Shades of MMT in the Blogosphere

Modern Monetary Theory continues to make inroads. The latest example is the successful conference in Rimini on the weekend. Michael Hudson has offered his reflections. But what the newcomer to MMT may not yet appreciate is that there are many shades to MMT. Sure, the work of the academics is pretty much homogenous. But this is not always the case in the blogosphere, where we feel free to mix things up. Out here, we don’t necessarily agree that we are discussing economics, let alone MMT. Some of us are not even willing to concede that we blog. With this in mind, I think it is time we had a Glossary that clarified the many nuances of wider MMT. On the surface we may seem identical, but underneath there are almost differences. Perhaps such a Glossary was not needed in the past, but this is 2012. I am not actually qualified to compose a Glossary, but what’s done is done.

A short historical note may be in order before allowing “analysis” to go completely off the rails. Prominent MMTers include Warren Mosler, Randall Wray, Bill Mitchell, Stephanie Kelton, Scott Fullwiler, Pavlina Tcherneva, Mathew Forstater, Rob Parenteau and a few others. I am not exactly sure if Jamie Galbraith is a proponent or fellow traveler. I can’t be expected to be accurate. In recent years, the number of Modern Monetary Theorists has exploded beyond the half dozen, with some prominent Post Keynesians lending support and a new generation of young Modern Money geniuses emerging from UMKC. Even with these reinforcements, the theoretical approach appears to remain clearly defined among the academics. It is just as well, then, that the rest of us can pretend to confuse matters. Otherwise there would be no call for this post.

GLOSSARY OF TERMS – Part A: Academic

MMT. 1. Modern Monetary Theory. Known in academic circles as Neo-Chartalism. It is represented by the following macroeconomic accounting identity:

MMT = Monetary Operations + Stock Flow Consistency + Minskian Financial Instability + Functional Finance + Job Guarantee

MMT. 2. Modern Money Theory. An alternative approach sometimes adopted at UMKC. It is the same as Modern Monetary Theory in every way except that “Monetary” is replaced by “Money” in the name of the approach, which makes all the difference.

[As far as I can tell, this exhausts the shades of MMT in academia. Things are more diverse in the blogosphere. In the following list, there is plenty of overlap. Many of us are in more than one of these groupings, or switch between them from one day to the next without meaning to, or just to keep things interesting.]

GLOSSARY OF TERMS – Part B: Bloggers

MMR. Modern Monetary Realism. At first it was thought that this approach could be represented by the accounting identity:

MMR = MMT – Job Guarantee

But it is now known that there is more to it than that.

Platinum MMT. Members of this school like really big coins. For instance, a trillion dollars – or more – just in the one coin.

C-MMT. MMT for creditors. Opposed to a zero interest rate policy. Maybe this school doesn’t exist yet, but surely it will once MMT really catches on.

Neoclassical Synthesis MMT. In this approach, a role is found for a natural rate of interest, liquidity trap, money multiplier and other notions considered no-no’s in MMT proper. Its founders developed it in an attempt to woo Nobel laureate Paul Krugman into the fold. (Yes, I realize it is not a real Nobel Prize, but that’s the best they give the economists.) The gambit hasn’t worked, but the approach is here now, and no one’s bothered specifically to debunk it.

Non-Consolidationists. Members of this school are sometimes sympathic to aspects of MMT but reject consolidation of Central Bank and Treasury balance sheets in the general depiction of monetary operations.

Austrian MMT. Combines an understanding of monetary operations with some Austrian stuff.

Ancient MMT. In this approach, archaeological records and ancient religious texts are examined in light of MMT.

Spiritual MMT. The Spiritual Neo-Chartalists will focus on MMT when they absolutely have to, but otherwise read more widely and reflect on deeper philosopical or spiritual questions.

Neo-MMT. This is my suggestion. It is just a shell at the moment. Marx fits in somewhere. But mainly I just wanted to start an approach that could be known as Neo-Neo-Chartalism. For the accounting identity, I’m thinking:

Neo-MMT = MMT + (Neo-MMT – MMT)

However, I will need to obtain copyright permission.

