by Important. Here is the beginning of a debate over MMT and Marx, if Bill (and perhaps other MMT economists) take up the challenge. But I think Bill is much more acquainted with Marx than other MMT economists — excepting Peter Cooper, of course, but I am not sure how he would characterize himself. Hopefully, Peter will join in the debate at his blog (heteconomist.com), which is the premier site treating MMT and Marx.There are a lot of details in the post and I would like to hear an exchange over these issues among the relevant parties, that is economists familiar with both MMT and Marx, which I realize is probably only a few.Michael Roberts (as I understand him from a quick reading) claims that Marx hold that the the profit motive is the driver of capitalism and that Marx further held that
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There are a lot of details in the post and I would like to hear an exchange over these issues among the relevant parties, that is economists familiar with both MMT and Marx, which I realize is probably only a few.
Michael Roberts (as I understand him from a quick reading) claims that Marx hold that the the profit motive is the driver of capitalism and that Marx further held that investment drives profits. Therefore, he disputes the MMT (Keynesian) claim that effective demand drives profits since, in his view, effective demand depends on investment.
MMT points out that both firms and consumers also borrow on credit and credit is really the basis for circulation in a monetary production economy. Minsky showed that financial (credit) cycles drive the business cycles, introducing instability as credit issuance runs up against it the limit and the cycle climaxes in a debt crisis.
This is the dynamic that MMT addresses. It seems to me that MMT economists hold that the cycle can be smoothed and downturns ameliorated, but I don't think that they claim that the financial/business cycle can be eliminated.
I think that MMT economists, Marxians and other heterodox economists are close to being in the same page regarding the outcome of liberal economics on ecology and that only state interference can adequately approach the issues, which will necessitate changing the basic nature of economic liberalism one way or other in the direction of socialism. The only way to preserve a modicum of economic liberalism is by imposing true cost accounting that takes externality into account rigorously. Would that be enough? Not really, since there are other isuues.
There are the social consequences of rising inequality. Obviously, the only adequate answer to this is more socialism involving distributive justice aimed at producing common (distributive) prosperity as a public good and a necessity condition for social cohesion.
I am in basic agreement with Michael Roberts' main point, that "capitalism" as economic liberalism (laissez-faire) is the problem and there is no way to fix it and have it remain economic liberalism. This is a key fundamental in the paradox of liberalism, in which social, political and economic liberalism cannot be resolved. Either economic liberalism will dominant at the expense of social and political liberalism, or social and political liberalism will result on the imposition of socialism on capitalism.
This is happening in China, ironically, since China is not socially and economically liberal in the Western sense. But the Chinese government realizes that to stay in power it needs popular approval and adjust its policy based on public opinion, which it researches carefully. As a result the China government has the overwhelming approval of the populace, while the opposite is the case in the West.
However, it must also be noted that in the West, economic liberalism as laissez-faire is no longer the case, even though the principles are advocated. Rather, the reality now is neoliberalism, which is state capture by capital through institutional arrangement that class power is used to impose to its advantage. This is the basis issue facing the world today, since neoliberalism is joined at the hip with neo-imperialism and neocolonialism.
Michael Roberts Blog — blogging from a marxist economist
MMT and Marxist monetary theory – a reply to Bill Mitchell by a man with no name
Michael Roberts