An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Tom, you've made an interesting point that the decision by Krugman, Baker, etc. to not give proper attribution to MMT is maybe strategic. They then don't have to answer questions like: "If you accept that portion of MMT, which portions do you reject?" … If they had to answer those kinds of question then they'd have to either admit MMT is correct or battle out the ideas publicly. And we know MMT is ready and willing to have that battle.
With all that said, it's worse than tacky to not properly attribute MMT. It's borderline plagarism.
Definition of Plagarism: "the practice of taking someone else's work or ideas and passing them off as one's own."
Right, it's the chance you take. The way I see it is that liberals like Krugman, Summers, Baker, and Bernstein are waking up to the fact that this ship is sinking and are willing to go out on a limb to save it, but they aren't willing to hand the opposition a saw, either. They are all careful to maintain the bounds of conventional propriety in an environment where mentioning heterodox economists who are perceived as on the left is tantamount to citing Marx. So I'm not sure that they are must being twits about this by laying claim to others' ideas as their own. IF they are, that would be really, really bad. But I am willing to cut them the benefit of the doubt as acting pragmatically in a poisonous environment where opponents will take any advantage they can find. I said sometime ago that this was what was going to happen. So I am hardly surprised now.
Better question: how could they plagarize that idea without the moral conscience to give proper attribution?
I understand Tom's point about the sensitivty of political decisions, but Krugman and Baker are pretty much kings of the liberal economic establishment. Whatever they do, others will follow. They will not be banished. They are gatekeepers. It is in their power to bring MMT mainstream. It is their choice not to make it happen.
I don't agree with the choice but it is one that scholars in all fields sometimes have to face in documenting sources. Will the source help or hurt my case. The honest thing to do is not to use the information if you think that the documenting the source will harm the case you are making.
The proper attribution here has nothing to do with MMT and everything to do with Hyman Minsky. MMT did not create the ELR concept. It was "lifted" (Mosler's words) from Minksy's work and renamed the Job Guarantee.
What's a shame is that Baker and Bernstein don't cite Minsky. What's even more shameful is that MMT has tried to brand this concept as their own.
MMT has not rebranded the Mnsky JG. The MMT JG is different from the Minksy JG. Randy Wray has often made this clear.
There is no plagiarism of ideas, only words. It's customary to attribute ideas and sources of ideas.
Here the question is of words as much as ideas. Plagiarism still results if one takes the substance and just changes a few terms so that it isn't literally copying.
Anyway, there has been a conspiracy of silence directed at MMT economists, even by some Post Keynesians.
You know I wrote SCE and Full Employment AND Price Stability independently without knowing about Minsky (or Keynes or Lerner, etc) so attribution on my part was/is inapplicable.
The ELR and the JG are the same basic concept. MMT "tweaked" the ELR and renamed it. Baker and Bernstein even use Minsky's words "Employer of last resort" in the text.
They're stealing from Minsky. And MMT stole from Minsky and is now acting like they deserve full credit.
Mr. Mosler, it doesn't matter if you came up with it independently or not. If someone invents something 20 years before you do you don't get attribution for the idea just because you didn't know it already existed.
There are a few things in play here. If Baker and Bernstein got the idea from Minsky, and knew about it prior to exposure to Mosler or MMT, then that's fine… they should cite Minsky (maybe they did? I don't know). If their conception of a transition job comes from exposure to MMT, then they should cite MMT. It's simple, isn't it?
This isn't rocket science.
If Baker and Bernstein do not cite anyone, that's very suspicious… since we know via Mosler that they've met and discussed it; which is why I made the charge of Plagarism.
It's not just the job guarantee. I've noticed some language lately in both Krugman and Baker that is very MMT-ish compared with their wiritng of the previous years.
As Tom just said, there seems to be a 'conspiracy of silence'
Here's what I think: if you're an academic with years and even decades of published material and then all of a sudden a 'heterodox' school of thought teaches you a thing or two, it's probably embarassing to admit that you flat out missed those ideas during your career. "How come it never occurred to be that the entity that issues the currency is fundamentally different than the entities that use the currency?"
But it's only embarassing if you think this is all about YOU, and not the people who's lives are affected by the policies. If you focus on the big picture, that this is about the well being of society, then it's easy to give credit where credit is due.
Hell, even the MMTers say over and over again that they're synthezing some old ideas (Keynes, Minsky, Lerner, et al.).