Loose Cannon MMT. This is a blogging approach that threatens at any moment to distort MMT while at the same time attempting to disseminate it to a wider audience. This Glossary is an example of the approach.


27 thoughts on “Shades of MMT in the Blogosphere

  1. Nice taxonomy, Peter. I regard myself as one of the primary expositors of “Loose Cannon MMT”, also sometimes known as “Wandering Off the Reservation MMT.”

    Austrian MMT is interesting. It seems to consist of people who accept the MMT account of the role of the government sector, but who hate the fact that that account is true and want to whack the government sector. It’s favored equation is:

    (S-I) + (T-G) + (M-X) = 0

  2. I regard myself as one of the primary expositors of “Loose Cannon MMT”, also sometimes known as “Wandering Off the Reservation MMT.”

    I like it. 🙂 I’ve certainly fallen into this category from time to time as well, despite my best efforts.

  3. “Nice taxonomy, Peter. I regard myself as one of the primary expositors of “Loose Cannon MMT”, also sometimes known as “Wandering Off the Reservation MMT.””

    But have you ever created a (non-proofread) viral email attempting to explain the national debt, injected directly into the senior citizen email-forwarding machine? You bloggers are amateurs. My MMT distortions threatened to reach millions of old people, eventually ending up on

    Of course, it didn’t work, because I didn’t say something negative about Obama in my subject line…

  4. You’ve proven that MMT is the backbone of Neo-MMT, Peter. Genius!

    On a more serious note regarding Non-Consolidationism, whether or not to consolidate Central Bank and Treasury balance sheets into a single balance sheet is surely juts a matter of explanatory utility and is dependent on the purposes of the inquirer or expositor. But I think it has to be said that much of what MMT says about the role of the government sector only makes sense if all of the government sectors are consolidated. The treasury in the US, for example, operates under a variety of customary and legal constraints that have been imposed on it by other parts of the government sector. You can’t understand how the government increases the total stock of financial assets by looking at Treasury operations alone.

  5. JohnfrmCleveland,

    I recommend a subject line such as “Obama Is Leaving an Austerity Burden to Our Grandchildren!”

  6. ah come on Peter, you’ve made what could have been a serious endeavor into humor…i am slightly disappointed, but laughing at the same time 🙂

  7. Great humor!

    Although I have to admit that sometimes I really feel a little confused about the “Monetary” or “Money” used in MMT.

    Curious to see what name the new MMT macroeconomics textbook will have. 🙂

  8. What about “Matrix MMT” where we’re really operating under MMT but we’re all just plugged into a computer program that is constantly replaying a neo-classical nightmare.

  9. Matt, I love the ancient MMT and follow the literature as best I can. Keep it coming. Trixie, I enjoy work as long as its self-directed, so perhaps I could splinter off into Post-Hoc Ergophobia. Neil, yes, The Matrix. Love that movie. We must have an MMT about it! Ryan, as best I can understand it, when we speak of “money” we “do theory” whereas when we say “monetary” we are merely “being theoretical”. Deus-DJ, if this is the first time you’ve been disappointed, you have a lot to learn about heteconomist. JohnfrmCleveland, look at it this way, your Email went viral. Not many people can say that. Dan, I can’t take all the credit for neo-MMT, but will attempt to do so once some time has elapsed.

    By the way, I notice Dan is the only one who inserted anything of substance into his comments. (Maybe also John. I can’t tell.) The rest of you are boondogglers.


  10. Deus-DJ, your disappointment may have been justifiable after all. It seems I missed at least two shades of MMT: Neo-MMR (John Carney) and Post-MMT (Joe Weisenthal). If that isn’t bad enough, heteconomist has been accused of being mainstream.

    More seriously:

    The big MMT conference in Italy was a smashing success with thousands in attendance.

  11. It’s going to be interesting to observe the development of MMR, C-MMT, Austrian MMT, etc. It’s like being there at the birth of the neo-classical synthesis, watching as all the elements of Keyne’s thought that threatened the status quo were de-emphasized or defined away.

