tag:blogger.com,1999:blog-287551952024-03-08T12:00:47.123-07:00The Barefoot Bum[T]he superstition that the budget must be balanced at all times, once it is debunked, takes away one of the bulwarks that every society must have against expenditure out of control. . . . [O]ne of the functions of old-fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that long-run civilized life requires.Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.comBlogger2956125tag:blogger.com,1999:blog-28755195.post-67116594345759348672021-09-19T04:19:00.000-06:002021-09-19T04:19:06.855-06:00AOC is not one of us<p>I like Alexandria Ocasio-Cortez. I think she's intelligent, a good politician, and not particularly evil. I would definitely pick her for most anything over a bottom-feeder such as Kyrsten Sinema.</p><p>But she's not a socialist. She's not even a progressive, at least not in any meaningful sense. She's a bog-standard corporatist Democratic party politician. She's not a bad person, and I think she has done and will do what she can to ameliorate the billionaires' inherent assholiness, but when push comes to shove, she'll take the billionaires' side over the people.</p><p>How could she not? She's a member of Congress. If her fundamental loyalty to the billionaire class were in question, she would be completely excluded from the business of Congress until she lost her next election. </p><p>Most importantly, Ocasio-Cortez has no outside institutional support for any kind of socialist or progressive agenda.<br /></p><p>Socialists and progressives cannot simply depend on electing "good" people to political office. Socialists exert real power over the state, or take actual state power, by developing institutions outside of the capitalist- or billionaire-oriented official political institutions. </p><p>None of our socialist organizations are developing these institutions.</p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-79438302748728403522021-07-31T05:50:00.000-06:002021-07-31T05:50:07.202-06:00Political and ethical philosophy<p>Ian Welsh is almost always politically on point, and the politics in his post, <a href="https://www.ianwelsh.net/rationality-is-not-a-way-out-of-group-action-problems-like-climate-change-and-covid/">Rationality Is Not A Way Out Of Group Action Problems like Climate Change and Covid</a>, is a good example. Solutions to problems of public goods just do not emerge from the politics of individualism and individualistic "rationality".</p><p>Welsh's position has some precedent. Hume writes that it is "not contrary to reason to prefer the destruction of the whole world to the scratching of my finger," and Mel Brooks puts the sentiment mordantly: "Tragedy is when I cut my finger. Comedy is when you fall into an open sewer and die." And the first lesson of game theory is the <a href="https://en.wikipedia.org/wiki/Prisoner%27s_dilemma">Prisoner's Dilemma</a>, where the "rational" choice leads to the <i>least </i>desirable outcome for everyone.</p><p>In <a href="https://en.wikipedia.org/wiki/Arrow%E2%80%93Debreu_model">theory</a>, we could (maybe) get optimal outcomes by making <i>everything</i> a private good in a pure free market economy, but in the real world, the Arrow-Debreu model fails on the same computation problem that kills the omniscient central planner problem. It's not particularly helpful to declare, however correctly, that everything works perfectly in a perfect world.</p><p>But Welsh is mistaken at a fundamental level by arguing that virtue ethics is preferable to utilitarianism and instrumentalism. According to Welsh, our poor reasoning abilities undermine utilitarianism: we cannot act to improve the world if we cannot accurately predict the consequences of our actions.<br /></p><p>He's definitely correct that utilitarianism can easily degenerate into justifying apparently horrible actions for the supposed "greater good." (I've been reading a lot of trash superhero/supervillain fiction lately, and the trope of the supervillain perpetrating horrible actions for the greater good" trope is ubiquitous; indeed the "antagonist is just pure evil" trope has entirely ceased to be entertaining.)</p><p>Welsh constructs virtue ethics to mean that there are actions that are intrinsically bad, and these bad actions are absolutely unjustifiable, regardless of even the actual outcome, much less the supposed outcome. Moreover, we <i>know </i>these action are intrinsically bad directly without mediation:</p><blockquote><p>We know that being greedy, or selfish, or cowardly, or sadistic are bad.
We know that rape is always bad. We know that killing people is bad. We
know that beating people is bad.We know that hunger is bad. We know
that homelessness is terrible. We know lack of water kills. When the IMF
removes food subsidies we KNOW more people will go hungry. When we sell
bombs to Israel and Saudi Arabia, we know they’ll be used to murder
innocents.</p></blockquote><p>I definitely <i>agree</i> with Welsh: I think that "being greedy, selfish, cowardly, or sadistic are bad;" however, I just don't think my opinion is <i>true</i>. I don't <i>know </i>that they're intrinsically bad; all I know is just that I don't like them.</p><p>The problem with utilitarianism, that doing utilitarianism stupidly will fail, is not a problem with utilitarianism per se; stupidity and poor reasoning is a problem with human beings. Literally anything can be done stupidly to bad effect.</p><p>If we have to reason out what is virtuous, then virtue ethics is susceptible to the same problem: we can stupidly or fallaciously come up with the wrong virtues. Welsh just handwaves around the problem, supposing that we have some sort of mystical knowledge about what really constitutes virtue. At some level, unvirtuous people don't disagree about virtue; instead, they ignore their intrinsic knowledge of true virtue. But we can just handwave around the problem for utilitarianism: people who do horrible things supposedly for the greater good are just ignoring what they mystically know is the true greater good for the same reason a person might ignore what they know is true virtue.<br /></p><p>Welsh speculates without evidence that a fundamental social problem is that the elites have used utilitarianism to rationalize behavior they know is unvirtuous. I don't want to disparage Welsh for speculating, but we could just as easily speculate that our elites have failed because they have a different conception of virtue than Welsh and I both have. The elites might well see themselves as paragons of virtue and the suffering of the common people as not a result of elite's actions but rather a consequence of the common people's lack of virtue.</p><p>We can say that rape and murder are across the red line. Fine, but what do we <i>do </i>about it? What do we do about the person who will rape unless they are killed or imprisoned? Are killing or imprisonment (and imprisonment is torture), across the bright line or not? What do we do about millions of people who demand to keep slaves and will die before they free their slaves? Do we <i>force</i> them to release their slaves under threat of death, torture, or impoverishment? Virtue ethics, I think, suffers from the same sort of sophistry as I've long accused Libertarianism of. Immoral actions are only immoral when we don't agree with the <i>end</i>. <br /></p><p>I think the latter theory has more support. Corey Robin's <i>The Conservative Mind</i>, Bob Altemeyer's <i>The Authoritarians</i>, or really anything in the present conservative media. Conservatives and authoritarians fundamentally justify their position by appeal to <i>virtue</i> and only secondarily by an appeal to utilitarianism.</p><p>Remember, to many conservatives, the fundamental argument against homosexuality is that homosexuality is just as intrinsically wrong as rape or murder. They <i>know</i> so with exactly the same conviction and sincerity that Welsh claims to <i>know</i> that rape and murder are wrong. The fundamental argument against helping poor people is that they <i>deserve</i> their poverty as a result of their vice, and it is just as much a vice to alleviate poverty as it would be to procure new victims for a rapist. The poor <i>should</i> suffer as much for their poverty as rapists <i>should </i>suffer prison for their crimes.</p><p>Utilitarianism, instrumentalism, and pragmatism does not have the same fundamental flaw. Again, I concede that utilitarianism done stupidly will have bad effect, but, again, <i>anything</i> done stupidly can have bad effect, and (absent magical knowledge) virtue ethics can be done just as stupidly. However, I claim that utilitarianism can be done intelligently and that virtue ethics <i>cannot </i>be done intelligently, unless we construct our virtues on utilitarian grounds.