One of the things that modern monetary theory (MMT) obviously needs are good short “explicators” for people who already consider themselves experts in economics. (In addition to those trained as economists, this would include market practitioners – like me – who see themselves as macro experts.) There are many databases for people unfamiliar with economics and articles in academic journals – but not much in between. The new manual – Macroeconomics, by Mitchell, Wray and Watts – covers this ground, but it is long (a manual), yet introductory. As can be seen in a previous discussion of the book, it misses the mark.
I would obviously like to write such an explicator, but the need for brevity is the problem I face.
If the reader has come across this article and is looking for such an explanator, all I can offer is this: instead of looking for a thousand word summary of MMT, look for a thousand word summary of MMT views on a particular topic .
The fundamental problem of MMT explicators
It is very easy to understand why people who consider themselves economic experts but who are not MMT find it difficult to tackle it. It comes from a few directions.
The main stumbling block is that MMT is a school of thought (from within post-Keynesianism). In particular,
- Post-Keynesians reject a considerable part of the neoclassical economy. The implication is that for anyone with conventional training in economics, everything they know is allegedly false. This is obviously a message to be resisted, and the implications ignored. Even conversations are difficult because the definitions of the words used are different.
- Post-Keynesians reject the mathematical approaches used by the neoclassics. Over the years, I have encountered many neoclassicals who insist that MMT be expressed by a single mathematical model, which does not make much sense for MMT.
- The need for brevity in the explanations means that one cannot hope to cover the whole subject in an essay. For example, I have a little book (Understanding public finances) which is an introduction to the concepts of functional finance. However, we come up against the concept of inflation as the limit of fiscal policy. Guess what? Modern monetary theory follows the post-Keynesians by having a theory of inflation different from that of the neoclassics. This theory is another planned delivered. So we see that we are going to do adequate work on the two subjects in 1,000 words.
- If you put two economists in one room, you can very easily end up with three points of view on any subject. MMTs are not immune to this cultural trait.
- A final problem is that for most people, their contact with MMT is based on reading comments posted on the Internet by activists. There is an obvious discrepancy between such comments and what might be found in an academic journal.
Am I going to make a hit at writing one?
At some point, I hope to write an intermediate level MMT primer. How well I plan my books, my goal is that they are designed to be useful to people who fly over them. If I can get a thousand word introduction usable in MMT, it would be the first sections of the first chapter of the primer; the remaining text would support all the different assertions made in this introduction.
The question is when will I try. I’m just starting to edit the first volume of my recession book and I should get through to the final stages of publication in January. The question is whether volume two will be next, or if I’m working on something shorter in between. An MMT primer seems to be the wisest option from a business perspective, so I can pivot in that direction.
This will be my last entry here for 2019, so happy new year!
(c) Brian Romanchuk 2019