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Are we entering an experiment in Modern Monetary Theory (MMT)?
Answer by ishiMay 12, 2020-3

I've been following some of the literature (and also blogs ) on MMT off and on for about 3 years. I sort of agree with Brad Delong (economic historian at UC Berkeley) that its 'warmed over keynesianism' (as noted in OP it it could also be called 'keynsianism on stilts'. (Unlike Keynes, MMT people say just keep printing money, all day, everyday since you can never run out. Although I mostly disagree with Niall Ferguson he pointed out this was tried in the past, and Ferguson argues in his first, and one reasonable book that it was this view that led to the collapse of the British Empire.)

MMT partly owes its creation to Arthur Laffer (of the 'laffer curve' under Reagen ('supply side economics') who argued that by cutting taxes (especially on the rich) the government raises more revenue due to economic growth---which in my view has been disproven by many mainstream economists (although Trump is following that policy).

MMT 's main founder is W Mosler --friend of Laffer--- is a wealthy hedge fund owner/manager who keeps his money off shore in tax free accounts. He more or less funded the 'economists' (eg R Wray of U Mo and S Kelton now in NYC ) who are MMT's main figure heads.

Neither has much of a background in quantitative economics---they are primarily economic historians. You won't find a single mathematical formula in most of their papers. (Instead you will find many discussions of 1800's economics --they remind me of many marxists and free market and libertarian economists who try to analyze the US or world economy of 2020 in terms of adam smith ('division of labor', 'the invisible hand', the person who makes a safety pin cooperating with someone who brings food from the farm in a horse and buggy) and marx (e.g. an example of someone exchanging 4 pounds or iron for 3 sacks of corn is supposed to explain silicon valley) .

My view is the main ideas or rationals behind MMT is to

1) stop taxing the rich (this is why they say taxes have no affect on the government budget --and there is a small element of truth in that --Mosler doesn't want to pay taxes--he says rather than take his money, government should just print more.)

2) 'help the poor' , ' people with no or low income', and the 'unemployed', by giving them a 'guaranteed job' paid for not with money from progressive taxes, but just printed by the govt. These jobs could be something like FDR's new deal , Sanders-AOC's green new deal, or they could be like indentured servitude on some billionaire's such as Mosler's plantation. (My impression is the MMT'ers like the plantation idea the best.)

MMTers are adamantly against a Universal basic Income---they feel it makes people feel better to 'work for a living' even if its on a plantation picking cotton than to just get 'free money' ---hedge fund managers have to work for their money (eg collect interest).

'Economists' like Wray and Kelton also work--they regurgitate ancient economic literature, relabel it as MMT, make podcasts, do TED talks, write blog posts, write papers in non-mathematical economic history journals , and become media stars. I don't view what they do as a very productive job.

Unfortunately mainstream economists' critiques of MMT (eg Krugman) come from a perspective which is equally flawed.

(I support a Universal Basic Income (uBI--not exactly the same as Unconditional basic income, or UBI, promoted by Yang , though the 2 can be made equivalent if viewed as a negative income tax---Hayek and Friedman) but unfortunately proponents of BI in general also have almost no quantitative analyses. Most of them just make general --but valid-- arguments that if people have a basic income they are less likely to go into a life of crime and can spend more time dealing with local issues--eg family, community improvement , etc. Studies have shown also that people with a BI actually work more than those without one---but they choose which jobs to take--and they keep them---if you are forced to work a job you don't like, you likely will quit very soon.)

The discussions around MMT, UBI or BI, and mainstream neoclassical economic theory are all ideologically biased. They all preach to their respective choirs and echo chambers--and they all have big 'megachurches' with devout followers.

Lant Pritchett's "smell test": is your impact evaluation asking questions that matter?

I was only commenting on the particular wording of the 'smell test' in devlopemntal economics---i use a smell test to decide if i need to throw food away which i try not to do, or wash clothes , or if somehow a dead mouse is in my apt --i leave mice alone but they are poisoned by what they eat or die of old age--i dont think they live very long--maybe 2 years

developmental economics (definately not my area) i associate with jeffrey sachs, william easterly, amartya sen, and partha dasgupta. one can add jagdish baghwati and more than i can remember. there are more recent ones. i just know these from books and articles. (there are math modelers, anti-globalization/neoliberalism activists, etc --they all have books and articles).

Effective Altruism and Free Riding

That article has a good reference list but these are mostly of historical interest . I do reccomend reading the article and looking at the references . (it might take 80,000 hours to read them all in full so i do not reccomend that --just read the abstracts , and if you want look at the intros, conclusions, scan main text --especially equations----one can say in 1 equation more than in 1000 words, but the equation has 1000 words behind it, and references. )

Michael Taylor's 1976 book 'the possibility of cooperation' discussed this theme, but he used a sort of outmoded game theoretic approach which has been mostly replaced by a different formalism (which derives from physics and theoretical and evolutionary biology--behavioral economics and Rawlsian utilitarianism or other variants doesn't come close to that formalism.)

