"In any case, who cares? Not I for one. Crypto is a kind of cordoned off other world"
Well, if you simply ignore the black market ability to destroy capital flow restrictions, and the child trafficking and criminal fraud, it's cordoned off.
Major corporations companies like Amazon are quite eager to start up their own stable coins because it becomes a giant dollar slush fund for them. They hang onto dollars exchange for these coins, which they use as currency. It's a combination of loyalty points and gift cards as a scam.
The scale of this fraud now woven in by its chief beneficiaries in the White House cabinet can only expand as more and more parts of the financial system integrated into a black market system. Not that many large banks have already been caught in more traditional forms of money laundering.
The $40 billion being handed over to Argentina to a first order of approximation is a free hand out of public money in order to cover the short positions of a lot of hedge funds that banked on Argentina's peso exchange value. But no one with resources in that country has any reason to hang onto the peso and they use the stable coin exchanges to trade their pesos basically for dollars. Argentina has no sovereign control over capital flight.
"This achieves what all soi dissant lefties say they want — a wealth tax on hoarded tax credits. "
The problem with this thinking is that it ignores the real economy, where inflation rewrites the social order (h/t Blair Fix who may have been referencing another quote). A red queen scenario is insane. You don't need inflation you don't want inflation small merchants don't want wildly changing prices in either their inventory or the wage price structure. They benefit from a drive or an incentive to engage in commerce certainly, yet a fire storm of price changes controlled by the largest companies in the world is not good
The people who suffered the worst inflation, the Germans have long sought for price stability. The proper way to gain a price stability and impose a tax on surplus means of exchange, because I refuse the reductionism that the means of exchange exist only as a tax credit, is demurrage of some form. Gesell's stamp script or the much older Bracteates systems are known to be price stable. You should get around to reading his book on the natural economic order. As I think I've measured before the preface is a little bit hard reading because 19th century sentiments, but largely they're given an expression as a platform to vent his rage as a merchant over creditors, starving him of the means of exchange so he could make a living.
With Bracteates the entire money supply was reminted on a bi yearly basis. The entire money supply was destroyed and recreated once or twice a year. Exchanging 4 old tokens for 3 new ones was a 25% tax vs losing all its purchasing power.
The city mint obviously had to issue 100% of the money supply, but that was the money the city government used for cathedrals, fortifications and public works that are still enjoyed today as tourist locations in Magdeburg, Germany. They didn't have inflation. They financed major public long-term, works by cathedrals without economic crisis. They didn't need growth for a thriving local economy.
Those with surplus means of exchange had little choice but to spend the money or lend it out, even at a loss, to minimize their own tax liability. With the simple addition of some other tax obligation, people could take their surplus means of exchange to settle their tax obligation.
I much prefer the idea of either a limited surplus amount, which replicates what happens with credit card loyalty points. One could choose to pay off one's tax obligation with anything that goes over the limit. Simple and effective with little recourse to avoid and every incentive to pay tax (you get 100% value for it).
If your surplus means of exchange is simply going to rot like bananas, it completely alters incentives surplus as any merchant will tell you about any of their inventory, especially perishable ones.
Re: “… fire storm of price changes controlled by the largest companies in the world is not good.”
I agree, but that is not inflation.
I think you maybe have a different definition? I do not like Blair Fix either, on this topic. But also many other MMT’ers annoy me too 🤣🤣 What can I say? They beat me up all the time. It is depressing. He’s framing things as monopoly price gouging. That is not inflation. Completely different phenomenon.
I always think it is important to know the distinctions, so language is not weaponized and deployed against us. If you know not to fear inflation, then the reich-wing/libertarian crowd cannot use it as a weapon.
Also, I am “pro-inflation by design” as a STABILITY tool. The stability is the rate. Constant rate. It can be step-wise, say every year. But it is only an academic point, not a policy suggestion. A toy model to illustrate a point. If everyone knows the policy, no merchant should care. But I would not advocate this as currently the best policy, since it ignores the psychology of realpolitik. It is just an academic MMT point, that inflation per se is not a problem. Wild price fluctuations are, a huge problem, but are not what we mean by “inflation”. You, or I, need a different vocabulary.
I also prefer Gesell’s system (naïvely, I have the book, but have not read it, so will get back to you).
