by Summary:
MMT is a theory of empire. This is not to say that its advocates are imperialists. Rather, they are observers who note a reality that the post-colonial thinker has long understood – imperialists can run the world on whims and fictions. The question is ultimately, what are the merits of the whims. Should the US spend a trillion dollars invading a country of herdsmen, or should it build better hospitals, airports, and highways? MMT does not take a position on this; it merely states that the US can pursue either path indefinitely. As it is a technical assessment of empire, it does not offer the substance for the wretched of the earth, the citizens of the third world, to liberate themselves from the shackles of an unfair economic system. They must still borrow in the world’s reserve
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Mike Norman considers the following as important: MMT
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MMT is a theory of empire. This is not to say that its advocates are imperialists. Rather, they are observers who note a reality that the post-colonial thinker has long understood – imperialists can run the world on whims and fictions. The question is ultimately, what are the merits of the whims. Should the US spend a trillion dollars invading a country of herdsmen, or should it build better hospitals, airports, and highways? MMT does not take a position on this; it merely states that the US can pursue either path indefinitely. As it is a technical assessment of empire, it does not offer the substance for the wretched of the earth, the citizens of the third world, to liberate themselves from the shackles of an unfair economic system. They must still borrow in the world’s reserve
Topics:
Mike Norman considers the following as important: MMT
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
MMT is a theory of empire. This is not to say that its advocates are imperialists. Rather, they are observers who note a reality that the post-colonial thinker has long understood – imperialists can run the world on whims and fictions.
The question is ultimately, what are the merits of the whims. Should the US spend a trillion dollars invading a country of herdsmen, or should it build better hospitals, airports, and highways? MMT does not take a position on this; it merely states that the US can pursue either path indefinitely.
As it is a technical assessment of empire, it does not offer the substance for the wretched of the earth, the citizens of the third world, to liberate themselves from the shackles of an unfair economic system. They must still borrow in the world’s reserve currencies, and are therefore bound by the whims of their creditors....
Currency sovereignty implies that a nation issues its own state currency on which it has a monopoly and does not diminish or forfeit this monopoly by taking on obligations other than in its currency.
But many if not most nations do not enjoy currency sovereignty other than theoretically, since the world's business is conducted in reserve currencies, chiefly the USD. Moreover, oil is traded in USD.
Most countries are are neither autarkic nor self-sufficient in resources. They need to obtain vital resources from trade. Therefore, They have to either generate enough foreign currency through trade or else they must borrow in a foreign currency to settle in international markets. Only countries that are rich in natural resources are able to avoid the debt trap involved in the balance of payments. This results in neo-imperialism and neocolonialism as the concomitants of neoliberalism. "Liberal globalization" contains a contradiction.
The author is not condemning MMT for either creating this situation, or even abetting it. MMT analysis simply lays bare how the system works to create debt slaves internationally.
A further investigation of MMT analysis would show that this is also the case domestically in countries with reserve currencies owing to debt-based rentierism. Again, MMT is just describing the current system and its implications.
MMT analysis also shows, however, that it doesn't have to be be this way. Money is a legal construct rather than a natural object. Institutional arrangements are malleable.
Coronavirus and Modern Monetary Theory
Usman W. Chohan | Director for Economics and National Affairs at the Centre for Aerospace and Security Studies (CASS)