</p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-54109010226738731952021-07-22T06:46:00.001-06:002021-07-22T06:46:28.365-06:00Pusillanimous pissants<p>Do you believe that Donald Trump legitimately won the election in 2020? If so, an astonishing number of people, including election officials, state attorneys general, and judges, conspired to fraudulently undermine the election. Indeed, the necessary conspiracy would be so vast that democracy (or what passes for democracy) in America is dead. The entire government lacks any semblance of constitutional legitimacy.</p><p>So if you believe this conspiracy, if you believe that the government is irredeemably broken, why are you posting on Facebook/Twitter/whatever? All you're doing is exposing your dissent to an illegitimate tyranny. If you truly are a patriotic American, you should be running to the hills <i>right now</i> with your AK-47 to join the Resistance. </p><p>But you're not running to the hills right now, are you?<br /></p>You're not because you <i>know</i> that Trump lost the election, and that result is so unacceptable that if elections mean Trump loses, so much the worse for elections.<br /><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-22665885580057008302021-07-11T05:00:00.003-06:002021-07-11T05:00:20.106-06:00A call for unity<p>It's not really a good sign when Paul Campos opens his call for unity, <a href="https://www.lawyersgunsmoneyblog.com/2021/07/how-to-build-a-mass-political-movement-to-empower-the-poor-and-working-class">How to build a mass political movement to empower the poor and working class</a>, with an example of a jackass saying something dumb (quoting ComrⒶde Cooper saying, "[I]f you’re a nonvegan, you are not a leftist"). Jackasses of every political affiliation say say stupid shit all the time. It's just noise with zero political significance.<br /></p><p>Sure, the <s>Party of Trump</s> Republican party is actually fascist, and there are a lot of people opposed to fascism; however, fascism is a very particular strain (and a particularly malevolent strain) of authoritarianism, and there are a lot of authoritarians, and other varieties of assholes, who are not fascists.</p><p>The Democratic party has been the party of neoliberal authoritarianism since Carter. Neoliberal authoritarianism isn't fascism, and is less pernicious than outright fascism, but it's still an anti-worker authoritarian ideology. </p><p>Campos's implication is clear: if you don't support the mainstream neoliberal "resistance" to Trumpian fascism, then you're <i>just like</i> that dumbass vegan who is undermining the mass movement. If you're not part of <i>our </i>opposition to fascism, then you're objectively pro-fascist, <i>n'est ce pas</i>?<br /></p><p>I've said this for years: it's <i>not enough</i> to declare, even sincerely, that you're against fascism. It's <i>not enough</i> to say that your brand of authoritarianism is slightly less obnoxious than their brand of authoritarianism. </p><p>If you want the support of the working class, you have to actually <i>support</i> the working class. Biden does not want to support the working class. The Democratic party does not want to support the working class. You don't need all the votes to win; I guess you don't want mine.<br /></p><p><br /></p><p><br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-3613100444961802222021-05-28T06:12:00.003-06:002021-05-28T06:12:58.875-06:00Yes, Senate Democrats DO understand the urgency of the moment<p>Mike the Mad Biologist thinks that<a href="https://mikethemadbiologist.com/2021/05/27/senate-democrats-do-not-understand-the-urgency-of-the-moment/"> Senate Democrats Do Not Understand the Urgency of the Moment</a>.</p><p>He's wrong.</p><p>It's tempting to invoke <a href="https://en.wikipedia.org/wiki/Hanlon%27s_razor">Hanlon's Razor</a>, but after a point, the hypothesis of stupidity becomes too unlikely to support. And the alternative here is not really "malice".</p><p>The billionaire class does not like democracy. Why should they? It's not so easy to maintain an oligarchy when just nyone can vote, and just anyone can credibly run for office.</p><p>Both the Democratic and Republican parties serve the billionaire class. Where do you think they get their money?</p><p>The Democrats and Republicans barely defeated Bernie Sanders. Increasing democratic voting rights will just give socialists even more opportunities. That ain't gonna happen. </p><p>Remember, the fundamental Democratic slogan is always "Better Trump than Sanders." They rolled those dice twice, and won the second time only because Trump mishandled the pandemic. (And Obama won only because Bush and McCain mishandled the global financial crisis.)</p><p>The billionaire class doesn't really want a fascist dictator, but they believe they can survive a fascist dictator; they don't believe they can survive socialism. Most if not all of the big German corporations survived Hitler.</p><p>This point bears repeating: the Democratic party has One Job: protect the billionaire class from socialism at any cost.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-23599400109976271242021-05-23T06:13:00.002-06:002021-05-23T06:13:19.351-06:00A fatal flaw?<p>Ekosj writes a surprisingly less-bad article at the conservative site <i>Richochet</i>, "<a href="https://ricochet.com/962507/modern-monetary-theory-wishful-thinking-or-exposing-a-fatal-flaw-at-the-heart-of-neoclassical-economics/">Modern Monetary Theory: Wishful Thinking or Exposing a Fatal Flaw at the Heart of Neoclassical Economics?</a>" The author includes the obligatory ideological swipes at MMT, but points out an interesting feature of contemporary macroeconomics.<br /></p><p>The supposed "fatal flaw" is that with superficially reasonable assumptions (notably the natural rate of unemployment and rational expectations), the quantity of money drops out of our macroeconomic models.</p><p>Well, yes. This feature is more-or-less by design. Economics is usually concerned with the real economy, the goods and services that provide actual utility to consumers. Economists usually view money as a "neutral veil" over what is essentially a barter economy. And, of course, a barter economy needs no money.</p><p>Economists do look at money too, but the constrained choices about money are almost, but not quite, completely unlike the constrained choices of an abstract real (barter) economy: a theory of the real economy works doesn't tell us much about how to set up a money system. Very different social systems could, in theory, coordinate a complicated real economy, and the simplifying assumptions are equally weird in every system.</p><p>We have to understand money on its own terms, not as something that emerges from real economic analysis. Ironically, when you study money on its own terms in a capitalist, fiat currency context, you get MMT.<br /></p><p><br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-13860483637193555362021-04-11T07:24:00.002-06:002021-05-23T05:41:07.943-06:00R.I.P. Snopes<p>For more than two decades, I have relied on <a href="https://www.snopes.com/">Snopes</a> to provide accurate and truthful fact checking.</p><p>Lambert Strether makes a compelling case that <a href="https://www.nakedcapitalism.com/2021/04/fact-checking-is-dead-killed-by-snopes-over-bidens-broken-promise-of-2000-checks.html">Snopes just bullshits their readers</a> when they claim that the charge that Biden broke his $2,000 stimulus check promise is "<a href="https://www.snopes.com/fact-check/biden-ossoff-warnock-checks-2000">Mostly False</a>". </p><p>It's not. Biden made the promise, and he broke it. I dunno, maybe he had good reasons to break it. Maybe he's just an asshole. I don't really care; politicians break promises all the time, and I didn't vote for him anyway.</p><p>In <i>On Bullshit, </i>Harry G. Frankfurt defines <i>bullshit</i> as an indifference to the truth, in contrast to a lie, where the liar cares enough about the truth to falsify it. Frankfurt goes on to argue that bullshit is more destructive to truth than lies.</p><p>In one article, Snopes has completely destroyed its reputation for caring about the truth. I simply cannot trust <i>anything</i> Snopes says or has ever said. They're dead to me.<br /></p><p>R.I.P. Snopes.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-29673135623372099562020-11-09T02:27:00.000-07:002020-11-09T02:27:00.176-07:00Biden rides to the rescue!<p>So it looks like Biden has won. Even if Trump tries to hold on by his fingernails, no one appears to be taking him seriously. We haven't quite lost what passes for "democracy" in America, but that's not the most important point.</p>Trump is not the real problem. The Republican party is not the real problem. I mean, they're terrible, sure, but they're not the problem in the sense that the the shark in <i>Jaws </i>was not the problem. The shark just is; the real problem Mayor Vaughn.<br /><p>We've known since the 1980s that the Republican party is evil. And you can't really blame them: sharks gonna shark, amirite? The question is, what are we going to do about it?