by The simple fact is that imports are real benefits, meaning real goods, for the importer and exports are real costs for the exporter, who exchanges real goods for financial goods ("money").That is to say, one party to the exchange obtains real resources in exchange for monetary payment. This implies that the party accepting the payment desires to save, however, temporarily in the currency in which the real goods are priced.Nothing else is claimed in saying that imports are real benefits and exports are real costs. One party, the importer, is preferring real resources and the other party, the exporter, is preferring financial resources.This entails many other conditions as Richard Murphy states. However, those conditions don't alter the truth of the simple statement that imports confer
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The simple fact is that imports are real benefits, meaning real goods, for the importer and exports are real costs for the exporter, who exchanges real goods for financial goods ("money").
That is to say, one party to the exchange obtains real resources in exchange for monetary payment. This implies that the party accepting the payment desires to save, however, temporarily in the currency in which the real goods are priced.
Nothing else is claimed in saying that imports are real benefits and exports are real costs. One party, the importer, is preferring real resources and the other party, the exporter, is preferring financial resources.
This entails many other conditions as Richard Murphy states. However, those conditions don't alter the truth of the simple statement that imports confer real benefits on the importer at the real cost of sacrificing the use other those real goods by the exporter. MMT economists have discussed this, and the job guarantee, for example, is partially addressed toward it. MMT economists have also pointed out that a currency sovereign has the fiscal space to create new opportunities for work though public investment.
The other conditions involved are contingent on a variety of factors and a simple statement regarding this is difficult to impossible to make in a general way.
For example, it may seem that the statement that imports are real benefits (only) at full employment is categorically true, but it is contingent. For example, the importation of real goods produced by low skilled labor may result in eventual substitution of capital for labor, which is now actually happening through automation and robotics.
The low skill labor formerly involved in tedious and repetitive factory work is in the process of transitioning to more suitable employment for the times. A well-designed job guarantee (guaranteed work opportunity at a living wage) would cushion this transition and facilitate it.
Some of the exported manufacture is beginning to "come home," but not the former factory jobs that are now obsolete. The new jobs are higher skill jobs involving "knowledge," this is, more labor power per unit of labor time, resulting in higher productivity through a combination of knowledge and "high" technology. Of course, this is not one for one, since capital in the form of technology is being substituted for labor, and labor requires more skills.
The labor that was idled by the initial job losses eventually transitions to new jobs in other areas. Think the transition from horses and oxen to automobiles, trucks, and tractors. A job guarantee would ease the transition, and public investment in R&D, education, and training would replace low skill with higher skills, or at least more suitable skills.
The hilarious thing about Richard Murphy's criticism of Bill Mitchell is that he criticizes Bill for not understanding economics.
Bill has said here is fundamentally economically mistaken. Why do I say that? I have, as usual, good reason.
First of all, this is an absurd abstraction from reality, which is about as bad as the worst of neoclassical economics. What Bill is doing is to assume that we barter. Quite extraordinarily, it would appear that he thinks that we trade without requirement for payment to be made in settlement. For someone promoting monetary theory, this is staggering.Richard Murphy is a public accountant and not an economist. He appears to be minimally acquainted with work of Bill Mitchell and the MMT economists, which renders his criticism nonsensically uninformed. But he apparently thinks he has the ability to understand economics better than a full professor of economics. ROFLMAO.
Tax Research UK
Why Bill Mitchell is simply wrong on modern monetary theory and imports and exports