If Baker and Bernstein got this idea from MMT then it is truly dishonest that they provide no citation at all. I find the use of the term "employer of last resort" to be incredibly suspicious since that is right out of Minsky's work in the 60's and 70's.
I do find it rather deplorable to see MMT implying that the ELR is an MMT concept. If Baker and Bernstein came up with this concept on their own then how is that any different than Mr. Mosler claiming that he came up with it on his own and wanting attribution?
Baker is on the same side of the political combat against austerity. It's not very wise, tactically, to concentrate energies against him.
Maybe someone should simply ask him: "did you get these ideas from MMT and if so why didn't you quote the authors? if not - did you arrive independently, though a bit later, at the same conclusions (in another indication the ideas are correct)?
Kalecki also produced the concept of effective demand before Keynes (J. Robinson dixit), Keynes did not quote him and the world is not a worse place because of that.
you find anything to do with MMT "deplorable" because you're a cullen roche fanboy who'll attack MMT for any pathetic and idiotic reason you can come up with.
Y, I don't know what you find honorable about the fact that MMT stole the ELR and tried to reframe it as their own idea and is now getting upset that they aren't getting credit for it. Minsky came up with the ELR 20 years before MMT even existed.
Shouldn't we all be outraged that Minsky is not getting proper attribution here?
Why does MMT try to claim the ELR and JG are different things and that they deserve credit for an original idea?
This looks like academic dishonesty all around here.
<i>I don't know what you find honorable about the fact that MMT stole the ELR and tried to reframe it as their own idea and is now getting upset that they aren't getting credit for it. Minsky came up with the ELR 20 years before MMT even existed.
Shouldn't we all be outraged that Minsky is not getting proper attribution here?
Why does MMT try to claim the ELR and JG are different things and that they deserve credit for an original idea?
This looks like academic dishonesty all around here.</i>
Uninformed argument, Lars. Minsky was Wray's teacher and Wray fully acknowledges his debt to Minsky. I is also careful to point out, as professionalism requires, where he differs from Minsky.
Apparently you don't full understand the difference between the JG/ELR proposed by Minsky and the MMT JG proposed by the MMT economists. The MMT JG is a more developed concept and does more economic work. function as a buffer stock of employed instead of unemployed, provision of transitional employment, and functioning as a price anchor for the currency.
1. Introduction In the past few years there have been a number critical assessments of the job creation proposal that has been variously termed the Job Guarantee (JG), Public Service Employment (PSE), Buffer Stock Employment (BSE) or Employer of Last Resort (ELR). The terms are interchangeable and reflect the evolution of the literature. Mitchell (1998) uses JG to describe his approach to full employment whereas the ELR terminology has been used by Wray (1998). The term ELR was used in the US as long ago as the New Deal, and was revived by Hyman Minsky in the mid-1960s. Wray now prefers PSE. While ELR is accurate in one sense, it also provides a negative connotation that neither PSE nor JG implies. Some of the more important explications of JG/PSE/ELR include Gordon (1997), Mosler (1997-98), Mitchell (1998), Wray (1998), Forstater (2000) and Harvey (2000). The most recent critiques include Sawyer (2003) and Ramsey (2002-3), while earlier critics include Aspromourgos (2000), Kadmos and O’Hara (2000), King (2000), Kriesler and Halevi (2001), and Mehrling (2000). In this paper, we use the term JG, reviewing the progress of the development of the JG approach and responding to what we believe to be the main thrust of our critics
I'm going to jump in and defend Dean here. I have met him on multiple occasions, and he is the most down to earth, humble guy you could meet in Washington. The guy wears old suits with elbow patches and blue jeans around the nations capital, alongside lobbyists in $2000 suits and silk ties. He is a genuine progressive and absolutely not an elitist, and I think this may have been a simple mistake on his/Jared's part. Let's not rush to judgement here, and wait and see what the real story is.
In fact, I wouldn't be suprised if, in fact this omission was intentional, it came from Jared instead of Dean, since he is much more of an establishment player, having been Biden's econ advisor and has worked for EPI and CBPP.
Remember, Dean moderated one of the Modern Money Network debates at Columbia with Scott Fullwiler. Please, lets not make enemies with people who agree with us on 90% of the stuff. If we want to succeed in Washington, we need allies, not more enemies.
I thought you would be thrilled that the ideas are being adopted by mainstream econ. For the ego it would be nice to have proper credit but the real compliment is that they adopted the idea into their world view and they are economics. And really, nobody thinks Baker or Krugman came up with these ideas. Google search, employer of last resort or job guarantee, and see who comes up... Y'all and Minsky.