</p><p>And what has the Democratic party done about the Republicans? As little as possible. For nearly a half a century.</p><p>All right, fine, it took me more than twenty years to figure it out myself. I even voted for Bill Clinton. Twice. Sorry, I'm a little slow on the uptake. But I figured it out eventually.<br /></p><p>Joe Biden and the Democratic party has indeed come to the rescue. But they are not there to rescue <i>us</i>.</p><p>They're here to rescue the Republican party. That's been the Democrats' job since 1991.</p><p>Biden and the Democrats will make zero real changes. Their job is to do just enough to stabilize the country so the Republicans have time to regroup, get their shit together, and continue their project to turn the U.S. into an authoritarian plutocracy. Don't worry: the Democratic party insiders will get their 30 pieces of silver.<br /></p><p>Look for someone in 2024 who makes us yearn for Trump's childlike antics.</p><p>I guess that's what we want. That's what we keep voting for.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com1tag:blogger.com,1999:blog-28755195.post-39142321610265651472020-10-12T04:59:00.004-06:002020-10-12T04:59:26.864-06:00Happy Columbus Day!<p></p><div class="separator" style="clear: both; text-align: center;"></div><p></p><p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRUG4vsOmmCHVrDUaPCEl7VNe99qQ_KJ-yL-9fZ70jw-yFhIB5R1nYxnJ1yaT4z7TcS_6pdcP8Iw-RjtuFuYjz0-fSukeXYFsCot0meOZ7GjLm8_6YAFAKj-isBjTLPYULF9Pi/s1280/columbussentiment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="620" data-original-width="1280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRUG4vsOmmCHVrDUaPCEl7VNe99qQ_KJ-yL-9fZ70jw-yFhIB5R1nYxnJ1yaT4z7TcS_6pdcP8Iw-RjtuFuYjz0-fSukeXYFsCot0meOZ7GjLm8_6YAFAKj-isBjTLPYULF9Pi/s320/columbussentiment.png" width="320" /></a></div><p></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com1tag:blogger.com,1999:blog-28755195.post-9362654307821119052020-09-24T04:47:00.004-06:002020-09-24T04:47:54.626-06:00Science. the left, and genetic academic ability<p>I am a "scientist" both by profession (I'm minimally qualified to publish in the social sciences) and by philosophical inclination. I think science, broadly defined, is not only the best but the <i>only </i>way to anything that looks even remotely like truth.</p><p>I'm not stupid. I know that science is not just a philosophy but a social activity, and prone to the same biases and bullshit as every other social activity. Scientists can be just as racist, sexist, and classist as anyone else. As individuals scientists can hold onto their cherished biases in the face of evidence just as fervently as the most conservative priest. I don't think that if someone has a Ph.D. and slaps the "science" label on something, it is therefore God's Own Truth... or even a little bit true.</p><p>But, as a philosophy, as a methodology, as a social practice, I think science, and scientists, have a least a <i>chance </i>of stumbling onto the truth, a chance that no other social practice has. And when some individual scientist makes a mistake, however egregious, we can correct the mistake... using science. And science does, at least in the long run, actually <i>privilege</i> some statements as truth, or at as least moving us closer to the truth.<br /></p><p>I'm also a moral subjectivist. I don't think there are any moral <i>truths</i>, precisely because we can't use science to decide moral questions. If the evidence contradicts a moral statement, too bad for the evidence: science is about how the world is, but morality is about the world <i>isn't </i>and what we <i>want</i> it to become. The observation that people can and do murder each other contradicts the statement that people <i>cannot</i> murder each other, but does nothing to contradict the statement that people <i>shouldn't</i> (in some broad sense) murder each other.<br /></p><p>Just like any other progressive or socialist, I become incensed when reactionaries ignore or contradict scientific truth just because they don't like it. </p><p>No, COVID-19 <i>really is </i>infectious, whether you like it or not; it really is an order of magnitude more deadly than the flu, whether you like it or not. To be honest, I <i>don't</i> like that COVID-19 is infectious and deadly, but there it is. <br /></p><p>No, the Earth really is becoming warmer because of human activity, and the Earth will soon become at best inhospitable and at worse uninhabitable, whether you like it or not.</p><p>No, life really did evolve over hundreds of millions or billions of years, whether you like it or not.<br /></p><p>No, Black people really are just as smart as white people; women are just as smart as men, gay people just as pro-social as straight people, etc. I happen to like those truths, but that doesn't matter: they're really true regardless of whether I like it or not. And if someone else doesn't like those truths, well, they're free to dislike them, but they're still true.</p><p>And we know all the above because <i>science</i>, not because it is somehow "morally superior" to believe any of the above.<br /></p><p>But I become just as incensed when progressives or socialists ignore or contradict scientific truth just because <i>they</i> don't like it.<br /></p><p>There are a lot of rhetorical moves one can make against any scientific truth. Scientific truths are <i>never</i> known with certainty. Scientific truths are <i>always</i> underdetermined by observation. Science is always theory-laden and dependent on preconceptions. Scientists might <i>always </i>have made a mistake, forgotten this important factor, missed that causal pathway.</p><p>Fine. If some philosopher wants to argue that science has given us some nifty gadgets but does not move us one iota closer to any interesting <i>truth</i> about the world, just because science is uncertain, underdetermined, theory-laden, possibly in error, well, that's hardly <a href="https://plato.stanford.edu/entries/skepticism/" target="_blank">philosophically disreputable</a>. But I think such a philosopher should be consistent: they should reject arguments from science for positions they like just as vehemently as they reject them for positions they dislike.</p><p>I don't think Nathan J. Robinson is that kind of radical skeptic. But when he comes across an idea he doesn't like, he trots out the same <a href="https://www.currentaffairs.org/2020/09/we-dont-know-our-potential" target="_blank">anti-science rhetorical moves</a> that I think (hope!) he would vehemently denounce from a reactionary.</p><p>Robinson takes exception to Fredrik deBoer's recent book, <i>The Cult of Smart</i>. Robinson quotes deBoer's own summary:</p><blockquote>The existence and power of genetic dispositions in academic ability have been demonstrated by literally hundreds of high-quality studies that replicate each other and that find again and again that genetic influence can explain .5 – .8 of the variation in educational metrics within the population.<br /></blockquote><p>I'm probably qualified to evaluate this claim, but I'm honestly too lazy to do so. There are plenty of people whose job it is to evaluate this kind of claim and who could do a much better job than I ever could. But it is certainly possible to contest this claim on scientific grounds, and if the science doesn't hold up, too bad for deBoer and genetic academic ability. We'll never be certain, but if we don't abandon science on this topic, we'll be a lot more confident about the answer in twenty years.<br /></p><p>Robinson, however, does <i>everything but </i>contest this claim on scientific grounds. Instead, he constructs an elaborate screed that is nothing more than the idea that he doesn't <i>want</i> there to be genetic academic ability, the idea of genetic academic ability is <i>morally reprehensible</i>, therefore there <i>cannot</i> be any such thing.</p><p>Maybe that's a good strategy, at least for Robinson. Maybe abandoning scientific reasoning will bring about the kind of world that Robinson wants, and hey, use what works, <i>n'est ce pas</i>?</p><p>But I don't want <i>any </i>kind of world that abandons scientific reasoning. And Robinson's science denialism is as repugnant to me as climate change denialism, and has destroyed the credibility I had for <i>Current Affairs</i> as thoroughly as <a href="https://www.jacobinmag.com/2019/02/modern-monetary-theory-isnt-helping" target="_blank">Doug Henwood </a>destroyed my credibility for <i>Jacobin</i>. <br /></p><p></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com4tag:blogger.com,1999:blog-28755195.post-74368383494300561482020-09-19T05:46:00.001-06:002020-09-19T05:46:14.127-06:00Marxists should not dismiss MMT<p>I'm not saying that Marxists should become MMT <i>enthusiasts</i>. <span>Adam Booth is at least <a href="https://www.marxist.com/review-the-deficit-myth-two-wrongs-don-t-make-a-right.htm" target="_blank">partly correct</a>: MMT scholars are mostly not Marxists or socialists, and MMT by itself will not usher in a socialist utopia.</span></p><p><span>By definition, a truly "communist" society doesn't need anything remotely resembling money: the opportunity cost of producing and consuming the ordinary social product — food, shelter, clothing, communication, entertainment, etc. — is negligible and there is no need to carefully account for its use or ration its consumption.<br /></span></p><p><span>But any kind of "socialist" society will need something that looks very much like money. By definition, a "socialist" society must manage scarce resources, which means that society must carefully account for the opportunity cost of producing and consuming the social product to ensure that we produce what we want the most, and ration the consumption of the social product. Essentially, anything that does the job of accounting for and rationing the social product <i>is</i> money*.</span></p><p><span><span style="font-size: x-small;"><i> <span>*It's pointless to quibble over definitions, a task I have spent far too much time on. We could define the label </span></i><span>money