And for work (the noble and meaningful kind, not the ꕗꖹꝆꝆꕷꖾꕯꖡ) I favour a Le Salaire a Vie. But these are not reapolitik practical suggestions for people running the show TODAY. Maybe when I am older. However, I feel the education about these policy options is still useful today. It’s good for people to know there are many options. No one set of which is necessarily superior to the other, since superior politics comes from just being kind to each other, or at least not total 𖧥𖨚𖨚𖦙𖥕ꛚ𖠢ꕷ. A decent system helps, but is never a guarantor of kindness. But regardless of how crazy or not the system we have is, everyone can still be kind. The government cannot (yet) prevent me from giving away all my scorepoints to someone in more need than skinny starving old me.
Well, yes, obviously we have a very different definition of inflation. I’ve been after you to spit it out already. 😂
The standard definition is strictly a percentage change or trend in (overall) prices. This is a very you know mathematical definition of price changes and it’s useful for business and finance for obvious reasons. Fix has done some rather definitive work to demonstrate just how much nonsense something like a CPI is.
But within the last few years, I’ve come to understand that if you talk to human beings as Paul Solman (pbs guy) has people on the street see inflation as shit they can no longer afford or no longer believe they ever will be able to this definition takes a lot of sense when you measure things in terms of affordability rather than by score points. Yeah, this is exactly the kind of measure my statistical analysis friend over on mastodon actually did research on in California cities. He developed an affordability metric of income over cost of living to determine the economic disposition of distinct neighborhoods within a city, which has some relevance to city finances and well-being. Unfortunately, had to abandon the project because takes money and needs another body or just one person.
I am glad I take time to read your replies, sometimes I forget or things roll off the scrolled list.
AFFORDABILITY. That's the werd. It removes any ambiguity. It is NOT inflation. It removes gauge.
Yes, I am, despite appearances in the written word, still a bone fide geek and nerd. So I prefer the mathematical definition, of "Inflation" which is not the CPI and not what Dr Fix uses. So to me he is dumb as nuts. But of course he is closer to where normal people's heads are at, so for realpolitik he is smart and I am dumb. I do 100% acknowledge this. But to me you are all dumb. What can I say?
It's what should be informing government policy that worries me, not what people think. We need government to be the smart ones, not the dumb ones swayed by libertarian/neoliberal realpolitik, which is the cultural milieu, unfortunately, even for people who hate libertarianism. Mr Garryeconomics, Wolff, Hudson, Mr Economicsexplained, Mr Unleanringeconomics, the whole lot. All use a neoliberal framing. I phreakin' hate it.
But basically, I am almost resigned to howling into the force 100000 tempest of hot air forever. I will maintain though I am not anti-realist, I am just hopelessly unpragmatic perhaps? Which I still would rather not have to be.
No one really measures inflation properly, but we know what the base rate is, it is equal to the inflation rate set by the monopoly currency issuer, which is roughly some sort of weighted average of the fedfunds rate, the floor rate, and some weighting of the Tsy bill/securities. I would not hazard a guess at the weights, but it is purely academic. It depends on which factor most into forward pricing and future contracts, and some of that has to pass through the insane gears of CFO underling's XLS spreadsheet grindings. These all set "pretty deterministically" the term strucutre of priced faced by consumers today.
For the other austerity measures I would prefer a whole new WORD. So that people stop beating me up about this. It's terrible for a nerd like me to get hit on the head about language and semantics. I think my semantics are appropriate, and everyone else is being too normative! 🤣🤣
I think your word "Affordability" should be raised to prominence, and from henceforth I will endeavour to do so. "It is a good word Blackadder." — for some reason Fry and Atkinson popped into my head.
“No one really measures inflation properly, but we know what the base rate is, it is equal to the inflation rate set by the monopoly currency issuer, which is roughly some sort of weighted average of the fedfunds rate, the floor rate, and some weighting of the Tsy bill/securities.”
It does be affirm my own sanity that interest and inflation are the same beast. I am a usury hawk. I tend to get all dalek on it (exterminate). It is very bizarre to me that a monetary system should seek to constantly expand the money supply without reference to the size of the population and the amount of commerce they need to engage in to go about their daily lives. Price stability is a good thing, but it has to be in an environment with the expectation that there will be demand for things. Gesell’s perspective on how to achieve both is what makes him interesting. I think he also had very firm ideas about how to deal with access to real estate (housing, factory space)
I like Blair’s definition: inflation as restructuring social order.. pricing power is the social relation between buyer and seller. It is certainly closer to the definition that Gary uses. Here I think price coercion might be the best way to name that concept. The conversation that Gary is having in his public campaign revolves around price competition primarily but not exclusively over housing.
I’m still a little curious of your use of the word gauge, which is always felt it had the whiff of heavy math. It makes much more sense I guess because in some ways it’s a measure of income stream opportunity for certain classes in the economy.