If you take the long view, think of what you have done as open source, the more people that use it, the better you are, the stronger you get, the better your reputation. You've not done the work in vein and you will get credit.
As more people want to learn about the concept, they will find your work, you've spent decades and mountains of writing elaborating the ins-and-outs of the topic. Unfortunate these big economic names didn't acknowledge you but take the high road as Lars suggests it is no longer 'your' idea once it leaves your head. Others are going to build on it and have no idea who you are or were until they want to learn more and look deeper into the concept or need help. Then you and your work will be there waiting for people to explore and call upon you again.
These issues can be difficult to sort out. For example, it's not necessary in to document very well known ideas or ideas that are common currency unless there is some specific reason to do so. Those that cite excessively come across as pedantic although it's usually safe to cite when in doubt. Maybe Baker and Bernstein just thought that it was a idea already out there and sufficiently common as not to need attribution.
I don' think that this is a matter to get all twisted out of shape over, since as Bill and Randy point out in the paper I cited above the idea of a job guarantee has been around since the New Deal and there's been a lot of development of it since.
I also think that a lot of economists that have looked at MMT probably realize that the MMT paradigm contradicts conventional approaches to economics based on neutral money and fixed rate assumptions.
Who else is doing economics based on the operational realities of a non-convertible floating rate system? Without this understanding, then the issue becomes funding social programs through taxes or borrowing, i.e., taking from the private sector.
As far as I can see, Krugman, Summers, DeLong, Bernstein, Baker, etc. don't want to go there and have to admit that they've changed their minds and as result changed course. Krugman did recently say that he hadn't properly appreciated the effect of issuing one's own currency and not borrowing in a currency one doesn't issue or pegging. So that is a step forward. But he didn't credit MMT economists either.
The fact that they even talk about the JG (without mocking it) makes the idea non-toxic for a swath of young economists to work with, write about, use as policy.
Anyone know if an ELR/JG idea was written about before Keynes/Great Depression/New Deal (Maybe the so-called 'Utopian Socialists' or Marx/Marxists?)…? An extension of that question: what's the earliest known reference to government as an Employer of Last Resort or Job Guarantee?
To everybody saying "don't pick a fight" with B&B:
I don't see how an out of paradigm presentation of Warren's 'transitional' JG helps the situation. I see B&B making the situation worse, and muddying the waters with a distraction. I don't know what all the book gets into exactly, but they have an article calling the trade deficit the problem to focus on, yet they are selling the JG as a mechanism to balance the gov't budget in the book.
B&B might be good hearted people, but they are acting like bumbling goofballs with this. What they are trying to sell is far more politically toxic than MMT.
Warren Mosler can flip more minds in an hour than B&B can flip in a decade. And that's what ultimately matters.
Attribution issues aside, the book doubles down on stupid.
It is not helpful. We already have the Humphrey Hawkins FEA, the issue remains that morons do not know how to implement full employment due to out of paradigm thinking, thinking that this book DOES NOTHING to eradicate and in fact helps many on the left remain morons on this.
I'm glad MMT wasn't mentioned because then we would be discussing how embarrassing that was vice the attribution issues.
"However, there should be no poor among you, for in the land the LORD your God is giving you to possess as your inheritance, he will richly bless you." Deuteronomy 15:4
Charles, I think I agree. Everyone is grown adults here. Why do we need kid gloves? This is serious stuff that has a huge impact on people's lives and standard of living. Peer-Professionals should have enough maturity to respect harsh criticism.
Like I said about… "it's only embarassing if you think this is all about YOU, and not the people who's lives are affected by the policies."
Keynes's targeted approach led to New Deal government-run employment programs like WPA and CCC. Remember the UE rate was 25% then. There was enormous political pressure to do something immediately in order to obviate social dysfunction from erupting into large-scale revolt over political dysfunction. People expect the government to keep the trains running, so to speak, and at this time Hitler and Mussolini realized this. There was also the socialist specter, not to mention the "red scare." So, a very different environment from now.
Even with the extreme situation at the time, these programs were opposed out the gate by business interests.
BTW, getting wrapped up in in fighting with people basically in agreement is just aiding the enemy, which always attempts to sow discord among the opposition to weaken it. Why help at this.
We have to realize that the avowed goal of the opposition is to reduce workers as close as possible to slavery as modern civilization will allow.
The present danger is that there are no alternative system that threaten TPTB given US global hegemony. They see their power as unlimited and are going for the whole enchilada.
