"Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Wossname wrote:I don’t think we need rehash the arguments though. We have done it to death I think.
Yes, I think you're right there. We'll have to agree to disagree! I'm afraid I will persist with the illusion that doctors and nurses eat food that they did not produce themselves.
Wossname
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Wossname »

Steve3007 wrote: July 14th, 2020, 8:21 am Steve3007 » 29 minutes ago

Wossname wrote:
I don’t think we need rehash the arguments though. We have done it to death I think.
Yes, I think you're right there. We'll have to agree to disagree! I'm afraid I will persist with the illusion that doctors and nurses eat food that they did not produce themselves.

Well they certainly pay for food in money that they did not create but which the government created.

We will as you say, agree to disagree.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Sculptor1 »

Steve3007 wrote: July 14th, 2020, 8:17 am I've read the article a second time now. My first thought is the same as when I read it the first time: I find articles which are full of editorializing, mockery and rhetorical questions annoying because they're just a distraction from the message. If I'm trying use an expert view to help me make up my mind about something, I'd rather they just use their expertise to layout the facts as they see them, rather than using terms like "deficit fetishist" and "Santa Claus" and stuff.

But, anyway, trying to ignore all that and extract what Richard Murphy is saying factually, he seems to say this:

1. The FT overstates public sector net debt because it doesn't factor in QE.

2. It is not true that BoE bond buying can't continue. It has in Japan and this has not created inflation there.

3. "Sustainable footing" means affordability and low borrowing costs make high government borrowing affordable.

4. The economy will not "fire on all cylinders" again unless we adopt the Green New Deal.

5. Tax rises are bad for the economy.
The blog is just a snippett playing to his audience of the converted, and should simply offer a glimpse into a whole world of understanding.
You owe it to yourself to find out more about MMT. The current Friedman Monetarism is not the only economic theory on town, nor was it the first. But over the last 50 years it has had a injurious and harmful effect on the poor all over the world whilst further enriching the rich.
Roosevelt's New Deal which dragged the US and by extension the entire western world out of its self imposed depression is quite akin to what Murphy is alluding to, except that it is renewed for the modern world. MMT is the logical and updated extension of Roosevelt's success.

Friedman's new economic theory first tried out by Pinochet against his own people, then by Thatcher who destroyed British industry and gave us long term unemployment has become the new normal. But even some of its greatest beneficiaries are now starting to question the folly of boom bust, and the absurdity of "fiscal responsibility", in the world of austerity.

Wiser minds have been on about this for years.

But if you think you can trust the market. If you think you just need to reject money as an abstract and think of it as as simple exchange medium then how do you account for BitCoin and all those other cryptocurrencies. If you think money simply represents good and services, they what does BitCoin represent?
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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On this particular point:
Sculptor1 wrote:But if you think you can trust the market. If you think you just need to reject money as an abstract and think of it as as simple exchange medium then how do you account for BitCoin and all those other cryptocurrencies. If you think money simply represents good and services, they what does BitCoin represent?
This isn't about what I "trust" or "don't trust".

Thinking of money as a mechanism for the exchange of goods and services produced by human labour does not constitute "rejecting money as an abstract". The exchange value of goods and services is an abstract concept. The amount of the abstract concept called money that any given person is willing to pay for any good or service - i.e. the monetary value that they personally place on it - is an abstract concept. Being an abstract concept doesn't somehow mean that money has no relationship to the real things called goods and services.

And it doesn't alter the fact that doctors and nurses eat food that they didn't produce themselves, with the result that they can spend their time doing doctoring and nursing. And therefore (as we all surely know) NHS doctors and nurses are paid for (i.e. facilitated in doing what they do) by the labours of people who specialize in other things.

Bitcoin can be used to represent the exchange value of goods and services, like a fiat currency can. A key difference with bitcoin (and similar cryptocurrencies) is that it has been designed in such a way as to simulate a finite resource. Hence the concept of "mining" bitcoin, by analogy with the real physical activity of mining. Another key characteristic is that it has been designed such that transactions using it are untraceable. At least, that's my understanding.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Steve3007 wrote: July 14th, 2020, 10:04 am On this particular point:
Sculptor1 wrote:But if you think you can trust the market. If you think you just need to reject money as an abstract and think of it as as simple exchange medium then how do you account for BitCoin and all those other cryptocurrencies. If you think money simply represents good and services, they what does BitCoin represent?
This isn't about what I "trust" or "don't trust".

