Category Economics

In reaction to MMT statements that government spending must occur before taxes can be paid, it is sometimes noted that a household could pay taxes by borrowing from a bank that subsequently obtains reserves from the central bank. Whether this…

This post concerns ten recent Marxist claims about MMT and one about Kalecki (a forerunner, in certain respects, of MMT). Some Marxists claim that: MMT fixates on the monetary, ignoring the real. MMT ignores social structure in favor of tweaks…

In recent exchanges on Marx and MMT, one question has concerned the capacity of government spending to encourage private investment and promote employment. Some Marxists appear to regard MMT as incompatible with Marx on this question. My own view is…

For Marx, a currency’s representation of the labor performed in commodity production is indirect, mediated through a ‘money commodity’. The reason for this is that labor performed in commodity production is not directly social but only made so, indirectly, according…

MMT does not presuppose a particular theory of value. In principle, it is possible to situate a subjective or objective view of value within it. The present focus is on Marx’s theory of value and, more specifically, his ‘law’ of…

It is suggested in an earlier post that the presence of complex labor affects value creation in Marx’s theory, including at the aggregate level. The argument starts from Marx’s distinction between concrete and abstract labor. In making this distinction, Marx…

In principle, a currency’s command over any category of real input or output can be considered in terms of a suitably defined price index. The present focus is on the aggregate level and, in particular, a currency’s command over real…

First acquaintance with MMT can bring clarity on key aspects of the monetary system that may previously have seemed unclear, yet likely also calls other questions to mind. For instance, if taxes do not finance a currency issuer, why are…

This is not just a matter of markets requiring a system of enforced property rights, which presupposes government, at least in rudimentary form. In monetary economies, functioning markets also require a viable currency, one that is generally accepted in exchange.…

Capitalist economies are demand led in the sense that both output and growth tend to reflect the behavior of autonomous demand, especially in the long run. Prices, in contrast, tend to be supply determined, reflecting cost. Supply shocks can temporarily…