The trend is toward the debasement of the value labor at the same time that TPTB also focus on preventing the debasement of money through "social profligacy." The EZ is the poster child of this at the moment, and the UK and US are not far behind.
This is a crisis situation and all eyes have to fixed on the goal. All knives (minds) need to be sharpened and spines staunched in the fight for survival as free people.
The numbers are on the side of the workers, and the resources and control levers are on the side of TPTB. The side with superior organization, strategy and tactics will prevail. Either democracy as government of the people, by the people and for the people will triumph or neoliberal capitalism as the equation of economic liberalism with political liberalism will carry the day.
This is the context of the early years of this century and it will be decisive. One scenario would be catastrophic for most people given the emerging challenges the world will face in the coming years. If TPTB prevail there will be not only a great leveling but a great culling.
Tom, when you talk about in-fighting helping the enemy, I think you neglect another aspect; specifically: having a consistent message.
The austerity crowd has a consistent message and they stick to it; i.e. the houshold analogy. That message gets amplified through consistency and it then resonates.
This is why it's so important for Krugman, Baker, etc. to stop half-assing their approach to MMT. Progressives have a disjointed message. This sends mixed signals. It's confusing. As a result there isn't increasing amplification and resonation.
We need this in-fighting, we need it now, and the establishment progressives are preventing progress for the progresive movement because they are basically unwilling to publicly acknowledge, give attribution and even spar with MMT. Why are they unwilling?
Do they think MMT is just wrong and not worthy of attention. I don't think so. take a look at the Modern Money Public Purpose Q&A session with Scott Fullwiler and Dean Baker. Scott is trying to explain to Baker simple Reserve operations that EVERYONE in this comment section understands. It is flying over Baker's head. He looks baffled, shakes his head, even acknowledges that he doesn't understand what Fullwiler is saying. That's INSANE. This stuff is not difficult.
I am not in favor of airing dirty laundry on social media and blogs. These issues are best argued in papers, and when there are personal differences, interpersonally via private communication.
There is private communication going on to some I realize that there is private communication going on already to some degree. I'd be for amping up the behind scenes push for presenting a united front against neoliberalism to the degree possible.
This is matter of survival now and people have to get into survival mode.
Airing what dirty laundry? Do you mean Kelton's tweet and Mosler post?
The way I see it Baker & Bernstein are inside the political establishment. Both of them know that MMT has been writing about an ELR/JG for what, 10, 15, 20 years now? They could have extended a simple olive branch with a citation, at minimum to Minsky. They purposely chose not to.
What does that say?
I don't buy your argument that associating with heterodox economics is akin to quoting Marx. Baker & Bernstein (and Krugman, et al) are "gatekeepers" to the status quo of the state of knowledge in progressive politics. Where they go, others will follow. They are playing politics and therefore we should treat them as politicians -> apply pressure, publicly.
First, some of the MMT economists are known as testy, and this has led to their isolation. Better to build bridges rather than erect walls. That course of action is not working.
Secondly, these people know each other personally and, I think, are on good terms. Why not connect personally over issues like this?
Regarding some MMT people being testy and leading to their isolation. If establishment progressives care more about that than the content of the MMT argument then they don't deserve the label "progressive"... they are simply establishment. This isn't a high school popularity contest. Millions of people in America, and billions of people around the world, need better policy.
While I agree it makes sense to try to build bridges and connect, it makes even more sense to make the #1 priorty truth telling. If allies aren't interested in that, if they're more interested in political tip toeing, then maybe they don't deserve the positions of power and influence they hold?
'With great power comes great responsibility' (paraphrase)
JK, I have learned over the years that a key to getting ideals adopted is to convince people capable of implementing them that they are their own ideas, especially when one is not a position to implement them oneself. Usually big ideas and visions have to be sold strategically and pragmatically, and often that means sacrificing ownership. Anyway, the record is there and eventually come out.
Most people don't yet understand that without the MMT JG, knowledge of the monetary economics doesn't get one very far with respect to macroeconomic (policy) results.
Government has to offset non-government saving desire and without creating a buffer stock of employed, inflation will be a problem as the economy nears full employment. TINA. See Peter Cooper's heteconomist post today that I linked to here at MNE.
While I agree it makes sense to try to build bridges and connect, it makes even more sense to make the #1 priorty truth telling. If allies aren't interested in that, if they're more interested in political tip toeing, then maybe they don't deserve the positions of power and influence they hold?