Thinking of money as a mechanism for the exchange of goods and services produced by human labour does not constitute "rejecting money as an abstract". The exchange value of goods and services is an abstract concept. The amount of the abstract concept called money that any given person is willing to pay for any good or service - i.e. the monetary value that they personally place on it - is an abstract concept. Being an abstract concept doesn't somehow mean that money has no relationship to the real things called goods and services.

And it doesn't alter the fact that doctors and nurses eat food that they didn't produce themselves, with the result that they can spend their time doing doctoring and nursing. And therefore (as we all surely know) NHS doctors and nurses are paid for (i.e. facilitated in doing what they do) by the labours of people who specialize in other things.

Bitcoin can be used to represent the exchange value of goods and services, like a fiat currency can. A key difference with bitcoin (and similar cryptocurrencies) is that it has been designed in such a way as to simulate a finite resource. Hence the concept of "mining" bitcoin, by analogy with the real physical activity of mining. Another key characteristic is that it has been designed such that transactions using it are untraceable. At least, that's my understanding.
Trust money or not. It is not equivalent to value in any sense.
Had I bought a 100 bit coin and held onto them till today I'd be a millionarre having done not work at all.
And that is most of the trouble is all types of money - it enables and encourages rent seeking behaviour. Making money from nothing by doing nothing and contributing nothing.
Money markets do just that.
Money is not what you think it is.
The biggest crime against the economy is the ability money gives you to take more money by doing nothing.
The current system does not account for this. And who pays- people who actually do work.
Ordinary people are paying for the manipulations and failures of money markets that have since the financial crisis TRIPLED the number of Sterling billionaires. All the while ordinary people are being told to tighten their belts, accept less- less health care, less education provision, lower wages, less job security.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Yet what EXACTLY happened in 2008? Did the sky fall down? Did houses burn to the ground? Did the earth shake. Did **** just disappear? Nothing happened. All the infrastructure and the resources stayed exactly the same?
What happened is the people that control the money decided to cash in; instigate a new austerity so that they could enrich themselves further.
What was the government response? Create more money from nothing to give the banks more. Who pays. The poor.
The ideology of Friedman economic theory provides them with the faith based notion that it was not the fault of the people that were to blame. And the acolytes of that system knowing full well that they were not going to suffer, accepted the myths promulgated by the ideology of the neo-liberal system. Laughing all the way to and from the bank the bonuses did not stop.
Yet ordinary people lost their jobs, houses and futures.
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Sculptor1 wrote:Trust money or not. It is not equivalent to value in any sense.
Had I bought a 100 bit coin and held onto them till today I'd be a millionarre having done not work at all.
And that is most of the trouble is all types of money - it enables and encourages rent seeking behaviour. Making money from nothing by doing nothing and contributing nothing.
Money markets do just that.
I broadly agree with a lot of the political point you're making, and that you continue to make at length after this snippet (and which you've made many times before). But I don't think it makes anything that I've said factually false. I know from past conversations that you rarely want to stick to talking about ideas just for the interest of those ideas. You want to take a political position and argue against others who take a different political position. as I've said before, I'm not often interested in that here.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Sculptor1 »

Steve3007 wrote: July 14th, 2020, 10:31 am
Sculptor1 wrote:Trust money or not. It is not equivalent to value in any sense.
Had I bought a 100 bit coin and held onto them till today I'd be a millionarre having done not work at all.
And that is most of the trouble is all types of money - it enables and encourages rent seeking behaviour. Making money from nothing by doing nothing and contributing nothing.
Money markets do just that.
I broadly agree with a lot of the political point you're making, and that you continue to make at length after this snippet (and which you've made many times before). But I don't think it makes anything that I've said factually false. I know from past conversations that you rarely want to stick to talking about ideas just for the interest of those ideas. You want to take a political position and argue against others who take a different political position. as I've said before, I'm not often interested in that here.
Then accept your own oppression as so many others do
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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Oh LOOK.
The Bank of England agrees on MMT's view of money creation.

https://www.bankofengland.co.uk/-/media ... rn-economy
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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All money is government debt,