I worry that a lot of what comes out of economists about inflation may suffer from a lack of common meaning.
Apparently gauge theory is the tool used to understand fundamental particles, and it requires, confusingly, combining abstract algebra, with topology. I can handle the basics abstact algebra but have never properly done topology, never really got past the definition of a topology as some kind of relation on sets, with balls I think? not sure if you even need a distance metric.
But to summarize, I would hazard an hazard a guess that while abstract algebra is about symmetries, in other words, being able to know when you are standing in front of a mirror, topology is about local spaces flowing into each other. So to understand macro reality you must both be able to tell when you are looking at mere reflections, and the paths along which things may freely move.
But again, I don’t know gauge theory or lie algebra.
Understanding the economy is not so different from fundamental particles. Both particles and financial tokens exist as relations within a larger fabric, and are essentially accounting constructs. Particles are accounting units for physical interactions, tokens play the same role too
Interesting. I loved Group theory in college, but not so much in any formal topology.
My Outlook towards economics is very far from this level of abstraction. Human societies and ecologies aren’t suitable subjects for them. They provide the tools for analysis, but the most useful work I think I’ve seen is done by individuals like with sharp analytical skills and statistical analysis.
For an example of this see here where Mr. Lakeland quickly rubbishes what I think is supposed to be the most recent “Nobel prize” work in economics. I mean he did this analysis while helping his son with calculus and a broken toilet. GOAT
I should not have written “Who cares?” so flippantly. I have written about the black markets etc., and that’s one of the main reasons I attack the boosters of privatized otherwise worthless tokens. Eventually, the private sector finds sneaky ways to in-effect impose a tax on us, it’s the stupidity tax, basically casinos in a weird form (so the players do not realize it is a casino). I’ve seen this so often occur with friends of friends. None of them went into the get-rich-quick scheme thinking they were going to get ripped off.
Of course it is all heinous activity. But it is cordoned off. But in a similar sense to I do not need to go to Las Vegas. I did not mean to imply that was a good thing, since it sucks people in, sometimes just because they are ignorant, which is deplorable. And yeah, it leaks out into our lives, since unemployment has basically an epidemic type of dynamic.
But this leakage into normal society is not the “fault” of the crypto gangs and casinos, it is the fault of government policy. Why does anyone who is not a power-crazed sociopath ever resort to crime? They want more tax credits in order to eat.
The problem is, I see it is the foxes running the chicken coop in the White House are all crypto frauds even dear leader himself. The cancer has gotten itself into the circulatory system quite badly.
Liam is not reading what I write it seems. You almost have the exact wrong view, almost maliciously at one point...
This insinuation, for example, is gross and disgusting, I wish you would take it back:
"The system is designed to protect itself. You can’t reform it from within because it selects for people who think like you, who are smart, well-intentioned, and convinced that if only they were running things, everything would work."
--- dude. Do you even know who I am???? There is NO WAY the system selects for people like me. It's almost the exact opposite. No one like me gets a sniff of power. If we did, then yeah, things would be a lot better (I would guess). Excuse my immodesty. The system selects against people like me, objectively and in almost all ways. Yes, it protects itself, it protects the wealthy (not me) --- that's the Capital Order (q.v. Clara Mattei). It does not select for people like me at all. People like me are not trying to protect the system.
We are trying to educate others about MMT, and how this knowledge permits (as in liberates) moral clarity and public good purpose.
We already "implement MMT" — it is the existing monetary system. But this is not the cause of the rot. An accounting system is not a cause of anything.
So everything economic justice activists have to say is against the power structure that prevails. It's not putting lipstick on a pig or perfume on a rotting tomato.
It is because MMT is neutral that it permits moral clarity and good people to operate will then result in good outcomes. If well-intentioned people are in power, they can do maximal good with an MMT monetary system. What I agree with you about is that the other aspects of current political economy are NOT selecting for kind and compassionate people in power. We get quite the opposite: technocrats and neoliberals and fascists. MMT has nothing to do with this, precisely because none of these characters understand MMT. (You cannot blame the school bully for being nasty and brutish just because they do not understand gravity.)
To sustain and invigorate the moral imperatives in any politics (art of governance) you need morally inclined people, but in addition they would need the raw knowledge of how the monetary operations function. That's knowledge of MMT.
If we did not have MMT systems then it would call for whatever that other knowledge happens to be.
