Politicians often tell us that we should live within our means. True enough. Unfortunately, many of them do not appear to understand what this actually entails when it comes to fiscal policy. So far as most economists are concerned, the…
Neoclassical economics, which remains the prevailing orthodoxy, emerged in the late nineteenth century in the context of rising working-class opposition to capitalism. The theory’s appeal in certain circles as an apologetic for the status quo probably assisted its rise to…
This post concerns an implication of Marx’s treatment of productivity and labor complexity for the appropriateness of alternative processes of wage determination. For simplicity, it is assumed that all activity is productive in Marx’s sense (that is, productive of surplus…
There are often attempts in the west to depict China as capitalist rather than socialist. After decades of China going from strength to strength on macroeconomic criteria – and in view of its undeniable achievement in reducing poverty at a…
For Marx and many Marxists, money is based in a commodity; in Modern Monetary Theory (MMT), it is not, being based instead in a social relationship that holds more generally than just to commodity production and exchange. Even so, to…
Value, in Marxist theory, is an amount of abstract labor that is measured in hours of simple labor or a monetary equivalent. Marx argued that complex labor is reducible, for the purposes of commodity production and exchange, to amounts of…
While revisiting old files on Marx and Modern Monetary Theory (MMT), I came across an interesting discussion. In it, somebody raised an argument that seems worth addressing: MMT treats money as a public utility, while Marxism treats it as an…
An economy’s minimum wage equates a unit of the currency to an amount of labor time. For instance, in Marxist terms, a minimum wage of $15/hour sets a dollar equal to 4 minutes of simple labor power. At a macro…
Generations of economics students have been misled into believing that banks are reserve constrained. Even today, though most specialist monetary economists would likely cringe at the idea, there are widely used textbooks that teach this mistaken view to a new…
Modern Monetary Theory (MMT) makes clear that, for currency-issuing governments, the macroeconomic constraint on fiscal policy is resource availability, not revenue. This is sometimes summarized as “the constraint on fiscal policy is inflation” in recognition of the link between resource…