Well, that's one point of view. In my view, it is wise to adopt different strategies and tactics. We don't all need to sing same notes if we are singing in the same key. Harmony is good, and some discordance and counterpoint can be useful too.
I think anything that gets the discussion moving away from the neoliberal market-based approach to UE, as well from NAIRU and a buffer stock of unemployed is useful overall. We should be having a lot discussion of options, from the MMT to other ideas about a JG, a BIG, and also Friedman's permanent income. People on the right are already surfacing the latter now.
We don't need to get hung up in supply side/investment v. demand side/consumption either. There's room to integrate both approaches.
"My way or the highway" seldom works over time. Without achieving substantial consensus, the opposition will always be nipping at your ankles until they see an opportunity to go for the throat.
I don't think we should start with the economics either. That's the neoliberal approach that sees economics dictating policy. We should start with policy and they develop the economic rationale for achieving it.
First and foremost it is an ethical issue regarding doing what's right even though it is hard and there will be tradeoffs.
Second, it is a social issue having to do with the good society.
Third, it is a political issue having to do with articulating a policy with respect to which it is possible to achieve sufficient consensus to enact.
Fourth, it is an economic issue having to do with how to achieve the objectives set by policy goals efficiently and effectively.
In my view, this requires a comprehensive treatment of major issues rather than starting with some fix for some problems that happen to be to the fore at the moment.
The opposition will consist of powerful forces that want to limit the role of government in order "encourage market-based solutions," which, of course, are dictated by TPTB "for the good of the country." The problem is that "what's good for America" isn't necessarily good for either the vast majority of Americans or the world either. At the moment, TPTB hold the upper hand.
Best comment on this whole topic was from last May, by Ed Harrison, ironically.
"So I just want to make that point because it seems to me that Krugman's straw-manning in 2011 was just an attempt to create rhetorical space between himself and other economists he believes are not sufficiently credible within the body of mainstream economists." http://www.creditwritedowns.com/2013/05/how-bond-market-vigilantes-force-rates-higher.html
the rest of Ed's post goes on to indicated that egos trump logic? in nearly every corner?
I think that Ed Harrison got that right to some degree, but I's also pretty clear that Krugman is not a Post Keynesian, let alone having an understanding of currency system at the level of MMT. He is monetarist that believes in loanable funds, which is why he is wedded to ISLM, and he is somewhere between a bastard Keynesian and a New Keynesian. He is an unreconstructed conventional economist with a liberal political stance.
I see this has pretty much run its course, but some might find a few things of interest regarding the highly misinformed comments by Lars--whom I noticed stopped commenting here after Tom posted the paragraphs by RAndy and Bill (from 2004, by the way).
First, most were unaware that Minsky pushed ELR until Wray started pointing it out. Bell/Wray in fact pushed Minsky in a highly visible way back in 2004 (if not earlier--but this one was particularly significant) http://www.levyinstitute.org/pubs/ppb78.pdf
Wray also recently published several Minsky papers on ELR in a book http://www.amazon.com/Ending-Poverty-Jobs-Not-Welfare-ebook/dp/B00CC2KEPA/ref=sr_1_1?ie=UTF8&qid=1385310493&sr=8-1&keywords=minsky+jobs
The suggestion that MMT has "stolen" the idea from Minsky is simply preposterous and something only someone with a chip on their shoulder against MMT would say. The evidence is so overwhelmingly against such a statement that it's simply disingenuous and not worth engaging.
(This is all not to mention that Levy--largely if not exclusively due to the efforts Wray, Papadimitriou, and Kregel--has pushed the full range of Minsky's work more than anyone, from publishing new editions his 3 books (which were very difficult to find before this reissue), to posting archives of all of his finished and unfinished work, to holding a major academic and policy conference and another major graduate/Ph.D summer school on Minsky each year.)
Second, there is NO difference between what is meant by ELR, JG, PSE, etc. The idea we are pushing is and has been exactly the same throughout (the first time I encountered it was in Warren's paper he mentions above) though at various times we have preferred to use these different labels. They all mean the same thing and are essentially interchangeable. The quote from Bill and Randy above is simply noting this point, not suggesting there is any difference of significance between the respective views--though there might be differences in some instances (between Bill and the rest, largely) regarding some preferred program details, this has nothing to do with the particular label being used.
55 comments:
"what I’ve been posting and publishing at least since ‘Soft Currency Economics’ written in 1993, with editorial assistance by Art Laffer..."
Uh-oh!
