Economic Update: Government Deficits; Why They Happen, Who Benefits From Them, and MMT
Richard Wolff mentions the printing of money occasionally, but he never squares that with the government supposedly needing to tax and/or borrow first before it can spend.
He spends the last two minutes talking about MMT, but not as a theory of fiat money; instead as a novel monetary policy proposed by “progressive-minded economists.”
Somewhere in there he also repeats the common fallacy that what banks lend is other people’s savings. They don’t. The money they lend is created out of thin air, and the “money multiplier” is a myth.
I’m just a technerd who’s never taken an economics course, and I grind my teeth every time this expert botches these fundamentals. Why Michael Hudson and Radhika Desai never push back on him when they do talks together is a mystery to me.
I would like to be able to say that Marxism encapsulates MMT without the liberal fluff, but unfortunately it depends on which Marxist you talk to.
And that’s why I bring up MMT in the first place: to introduce the aspects of MMT that I think are encapsulated by Marxism, or at least ought to be.
I think Capital III is where Marx gets into what money actually is, and I think he gets as far as distinguishing between the commodity value of the metal in a silver coin and value of the coin-as-money. So perhaps he gets close to explaining that ultimately, all money is fiat money, but not having read it yet, I can’t say.