Topics about the Labour Party
:sunglasses: 51.1 % ❤ 2.1 % :thumbsup: 4.3 % 😯 6.4 % :grinning: 24.5 % 🧥 2.1 % 😟 2.1 % :shit: 7.4 %
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#626401
Socialism is Love, apparently. Because that's the word that always comes to mind when thinking of the socialist left.

Fair enough, she puts this forward as a personal view. But surely, you can like stuff she likes and not be socialist?

#626402
She’s right but I’d never say it. Love only works in English politics for Tories cuddling dogs so their village green preservation society supporters feel a bit better about the cunts they’re voting for. Socialism should only be sold to the English as hard headed mutual self-interest.
Last edited by youngian on Sat Oct 10, 2020 2:11 pm, edited 1 time in total.
#626414
Defining socialism is fine. Socialism itself is fine. The problem is socialists deciding who else is or isn’t socialist based on whether they are exactly as socialist as they are, and if they aren’t classing anything and everyone else as right wing.
Abernathy, oboogie, Timbo and 1 others liked this
#627181
Haven't you come across MMTers? Lucky you.

Jonathan Portes isn't a fan.

https://www.prospectmagazine.co.uk/econ ... ary-theory
But MMT goes farther than this. First, it says that deficits are positively necessary for growth. Since it’s government deficits that ultimately create money, without a deficit demand will inevitably be below what’s needed. As Richard puts it: “A government with a balanced budget necessarily denies an economy the funds it needs to function.”

But this isn’t true as a matter of economics, theoretical or empirical. Money is ultimately a creation of government—but that doesn’t mean only government deficits determine the level of demand at any one time. The actions and beliefs of the private sector matter as well. And that in turn means you can have budget surpluses and excess demand at the same time, just as you can have budget deficits and deficient demand. Remember that the UK’s budget was in surplus in 1987, at a time when the economy was in an unsustainable boom. Germany has been running surpluses for years.

Does MMT then argue that governments can simply spend whatever they like? This is perhaps the nub of the issue. There are certainly some who think that MMT is indeed a “magic money tree” and that, for example: “as a sovereign nation, the UK can always afford high quality universal NHS healthcare.”

The problem is obvious. Bangladesh is a sovereign nation just as much as the UK is (meaning, in this context, that it has its own currency managed by a central bank that is under the ultimate control of the government). But, no matter how large a deficit it ran, Bangladesh couldn’t afford universal NHS-quality healthcare for its people. It simply isn’t rich enough—it doesn’t have the doctors, nurses, or hospitals it would need. And this is the crucial point—if it tried to buy them and printed money to do so the result would mostly be inflation, with more money chasing a restricted supply of doctors and
so on.

And the same applies to the UK. Yes, the UK can afford a high quality NHS. And education, and welfare system, and so on. But the idea it can do so without raising taxes is for the birds. Sure, the UK could run very large budget deficits, even with unemployment low. But the result would still be the same as that predicted by conventional economists. Inflation would rise. You can create money out of nothing, but you can’t create doctors, schools, or consumer goods.
#627186
My point, Tubbz, is that using acronyms and initials that others may not instantly remember or use or even recognise doesn't make posts any easier to understand. Not everyone has the same fields of interest, so some contextualisation reduces the gnomic qualities.

You still don't say what MMT is, just use the initials. So I go and look it up, because apparently I should know what it means. I find this:
Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.
Now, I may not know much about economics, but I know 'look at me I'm a genius' linguistic exclusionism when I see it.
#627188
You can create money out of nothing, but you can’t create doctors, schools, or consumer goods.

You can if you pay for them. Provided your currency has value. I’m too rusty to follow the arguments through but I wouldn’t take Chris Williamson’s word for it. Anyway central banks pull all sorts of magic strokes like QE. I guess the watch words are don’t get too cocky.
#627189
Points taken. I'll have a go at explaining it, though this is probably above my pay grade. I'll try and give you the popularized version of it which you might see BTL in the Guardian, places like that.

The government, so they say, doesn't finance spending by levying taxes, but by creating money. So, MMT seems to offer a way to fund all the spending we might want without having to do anything unpopular like raising taxes. This is what Portes is getting at up there with his "magic money tree" point. The more excitable MMTers really do see the theory as being something like that.

You'll probably be thinking "what about inflation?!" by this point. And you'd be right. As Portes says, if Bangladesh decided to finance an UK style NHS, it would just fuck itself up with inflation. MMT theory sees taxes as having the role of managing inflation- I presume because they reduce demand and therefore should reduce inflation. Funnily enough, in BTL MMT, nobody gets particularly concerned with these taxes, and the risk of inflation is generally played down.

You can probably see the attraction of this stuff though. Not just the magic money tree aspect, but also its radical feel. Not surprisingly, the BTL adherents at least (no idea what the academic ones are like) love calling other people "neo-liberal", including people like John McDonnell who believe in borrowing lots for investment when the rates are right, but also in raising taxes to pay for stuff.
#627191
The government, so they say, doesn't finance spending by levying taxes, but by creating money. So, MMT seems to offer a way to fund all the spending we might want without having to do anything unpopular like raising taxes. This is what Portes is getting at up there with his "magic money tree" point. The more excitable MMTers really do see the theory as being something like that.

The government does print money to pay for stuff but are the MMTers saying there is no point of elasticity where inflation sets in due to being able to withdraw money from the economy through raising taxes?
#627194
The theory, as its laid out in general, stresses the need for taxes to be brought in to control inflation. And if you press an excitable MMTer they'll tell you about the taxes. I don't know if there's some sort of sweet spot where we can genuinely pay for Green New Deals or whatever from creating money. The progressive Keynsians I follow seem to think that even if you do MMT as well as it can be done, you only get to where you can with regular progressive economics- ie you pay for the Green New Deal by borrowing at the right rates, putting up taxes, and having a sensible inflation target for the Bank.

So at the best, MMT seems like a waste of time. At worst, it would fuel all sorts of expectation of spending. I think lots of people like it just because it sounds like free money.
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