Forget about any mention from the likes of lefties Bernstein and Baker then... this leaves you without even 'honorable mention' from these two...
After all everybody knows this all about politics not truth or something...
Tom, you've made an interesting point that the decision by Krugman, Baker, etc. to not give proper attribution to MMT is maybe strategic. They then don't have to answer questions like: "If you accept that portion of MMT, which portions do you reject?" … If they had to answer those kinds of question then they'd have to either admit MMT is correct or battle out the ideas publicly. And we know MMT is ready and willing to have that battle.
With all that said, it's worse than tacky to not properly attribute MMT. It's borderline plagarism.
Definition of Plagarism: "the practice of taking someone else's work or ideas and passing them off as one's own."
Right, it's the chance you take. The way I see it is that liberals like Krugman, Summers, Baker, and Bernstein are waking up to the fact that this ship is sinking and are willing to go out on a limb to save it, but they aren't willing to hand the opposition a saw, either. They are all careful to maintain the bounds of conventional propriety in an environment where mentioning heterodox economists who are perceived as on the left is tantamount to citing Marx. So I'm not sure that they are must being twits about this by laying claim to others' ideas as their own. IF they are, that would be really, really bad. But I am willing to cut them the benefit of the doubt as acting pragmatically in a poisonous environment where opponents will take any advantage they can find. I said sometime ago that this was what was going to happen. So I am hardly surprised now.
How did they think they could take credit for those ideas without someone noticing that they were taken chapter and verse from Warren Mosler?
Rombach,
Better question: how could they plagarize that idea without the moral conscience to give proper attribution?
I understand Tom's point about the sensitivty of political decisions, but Krugman and Baker are pretty much kings of the liberal economic establishment. Whatever they do, others will follow. They will not be banished. They are gatekeepers. It is in their power to bring MMT mainstream. It is their choice not to make it happen.
It's past time that the idea of a Soverign Currency Issuer, Functional Finance, and a Job Guarantee... are standard platforms of progressives.
I don't agree with the choice but it is one that scholars in all fields sometimes have to face in documenting sources. Will the source help or hurt my case. The honest thing to do is not to use the information if you think that the documenting the source will harm the case you are making.
The proper attribution here has nothing to do with MMT and everything to do with Hyman Minsky. MMT did not create the ELR concept. It was "lifted" (Mosler's words) from Minksy's work and renamed the Job Guarantee.
What's a shame is that Baker and Bernstein don't cite Minsky. What's even more shameful is that MMT has tried to brand this concept as their own.
MMT has not rebranded the Mnsky JG. The MMT JG is different from the Minksy JG. Randy Wray has often made this clear.
There is no plagiarism of ideas, only words. It's customary to attribute ideas and sources of ideas.
Here the question is of words as much as ideas. Plagiarism still results if one takes the substance and just changes a few terms so that it isn't literally copying.
Anyway, there has been a conspiracy of silence directed at MMT economists, even by some Post Keynesians.
Lars,
You know I wrote SCE and Full Employment AND Price Stability independently without knowing about Minsky (or Keynes or Lerner, etc) so attribution on my part was/is inapplicable.
The ELR and the JG are the same basic concept. MMT "tweaked" the ELR and renamed it. Baker and Bernstein even use Minsky's words "Employer of last resort" in the text.
They're stealing from Minsky. And MMT stole from Minsky and is now acting like they deserve full credit.
I guess these two think Warren is harmful to all of this then Tom.
Partisan losers imo.
They will get nowhere with this as they still remain out of paradigm morons look at their Chapter 4 excerpt:
"In a fully employed economy deficits can lead to excess demand,
leading to inflation and higher interest rates"
How the hell can additional savings lead to 'excess demand'???
Mr. Mosler, it doesn't matter if you came up with it independently or not. If someone invents something 20 years before you do you don't get attribution for the idea just because you didn't know it already existed.
"how could they plagarize that idea without the moral conscience to give proper attribution?"
Because they are arrogant, conceited, elitists, who pose as champions for progressive causes.
MMT and its proponents are beneath them and not worthy of attribution.
I like Dean Baker. Quite the opposite of a conceited elitist in my experience.
Wishful thinking again y... rsp,
Lars,
There are a few things in play here. If Baker and Bernstein got the idea from Minsky, and knew about it prior to exposure to Mosler or MMT, then that's fine… they should cite Minsky (maybe they did? I don't know). If their conception of a transition job comes from exposure to MMT, then they should cite MMT. It's simple, isn't it?
