by Stephen John Lewis is not an MMTer, but he then goes on to explain why he thinks China uses an MMT type system and why they could outsmart the West with it. He's not saying that MMT doesn't work, but that it's too authoritarian. Does this mean I am switching my allegiance to supporting MMT? No, it very much does not. Firstly I worry about the concentration of power, second I worry about the ability of any governing authority to pick the necessary interventions well and third it’s noticeable that China is playing the economic game from a very different starting point than western economies. It’s talking about 6% growth rates as “a slowdown”, that sure seems to leave a lot of wiggle-room that other economies don’t have! Plus it has capital controls, has historically been willing to
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Stephen John Lewis is not an MMTer, but he then goes on to explain why he thinks China uses an MMT type system and why they could outsmart the West with it. He's not saying that MMT doesn't work, but that it's too authoritarian.
Does this mean I am switching my allegiance to supporting MMT? No, it very much does not. Firstly I worry about the concentration of power, second I worry about the ability of any governing authority to pick the necessary interventions well and third it’s noticeable that China is playing the economic game from a very different starting point than western economies. It’s talking about 6% growth rates as “a slowdown”, that sure seems to leave a lot of wiggle-room that other economies don’t have! Plus it has capital controls, has historically been willing to devalue its currency, etc, etc. I do think this means we need an answer to the Chinese economic model though. MMT is politically relevant today because of figures like Sanders and Ocasio-Cortez being ascendant in US politics but China is a much bigger deal than that. As it climbs into undisputed first place in the rankings of world economies, as is clearly inevitable, it’s surely going to be the case that the world will look to them and their economic system for guidance on how to effectively run an economy. That is far more powerful than any individual person, no matter how ascendant they may be in US politics today.
I could, of course, be entirely wrong. I’m not really qualified to say. We should be careful though about dismissing MMT as pseudo-science because although its advocates spout a lot of nonsense there is the whole other issue of the spectre of China’s influence on economic policymaking worldwide. It is going to grow enormously over the next century and if we have no alternative proposals then their system will surely win out.
Stephen John Richmond - How China uses MMT & how MMT is a description of ‘Minsky Socialism’.