by Summary:
What is the most appropriate entry point to the study of a monetary economy in which government is currency issuer? Is it “the market”? Is it the definition: total spending equals total income? Is it real exchange? Real production? Is it total output? Total employment? Total value? Distribution of income? The origin of profit? Price formation? Competition?I would answer “no” to all these suggestions. They are all important aspects of the subject, but they are all embedded in something else. They are all embedded in a social context that is put in place through collective action. In modern monetary economies, this collective action is conducted through currency-issuing government and its instrument, state money.The operation of markets requires various collective arrangements already to
Topics:
Mike Norman considers the following as important: Chartalism, MMT, monetary economics, state money
This could be interesting, too:
What is the most appropriate entry point to the study of a monetary economy in which government is currency issuer? Is it “the market”? Is it the definition: total spending equals total income? Is it real exchange? Real production? Is it total output? Total employment? Total value? Distribution of income? The origin of profit? Price formation? Competition?I would answer “no” to all these suggestions. They are all important aspects of the subject, but they are all embedded in something else. They are all embedded in a social context that is put in place through collective action. In modern monetary economies, this collective action is conducted through currency-issuing government and its instrument, state money.The operation of markets requires various collective arrangements already to
Topics:
Mike Norman considers the following as important: Chartalism, MMT, monetary economics, state money
This could be interesting, too:
Mike Norman writes Jared Bernstein, total idiot. You have to see this to believe it.
Steve Roth writes MMT and the Wealth of Nations, Revisited
Matias Vernengo writes On central bank independence, and Brazilian monetary policy
Michael Hudson writes International Trade and MMT with Keen, Hudson
What is the most appropriate entry point to the study of a monetary economy in which government is currency issuer? Is it “the market”? Is it the definition: total spending equals total income? Is it real exchange? Real production? Is it total output? Total employment? Total value? Distribution of income? The origin of profit? Price formation? Competition?
I would answer “no” to all these suggestions. They are all important aspects of the subject, but they are all embedded in something else. They are all embedded in a social context that is put in place through collective action. In modern monetary economies, this collective action is conducted through currency-issuing government and its instrument, state money.
The operation of markets requires various collective arrangements already to be in place, which can be summarized as the laws and regulations governing property rights and their transference, along with supportive social institutions.
Spending, in a modern economy, is monetary, and is received by somebody else as monetary income. But where does this “money” come from?The weakeness of conventional economic is that it assumes away the social basis for a modern economy, e.g., by beginning with the Robinson Crusoe model of barter exchange in Econ 101.
Modern economies are nothing like that.
Modern economies, even relatively ancient ones, presume an existing institutional basis, e.g., in law. Property, for example, is a legal matter. Law ariese out of custom. Even the most ancient socieites were regulated by custom.
There is no "natural" field in economics that is anything like the natural sciences. Presuming there is skews the investigation from the outset.
A small mistake in the beginning is a big one in the end, according to the Philosopher [Aristotle] in the first book of On the Heavens and the Earth. —Thomas Aquinas, De ente et essentiaheteconomist
State Monies are Fundamental to Modern Monetary Economies
Peter Cooper