What puzzles me about Simon Wren-Lewis’s response to MMT is his claim that he finds nothing new or surprising in the theory. I think his claim can be understood in light of the fact that MMT is not a theory of economics. It is a bit of political economy, or, more generally, a bit of political philosophy.
When I read Warren Mosler’s Seven Deadly Innocent Frauds, I found it refreshingly plain and non-theoretical, but also very radical. I find it hard to imagine Wren-Lewis reading the book and finding nothing surprising or interesting in it. Maybe he hasn’t read it. But if he went to it looking for a proof that the consolidated budget equation is incorrect, he was no doubt disappointed, and only because he was looking for the wrong thing. It would be like reading Joyce’s Ulysses and saying: “I don’t see how this book is innovative; it fails to refute Newton’s Laws.”
The most radical claim that Mosler makes is summed up in the quotation from Paul Davidson that opens his 1997-8 paper on full employment. The claim is that the state creates unemployment, and this is the only reason unemployment exists. I do not find this claim in the macroeconomic textbooks I have read, and if it is something that Wren-Lewis knew all along, I don’t see how he could have found it too unimportant to bother mentioning….
Selle kohta vaevalt, et saaks öelda, “me teadsime seda kõike”. Riik loob tööpuuduse ja see on ainus põhjus, miks tööpuudus eksisteerib. Selles ei ole süüdi kapitalism per se või mingisugune vaba turumajandus. SELLES ON SÜÜDI RIIK.