Category Economics

In explaining why it is investment that creates saving, and not the other way around, different economists have offered different ways of looking at the matter. Keynes (see previous posts here and here) distinguished planned (ex ante) from actual (ex…

Three previous posts (here, here and here) outlined the operational differences and similar macro effects of some alternative approaches to government spending; namely, bond issuance to the private sector, interest on reserves, and overt monetary financing. Since these posts were…

As discussed in the previous post, the net impact on balance sheets of the various approaches to government spending – (A) overt monetary financing, (B) sale of bonds to the private sector and (C) interest on reserves – is the…

Government spending has two immediate and direct macro effects. It: adds to the net financial assets held by non-government; creates income equal to the amount spent. This is the case whether the central bank is (A) permitted to purchase government…

The term ‘neoliberalism’ refers to an economic program of deregulation, privatization, trade liberalization, corporatization and small government – a project to subject more and more economic activity to the whims of “the market”. At its core, neoliberalism is an attempt…

“Lerner’s argument is impeccable but heaven help anyone who tries to put it across to the plain man at this stage of the evolution of our ideas.” (Keynes to Meade, April 1943) “The need to balance the budget is superstition…

MMT makes clear that a currency-issuing government can always spend sufficiently to ensure full employment alongside low, stable inflation. It can always purchase what is available for sale in its own currency. The point – which, on a little reflection,…

I am pondering the legitimacy or otherwise of Marx’s claim that labor is the sole source of value in capitalist commodity production. It is not clear that such a claim can be proved. Sometimes it is simply presented as an…

In recent parts of the series, we have been considering the temporal single-system interpretation (TSSI) of Marx’s theory of value. We have considered how, in the TSSI, the values of constant capital and variable capital depend upon the prices that…

The previous post introduced the temporal single-system interpretation (TSSI) of Marx. It was seen that, under this interpretation, Marx’s three aggregate equalities all hold. It was noted that the same can be said for other single-system interpretations. As long as…