To answer your question:
I cannot redesign the political strucutre, it is a community effort, it'll take a long haul. MMT education is part of it, but only a small part, the minimal requirements part. The rest is class consciousness raising, and also moral and spiritual education --- so that if good people do gain seats in political office, or the civil service, then they are not corrupted by money, self-aggrandizement, neoliberalism nor fascism, and see no use for war and colonial conquest, and can see how to eliminate poverty and unemployment over-night. My role in this is as a humble educator, and I seek no higher role.
I’d be interested to hear how you would redesign the entire economic and political system around MMT, rather than trying to graft it onto the current framework. In other words, if you were starting from scratch, what would an MMT-based system that genuinely works for everyone look like?
This is a thoughtful piece and one of the better attempts to link economics and morality, but like most MMT discussions it misses the deeper point. It treats society as a kind of moral vacuum in which we could simply redesign the fiscal machine if only we adjusted the levers correctly. The trouble is that economic systems are not neutral. They reflect the psychology and moral frameworks of the people who run them.
The "Trump bubble" is a perfect example. Trump did not appear in isolation. He filled the vacuum left by the moral collapse of the left. When institutions abandoned accountability and replaced moral conviction with technocratic self-justification, ordinary people looked for someone, anyone, who would at least sound decisive. Many Christians voted for Trump not out of admiration, but because the alternative was a political culture that no longer believed in anything except its own managerial competence.
The same applies to issues such as Roe v. Wade. It is not that Christians want to control people's lives. It is that their worldview still acknowledges moral duty rooted in biology, the sense that life carries intrinsic responsibility. You do not have to be religious to see that a civilisation which can rationalise the destruction of its own offspring is psychologically unwell.
Broadly, the world now divides into four moral camps: Zionists, Islamists, a small residue of morally grounded faith traditions such as Christians, Hindus, and Sikhs, and then everyone else. The first two are still governed by explicit religion but are locked in rivalry, each defining itself against the other. They fight proxy wars across the world and show little moral concern beyond their own boundaries. The smaller faith-based traditions still carry a sense of shared moral duty and respect for life, but they lack the numbers and influence to shape events. The remaining majority, the secular world shaped by the modern left, believes in individual rights above all else. We treat autonomy as the highest good, even when it means claiming rights over our unborn children.
In this landscape no camp acts morally toward the others, and the system that contains them all is built on that distrust. Even people inside it who recognise what has gone wrong find they cannot change it; the machinery rewards conformity and punishes conscience. Real reform will not come from within. It has to come from outside, from people who still understand responsibility, duty, and the biological reality of life itself. Only when that moral ground is rebuilt from the outside in can any economic or political system, including MMT, hope to work at all.
The purpose of the piece is well-meaning and the frustration is understandable, but it falls into the same trap as the system it criticises. Once we begin to blame, we divide the world into us and them, left and right, moral and immoral. The truth is that we are all part of the same failing structure. Only when we stop blaming and start rebuilding shared moral ground will anything truly change.
Where exactly did I miss the point? You are making me 🤣 .
Do you ever really read what I write, Liam? All my writing is suffused with the moral imperatives, MMT is just the correct accounting framework and is morally neutral.
Richard Murphy and myself are two (of many, see Mr Grumbine and Co.) MMT activists who directly insert principles of justice, not just skirt around them. If you frequent centrist-liberal MMT spaces you will not find as much moral imperative. Which is why i do not frequent those spaces.
Where you miss the point is that you confuse moral intent with moral structure. It doesn’t matter how many times you say your work is “suffused with moral imperatives”, you’re still operating within a system that rewards the exact opposite. Saying MMT is morally neutral doesn’t make it neutral in practice. Once you apply it inside a morally bankrupt framework, it inherits the corruption of that framework.
And that’s the real problem, not whether you or Murphy or anyone else is moral, but whether the system itself can ever reflect those values. You talk about justice as if it can be inserted into an existing mechanism, but that’s not how power works. The system is designed to protect itself. You can’t reform it from within because it selects for people who think like you, who are smart, well-intentioned, and convinced that if only they were running things, everything would work. That’s the same delusion that’s driven the left for decades and why we have the "Trump Bubble".
So I’ll ask again, not how you’d implement MMT inside the current structure, but how you’d redesign the structure itself so it can sustain the moral principles you’re talking about. Because until you can answer that, you’re just putting a fresh theory into a rotten system.
"In any case, who cares? Not I for one. Crypto is a kind of cordoned off other world"
Well, if you simply ignore the black market ability to destroy capital flow restrictions, and the child trafficking and criminal fraud, it's cordoned off.