</span><i><span>as including something unique to capitalism, and then, of course,
socialists wouldn't use money. But there still would what we use to
account for and ration of social product, which we'll arbitrarily label as </span></i><span>gnippa</span><i><span>. Then the rest of this article is about </span></i><span>gnippa</span><i><span>.</span></i></span> <br /></span></p><p><span>People in a socialist society will have very different relations to money than people in a capitalist society. Socialists will use and think about money differently than capitalists use and think about money, but whatever those relations, so long as they account for and ration the social product, they will have some relations to money.</span></p><p><span>There are two reasons I think Marxists should pay attention to MMT. The first is that at least initially, a socialists society must actually manage money. I can't imagine any benefit for a socialist society to <i>not</i> account for the social product, and try to ration access without using numbers. Once we start slapping numbers on the social product and use those numbers to ration access to the social product, we have what is essentially money. And if we're using money, we need theories about how it works.</span></p><p><span>And just as capitalist scientists can come up with good theories about how electrons, viruses, cows, and ecosystems work, capitalist economists can come up with good theories about how money works, and how to manage the accounting and rationing of the social product.</span></p><p><span>As an economist in a capitalist society, I understand that most of my colleagues spend most of their time just providing academic support for capitalist ideology, a task I don't really endorse, but there is a little truth, mostly independent of ideology, in there. And I think that MMT has some of that mostly ideology-independent truth.<br /></span></p><p><span>The second reason that I think Marxists should pay attention to MMT is that MMT explicitly challenges a critical capitalist myth: the myth that money itself is a scarce resource, and that to get what they want, the masses must <i>get </i>money from those who already <i>have </i>it. </span></p><p><span>If the capitalist class had all of the iron in storage, protected by armed guards, then regardless of our social structure, if we wanted to build stuff using iron, we would need to get the iron from those who had it, by persuasion or force. And because iron is really useful in making weapons, control over iron would give the capitalist class an enormous advantage in the exercise of force.</span></p><p><span>The capitalist class rules because it has control over money. So long as we buy the myth that money itself is a scarce resource, capitalists' control over money gives them as much or more power as they would have if they controlled all the iron. Even if 99% of the people wanted socialism, if the people believed that capitalists controlled a scarce resource they needed, then the capitalists can block socialism.</span></p><p><span>This myth has real bite. Margaret Thatcher supported her eleven-year rule with little more than the slogan, </span><span>"The trouble with Socialism is that eventually you run out of other people's money."But if money is <i>not</i> a scarce resource, then we cannot run out of anyone's money. </span></p><p><span>The Democratic party in the United States cannot implement even a hint of a progressive, much less a socialist, agenda just because they cannot imagine how they could pry the <i>money </i>out of rich people's hands. Worse, the Democratic electorate, as much as they might want a progressive agenda, falls for the myth that they <i>need </i>rich people's money, and they too cannot imagine how to get at that money, so they don't demand that the party attempt the impossible.<br /></span></p><p>MMT proponents directly challenge the myth of the scarcity of money. Whether or not they realize it, they are fundamentally <i>subverting</i> a fundamental myth of capitalism, really in the same sense that Christian scholars who challenge the historicity of the resurrection fundamentally subvert a fundamental myth of Christianity. </p><p>Capitalism dominates today not just because capitalists successfully argue that capitalism is <i>better</i>, but because capitalism is <i>true</i>, that any sacrifices or privation the people must suffer under capitalism are imposed not by the capitalist system, but by nature: there is only so much <i>money</i> to go around, and if there isn't enough <i>money</i>, we can't get what we want, regardless of the availability of other resources.<br /></p><p>So no, MMT is not itself socialist, and a simple restructuring of the Treasury and Fed around MMT theories will not by itself bring about a socialist society. However, MMT subverts a fundamental myth that supports capitalism, and it behooves all anti-capitalists to endorse that subversion.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-38064340438539464642020-09-07T04:25:00.001-06:002020-09-07T04:25:11.700-06:00Opinion: Detroit accountant shows that opinions built on ignorance come crashing down<a href="https://barefootbum.blogspot.com/search/label/the%20stupid%20it%20burns" title="see more burning stupidity!"><img align="right" alt="the stupid! it burns!" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbJPP4xmuffYbDP4HyRkmvbJPUSELtpqEf5vAaIG6uHcdYhsin9cBxzMlQwWGCaErzhB5ffeuU6o4chw2gc0mOspzIKkZbETtj4NPV7O2GrQuLlnlzo51WQP4vwsUGFnkduva8/s144/thestupiditburns.jpg" /></a><p>Richard Drumb <a href="https://www.detroitnews.com/story/opinion/2020/09/05/opinion-detroit-shows-economies-built-debt-come-crashing-down/5718524002/" target="_blank">disapproves of Modern Monetary Theory</a>. He pretty much trots out every moronic anti-MMT trope. </p><p>Drumb compares the federal government to the city of Detroit, but Detroit <i>cannot</i> create money, and the federal government does <i>nothing but</i> create the money it spends.</p><p>No one lends money to the federal government. Why would the government need to borrow money, which it creates? The government does not borrow; instead, it generously offers to pay people interest to take money out of circulation.</p><p>We have a lot of economic problems, and the federal government is doing a lot of harmful things. But a violating a non-existent budget constraint is not one of those problems.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-21203052255421685672020-08-29T03:50:00.000-06:002020-08-29T03:50:04.044-06:00Sayings<p> Curiosity killed the cat... but satisfaction brought it back.</p>