This isn't rocket science.
If Baker and Bernstein do not cite anyone, that's very suspicious… since we know via Mosler that they've met and discussed it; which is why I made the charge of Plagarism.
It's not just the job guarantee. I've noticed some language lately in both Krugman and Baker that is very MMT-ish compared with their wiritng of the previous years.
As Tom just said, there seems to be a 'conspiracy of silence'
Here's what I think: if you're an academic with years and even decades of published material and then all of a sudden a 'heterodox' school of thought teaches you a thing or two, it's probably embarassing to admit that you flat out missed those ideas during your career. "How come it never occurred to be that the entity that issues the currency is fundamentally different than the entities that use the currency?"
But it's only embarassing if you think this is all about YOU, and not the people who's lives are affected by the policies. If you focus on the big picture, that this is about the well being of society, then it's easy to give credit where credit is due.
Hell, even the MMTers say over and over again that they're synthezing some old ideas (Keynes, Minsky, Lerner, et al.).
Matt, why do you say that? Just because he didn't cite Mosler or MMT or Minsky? Maybe someone should ask him why.
If Baker and Bernstein got this idea from MMT then it is truly dishonest that they provide no citation at all. I find the use of the term "employer of last resort" to be incredibly suspicious since that is right out of Minsky's work in the 60's and 70's.
I do find it rather deplorable to see MMT implying that the ELR is an MMT concept. If Baker and Bernstein came up with this concept on their own then how is that any different than Mr. Mosler claiming that he came up with it on his own and wanting attribution?
I agree with y.
Baker is on the same side of the political combat against austerity. It's not very wise, tactically, to concentrate energies against him.
Maybe someone should simply ask him: "did you get these ideas from MMT and if so why didn't you quote the authors? if not - did you arrive independently, though a bit later, at the same conclusions (in another indication the ideas are correct)?
Kalecki also produced the concept of effective demand before Keynes (J. Robinson dixit), Keynes did not quote him and the world is not a worse place because of that.
you find anything to do with MMT "deplorable" because you're a cullen roche fanboy who'll attack MMT for any pathetic and idiotic reason you can come up with.
above comment directed at Lars
I'll also second y's comment on Dean Baker. I like him a lot and try to keep up with his op-ed's at:
http://www.cepr.net/index.php/clips/dean-bakers-op-eds/
Y, I don't know what you find honorable about the fact that MMT stole the ELR and tried to reframe it as their own idea and is now getting upset that they aren't getting credit for it. Minsky came up with the ELR 20 years before MMT even existed.
Shouldn't we all be outraged that Minsky is not getting proper attribution here?
Why does MMT try to claim the ELR and JG are different things and that they deserve credit for an original idea?
This looks like academic dishonesty all around here.
<i>I don't know what you find honorable about the fact that MMT stole the ELR and tried to reframe it as their own idea and is now getting upset that they aren't getting credit for it. Minsky came up with the ELR 20 years before MMT even existed.
Shouldn't we all be outraged that Minsky is not getting proper attribution here?
Why does MMT try to claim the ELR and JG are different things and that they deserve credit for an original idea?
This looks like academic dishonesty all around here.</i>
Uninformed argument, Lars. Minsky was Wray's teacher and Wray fully acknowledges his debt to Minsky. I is also careful to point out, as professionalism requires, where he differs from Minsky.
Apparently you don't full understand the difference between the JG/ELR proposed by Minsky and the MMT JG proposed by the MMT economists. The MMT JG is a more developed concept and does more economic work. function as a buffer stock of employed instead of unemployed, provision of transitional employment, and functioning as a price anchor for the currency.
For example, see Full employment through a Job Guarantee: a response to the critics
William Mitchell and L. Randall Wray
1. Introduction
In the past few years there have been a number critical assessments of the job creation proposal that has been variously termed the Job Guarantee (JG), Public Service Employment (PSE), Buffer Stock Employment (BSE) or Employer of Last Resort (ELR). The terms are interchangeable and reflect the evolution of the literature. Mitchell (1998) uses JG to describe his approach to full employment whereas the ELR terminology has been used by Wray (1998). The term ELR was used in the US as long ago as the New Deal, and was revived by Hyman Minsky in the mid-1960s. Wray now prefers PSE. While ELR is accurate in one sense, it also provides a negative connotation that neither PSE nor JG implies. Some of the more important explications of JG/PSE/ELR include Gordon (1997), Mosler (1997-98), Mitchell (1998), Wray (1998), Forstater (2000) and Harvey (2000). The most recent critiques include Sawyer (2003) and Ramsey (2002-3), while earlier critics include Aspromourgos (2000), Kadmos and O’Hara (2000), King (2000), Kriesler and Halevi (2001), and Mehrling (2000). In this paper, we use the term JG, reviewing the progress of the development of the JG approach and responding to what we believe to be the main thrust of our critics
Lars, MMT didn't "steal the ELR" you pathetic idiot.