Major corporations companies like Amazon are quite eager to start up their own stable coins because it becomes a giant dollar slush fund for them. They hang onto dollars exchange for these coins, which they use as currency. It's a combination of loyalty points and gift cards as a scam.
The scale of this fraud now woven in by its chief beneficiaries in the White House cabinet can only expand as more and more parts of the financial system integrated into a black market system. Not that many large banks have already been caught in more traditional forms of money laundering.
The $40 billion being handed over to Argentina to a first order of approximation is a free hand out of public money in order to cover the short positions of a lot of hedge funds that banked on Argentina's peso exchange value. But no one with resources in that country has any reason to hang onto the peso and they use the stable coin exchanges to trade their pesos basically for dollars. Argentina has no sovereign control over capital flight.
"This achieves what all soi dissant lefties say they want — a wealth tax on hoarded tax credits. "
The problem with this thinking is that it ignores the real economy, where inflation rewrites the social order (h/t Blair Fix who may have been referencing another quote). A red queen scenario is insane. You don't need inflation you don't want inflation small merchants don't want wildly changing prices in either their inventory or the wage price structure. They benefit from a drive or an incentive to engage in commerce certainly, yet a fire storm of price changes controlled by the largest companies in the world is not good
The people who suffered the worst inflation, the Germans have long sought for price stability. The proper way to gain a price stability and impose a tax on surplus means of exchange, because I refuse the reductionism that the means of exchange exist only as a tax credit, is demurrage of some form. Gesell's stamp script or the much older Bracteates systems are known to be price stable. You should get around to reading his book on the natural economic order. As I think I've measured before the preface is a little bit hard reading because 19th century sentiments, but largely they're given an expression as a platform to vent his rage as a merchant over creditors, starving him of the means of exchange so he could make a living.
With Bracteates the entire money supply was reminted on a bi yearly basis. The entire money supply was destroyed and recreated once or twice a year. Exchanging 4 old tokens for 3 new ones was a 25% tax vs losing all its purchasing power.
The city mint obviously had to issue 100% of the money supply, but that was the money the city government used for cathedrals, fortifications and public works that are still enjoyed today as tourist locations in Magdeburg, Germany. They didn't have inflation. They financed major public long-term, works by cathedrals without economic crisis. They didn't need growth for a thriving local economy.
Those with surplus means of exchange had little choice but to spend the money or lend it out, even at a loss, to minimize their own tax liability. With the simple addition of some other tax obligation, people could take their surplus means of exchange to settle their tax obligation.
I much prefer the idea of either a limited surplus amount, which replicates what happens with credit card loyalty points. One could choose to pay off one's tax obligation with anything that goes over the limit. Simple and effective with little recourse to avoid and every incentive to pay tax (you get 100% value for it).
If your surplus means of exchange is simply going to rot like bananas, it completely alters incentives surplus as any merchant will tell you about any of their inventory, especially perishable ones.
Re: “… fire storm of price changes controlled by the largest companies in the world is not good.”
I agree, but that is not inflation.
I think you maybe have a different definition? I do not like Blair Fix either, on this topic. But also many other MMT’ers annoy me too 🤣🤣 What can I say? They beat me up all the time. It is depressing. He’s framing things as monopoly price gouging. That is not inflation. Completely different phenomenon.
I always think it is important to know the distinctions, so language is not weaponized and deployed against us. If you know not to fear inflation, then the reich-wing/libertarian crowd cannot use it as a weapon.
Also, I am “pro-inflation by design” as a STABILITY tool. The stability is the rate. Constant rate. It can be step-wise, say every year. But it is only an academic point, not a policy suggestion. A toy model to illustrate a point. If everyone knows the policy, no merchant should care. But I would not advocate this as currently the best policy, since it ignores the psychology of realpolitik. It is just an academic MMT point, that inflation per se is not a problem. Wild price fluctuations are, a huge problem, but are not what we mean by “inflation”. You, or I, need a different vocabulary.
I also prefer Gesell’s system (naïvely, I have the book, but have not read it, so will get back to you).
And for work (the noble and meaningful kind, not the ꕗꖹꝆꝆꕷꖾꕯꖡ) I favour a Le Salaire a Vie. But these are not reapolitik practical suggestions for people running the show TODAY. Maybe when I am older. However, I feel the education about these policy options is still useful today. It’s good for people to know there are many options. No one set of which is necessarily superior to the other, since superior politics comes from just being kind to each other, or at least not total 𖧥𖨚𖨚𖦙𖥕ꛚ𖠢ꕷ. A decent system helps, but is never a guarantor of kindness. But regardless of how crazy or not the system we have is, everyone can still be kind. The government cannot (yet) prevent me from giving away all my scorepoints to someone in more need than skinny starving old me.
