Remarkl
2 min readMay 11, 2021

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"An economy operating at its full-employment level provides an ideal condition to exercising the MMT policy framework."

I have two quarrels with this claim. First, I believe it's important to divorce MMT from policy except as an explanation for why a particular policy does not "cost too much." Thus, MMT does not "work" or "not work." Rather, MMT is true or not true, and relevant or not relevant.

I think of MMT as relativity in physics. Einstein had no agenda, but some planners point to relativity as a reason their plans will or won't work. Meanwhile, most planners don't think about relativity at all, because relativity, even though it's true, isn't relevant to their projects. MMT matters now because it IS true and it IS relevant to certain projects. But that doesn't mean that MMT entails any particular policy.

Second, full employment limits MMT to technological advancement. MMT explains why less-than-full employment may make non-inflationary deficit spending possible, not why full employment is a good idea per se. Deficit spending may be non-inflationary in part because there are idle workers available to meet the demand created by the spending. Thus, full employment is arguably the point at which MMT becomes irrelevant, because full employment implies scarcity. (There are other reasons a job guaranty is a bad idea, but they are beside the point here. MMT explains why we can get TO full employment, but it does not, to me, anyway, suggest that we should force our way there.)

In short, I think it's important to divorce MMT from its advocates' agenda. It's human nature for people who have an interest in something being true to take the lead in arguing for its acceptance. But the motivation is irrelevant to the truth; linking politics to MMT is essentially an ad hominem, and, therefore, fallacious, argument.

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Remarkl
Remarkl

Written by Remarkl

Self-description is not privileged.

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