<p><s>Blood is thicker than water.</s> The blood of the covenant is thicker than the water of the womb.</p><p>Jack of all trades, master of none... but better than a master of one.</p><p>Great minds think alike... but fools rarely differ.</p><p>Birds of a feather flock together... until the cat comes.</p><p>The early bird catches the worm... but the second mouse gets the cheese.<br /></p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-14020635102012564112020-08-26T03:03:00.000-06:002020-08-26T03:03:04.760-06:00It's not the automation<p><a href="https://cheezburger.com/12363525/twitter-thread-star-trek-and-the-inhumanity-of-gig-economies" target="_blank"> Kind of a cute premise</a> by Frisco Uplink.<br /></p><p>Step 1, invoke <i>Star Trek, the Next Generation</i> episode, "The Measure of a Man" (S02E09), where Picard argues that Data should be considered sentient, because holding him non-sentient risks creating a permanent underclass of disposable exploitable labor.</p><p>Step 2, argue that non-sentient supervisory software a la Uber goes the other direction: the supervisory software allows us to treat gig workers such as Uber drivers as disposable exploitable labor. According to the author, "Gig workers are precarious not only because they lack benefits, but also because the everyday bedrock of their work is determined by a black box algorithm designed to extract maximum profit for a distant corporation. . . . Software perfectly shields the humans profiting from this one-sided equation from confronting the personal toll it takes" on their disposable workers.<br /></p><p>The author puts too much weight on the means, and the inversion fails. Indeed, TNG gets it exactly right. The decision to classify some beings as non-sentient is the critical act. Once we have decided that some beings are non-sentient, we'll find some means or another — lords of the manor, colonial administrators, overseers, supervisors, software — to efficiently exploit them. </p><p>The bosses have <i>always</i> shielded themselves from the human consequences of their exploitation, and this alienation long preceded capitalism, although capitalism has refined alienation to its purest state (at least so far).</p><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-62125249083274272462020-08-04T04:40:00.003-06:002020-08-04T04:40:44.523-06:00#WorkersLivesMatter<div>Standing on one foot, <b>the government acts in the workers' interests</b>, that is the entirety of socialism, and the rest is its interpretation.</div><div><br /></div><div>Why the <i>workers' </i>interests? Why not humanity's interests? Everyone's interests?</div><div><br /></div><div>In part, the reasoning is, I think, along the same lines as #BlackLivesMatter. The intent of this slogan is not that <i>only</i> Black lives matter. Instead, everyone already agrees that White lives matter, but no small few seem to believe that Black lives do <i>not </i>matter. White people do not need a political movement to protect their lives because their lives are already protected. Black people do need a political movement because their lives are presently not protected by law and custom.</div><div><br /></div><div>Similarly with socialism, at least in part: all humanity does matter, but billionaires and their supporters and enablers do not need a political movement to get the government to act in their interests. The government already acts in interests of the billionaires, but acts against workers' interests.</div><div><br /></div><div>But in part, socialism is dissimilar to BLM. I hold as an article of faith that white people's interests are not <i>fundamentally </i>opposed to black people's interests, however presently entrenched the opposition. In contrast, billionaires' interests <i>are </i>fundamentally opposed to workers' interests. The government cannot act in workers' interests without acting against billionaires' interests. The only final resolution to the conflict is to eliminate the billionaires.<br /></div><div><br /></div><div>Happily, it is at least theoretically possible to eliminate the billionaires without killing anyone: we need only take away their money, not their lives. The billionaires might fight to the death to preserve their power and privilege, but that's their choice, not ours.</div><div><br /></div><div><i>A note on capitalization: I use the capitalized terms </i>White <i>and </i>Black<i> to denote socially constructed racialization. In this sense, White interests are fundamentally opposed to Black interests. I use the uncapitalized terms </i>white <i>and </i>black<i> to denote the physical characteristics that we usually use to socially construct race. I personally am white, but I do not see myself (or I do my best to not see myself) as White. Also, the social construction is not symmetric: Whiteness is intrinsically racist, but Blackness is not, because Blackness is a </i>response <i>to White racism.</i><br /></div><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-619560305288554222020-07-22T04:45:00.003-06:002020-07-22T04:45:54.606-06:00Breakup sex?In <a href="https://www.interfluidity.com/v2/7592.html">Breakup sex</a>, Steve Randy Waldman makes a curious argument with a colorful metaphor. Progressives' and socialists' "current relationship with the Democratic Party is intolerable." But what choice do we have? Vote for a presumably intolerable Joe Biden, or allow Trump to win. Waldman thinks he as a way out of this terrible dilemma. His answer: vote for Biden and hope things someday improve.<br />
<br />
Waldman's first idea is instead of <i>individually</i> deciding whether or not to vote for a Democratic party candidate, we create a social democratic political party which could <i>collectively</i> make the decision to support or withhold votes from a Democratic candidate.<br />
<br />
Well, duh. The problem is that we already have <a href="https://en.wikipedia.org/wiki/List_of_democratic_socialist_parties_and_organizations">several of these organizations</a>, including the <a href="https://www.dsausa.org/">Democratic Socialists of America</a>, the <a href="https://www.gp.org/">Green party</a>, and the <a href="https://workingfamilies.org/">Working Families party</a>. These alternative parties are not working now, and there's no reason to believe they will have any effect on the Democratic party in the future.<br />
<br />
Of course a big element is that if progressives were to make a collective decision to withhold votes from a Democratic party candidate, Joe Biden is pretty near the top of the list. (Bloomberg might take the number one spot, but not even the Democratic party elite could stand him.) And the Democratic candidates just keep getting worse. Still, even collectively, the argument against dividing the anti-fascist vote still holds. Either the DSA/GP/WFP etc. endorse fascist-lite Biden, or they allow full-on fascist Trump to win. And why will the argument be any different in four or eight years?<br />
<br />
Waldman's better idea is to get rid of plurality voting. No shit, Sherlock. Of course, the <i>only</i> reason the Democratic party wins any elections at all is precisely because plurality voting forces progressives to vote for shitty Democrats instead of even shittier Republicans. I don't think the Democratic party or any of its elected representatives will put plurality voting on the table.<br />
<br />
We can't escape the death spiral anymore; just voting is not going to change that. We're either going to end up with a fascist state or complete collapse. Both are scary.<br />
<br />
Oh, and literal breakup sex is almost always a Bad Idea.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-74680085530408998562020-07-19T05:24:00.001-06:002020-07-19T05:24:50.215-06:00Blame the DemocratsIn <a href="http://inthesetimes.com/article/22662/covid-19-coronavirus-unemployment-eviction-healthcare-united-states">There Is No Plan (For You)</a>, Hamilton Nolan gets the antecedent right: The U.S. federal government at best just doesn't care about the economic suffering the working class (an a fair fraction of the middle class) is experiencing now and will only get worse as the initial responses expire. At worst, the government, firmly in the control of the billionaire class, sees this suffering as beneficial, increasing the power of the billionaire class and eliminating the power of the working class to resist its descent into near-slavery.<br />
<br />
But he misses the conclusion. Nolan claims we should blame the Republican party. Yes, we should blame the Republicans, but only in the trivial sense that the shark does indeed deserve blame for eating swimmers. The Republican party since the 1980s has been fairly upfront that it serves the interests of the billionaire class, and why shouldn't they? The billionaire class pays their salaries.<br />
<br />
The real blame should go to the <i>Democratic</i> party, for failing to protect the country, and the working class, from the openly predatory Republicans. In just the same sense, the real villain in <i>Jaws</i> (1975) is not the shark, who is just acting according to its nature, but Mayor Vaughn (Murray Hamilton) who not only fails but actively interferes with the effort to protect the citizens of Amity.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-30577676082469705182020-07-14T04:14:00.000-06:002020-07-14T04:14:03.444-06:00The Pandemic and the Democratic PartyThe Democratic party should be screaming at the TOP OF THEIR LUNGS against Trump's and Republican governors' mismanagement of the pandemic response. They should be proposing bills, even if the Republican legislators block them and executives veto them. They should be filing lawsuits in every available court. They should be aggressively organizing whatever protests can be safely conducted during the pandemic. They should be in the news media EVERY DAY with op-eds and articles saying that this or that <i>must be done</i> and must be done <i>right fucking NOW</i> to control the pandemic.<br />
<br />
And, as a major political party, they should have the organizational ability to do all of the above.<br />