Well, yes, obviously we have a very different definition of inflation. I’ve been after you to spit it out already. 😂
The standard definition is strictly a percentage change or trend in (overall) prices. This is a very you know mathematical definition of price changes and it’s useful for business and finance for obvious reasons. Fix has done some rather definitive work to demonstrate just how much nonsense something like a CPI is.
But within the last few years, I’ve come to understand that if you talk to human beings as Paul Solman (pbs guy) has people on the street see inflation as shit they can no longer afford or no longer believe they ever will be able to this definition takes a lot of sense when you measure things in terms of affordability rather than by score points. Yeah, this is exactly the kind of measure my statistical analysis friend over on mastodon actually did research on in California cities. He developed an affordability metric of income over cost of living to determine the economic disposition of distinct neighborhoods within a city, which has some relevance to city finances and well-being. Unfortunately, had to abandon the project because takes money and needs another body or just one person.
I am glad I take time to read your replies, sometimes I forget or things roll off the scrolled list.
AFFORDABILITY. That's the werd. It removes any ambiguity. It is NOT inflation. It removes gauge.
Yes, I am, despite appearances in the written word, still a bone fide geek and nerd. So I prefer the mathematical definition, of "Inflation" which is not the CPI and not what Dr Fix uses. So to me he is dumb as nuts. But of course he is closer to where normal people's heads are at, so for realpolitik he is smart and I am dumb. I do 100% acknowledge this. But to me you are all dumb. What can I say?
It's what should be informing government policy that worries me, not what people think. We need government to be the smart ones, not the dumb ones swayed by libertarian/neoliberal realpolitik, which is the cultural milieu, unfortunately, even for people who hate libertarianism. Mr Garryeconomics, Wolff, Hudson, Mr Economicsexplained, Mr Unleanringeconomics, the whole lot. All use a neoliberal framing. I phreakin' hate it.
But basically, I am almost resigned to howling into the force 100000 tempest of hot air forever. I will maintain though I am not anti-realist, I am just hopelessly unpragmatic perhaps? Which I still would rather not have to be.
No one really measures inflation properly, but we know what the base rate is, it is equal to the inflation rate set by the monopoly currency issuer, which is roughly some sort of weighted average of the fedfunds rate, the floor rate, and some weighting of the Tsy bill/securities. I would not hazard a guess at the weights, but it is purely academic. It depends on which factor most into forward pricing and future contracts, and some of that has to pass through the insane gears of CFO underling's XLS spreadsheet grindings. These all set "pretty deterministically" the term strucutre of priced faced by consumers today.
For the other austerity measures I would prefer a whole new WORD. So that people stop beating me up about this. It's terrible for a nerd like me to get hit on the head about language and semantics. I think my semantics are appropriate, and everyone else is being too normative! 🤣🤣
I think your word "Affordability" should be raised to prominence, and from henceforth I will endeavour to do so. "It is a good word Blackadder." — for some reason Fry and Atkinson popped into my head.
“No one really measures inflation properly, but we know what the base rate is, it is equal to the inflation rate set by the monopoly currency issuer, which is roughly some sort of weighted average of the fedfunds rate, the floor rate, and some weighting of the Tsy bill/securities.”
It does be affirm my own sanity that interest and inflation are the same beast. I am a usury hawk. I tend to get all dalek on it (exterminate). It is very bizarre to me that a monetary system should seek to constantly expand the money supply without reference to the size of the population and the amount of commerce they need to engage in to go about their daily lives. Price stability is a good thing, but it has to be in an environment with the expectation that there will be demand for things. Gesell’s perspective on how to achieve both is what makes him interesting. I think he also had very firm ideas about how to deal with access to real estate (housing, factory space)
I like Blair’s definition: inflation as restructuring social order.. pricing power is the social relation between buyer and seller. It is certainly closer to the definition that Gary uses. Here I think price coercion might be the best way to name that concept. The conversation that Gary is having in his public campaign revolves around price competition primarily but not exclusively over housing.
I’m still a little curious of your use of the word gauge, which is always felt it had the whiff of heavy math. It makes much more sense I guess because in some ways it’s a measure of income stream opportunity for certain classes in the economy.
I worry that a lot of what comes out of economists about inflation may suffer from a lack of common meaning.
