT really is.
He does not understand anything about MMT
From my admittedly naive view the central tenet of MMT is that money is debt of the state held by a private individual. It is essentially a coupon for paying tax. You do seem to have addressed this at all?
7:02 not what mmt claims mmt respects natural resources as a factor
I was trying to break this down in my head not three days ago, you've got much better words to explain it than I do.
Plus you don't have to do it at 3 AM, high on caffeine and still at work.
Just stop drinking coffee u drug addict lmao
I don't think you understand mmt.
1. modern money is literally demanded by the government for taxes. mmt policies can not be applied to antiquated ideas of money or mediums of exchange in the absence of govt.
2. tax cuts, limited govt and deficit spending are perfectly fine (that's a political decision)
3. deficit spending should only be limited by inflation or the price of govt debt
4. money should not be used as a store of wealth, use govt debt or private sector instruments.
You contradict yourself when you say "deficit spending should only be limited by inflation or the price of govt debt". Then say " money should not be used as a store of wealth, use govt debt or private sector instruments.
". The reality is deficits are funded by borrowing which is debt creation so how would you fund deficits if not by borrowing?
Well said. Makes a lot more sense than the new-age MMT's with their "eternal printing extra money solves all problems"-mantra.
MMT makes way more sense than,” one day, when our deficit reaches I don’t know what amount of money, and I don’t know what date, our children will bare the burden, which I don’t know what burden.”
Ignoranxe beater: Just saying that contrary to the pervasive myths about MTT, NO WELL KNOWN MMT ECONOMIST SUPPORTS massive unrestrained spending, esp putting it mostly in asset bubbles. That is a myth.
Every single one I have ever heard from. I will send you $100 if you can prove me wrong from the 8 MMT Economists inc the founders.
MMT is only an attempt of a description of have a Fiat currency works starting with the facts of actual monetary operations instead of ideologies or abologies which don't fit how the system works. Some obvious policies flow from that.
"Just print more money no inflation" & esp "put it all in asset bubbles instead of real work & value" is NOT one of them.
That totally contrdicts basic MMT or the MMT Econonists.
There is SO MUCH false info about MMT that a simple Bing search shows to be wrong, yet the fearful myths continue.
@@xxbrian69herxx88
Your missing the point about the masses of misinformation on MMT that is easily debunked.
Sure, go critique MMT. It doesnt have all the answers. But note that most critiques start off by basic misrepresentation.
Did you know that?
AOC and other left wing crazies encoruage this, maybe this is partly why it happens.
Do you realize that if the masses undertand MMT PROPERLY amd not misinformed on it, then it follows logically the most powerful people in the world lose their power?
That could also be it.
@@pebblepod30 This is a rather superfluous statement. It's reminiscent of how the left always says "true" communism/socialism will work, and all the examples of failings were always due to it not being "true" communism. People seem to have a very flexible idea about what something really means or is about, especially if there are flaws in their ideas or concepts. I've had many such conversations before, where people keep saying it's something else - something they think, nay, are convinced it means, that I know such debates go nowhere.
So let me cut it loose from the start: I'm critiquing MMT in this forum AS it is represented in the video. Not as it might or might not be presented on some website or in someone's head. Furthermore, as long as the core tenets of MMT are, indeed, as they are noted in this vid, my critique stands, even when all the rest would be different. The problem with MMT does not lay in the details, but in its basic premises, after all.
Did this dude say inflation is always caused by an increase in money, what about when businesses hike prices to compete, what about Japan?
Communism. Just say, Debunking Communism. I'm beginning to hate nuance.
First time I heard about this, my initial thought was that it should be renamed Modern Marxist Theory. Like everything related to Marx, it only looks good when you glance at the surface, willfully ignoring the sinkhole that is forming below.
@@Neetje42everseeing as Marx has been proven correct time and again in his analysis of how capitalism functions, I doubt you’ve actually read anything from Marx other than just quote mining to take things out of context.
No, inflation can also be caused by a decrease in the goods and services going around, as has happened during the pandemic.
Watch his video on debunking German
“I can debunk the German Language - I don’t understand it so how can anyone else ?”
Smartest comment in this thread
monetary High time preference theory for r strategy governments
Can't inflation also be caused by sudden ressource scarcity?
regarding 3:23
Wouldn't unimplemented therefore increase Inflation in that regard? Because there are less goods produced when there is more unemployment.
So... MMTers are right in the absolute most sophistic way imaginable that deficit equals demand for savings.