<br />
The Democratic Party should do all of the above because it is their patriotic duty to do so. I'm not a big fan of patriotism, but if anyone has a patriotic obligation, a major political party that (supposedly) wants to govern is at the top of the list.<br />
<br />
More importantly, the Democratic Party should do all of the above because it would be incredibly politically successful. They could, if they chose, completely destroy the Republican Party, and secure decades of Democratic Party governance. Machiavelli is spinning in his grave at the Democrats' basic political ineffectuality.<br />
<br />
(All of the above applies also to the mounting protests against egregious police violence.)<br />
<br />
It's not like I'm some great political genius, and it's not like the Democratic Party employs only exceptionally stupid people to enact its political agenda. This is not rocket science or brain surgery.<br />
<br />
Instead, the Democratic party has decided to just let Trump and the Republicans do their thing and kibbutz from the sidelines, letting the Republicans twist in the wind. Unfortunately, it leaves hundreds of millions of Americans twisting in the wind.<br />
<br />
This strategy might just win them the Presidency in 2020, even with all of Biden's handicaps. But it won't win them a veto- or filibuster-proof majority in the Senate, and it won't destroy the Republican party. Instead, it will leave the Republicans strong enough to resist the Democratic party agenda in the 20s.<br />
<br />
It might be that the Democratic party really is that incompetent or stupid: Hanlon's razor, <i>n'est ce pas</i>? Or it might be that part of the Democratic party's goals is the preservation of the Republican party, because the Democrats' ideology and policy considerably overlaps the Republicans: the Democrats cannot destroy the Republican party without abandoning the overlap. Either way, stupidity or malice, the Democratic party refuses to aggressively further the interests of the majority of the American people.<br />
<br />
But I think it is malice: the Democratic and Republican parties both actively endorse the power of the billionaires. <br />
<br />
The billionaires at best do not care about — and at worst approve of — the deaths of millions of working Americans and the permanent damage tens of millions more have and will suffer. <br />
<br />
Therefore, the Democratic party does not care about these deaths and suffering, except that they make Trump look bad.<br />
<br />
If Biden wins, he will at best have a narrow majority in the Senate. The pandemic will still be raging in the U.S., and the economic effects will start spiraling out of control.<br />
<br />
I predict that the Biden administration will undertake a few token and largely ineffectual measures to address both the health and economic effects of the pandemic, not out of any real concern for American workers, but to establish a trivial differentiation from the Republican regime. Otherwise, the Biden administration — like the Obama administration — will continue to transfer wealth and political power to the billionaires. A continuing pandemic <i>helps</i> that effort, so the Biden administration will not take effective measures against it.<br />
<br />
Regardless of who wins, the next four years are going to be a real shitshow.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-89876054374988461462020-07-10T13:12:00.003-06:002020-07-10T13:16:12.021-06:00Quiggen on MMTJohn Quiggen is awesome. His book, <i>Economics in <s>One</s> <u>Two</u> Lesson<u>s</u></i> should, I think, be required reading for everyone (and I assign it for extra credit in my Principles of Macroeconomics classes). But his recent post, <a href="https://crookedtimber.org/2020/07/09/the-general-theory-and-the-special-theories/">The General Theory and the Special Theories</a>, shows that he doesn't quite get Modern Monetary Theory. Or, at least, he doesn't get it in the same way I do.<br />
<br />
I am not any kind of "official" spokesbeing for MMT. I don't have a PhD and I don't publish. I'm not affiliated with the Levy Institute or UMKC. I've never met or corresponded with Kelton, Mitchell, Mosler, Tcherneva, Wray, etc. <br />
<br />
I have, however, read a lot of the MMT literature, both peer-reviewed and popular. And I have a Master's degree in economics, and I teach undergraduate economics, so I'm not entirely illiterate in economics. The best I can do is put my interpretation of MMT alongside Quiggen's.<br />
<br />
Quiggen claims that "Modern Monetary Theory (MMT) is, in essence, based on the assumption that the economy is always in what Keynes called a 'liquidity trap'"; in other words, it applies only under special circumstances, when the "natural" rate of interest is below the zero lower bound.<br />
<br />
I disagree. Modern Monetary Theory is, in essence, based on the observation that a sovereign-currency issuing government <i>creates</i> currency, the foundation of the social permission to allocate real resources. Therefore, the government is not required to <i>obtain</i> currency (or money) from those who already have it to get the social permission to allocate resources. The government's social permission both to allocate resources and to manage the money system comes from its political legitimacy.<br />
<br />
More technically, MMT scholars conclude (not assume) that monetary policy is never an effective method to employ unused resources. Mainstream Keynesian economists generally believe that monetary policy is ineffective only in a "liquidity trap" (where the real interest rate "wants" to be negative), so this confusion is perhaps understandable. But Quiggen's assertion and the actual MMT position are different.<br />
<br />
Quiggen complains that "The problem with this special theory is that a successful application implies destroying the conditions under which it works. Once the economy reaches full employment, any increase in public expenditure requires a corresponding reduction in private expenditure." Well, yes, and MMT advocates always add this proviso literally in the same (or next) breath as the assertion that well-targeted fiscal policy can reach full employment.<br />
<br />
Quiggen nitpicks that "MMT advocates, like Stephanie Kelton kind-of admit" that progressive taxation is necessary to reduce private expenditure, "but continuously seek to dodge the point." Maybe Quiggen kind-of has a point, and maybe MMT advocates should emphasize that really big infrastructure projects such as the Green New Deal will require increased taxes to distribute the necessary reduction in real private consumption. I honestly don't know what specific policy positions MMT advocates should emphasize; I'm not at all a specialist in public policy debate. However, the right mix of tools to manage private consumption versus inflation seems to me more like implementation details than deep theoretical issues.<br />
<br />
Quiggen states that: <blockquote>MMT advocates Nersiyan and Wray* suggest that the Green New Deal can be financed without “taxing the rich” . . . relying instead on “well-targeted taxes, wage and price controls, rationing, and voluntary saving”</blockquote>But this interpretation misses a key theoretical point about MMT. MMT advocates argue that large public works programs such as Green New Deal will necessarily be <i>financed</i> the way all government spending is financed: by creating the currency. <i>Financing</i>, i.e. getting the money, isn't ever a problem for the government; the problem is fairly distributing the opportunity cost of using money creation to divert real resources, with inflation (perhaps) the most problematic way of distributing opportunity cost.<br />
<br />
<i>Quiggen does not include a link; presumably he's referring to <a href="http://levyinstitute.org/pubs/wp_931.pdf">How to Pay for the Green New Deal</a>.</i><br />
<br />
And I honestly don't know whether households in top decile or percentile even use as many resources as a huge public spending program such as the Green New Deal would require, even if we reduce their consumption to the 20th percentile. I'm pretty sure we cannot provide universal health care just by reducing the real consumption of the ultra rich; we cannot return <i>all</i> the purchasing power middle-income households already forego by paying private insurance companies.<br />
<br />
Other than quibbles about the gory details about optimal tax policy, I really don't understand why Quiggen seems to dislike MMT at a theoretical level.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-11601994837778837442020-07-04T06:30:00.002-06:002020-07-04T06:32:27.949-06:00The fundamental problem with MMTRobert P. Murphy has a mostly negative <a
href="https://seekingalpha.com/article/4355605-review-of-stephanie-keltons-deficit-myth"
>review of Stephanie Kelton's <i>The Deficit Myth</i></a