Government deficit is out surplus.
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thrasymachus
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by thrasymachus »

gad-fly wrote
How did money emerge? Imagine a barter market. One trader wants to trade his pig for chicken, another his two chicken for pig. They agree one pig is worth three chickens. So the second trader writes an IOU to the first before returning home with the pig. This IOU is private crypto-money.
Just to note that this makes for an interesting concept of desert in accruing one's fortune: If I were to cash in all my assets, the bulk of cash money I have could be seen as a promissory note of what society (those within the legal parameters of exchange) owes me. It owes me a debt, redeemable at stores everywhere. It gets interesting when this debt is analyzed for its grounds of redemptive claims. Bill Gates' 100 billion or so, why do we "owe" Gates this? Certainly it can be argued Microsoft is a great accomplishment, but does this translate into such a debt? We are indebted to the institution called Microsoft, but this is not Bill Gates. His actual contribution left his hands long ago, even though he may be involved, and into the thousands of productive intelligences make make it all work.

We are capitalists (welfare capitalists!) because this works better than competitors, but we shouldn't kid ourselves about that elusive concept of desert.
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Sculptor1
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

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thrasymachus wrote: November 20th, 2020, 10:43 am
gad-fly wrote
How did money emerge? Imagine a barter market. One trader wants to trade his pig for chicken, another his two chicken for pig. They agree one pig is worth three chickens. So the second trader writes an IOU to the first before returning home with the pig. This IOU is private crypto-money.
Just to note that this makes for an interesting concept of desert in accruing one's fortune: If I were to cash in all my assets, the bulk of cash money I have could be seen as a promissory note of what society (those within the legal parameters of exchange) owes me. It owes me a debt, redeemable at stores everywhere. It gets interesting when this debt is analyzed for its grounds of redemptive claims. Bill Gates' 100 billion or so, why do we "owe" Gates this? Certainly it can be argued Microsoft is a great accomplishment, but does this translate into such a debt? We are indebted to the institution called Microsoft, but this is not Bill Gates. His actual contribution left his hands long ago, even though he may be involved, and into the thousands of productive intelligences make make it all work.

We are capitalists (welfare capitalists!) because this works better than competitors, but we shouldn't kid ourselves about that elusive concept of desert.
The system is a system of survial of the most ruthless, benign individuals also reap un fair rewards. No one on earth is worth $100billion. But this is why we have a tax system. The people that made the wealth of Microsoft are the millions of users, and the millions of designers and project planners on wages that actually did the work, whilst one fat cat sits there doing basically nothing and reaps all the rewards, the workings and uses getting crumbs from his table.
This is not a system that is sustainable, nor does it fully benefit society, no matter how much they argue that it does.
So where is the tax system to return the value to the people actually doing the work and paying out for MS poorly designed products?
Sadly the tax system is under the control of the same class of people who most benefit from the lack of re-distribution.
What little efforts that have been made to redress the balance have been trduced as "socialism".
As if that were a dirty word!
Tax cuts for the rich!
As Gore Vidal used to say; "It's socialism for the rich and capitalism for the poor".
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thrasymachus
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by thrasymachus »

Sculptor1 wrote
As Gore Vidal used to say; "It's socialism for the rich and capitalism for the poor".
And yet so many of the poor side with the rich plutocratic predators. What we need is a well constructed media campaign to do what Trump does: sell! We need to sell the truth better than they sell lies, and this is expensive. We need to "market" the truth; we need to "play" this hand with clever strategies that look into the targeted groups, identify their needs, weaknesses, and construct a counter-propaganda assault on the lies.

Barr once said Trump was a brilliant strategist, but didn't go into details. I know what he was talking about (to go entirely off topic): it is the post modern strategy that dismisses the notion of truth altogether, and replaces this with power. Sound familiar? It is the capitalist's spin on Nietzsche. There is no truth, only power, and truth is only what the winner says it is. More like Foucault. In fact, this guy is screaming from the grave, I told you so!
Steve3007
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Re: "Modern Money Basics" in Modern Money Theory (M.M.T.)x

Post by Steve3007 »

Here in the UK, the Chancellor of the Exchequer (the finance minister), Rishi Sunak, yesterday presented to parliament some future taxing and spending plans (a parliamentary ritual called The Budget). He set out some of the plans for "repaying some of the debt" run up during the Covid crisis.

My understanding of the Modern Money Theory interpretation of this is that he shouldn't be talking in terms of repaying debt that he says the government has run up due to increased government spending of taxpayers' money on things like the furlough scheme. MMT says that it's a myth to say that this has happened (that taxpayers' money has been spent in this way). Is that right?
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