A while back on Facebook, or maybe it was twitter, someone asked what would be left for our own lives if artificial intelligence ever came to exceed our own.
Modern Monetary Theory (MMT) continues to make inroads into the mainstream discourse with the appearance of an article by Youssef El-Gingihy in The Independent Online. The article features MMT in connection with the new book by Bill Mitchell and Thomas Fazi, Reclaiming the State. At its recent rate of dissemination, MMT may transition from heterodox to mainstream ahead of expectations.
A recent post considered one way of including a job guarantee in the income-expenditure model. Doing so makes it possible to represent various macro effects of a job guarantee within the model. An obvious effect is that the program would deliver a degree of demand stabilization. An effect that is perhaps not quite so obvious is the way in which a job guarantee would ensure supply-side changes in the economy automatically impact on demand, actual output and employment. Before illustrating a few of these effects, the modified income-expenditure model will be briefly outlined and tailored to present purposes. A fuller discussion of the model is provided in the earlier post.
Welcome to the very first (and possibly last) “Don’t Understand, Don’t Even Want To F___ing Understand Modern Money” post, otherwise known as a DUDE WTF UMM… post. This is for those of us who have no desire to consider economics at even an elementary level but who are tired of others exploiting our indifference and blasé attitude for their own dubious ends. Just because we don’t know diddly-squat about economics and are proud of it, this should not disadvantage us in life. What we need are some easy ways to spot when we are being led astray, without too many boring details.
When Marx’s theory of value is interpreted in a simultaneist way, it is relatively easy to calculate the ‘monetary expression of labor time’ (or MELT). It is simply new value added, measured in monetary terms, divided by productive employment. If it were not for the ‘productive’/’unproductive’ distinction, the simultaneist MELT could readily be calculated from the National Accounts as the ratio of Net Domestic Product at current prices to Total Employment. Retaining the productive/unproductive dichotomy complicates matters somewhat, because it is then necessary to exclude unproductive activity from the calculations, but no other hurdles appear to be present.
The video below is of a three-part presentation by Bill Mitchell, L. Randall Wray and Martin Watts concerning their forthcoming MMT textbook. Throughout the presentation and in the Q&A session that follows there are interesting observations on the current state of university economics and prospects for MMT and the economics discipline in general. The presentation was given at the First International Conference on Modern Monetary Theory held from September 21-24, 2017 at the University of Missouri-Kansas City (UMKC).
Under a job guarantee, there would be a standing job offer at a living wage for anyone who wanted such a position. Anyone without employment in the broader economy, or unhappy with their present employment, could opt for a position in the job-guarantee program. Similarly, individuals with less hours of employment than desired could top up their hours by working part-time in the job-guarantee program. In principle, the program might be locally or centrally administered. But, irrespective of administrative details, it will be assumed that a currency-issuing government funds the program.
What is the most appropriate entry point to the study of a monetary economy in which government is currency issuer? Is it “the market”? Is it the definition: total spending equals total income? Is it real exchange? Real production? Is it total output? Total employment? Total value? Distribution of income? The origin of profit? Price formation? Competition?
Saul (real name Jackson Daly) stood amid general hilarity by the lake, drenched in moonlight and old and tawny port, a bottle of which he clutched to his chest. It had been procured earlier that day from the one and only liquor store in the small New South Wales coastal town of Sunshine. A scattering of his brothers and sisters, sprawled on a grassy knoll, partook of wine and herbal cigarettes. They looked at him expectantly, as though he might have something important to say, but he backed away, without comment, and headed toward the road. It traced the edge of the lake and could have led Saul, if he’d wished, all the way to the pier.
Some days, when things seem quiet on the economic front, and even occasionally when they don’t, minds can wander to less weighty matters and become momentarily lost in daydreams of yesteryear; a heady retreat, for instance, back to high school math class one barmy afternoon, sunshine streaming through the windows facing on to Main Quad, with the keener students engrossed in an exploration of the wonders of polynomials; back to a delirious springtime trance interrupted, rudely, by one of the less enthralled students, who wondered aloud, “Yeah, but what good are they in the real world?”