Apparently gauge theory is the tool used to understand fundamental particles, and it requires, confusingly, combining abstract algebra, with topology. I can handle the basics abstact algebra but have never properly done topology, never really got past the definition of a topology as some kind of relation on sets, with balls I think? not sure if you even need a distance metric.
But to summarize, I would hazard an hazard a guess that while abstract algebra is about symmetries, in other words, being able to know when you are standing in front of a mirror, topology is about local spaces flowing into each other. So to understand macro reality you must both be able to tell when you are looking at mere reflections, and the paths along which things may freely move.
But again, I don’t know gauge theory or lie algebra.
Understanding the economy is not so different from fundamental particles. Both particles and financial tokens exist as relations within a larger fabric, and are essentially accounting constructs. Particles are accounting units for physical interactions, tokens play the same role too
Interesting. I loved Group theory in college, but not so much in any formal topology.
My Outlook towards economics is very far from this level of abstraction. Human societies and ecologies aren’t suitable subjects for them. They provide the tools for analysis, but the most useful work I think I’ve seen is done by individuals like with sharp analytical skills and statistical analysis.
For an example of this see here where Mr. Lakeland quickly rubbishes what I think is supposed to be the most recent “Nobel prize” work in economics. I mean he did this analysis while helping his son with calculus and a broken toilet. GOAT
https://masto.ai/@dlakelan@mastodon.sdf.org/115413741335470320
Thanks for the corrective. 🙏🏼🙏🏼🙏🏼
I should not have written “Who cares?” so flippantly. I have written about the black markets etc., and that’s one of the main reasons I attack the boosters of privatized otherwise worthless tokens. Eventually, the private sector finds sneaky ways to in-effect impose a tax on us, it’s the stupidity tax, basically casinos in a weird form (so the players do not realize it is a casino). I’ve seen this so often occur with friends of friends. None of them went into the get-rich-quick scheme thinking they were going to get ripped off.
Of course it is all heinous activity. But it is cordoned off. But in a similar sense to I do not need to go to Las Vegas. I did not mean to imply that was a good thing, since it sucks people in, sometimes just because they are ignorant, which is deplorable. And yeah, it leaks out into our lives, since unemployment has basically an epidemic type of dynamic.
But this leakage into normal society is not the “fault” of the crypto gangs and casinos, it is the fault of government policy. Why does anyone who is not a power-crazed sociopath ever resort to crime? They want more tax credits in order to eat.
The problem is, I see it is the foxes running the chicken coop in the White House are all crypto frauds even dear leader himself. The cancer has gotten itself into the circulatory system quite badly.
Yes, I agree! Cancer is the exactly appropriate metaphor. Although it is a bit unkind to the feelings of natural cancer cells.🤣🤣
Liam is not reading what I write it seems. You almost have the exact wrong view, almost maliciously at one point...
This insinuation, for example, is gross and disgusting, I wish you would take it back:
"The system is designed to protect itself. You can’t reform it from within because it selects for people who think like you, who are smart, well-intentioned, and convinced that if only they were running things, everything would work."
--- dude. Do you even know who I am???? There is NO WAY the system selects for people like me. It's almost the exact opposite. No one like me gets a sniff of power. If we did, then yeah, things would be a lot better (I would guess). Excuse my immodesty. The system selects against people like me, objectively and in almost all ways. Yes, it protects itself, it protects the wealthy (not me) --- that's the Capital Order (q.v. Clara Mattei). It does not select for people like me at all. People like me are not trying to protect the system.
We are trying to educate others about MMT, and how this knowledge permits (as in liberates) moral clarity and public good purpose.
We already "implement MMT" — it is the existing monetary system. But this is not the cause of the rot. An accounting system is not a cause of anything.
So everything economic justice activists have to say is against the power structure that prevails. It's not putting lipstick on a pig or perfume on a rotting tomato.
It is because MMT is neutral that it permits moral clarity and good people to operate will then result in good outcomes. If well-intentioned people are in power, they can do maximal good with an MMT monetary system. What I agree with you about is that the other aspects of current political economy are NOT selecting for kind and compassionate people in power. We get quite the opposite: technocrats and neoliberals and fascists. MMT has nothing to do with this, precisely because none of these characters understand MMT. (You cannot blame the school bully for being nasty and brutish just because they do not understand gravity.)
To sustain and invigorate the moral imperatives in any politics (art of governance) you need morally inclined people, but in addition they would need the raw knowledge of how the monetary operations function. That's knowledge of MMT.
If we did not have MMT systems then it would call for whatever that other knowledge happens to be.
