It's a deliberately chameleon-esque "theory" that obfuscates its Keynesian roots with the massive dollops of economic jargon that every "explanation" of the theory you'll encounter describing it indulges in. The end result is that its incomprehensibility leads to people ascribing to it what they want it to be, slapping whatever label they want onto it - a "theory" that works like mayonnaise, something supposedly "good on anything" - for all political ideologies.
For neoliberals and soc dems, it's the perfect bandaid for the ails of contemporary capitalism; for some leftists, it's not only "compatible" with socialism but they'd argue that historical socialism actually "sleepwalked" through the precepts of MMT "unknowingly." This is why you'd see some online leftists on the likes of Hexbear and Reddit who are very vocal on their support of "MMT." Some of the other comments in this thread actually represent the typical argumentation pattern of "leftist MMT" where they travel back in time to historically backdate past socialist economic successes as "representative" of "MMT in practice."
The "leftist" argument for MMT is therefore unfalsifiable because any historical or contemporary socialist economic policy with sovereigntist characteristics and state involvement can be appropriated and claimed as demonstrating "MMT in action, if not in name" just like how some Western Marxist historians once tried to untenably label every mildly populist historical figure from the Roman Republic like Julius Caesar as "proto-Marxist." TL;DR, "leftist MMT" would claim it's a DLC to classical Marxist economics when in reality, it's the Keynesian competitor.
In practice, MMT is the modern reincarnation of the FDR New Deal snake oil, something meant to provide a backstop to the contradictions of contemporary capitalism and divert popular attention from the real alternative of socialism, just as how the original New Deal suppressed support for the socialist path. I've written my immense skepticism on it before but here's a proper Marxist critique:
This brings me to the third question: what is the aim of MMT? MMT does not touch on the important issues of the failure of capitalism to deliver social needs and the underlying exploitation of the many by the few. On these questions, MMT has nothing to say, and indeed different MMTers have different views. Most, if not all MMTers (like traditional Keynesians), want governments to intervene to meet social needs. Some even support socialist measures to replace the law of value and the capitalist mode of production; others (like Kelton) don’t. Kelton even insists that is not the point of MMT. She simply wants to show that it is a myth that the state cannot run up deficits without consequences. Again, this does not seem very new or radical – nor even correct in all circumstances.
[...] Where MMT does differ from Keynesian-type fiscal deficit spending is that its proponents see government deficits as permanent in order to drive the economy up and achieve full employment of resources. In this way, the state becomes the ‘employer of last resort’. Indeed, the MMT exponents claim that unemployment can be solved within capitalism. So there is no need to change the social formations based on private capital. Politicians and economists only need only realise that state spending ‘financed’ by money creation can sustain full employment.
[...] It seems that MMT eventually just boils down to offering a theory to justify unrestricted government spending to sustain and/or restore full employment. That’s its task, and no other. This is why it attracts support in the reformist left of the labour movement. But this apparent virtue of MMT hides its much greater vice as an obstacle for real change. MMT says nothing about why there are convulsions in capitalist accumulation. It has no policy for radical change in the social structure.
This is the most telling critique of MMT: that, because it fails to recognise the capitalist sector in its macro model of the circuit of money and instead only focuses on ‘the state’ and ‘the non-state’, it can tell us nothing about why and how there are regular slumps in production and investment in modern economies.
But the answer to unemployment or the end of crises does not lie in the simple recourse of issuing money, as MMT claims. MMT ignores or hides the social relations of exploitation of labour for profit. And by selling the snake oil of MMT instead, it misleads the labour movement away from fundamental change.
Very much agree, another way to approach the problem is by asking what exactly is an economy. Fundamentally, it's a system for ensuring that labor and resources are allocated to meet the needs of the people living in a particular society. Money is simply the mechanism that's used to direct the allocation.
From this perspective, what a government does when it issues currency is stimulate activity in a particular sector of the economy where that currency is allocated. For example, Chinese government starting to do investments into chip development is resulting in that sector of the economy growing. Similarly, when private spending and markets allocate funds towards some area of the economy then supply grows to meet that demand.
That's literally all this is, and obviously the government can issue as much currency as it wants, there's no fundamental problem here because all it's doing is directing the growth of the economy. Hence, as you point out, the issue isn't with the money supply but how that money is used. The problem we have under capitalism is with labor and resource allocation being driven primarily by the interests of the capital owning class. Their goal is to direct labor to grow their capital, with any social benefits being strictly incidental. This breaks the connection between the government issuing currency and that currency being used to direct labor in a productive way.
It's a deliberately chameleon-esque "theory" that obfuscates its Keynesian roots with the massive dollops of economic jargon that every "explanation" of the theory you'll encounter describing it indulges in. The end result is that its incomprehensibility leads to people ascribing to it what they want it to be, slapping whatever label they want onto it - a "theory" that works like mayonnaise, something supposedly "good on anything" - for all political ideologies.
For neoliberals and soc dems, it's the perfect bandaid for the ails of contemporary capitalism; for some leftists, it's not only "compatible" with socialism but they'd argue that historical socialism actually "sleepwalked" through the precepts of MMT "unknowingly." This is why you'd see some online leftists on the likes of Hexbear and Reddit who are very vocal on their support of "MMT." Some of the other comments in this thread actually represent the typical argumentation pattern of "leftist MMT" where they travel back in time to historically backdate past socialist economic successes as "representative" of "MMT in practice."
The "leftist" argument for MMT is therefore unfalsifiable because any historical or contemporary socialist economic policy with sovereigntist characteristics and state involvement can be appropriated and claimed as demonstrating "MMT in action, if not in name" just like how some Western Marxist historians once tried to untenably label every mildly populist historical figure from the Roman Republic like Julius Caesar as "proto-Marxist." TL;DR, "leftist MMT" would claim it's a DLC to classical Marxist economics when in reality, it's the Keynesian competitor.
In practice, MMT is the modern reincarnation of the FDR New Deal snake oil, something meant to provide a backstop to the contradictions of contemporary capitalism and divert popular attention from the real alternative of socialism, just as how the original New Deal suppressed support for the socialist path. I've written my immense skepticism on it before but here's a proper Marxist critique:
Very much agree, another way to approach the problem is by asking what exactly is an economy. Fundamentally, it's a system for ensuring that labor and resources are allocated to meet the needs of the people living in a particular society. Money is simply the mechanism that's used to direct the allocation.
From this perspective, what a government does when it issues currency is stimulate activity in a particular sector of the economy where that currency is allocated. For example, Chinese government starting to do investments into chip development is resulting in that sector of the economy growing. Similarly, when private spending and markets allocate funds towards some area of the economy then supply grows to meet that demand.
That's literally all this is, and obviously the government can issue as much currency as it wants, there's no fundamental problem here because all it's doing is directing the growth of the economy. Hence, as you point out, the issue isn't with the money supply but how that money is used. The problem we have under capitalism is with labor and resource allocation being driven primarily by the interests of the capital owning class. Their goal is to direct labor to grow their capital, with any social benefits being strictly incidental. This breaks the connection between the government issuing currency and that currency being used to direct labor in a productive way.
Mesopotamian Rulers allocating currency to their militaries directed their economy to grow supporting those enterprises. This stuff has deep roots
indeed
Honestly everyone should probably read the article you linked. Like holy shit, it goes into so much depth.