Once again, getting MMT wrong

This is pure ‘bond fairy’ nonsense. Even Paul Krugman (when not writing about MMT) has debunked this sort of scare-mongering, time and again. But let’s be clear why. First, people can’t dump money. Ultimately, it’s what they have to make exchange. So the idea that they exit money forever is absurd.

No.

Money’s convenient, sure, fiat money works as long as it is so. But that money is a medium of exchange does not mean that fiat money of one particular flavour or government is the only medium of exchange available. It’s tough to buy things with confederate dollars these days. OK, so, the government doesn’t exist any more. The Feds do and continentals aren’t worth much either. Zimbabwe is still a country, still has a government. The $Zim 100 trillion note doesn’t buy much. How many zeroes have they knocked off the Soviet ruble now?

We might even concede that that departing money forever is difficult but that doesn’t mean that leaving behind one specific fiat currency is.

17 comments on “Once again, getting MMT wrong

  1. Tim. Would it be a fair analogy to say that a currency is to the wealth of an economy as temperature is to the amount of heat in a system?

  2. First time I’ve heard “bond fairies”. They part of this LGBT+ alphabet soup bollox? Subset of BDSM?

  3. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor.

  4. First time I’ve heard “bond fairies”. They part of this LGBT+ alphabet soup bollox? Subset of BDSM?

    Reading Richard Murphy could probably be considered a subset of BDSM. You have to be a bit of a masochist to do it…

  5. This is my favourite

    ‘Including that democracy by and for the people should prevail.’

    Murphy converts to Brexit therefore?

    As for the rest, hasn’t his interpretation of MMT been comprehensively debunked as ‘voodoo economics’ over a thousand times by Tim alone?

  6. What exactly does Murphy’s latest (as of now) comment on that blog mean I wonder?

    I have always paid a price for being a free thinker
    I will be when leaving my current job this autumn
    It’s always been worth it

    Maybe yet again, he has pissed off those around him who refuse to re-engage him after his Professorship arrangement comes to an end?

  7. Spud was only ’employed’ (to use the word in its loosest sense) because he brought some EU grant money with him. If that’s no longer forthcoming, his feet won’t touch.

  8. Yes, the EU grant money has run out and with it his position, unfortunately this is not a result of Brexit the grant was limited term anyway, though one can hope that Brexit helped in it not being renewed

  9. Spud has hinted that he’s found some other Uni stupid enough to be associated with him.

    “I have always paid a price for being a free thinker”

    After close contact, everyone he works with wants to be free of his thinking.

  10. A quite glorious little vignette on Murphy’s reputation in the economics community on that blog

    Maire Mairie says:
    May 29 2019 at 3:08 pm

    Just sent your blog to The Wolf.

    This was his email reply.

    ” I don’t pay any attention to him. Why should I? ”

    Would you be prepared to debate with him if I could arrange it?
    Reply

    Richard Murphy says:
    May 29 2019 at 3:21 pm

    Of course

    I know he has no regard for me – we have met

    He has no regard for anyone outside his rather cloistered little circle

    That’s the problem

  11. @ Gunker. Thanks for that. Saint Terry of Pratchett, so sadly deceased, did a riff on this in his disc world novel, “Making Money”. The description of operations closely follows MONIAC, but hilariously. If you get the chance, read the book.

  12. Quite so – the best riff being that once they get the model right then the world conforms to it…..

  13. I know he has no regard for me – we have met

    He has no regard for anyone outside his rather cloistered little circle

    They say very similar people repel each other.

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