  12. excellent!!!

    one more ‘serious’ one for you-

    MMT= The currency is a simple public monopoly

    and then there is the

    ‘taxonomy drives MMT’ approach

  13. People overlap the categories of course. I think I’m MMT, but also Platinum MMT. Beo seems to be Platinum MMR. More generally however, I don’t see the dimensions underlying the categorization. For example, John Carney, says he’s neo- MMR, but I think he’s Austrian MMR, since his mentor seems to be Hayek. So, how do I tell the difference?

  14. Joe, I agree there is overlap. I am in several of the categories listed. I like the platinum coin idea, by the way.

  15. Don’t forget my favourite:

    Geo-MMT = Georgist MMT

    especially now Michael Hudson has said MMT out loud.

    Then again, being British, my favourite is probably just “Mmm Mmm, Tea”

  16. One entertaining contemplation for the mind is to sit yourself down on your favourite lounge chair, coffee at hand – somewhere about 2/3rds of the way out on one of the trailing arms of the Milky Way and take a look around. Kind of a relaxing Tibetan Buddhist monk thing to do! Yes there are other galaxies whirling around, but focusing back home on good old planet earth one of the first things you notice is we have black ones, white ones, yellow ones, brown ones, red ones – and every other beautiful colour in between. Which says nothing about human consciousness! (Maybe it might say something about human unconsciousness {stupid prejudice} but that is an absence of consciousness – not a presence).

    What you can say about human consciousness is that a lot of the time it is missing. From human beings. In aspects such as economics for example. To be conscious is to be aware. So there is something that we know about that we ‘forget’.

    Now, I am going to jump right in and be very upfront on what it is we forget. And what far reaching effect this loss of consciousness has on us and everything around us. We forget that we are just a tiny little infinitesimal part of creation; and what we are not conscious of is that the same Infinite Energy that has created Everything is also within us. We don’t actually need any broker between us and that Energy. We forget that the only way we can ‘know’ this Infinite Energy is within us is through FEELING; and we are not conscious of this Infinite Energy because we are lost in thought and ego. Man is a little clay doll, capable of feeling something that is Infinite – but lacks the conscious direction and understanding to do so.

    Those that know how to feel are fortunate. The effects on the human being are pretty universal. One of The most powerful when in the presence of that Energy within, is the knowledge that everything else is Illusion (in the proper sense of the word which means something is pretending to be something when it is not). The ‘world’ is temporary, forever changing; nothing in it is ‘real’ for very long. It is made out of the same ‘dust’ that we are. Coming face to face with something that is actually REAL then it is pretty simple to discern light from shadow.

    The next realisation is that this Energy has no top, no bottom, no sides; is neither Space nor Time; always WAS, IS, WILL BE etc. etc. etc. blah de bla de blah! What has been hinted at down throughout the Ages is forever true. The human consciousness is a 1/nanosecond to the Infinite-1 power blip on the screen of Reality and yet it is possible to be fulfilled. That is the gift.

    And the feeling of that Energy is, in the old terminology, ‘Bliss’. Sat. Chit. Anand. Take the human consciousness (Chit), plug it into the truth (Sat) and the result is Anand. It’s actually very very simple …. even jrbarch easily understands this!

    Now what are the consequences for the human consciousness that knows how to plug into SAT. Well, just a little consciousness goes a long long way.

    The heart is finally fulfilled. The mind becomes still in its Presence. The Self is finally known. Turning around 180deg. and looking back out into the world, it is obvious the ‘world’ is a mass of confusion, ego and concepts. We couldn’t have screwed things up more by design. If G.O.D. were actually a personal God, It would be rolling around on the floor laughing so hard the merriment would ring throughout the stars ….

    The kindness of that Energy within that is our very substance is not expressed. It is only with the consciousness of kindness can Intellect be guided to formulate something good that doesn’t harm others. This and this alone is Intelligence. Appreciation. Acceptance. Gratitude. Celebration. Clarity. It needs to be felt!

    That, in my humbled opinion, is what is missing. Without it the human drama will go on, bouncing unconsciously from pillar to post; discontent – searching until the last breath is drawn. Trying to draw comfort from the Illusion rather than the Reality. Formulas and rules cannot work successfully when consciousness is absent. Since we all live here on this little planet, unique for as many light years as our radio telescopes can search – it is imperative we help ourselves. It’s Time to wake up …..