>. Murphy appears to be a member of the <a href="https://seekingalpha.com/author/mises-institute#regular_articles"
>Mises Institute</a
>, so I assume he believes that the government cannot do <i>anything</i> good, other than to protect the property of the wealthy. Even before reading, I was pretty sure he would disapprove in principle of the whole MMT project of making it easier for the government provide for social welfare. Still, Murphy avoids the <i>OMG! hyperinflation</i> hysteria so common to vulgar critics of MMT, and ideological bias is no guarantee of error, so I want to look at his criticism in more detail. <br />
<br />
Murphy presents a laundry list of mostly unconnected objections to MMT, so I'll just present a corresponding list of rebuttals over at least a couple of posts, perhaps more. <br />
<br />
<b>The Fundamental Problem of MMT</b> <br />
<br />
Murphy begins his objections by stating MMT's "fundamental problem": <blockquote>regardless of what happens to the "price level," monetary inflation transfers real resources away from the private sector and into the hands of political officials. If a government project is deemed unaffordable according to conventional accounting, then it should also be denied funding via the printing press.</blockquote>I'm still really struggling to understand this objection. Clearly, Murphy thinks that monetary inflation is something different from a general increase in the price level, the usual definition of inflation. But I don't know what that is. (Murphy kind of expands on the point below.) Presumably, because MMT is all about the government creating currency as needed, I think Murphy considers the creation of additional currency by itself to constitute monetary inflation. <br />
<br />
Now it is definitely true that when the government creates money <i>to purchase goods and services from the population</i>, it is transferring real resources from the private sector to the government. That's pretty much the <i>whole point</i> of a government, and what governments have been doing for about 7,000 years. I get it, Libertarians are completely against governments except to protect their own privilege, but this objection seems misplaced and has nothing to do with MMT per se. <br />
<br />
Murphy continues with another opaque objection: "If a government project is deemed unaffordable according to conventional accounting, then it should also be denied funding via the printing press." But what does Murphy mean by "unaffordable" and by "conventional accounting"? Affordability precedes accounting: spending is affordable if a firm or household can <i>get</i> the money; once it has the money, firms and households <i>account for</i> how they spend it. But where does the money that firms and households need to get ultimately come from? Well, in every large economy since 1971, the government <i>creates</i> the money*. <i>All</i> government spending is "funded" by created money. Although MMT scholars are exceptional in that they don't try to <i>pretend</i> that governments don't create money, this objection has nothing to do with MMT. Libertarians might pine for a return to the gold standard, but the world abandoned the gold standard because it just doesn't work. Go back 50 years and argue with Richard Nixon, not Stephanie Kelton. <br />
<br />
<i>*The Eurozone is a Hot Mess and has suffered several financial crises precisely because the European Central Bank is </i>not<i> part of any national government.</i> <br />
<br />
I will concede one point to Murphy: if the government wants to appropriate real resources away from private production, it should ensure that the citizens believe that benefit of the government spending exceeds the benefit of alternative private employment of those resources: to avoid price inflation, the government should collect enough taxes (after, of course, it spends the money) to reduce private demand by as much as it reduced private production. But every MMT scholar agrees with this concession. The whole point of MMT is about how to employ <i>unused</i> resources, i.e. available labor <i>not</i> employed by the private sector. <br />
<br />
Murphy expands a bit, presumably on "monetary inflation". Government spending to employ real resources increases the price level. If the price level would have otherwised decreased, so that spending keeps the price level stable, then those with financial assets are poorer than they would have been had the government permitted deflation. <br />
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The easiest rebuttal is simply: yes, but so what? That's how the money system works. Instead of permitting deflation, investors increase their real wealth by collecting interest, which requires increasing the money supply. We might have chosen to keep the money supply constant and let price levels decline instead, but we didn't; which method is correct is beyond the scope of this post. Regardless, investors can't have it both ways: investors cannot be both entitled to interest, increasing their real wealth holding the price level constant, <i>and</i> entitled them a decrease in the price level, increasing their real wealth holding the money supply constant. <br />
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But it also matters <i>why</i> the price level decreases. There are two ways the price level can decrease. The price level will decrease if real production increases holding the money supply constant. That's the trade-off above: presently, the government increases the money supply, supplying all holders of financial assets with interest. However, the price level can decrease when real output <i>decreases</i>. In this case, an increase in real wealth for holders of financial assets is at best illusory. If financial asset holders were to increase their consumption, that spending would simply drive prices back up. Even worse, if the decrease in real production were to become permanent (as equipment rusts and workers forget their skills), then an attempt to convert financial assets to consumption will increase the price level <i>above</i> its original point, causing a <i>decrease</i> in asset holders' real wealth. <br />
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Murphy argues directly against employing unused resources at all. Murphy cites Mises' malinvestment argument: unused capacity is the result of earlier bad investments; employing that unused capacity will just perpetuate the bad investments. If, for example, we have a thousand factories and a million workers making Pet Rocks that nobody wants anymore, it's a pointless waste of real resources for the government to print the money to keep the Pet Rock factories operating and employing those workers. MMT theorist agree that the Pet Rock factories should not operate (and investors would lose financial claims to their revenue), but what about the workers? <br />
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Even taking the malinvestment theory at face value, what do we do with the million workers? We have four choices: pay them to continue to make Pet Rocks, let them starve and die, pay them while they're not working, or pay them to do something else useful. In theory, the private sector should be able to pay them to do something else useful, probably building more factories for products that people do want. Not that Libertarians care much about evidence, but the evidence shows that's not what happens in real life. Instead, if we abandon too many bad investments at once, those workers are not reaborbed into the workforce. Even worse, the workers that provided the newly unemployed workers with consumer goods also leave the private labor force. We end up losing useful productivity for years and sometimes decades. <br />
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Murphy continues with some more MMT-specific objections. I'll cover those in a later post.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-75103602490067371562020-06-22T05:35:00.002-06:002020-06-30T03:46:02.165-06:00Content-free criticismThe Deseret News Editorial Board believes that <a href="https://www.deseret.com/opinion/2020/6/20/21297284/washington-deficit-covid-19-pandemic-stimulus-national-debt">Washington’s deficit spending is dangerous</a>. However, their criticism is just that heterodox economics is heterodox.<br />
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Their key point quotes Fed Chair Jerome Powell: "'The United States federal budget has been on an unsustainable path for years now,' he said, adding 'the debt is growing faster than the economy, so debt-to-GDP is rising. That is, by definition, unsustainable.'"<br />
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But why should a <i>present</i> rise in debt-to-GDP during a severe economic crisis imply that debt-to-GDP must rise <i>forever</i>? If I heat my house in the winter, should I assume that I must necessarily run the furnace in the summer? If I incur \$300,000 debt this year to buy a house, should I assume that I will incur \$300,000 of debt every year for the rest of my life?<br />