The conclusion to the article does come to the correct conclusion. EA movement could easily just do the greatest good for the smallest number. In ancient europe the educated and better off classes barricaded themselves into forts, castles and mansions. There was the bubonic plague. But this in the long term in a sense saved many others in the future --created the 'enlightenment'.

I think with current modern knowledge that approach is unnecesary. i cannot wholeheartedly reccomend this group because they also have limited view of cooperation but they do have more currrent thought in this area. or

Are there good EA projects for helping with COVID-19? has a more recent study and discussion of 2 other studies at imperial college london and oxford. Science Magazine AAAS also has a whole issue (march 27) on topic. COVID-19 appears to be a real problem but time will tell. (My area has many scientists, but also many poor and uneducated people, so there are lots of 'conspiracy theories' floating around --'viruses of the mind' --there are academic papers on these as well, mostly written by physicists.)

My point 4 i actually view as the main one, unless you are actually developing vaccines in a laboratory or testing them in the field. I have done a tiny bit of lab biology and field biology as a student a but its not my area )

In that sense my comment was 'off topic'---i was talking about prevention, not cures. A term commonly used now is to avoid 'hot spots' --the temperature or incidence of the virus is not the same everywhere, so while it may seem biased, avoid the hot spots . You can say hi to your neighbor, but you cant hug them. may have more discussion that is more relevant to your post.

Free E-Book: Social Movements: An Introduction, 2nd Edition

On the same theme .

there was a free online copy and there may still be. its a collection of 100 essays by people associated with various social movements (some of which have been around for decades) mostly dealing with the global south, environmental issues and also ones relevant to 'developed countries' such as USA .

i think it overlaps with the Oxford handbook. both of these to me are like reading an encyclopedia or history book.

(There are more social movements than the 100 in the book, but they overlap alot, so in a sense even if the 'missing' movements are not in the book they are mostly implicity there. I think there may have been some favoritism into who was included in the book, and who was excluded.

Many of these 'movements' or groups are fairly short lived --they last for a few years and dissapear, often partly due to internal conflicts. )

I never joined any social movements except for the green party, and i no longer attend their events due to internal strife. These small groups tend to attract certain individuals who try to take them over and turn them into cults of personality, though they do it using the rhetoric of social justice, intersectionality, ecology, democracy, etc.

Jacobin magazine (now sort of affiliated with DSA and a big supporter of Bernie S., though it had its roots in ISO , and has had a sort of constantly shifting ideology ---they can't decide which form of socialism they prefer ) was among the groups involved in the local political or 'social movement' scene--sort of by mistake i get their magazine .

(it has interesting histories of leftist movements in USA and internationally--written by academics and grad students primarily (almost never in sciences), but some of it i view as redundant leftist drivel.) Its a younger version of the nation mag, and a high brow version of CPUSA (i've seen old copies of that) , with excellent production and graphics. Their articles are usually written by various academics affiliated with universities that range from fairly 'low level' city colleges to the ivy league. )

This book and the Oxford one are also relevant to a May 2019 discussion on the EA forum about 'leftist critiques of EA movement'---which i thought was fairly thorough. ( i looked at that partly since i'm 'self-quarantining'. My area is sort of on 'lockdown' , so i skim various math models of this issue, and then look at lighter stuff.)

The may 2019 discussion pointed out both criticisms of EA as well as its defenses. eg 'leftists' dislike the word 'charity'--it sounds paternalistic; and in the area i live, 'US imperialism' and 'capitalism' are sort of code or trigger words, or phrases, or rallying crys.

'Earning to give' does remind one of Andrew Carnegie (I had a relative who went to CMU which is a top school for AI research--carnegie and mellon gave their money away) , the Rockefellors (Rockefellor U), , the Sackler family (art gallerys, and credited in part for the US opiate epidemic) , and Henry Paulson (plans to donate his 4 Billion $ wealth to environmental causes which he earned on wall street. )

(I knew someone who made a fair amount of money on wall street, who also gave away a large fraction of it, but part of it was based on cigarette companies. He simply seperated his money making investment decisions from his values, so he invested in whatever was most profitable. And then he gave alot of that money away to good causes. He also didnt approve of smoking even though he invested in the companies. ).

(he was actually from a small town background, so didn't have a 'systems' point of view-he was just a good stock picker. I.e. he didn't notice he may have been 'stealing from the poor to get rich', and then acting as a kind of 'robin hood' to 'take from the rich and give to the poor'. (he also donated to bernie's 1st campaign against Hilary). )

I'm not really affiliated with any 'leftist movements' anymore (though i used to attend protests organized by many of these groups, which range from 'moderate DSA', green party, or 'progressive democratic ' groups , and environmentalist and anti-poverty groups , to ones with more 'radical views' (all kinds of socialists, anarchists, and others---many of whom did not get along with each other) .

However since i think i am familiar enough with many of these 'leftist' groups i would say for every criticism of EA one can make there is another one equal to that can be made of many of these groups.

(I actually view some of them as sort of modern versions of stalinists--i call them 'stalinists- lite'.