If the government spends at a deficit, then it's borrowing money. Someone needs to lend it that money. That's demand for savings, in the same way credit cards create demand for savings.
The real failure of GDP as a metric, however, is that government spending double-counts economic output, in terms of both consumption and investment. This is because government spending is not a separate category from either of these things. If a government builds a road, that is a capital investment. If the government disburses a Medicare check, that is consumption.
Wasn't that the point of the Keynesian multiplier? That the government could spend a certain amount of money and it will be multiplied to some extent that people consume it so GDP increases more than only by the amount of initial government spending?
So it's not really a bug that it gets counted twice, it's a 'feature'.
@@reilysmith5187 yes you are correct. Most people in this comment section have never taken an introductory economics class and thus have no context as to the strawmen being thrown up in this video.
At the end, you simply misunderstand what MMT-ers are saying. Theyre not saying that the REAL VALUE of savings increases with government spending. Theyre simply saying the nominal value of all savings in dollars is equal to the net deficit (modulo foreign exchange, as you say). This is not some tenet of MMT or a claim of causation, it is just true by definition, just something you need to understand to get started.
The anthropological evidence seems to indicate that money tends to emerge as a result of trade between groups with limited trust for one another. In fact we never think of the necessity of money for the doing of household chores, or actually various forms of labor. So using the starting point of the origins of money as some slum-dunk as to why MMT is a nonstarter is misplaced. Why, the origins of even the contemporary money system we have is the resulting emergence of global colonisation in large part. I mean the queen was the face in the currency of over 100 countries at a point. So if you start off why some theory is wrong and base it on some conjecture on the past which has not been even proven, then why should one take this treatment even seriously -- you clearly have not even bothered to look closely at why MMT was even theorised in the first place. Prison's are a very unique circumstance, i do not even understand how this example of bartering in prison is supposed to be compelling for really anything you argue -- apart from its obscurity. In fact, even writing systems are known, as of now, to have first emerged as a means to tally money rather than for other purposes -- so i fail to see how this speaks for or against the plausibility of barter. Furthermore, we are talking about a globe, so finding an example of barter somewhere is insufficient. And i can already tell you why most countries now have the monetary systems they have now without appealing to plausible conjectures of history -- and thats colonisation. And MMT actually is amenable to this very reality, and it can be centralised in such a theory as they distinguish those who are currency sovereign from those who are not. The very fact of the matter that you claim that this is not the economy as you recognise it is more so an indictment to how you recognise and conceive of the economy. I love how you distinguish "natural" versus "unnatrual" markets. this to me sounds like none-sense. What even is nature, your whole ontological world view will tie you up into knots here needlessly. How is somalia a "natural" market when it is in the midst of war, how is a prison a "natural" market when the inmates are incarcerated. this is an outright joke. Zimbwe's hyperinflation did not happen simply because they printed too much money. Of course such a stupid narrative of african affairs gains so much stock because of the deep racism toward africans -- implication they (the Zimbabweans) were so stupid they did not know that printing money would cause inflation. No systematic analysis of the matter -- you already start of with the assumption that such a reductive analysis of too much money being printed is the problem -- you already arrived to your conclusion and solely looked at the thing that could confirm it -- rather than adequately considering disconfirming evidence like sanctions, or the drop in production. In fact, if you analyzed those matters you would see the inflation started before the money printing, and the money printing was in response to -- rather than the cause of-- inflation. In fact, this social scientific analysis is not scientific, you already follow from your definition of inflation to the conclusion that the problem is too much money. You never spoke of the sanctions levied to zimbawe, the drought etc. People should not take your analysis seriously in this respect as you are clearly more clueless than you let on, and the people are impressed by your accent and your academic bonafides. But you are just wrong, and there are many people telling you that you are wrong. I studied economics at an undergrad and grad school level hoping to understand the world better, and I realised most of the questions i had were not answered and were actually unanswerable using the tools i was taught. Then I read the policies from the US federal reserve for the last 4 years, then went back to their reports from the 80s onwards and realised MMT is correct and the modus operandi of the federal reserve. What do you have to say to this? MMT is actually solely concerned with the real economy, not some David Ricardo inspired theory of comparative advantage. Why care about comparative advantage when i can colonise you and pay you subsistence and say I am benevolent because i did not shoot you? I urge you to at the very least read the federeal reserves bi-annual reports from 1980-2022, then you will see MMT is right about a lot of things.