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Of course, the board does not understand MMT or the operations of the federal government: <blockquote>Interest on the debt is now \$385 billion. This is money that must be paid through taxes before the government can begin funding necessary programs. It also is money that otherwise could be in private hands, funding businesses and innovations that create jobs.</blockquote>But these assertions are wrong. <br />
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First, interest on outstanding government securities does not need to be paid specifically through taxes. Taxes do not fund <i>any</i> government spending in the same way that income or revenue funds households' or firms' spending. The government spends what it chooses to spend, on purchases and interest payments, and <i>then</i> collects taxes. <br />
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Second, the government has <i>chosen</i> pay \$385 billion on interest payments; the government could, if it wished, choose to pay any amount, including \$0, on interest payments: the government, not the public, sets the interest rate on government securities.<br />
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Third, of course, the money that the government pays in interest <i>goes to</i> private hands, where it could, if the private sector wished, fund "businesses and innovations that create jobs."<br />
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The board also claims that "fending off a much more damaging fiscal day of reckoning, in which the world loses faith in the dollar, will take hard work and sustained effort." But why would the world lose faith in the dollar? Why should we even care if the world loses faith in the dollar? Literally, the worst that could happen is that the world starts using its dollars to buy stuff from the U.S., which would increase exports and GDP, hardly a catastrophe.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-24878574822801109682020-06-17T18:42:00.001-06:002020-06-17T18:42:37.571-06:00Blue lives matter!https://t.co/IcudsNfVLY<br />
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Cops are making themselves objects of ridicule.<br />
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Fucking snowflakes with guns, bad tempers, and no morals.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-92059994901210734242020-06-10T03:45:00.000-06:002020-06-10T03:45:31.443-06:00Blue lives matter<iframe width="500" height="281" src="https://www.youtube.com/embed/K5CCUdu7xFI" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-89473047818709953952020-06-09T19:18:00.001-06:002020-06-09T19:19:11.301-06:00What a criticism of MMT lacksPerhaps surprisingly, Daniel Tenreiro's criticism of Modern Monetary Theory, "<a href="https://www.nationalreview.com/2020/06/what-the-deficit-myth-lacks/">What <i>The Deficit Myth</i> Lacks</a>," at least avoids the usual hysterical bad-faith anti-MMT propaganda: Tenreiro does not froth at the mouth screaming <i>hyperinflation!</i> and <i>Venezuela</i>. Indeed, Tenriero grants MMT's most important claim: the United States can presently use government spending to use idle productive resources. However, seems to understand neither the basics of MMT nor basic economic theory.<br />
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Tenreiro observes that MMT (following Keynes) prescribes government spending when the economy is below full employment and MMT predicts that government spending will cause inflationary only when the economy is at (or above) full employment. However, these theories do not simply restate the <a href="https://en.wikipedia.org/wiki/Phillips_curve">Phillips Curve</a>; more over, modern theory has not thoroughly undermined the Phillips Curve.<br />
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We can use the Phillips Curve to say that <i>if</i> unemployment is above the "natural rate" (momentarily ignoring the political choices embedded in the natural rate of unemployment) <i>and</i> inflation is below the corresponding natural rate, then rather than shifting the Phillips Curve, government spending should just move both unemployment and inflation to their natural rates. Indeed, since the GFC, most capitalist economies have seen both too-high unemployment and too-low inflation, indicating that the government can indeed spend extra to use idle productive resources, i.e. labor and existing industrial capacity. Such spending is inflationary <i>by design</i>: a little inflation is a Good Thing. <br />
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It is only when unemployment is at or below the natural rate, indicating that the private economy (and ordinary government spending) is using all available labor, that government stimulus spending will crowd out private economic activity. This crowding out causes the Phillips curve to shift outwards, causing inflation with no corresponding increase in long-run unemployment, rather than causing movement along the curve to equilibrium.<br />
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Tenreiro mentions the Job Guarantee, an important and perhaps intrinsic MMT policy prescription. His sarcasm aside (the Job Guarantee does not "solve[] the economy"), he correctly states the MMT position: the Job Guarantee will "spur economic growth by employing workers who would <i>otherwise be idle</i> [emphasis added]." The qualification is critical, but Tenreiro perhaps does not grasp its implication.<br />
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Tenreiro does not appear to understand ECON 101 national accounting nor the usual rationale for government spending. Tenreiro's complaint here is that the Job Guarantee "would have a negligible effect on output, because by definition it would employ workers in the production of goods and services that private firms consciously avoid." Basic national accounting assumes that government spending counts directly to output: it's the $G$ in $Y=C+I+G+(X-M)$.* Tenreiro's deeper fallacy is that <i>all</i> government spending — roads, bridges, schools, police, the military — is <i>by definition</i> useless: if it were useful, private investors would find it profitable. There's nothing about MMT or the Job Guarantee that's any different from any other government spending.<br />
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<i>*In English, output (Y) equals the sum of consumption (C), investment (I), government (G) and net exports (X—M)</i><br />
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Tenreiro shows his disdain for public goods with the usual conservative contempt for alternative "clean" energy. But of course alternative energy hasn't "flopped". It's doing quite well, and the Germans and Chinese are killing us in the sector. The U.S. is lagging behind because it's actually <i>productive</i>, and there's no way to use alternative energy to loot American consumers. More importantly, the job guarantee's primary role would be not in developing but <i>converting</i> the current electricity, heating, and transportation infrastructure to methods that won't kill us all from global warming. Again, ECON 101 (at least as I teach it) tells us that <a href="https://en.wikipedia.org/wiki/Public_good_(economics)">public goods</a> cannot generate profit in a free market because of the free-rider problem. It is worth repeating that the social value of governments providing public goods is <i>not</i> a feature unique to MMT; it's standard economics.<br />
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Finally, Tenreiro absurdly objects that MMT isn't what <i>he</i> wants it to be. Tenriero wants a supply-side theory of long-run economic growth; MMT is a demand-side theory of short-run utilization of idle resources. True, MMT fails to address supply-side economics, nor does it promise to do away with war, disease, famine, death, mopery on the high seas, nor the heartbreak of psoriasis. So what? Criticize the theory for what it is, not what it does not even pretend to address.<div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0tag:blogger.com,1999:blog-28755195.post-22802127683990055532020-06-01T10:58:00.000-06:002020-06-01T10:58:26.009-06:00Trump on protests<a href="https://freethoughtblogs.com/pharyngula/files/2020/06/presidentrants.png" imageanchor="1" ><img border="0" src="https://freethoughtblogs.com/pharyngula/files/2020/06/presidentrants.png" width="415" height="800" data-original-width="415" data-original-height="800" /></a><div class="blogger-post-footer">From <a href="http://barefootbum.blogspot.com">The Barefoot Bum</a>.</div>Larry Hamelinhttp://www.blogger.com/profile/08788697573946266404noreply@blogger.com0