Just as i view the 'alt-right' as the 'lite' versions of nazis and kkk. (they don't dresss in white hoods and gowns anymore, or as storm troopers--they dress in khakis and suits and ties--look like college students or government buerocrats.

The stalinist-lite 'leftist' critics of US imperialism, etc. seem to have strong affiliations with RT state sponsored media 'russia today' and its 'Sputnik' radio version--they have their own radio shows or appear as guests on those stations, as well as with China. They are big critics of US presence in Afghanistan but never mention Russia also invaded Afghanistan. )

I think the differences between EAs, 'leftists' and people like myself are cultural and educational primarily. Many EA's seem to have a philosophy bacground, so for example they use the philosophical definition of Utilitarianism rather than the ones i've seen in economics , which are mathematical (Hilary Greaves of Oxford and associated with EA, who also has a background in physics, uses the formalism of utilitarianism closest to the one i try to use--though I am not at her mathematical level.) 'Leftists' tend to get their information more from either 'radical media' or in college classes in humanites or semi-social sciences like 'cultural marxism' and 'intersectionality studies'. I get my views from my backgroun in ecology and lived experiences in fairly diverse environments--so you have to keep your language simple, even if you are familiar with technical dialects. (There are in my view at least 3 or 4 different dialects for 'systems science' or 'systemic approaches'--i view them as equivalent but they range in mathematical complexity.)

AMA: Toby Ord, author of "The Precipice" and co-founder of the EA movement

I've seen and liked that book. But i don't think there really is enough information about risks (eg earth being hit by a comet or meteor that kills everything) to really say much---maybe if cosmology makes major advances or in other fields one can say somerthing but that might takes centuries.

Lant Pritchett's "smell test": is your impact evaluation asking questions that matter?

I can't really tell what the article is about, but it appears to be saying that devoting alot of resources and talent to academic economists to do rigorous RCT evalutions of programs is 'innefective' or 'inneficient' (a waste). (I think the recent noble econ prizes were for this---so this might be critique of them.) I think the same point is often made of alot of rigorous economics---many view these as primarily aesthetic or mathematical excercizes which some economists value more than developement or economic policy.

I think there is a place for aesthetics, mathematics, RCTs and evaluations of them, as well as other forms of policy research and interventions.

But you sort of have to figure out what mix is the best.

I also don't think the 'smell tests' are well worded. I think academic specialties often have their own dialects (as does EA) and they are often mutually almost incomprehnsible. Ecological economists and neoclassiclas often have different dialects, and the same theorem in math can be proven at times many ways, but people can only understand some of them,.

International Relations; States, Rational Actors, and Other Approaches (Policy and International Relations Primer Part 4)

I didn't notice this reply to my comment, but today i did. (as an aside i notice i have -33 votes and +55 votes for my comments. it would be nice if EA world could tolerate diversity of opinions--so far i'm still above zero and i don't want to start a war. but if people cannot disagree agreeably i'm perfectly willing to go somewhere else--and it won't be silicon valley. )

While i dislike the term 'intelligent', i would call your comment or answer a very intelligent and well informed reply to my comment.

Since you mentioned Brexit, in USA we have a similar issue---- the democratic primaries (as you likely know, though my impression is you are not in USA) --there are not really any single peaked preferences here though it has been reduced to Biden vs Bernie and other --possibly alot of nonvoters.)

I agree that 'the map is not the territory'. One needs to revise the maps as you go through the territory. there is a tradeoff --- do you follow the map you have and keep going, or spend time revising the map and take a different path?

Potential High-Leverage and Inexpensive Mitigations (which are still feasible) for Pandemics

I agree with you. 'common sense is not common sense'. (I personally am on a special diet--this means i mostly have to eat vegetables, but other people i know always say 'you need some protein or meat--that's common sense' . i do feel good if i eat some, but next day i wake up sick as a dog. so i avoid it. )

the only issue i had was most people do not read J Emergency management. everyone lives in a 'filter bubble'. (and more like that)

I had to look up PPE--personal protective equipment. )

I view plastic garbage bags as an almost neccessary thing to carry ( large ones. medium size and small ones --they keep everything dry --small ones are good for papers and books; medium ones are good for extra clothes, and big ones can serve as a rain or snow poncho or tent . I am aware of the environmental consequences of all this plastic but for now i still use them).

When i was in Alaska i lived a 6 mile walk down the frozen Yukon river (in winter ) from Eagle (near the canadian border) . In summer i stayed somewhere else in same area. it seemed like it could go from 80F in summer to -45Fp or colder in winter.

My current area used to be the 'murder capital of the USA' ( but now we have lost that title to Baltimore ) but now its the 'bedbug capital of the world' . (There are radio shows on the local NPR affiliate WAMU on this bedbug problem ---i even had it recently ---i dont know how they got in here--maybe some of my guests had them on their clothes and there are also mice in here. This plastic kills these bedbugs.

(Its required in my area that if you throw out a bedbug infested matress you have to enclose it in a big plastic bag).

The neighboring state (maryland) has just declared a corona virus (or covid) state of emergency . I think they only have a few confirmed cases.

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