This what AP Lerner over at Professor Anderson's blog was going on about. Also called Charlatism (ouch, not a marketable name if I may say so).
I did some surfing to find critiques of this theory, but didn't really find any. Can someone point me toward a thorough critique?
And apropos of nothing, I happened to notice a name that seemed familiar. Abba P. Lerner is credited for reviving the theory in recent times, according to Wikipedia. Here I thought AP Lerner was a cute way of calling yourself an Advanced Placement Learner. Oh, well, learn something new every day.
I think the theory is a train wreck. Did you see Think Blue's summary on the other thread (Public deficits = private savings)? It sounds like Resource Based Economics (Zeitgeist) to me. The theory is so bad I can't see how anyone would have spent the time to critique it.
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.
razerfish:This what AP Lerner over at Professor Anderson's blog was going on about. Also called Charlatism (ouch, not a marketable name if I may say so).
Heh. That would be Chartalism, not Charlatism. Maybe some charlatans didn't bother picking a better name. :)
razerfish:I did some surfing to find critiques of this theory, but didn't really find any. Can someone point me toward a thorough critique?
Unfortunately, I don't have time to analyze their theory, and since they're so outside the mainstream, it seems nobody else has bothered to criticize them.
But if you encounter AP Lerner (or his ilk) again, just say "he's a Chartalist!!, and I'm sure they'll be none to happy you didn't use their re-branded term "Modern Monetary Theory."
Here is a blog discussion between a Chartalist and some Austrians:
Mises Economics Blog
Hi razerfish. I think I found what you're looking for. Robert Murphy, an Austrian Economist, actually wrote a critique about some of their ideas, but without realizing they were Chartalists.
I posted the links on the other thread, so as to avoid duplicate posts:
http://mises.org/Community/forums/p/18268/349054.aspx
The school you're thinking of is Chartalism. Here's a Wikipedia article (which I have not fully read, so caveat emptor): http://en.wikipedia.org/wiki/Chartalism
Here's a terrific article on Modern Monetary Theory at the Seeking Alpha website: http://seekingalpha.com/article/242669-the-trouble-with-modern-monetary-theory
The author seems to understand the theory better than do its advocates. He brushes aside the apparent problems to get to the real issues.
Keynesianism has a certain overlap with MMT, but Keynes wouldn't follow his own flawed ideas to their logical conclusion and he never went as far as MMT does. Some Keynesians nowadays almost talk this way. But even Krugman refused to go down the MMT route, because he knows it would make him into the economic equivalent of a believer in perpetual motion or antigravity and destroy his reputation as an economist.
Cullen Roche soundly refuted that article a long time ago. Mercenary Trader doesn't even come close to understanding MMT. http://pragcap.com/discussion-forum?mingleforumaction=viewtopic&t=42
I don't see how anything has benn refuted, soundly or otherwise. The author concedes almost every point, only insisting that "we" are by nature corrupt and irrational as though, if true, this would justify monetary manipulation by gov't. But if humans are naturally this way, where will we find wise and decent folks to do the job?
Of course it's not true. What we are by nature is ignorant and self-interested; harmless traits absent coercive power over others.
To paraphrase: His government utopia is not applicable to a world in which men are self-interested and ignorant.
Cullen Roche is an entrepreneur and a conservative. There's no chance he's the socialist you make him out to be. You might do yourself a favor by being a little more open minded about MMT. It's not what you claim it is.
neutrinoman, you do realize you bumped a thread that is over a year and a half old, and are talking to a guy who hasn't visited these forums in almost that same amount of time...?
You're the MMTer, why don't you enlighten me, my mind is open.
I'm not making any claims about this guy, just noting that he hasn't refuted the criticism of MMT at all.
Apparently, he is trying to present a theory, right? Modern Monetary Theory. This implies that there is some kind of value-free science behind it, doesn't it? Yet his first line of defense against criticism is to pass judgment upon the moral and mental state of all humanity! As Bill Hicks would say: How f***ing scientific!
And the basic claim seems to be that "The govt has no financial constraint.", but then again they should not drop money from helicopters lest "death of currency" ensue. How is this not a financial constraint? And on he goes, making claims, then claiming the opposite and accusing his critic of strawmanning.
So yeah, no refuting going on. Why don't you try?
Yes, I do realize. I was researching MMT on the Web and came across articles and postings from the last couple years.
I don't understand all of the hostility towards MMT. Seems pretty reasonable to me. I defended it in another thread.
MMT has been refuted by me and by others right here:
http://mises.org/Community/forums/t/22477.aspx
and here:
http://mises.org/Community/forums/t/22452.aspx
http://mises.org/Community/forums/p/22477/395425.aspx
Also I blogged about it here:
http://smilingdavesblog.blogspot.com/2011/08/are-mmt-and-ae-compatible.html
One of the threads has a guest appearance by Walter Mosler himself, with a long back and forth between him and the forum members.
I confess I seem to use a different system of logic than Fool on the Hill.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Nah, probably just different definitions and assumptions.