To answer your question:
I cannot redesign the political strucutre, it is a community effort, it'll take a long haul. MMT education is part of it, but only a small part, the minimal requirements part. The rest is class consciousness raising, and also moral and spiritual education --- so that if good people do gain seats in political office, or the civil service, then they are not corrupted by money, self-aggrandizement, neoliberalism nor fascism, and see no use for war and colonial conquest, and can see how to eliminate poverty and unemployment over-night. My role in this is as a humble educator, and I seek no higher role.
"betetr thoughts" "Onyl really had"
being that specter.
I’d be interested to hear how you would redesign the entire economic and political system around MMT, rather than trying to graft it onto the current framework. In other words, if you were starting from scratch, what would an MMT-based system that genuinely works for everyone look like?
This is a thoughtful piece and one of the better attempts to link economics and morality, but like most MMT discussions it misses the deeper point. It treats society as a kind of moral vacuum in which we could simply redesign the fiscal machine if only we adjusted the levers correctly. The trouble is that economic systems are not neutral. They reflect the psychology and moral frameworks of the people who run them.
The "Trump bubble" is a perfect example. Trump did not appear in isolation. He filled the vacuum left by the moral collapse of the left. When institutions abandoned accountability and replaced moral conviction with technocratic self-justification, ordinary people looked for someone, anyone, who would at least sound decisive. Many Christians voted for Trump not out of admiration, but because the alternative was a political culture that no longer believed in anything except its own managerial competence.
The same applies to issues such as Roe v. Wade. It is not that Christians want to control people's lives. It is that their worldview still acknowledges moral duty rooted in biology, the sense that life carries intrinsic responsibility. You do not have to be religious to see that a civilisation which can rationalise the destruction of its own offspring is psychologically unwell.
Broadly, the world now divides into four moral camps: Zionists, Islamists, a small residue of morally grounded faith traditions such as Christians, Hindus, and Sikhs, and then everyone else. The first two are still governed by explicit religion but are locked in rivalry, each defining itself against the other. They fight proxy wars across the world and show little moral concern beyond their own boundaries. The smaller faith-based traditions still carry a sense of shared moral duty and respect for life, but they lack the numbers and influence to shape events. The remaining majority, the secular world shaped by the modern left, believes in individual rights above all else. We treat autonomy as the highest good, even when it means claiming rights over our unborn children.
In this landscape no camp acts morally toward the others, and the system that contains them all is built on that distrust. Even people inside it who recognise what has gone wrong find they cannot change it; the machinery rewards conformity and punishes conscience. Real reform will not come from within. It has to come from outside, from people who still understand responsibility, duty, and the biological reality of life itself. Only when that moral ground is rebuilt from the outside in can any economic or political system, including MMT, hope to work at all.
The purpose of the piece is well-meaning and the frustration is understandable, but it falls into the same trap as the system it criticises. Once we begin to blame, we divide the world into us and them, left and right, moral and immoral. The truth is that we are all part of the same failing structure. Only when we stop blaming and start rebuilding shared moral ground will anything truly change.
Where exactly did I miss the point? You are making me 🤣 .
Do you ever really read what I write, Liam? All my writing is suffused with the moral imperatives, MMT is just the correct accounting framework and is morally neutral.
Richard Murphy and myself are two (of many, see Mr Grumbine and Co.) MMT activists who directly insert principles of justice, not just skirt around them. If you frequent centrist-liberal MMT spaces you will not find as much moral imperative. Which is why i do not frequent those spaces.
I always read what you write but you never answer my questions...
Where you miss the point is that you confuse moral intent with moral structure. It doesn’t matter how many times you say your work is “suffused with moral imperatives”, you’re still operating within a system that rewards the exact opposite. Saying MMT is morally neutral doesn’t make it neutral in practice. Once you apply it inside a morally bankrupt framework, it inherits the corruption of that framework.
And that’s the real problem, not whether you or Murphy or anyone else is moral, but whether the system itself can ever reflect those values. You talk about justice as if it can be inserted into an existing mechanism, but that’s not how power works. The system is designed to protect itself. You can’t reform it from within because it selects for people who think like you, who are smart, well-intentioned, and convinced that if only they were running things, everything would work. That’s the same delusion that’s driven the left for decades and why we have the "Trump Bubble".
So I’ll ask again, not how you’d implement MMT inside the current structure, but how you’d redesign the structure itself so it can sustain the moral principles you’re talking about. Because until you can answer that, you’re just putting a fresh theory into a rotten system.