    Blue sky, green grass – Prem Rawat over at Words of Peace Global (url taught me the basics.

  17. Just to bring it back to economics, “The heart is finally fulfilled. The mind becomes still in its Presence. The Self is finally known,” implies the state of fulfillment that lies beyond desire and aversion. That is to say, self-interest persists as long as illusory personality and individuality remain, constrained by the finite limiting mind that knows and feels only partially.

    I recall one of my teachers (Maharishi Mahesh Yogi) saying that “spiritual” means holistic and that spirituality is the study of the whole. This is the practice of yoga, the quest for spiritual union as identification with the whole rather than with only a part (body, mind, personality, limited self). The state of yoga is realization of one’s true nature as the whole.

    The more holistic one’s consciousness becomes, the less attached to the partial it remains, shown by the receding of desire and aversion for limited experiences that center on self-interest.

    Contemporary economics is all about self-interest as the motivating force of life, pursuit of which is considered rational action. This is an expression of spiritual ignorance from the spiritual or holistic point of view , that is, ignorance of who and what one really is. This ignorance impels a person to pursuit illusion rather than reality. Pursuit of illusions through ignorance always ends badly, which is how human beings finally get the message that there is no cheese at the end of those tunnels and embark on the quest.

    Economics based on self-interest as rational encourages people in this pursuit, while spirituality encourages people to rise above self-interest if they are to find what they actually are seeking, which is abiding fulfillment. Thus, contemporary economics is antithetical to perennial wisdom. Ayn Rand realized this, and threw her lot in with Illusion, pursuit of which condemns one to the wheel of karma, that is, the endless cycle of alternating happiness and suffering until one wakes up to this folly.

  18. Fascinating, Tom. Thanks.

    I guess at least in macro we are trying to think about the whole, including the ways in which the whole is not reducible to “microfoundations”. (Not meaning to interpret your comment too narrowly. Just observing one example of the folly of putting our faith in actions driven by individual self-interested behavior.)

  19. The microfoundations folks are stuck in a simplistic model of human action and motivation based on a superficial understanding of psychological behaviorism (rationality reduced to stimulus-response) and philosophical Benthamism (utility), when philosophy, psychology and the social sciences have moved forward and left those ideas behind.

    Abraham Maslow pretty much overthrew Skinner’s behaviorism with humanistic psych and went on to lay the foundations of transpersonal psych. Similarly, advance in cognitive science have also pushed out the envelope, as have evolutionary science and the other life sciences. See, for example, David Sloan Wilson’s series, Economics and Evolution as Different Paradigms. Sociology and anthropology have also advanced. Mainstream economics has incorporated almost none of this knowledge.

  20. “Modern Monetary Theory continues to make inroads. The latest example is the successful conference in Rimini on the weekend. ”

    I’m a MMT ‘supporter’ and I learn a lot reading MMT blog and papers, but I think that there was a bad propaganda behind the conference in Rimini. The organizers said something like “MMT economists saved Argentina!” or “China is implementing MMT so China grows”. And a lot of people and inevitably most of the public at the conference, think that is right.

    You know better than me that this is a misrepresentation and it isn’t good marketing. I don’t know if people like Hudson or Wray or Parguez know the facts behind the conference and the intellectual dishonesty of the organizers, surely they don’t because I’ve never read something like “we saved Argentina”.

    Anyway, that’s really bad marketing and I think this is a “fabrication of history” and it is frustrating given the interesting message of the MMT and in general of PK economics.

  21. I’m definitely a loose cannon but I do try to minimise damage to the pioneers.
    Make no mistake though the mainstream need to ridiculed and shamed into submission. And it’s great fun. And it’s working.

  22. Three years on – time for a revised edition?

    Eco-MMT: MMT as nominal economic growth within the confines of sustainable life, and as a means to reverse the decline of, and regenerate, the biosphere we inhabit.

    And of course, there are the freaked-out Ecos who can’t distinguish between economic growth and resource depletion.

    And perhaps soon we’ll see Social-MMT: MMT focused purely on political social application.

    Great blog. 😉

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