I'm going to jump in and defend Dean here. I have met him on multiple occasions, and he is the most down to earth, humble guy you could meet in Washington. The guy wears old suits with elbow patches and blue jeans around the nations capital, alongside lobbyists in $2000 suits and silk ties. He is a genuine progressive and absolutely not an elitist, and I think this may have been a simple mistake on his/Jared's part. Let's not rush to judgement here, and wait and see what the real story is.
In fact, I wouldn't be suprised if, in fact this omission was intentional, it came from Jared instead of Dean, since he is much more of an establishment player, having been Biden's econ advisor and has worked for EPI and CBPP.
Remember, Dean moderated one of the Modern Money Network debates at Columbia with Scott Fullwiler. Please, lets not make enemies with people who agree with us on 90% of the stuff. If we want to succeed in Washington, we need allies, not more enemies.
I thought you would be thrilled that the ideas are being adopted by mainstream econ. For the ego it would be nice to have proper credit but the real compliment is that they adopted the idea into their world view and they are economics.
And really, nobody thinks Baker or Krugman came up with these ideas. Google search, employer of last resort or job guarantee, and see who comes up... Y'all and Minsky.
If you take the long view, think of what you have done as open source, the more people that use it, the better you are, the stronger you get, the better your reputation. You've not done the work in vein and you will get credit.
As more people want to learn about the concept, they will find your work, you've spent decades and mountains of writing elaborating the ins-and-outs of the topic. Unfortunate these big economic names didn't acknowledge you but take the high road as Lars suggests it is no longer 'your' idea once it leaves your head. Others are going to build on it and have no idea who you are or were until they want to learn more and look deeper into the concept or need help. Then you and your work will be there waiting for people to explore and call upon you again.
These issues can be difficult to sort out. For example, it's not necessary in to document very well known ideas or ideas that are common currency unless there is some specific reason to do so. Those that cite excessively come across as pedantic although it's usually safe to cite when in doubt. Maybe Baker and Bernstein just thought that it was a idea already out there and sufficiently common as not to need attribution.
I don' think that this is a matter to get all twisted out of shape over, since as Bill and Randy point out in the paper I cited above the idea of a job guarantee has been around since the New Deal and there's been a lot of development of it since.
I also think that a lot of economists that have looked at MMT probably realize that the MMT paradigm contradicts conventional approaches to economics based on neutral money and fixed rate assumptions.
Who else is doing economics based on the operational realities of a non-convertible floating rate system? Without this understanding, then the issue becomes funding social programs through taxes or borrowing, i.e., taking from the private sector.
As far as I can see, Krugman, Summers, DeLong, Bernstein, Baker, etc. don't want to go there and have to admit that they've changed their minds and as result changed course. Krugman did recently say that he hadn't properly appreciated the effect of issuing one's own currency and not borrowing in a currency one doesn't issue or pegging. So that is a step forward. But he didn't credit MMT economists either.
The fact that they even talk about the JG (without mocking it) makes the idea non-toxic for a swath of young economists to work with, write about, use as policy.
One of my favorite paper from the Levy: A survey of JG programs by Fadhel Kaboub
http://www.levyinstitute.org/pubs/wp_498.pdf
A good read
Anyone know if an ELR/JG idea was written about before Keynes/Great Depression/New Deal (Maybe the so-called 'Utopian Socialists' or Marx/Marxists?)…? An extension of that question: what's the earliest known reference to government as an Employer of Last Resort or Job Guarantee?
To everybody saying "don't pick a fight" with B&B:
I don't see how an out of paradigm presentation of Warren's 'transitional' JG helps the situation. I see B&B making the situation worse, and muddying the waters with a distraction. I don't know what all the book gets into exactly, but they have an article calling the trade deficit the problem to focus on, yet they are selling the JG as a mechanism to balance the gov't budget in the book.
B&B might be good hearted people, but they are acting like bumbling goofballs with this. What they are trying to sell is far more politically toxic than MMT.
Warren Mosler can flip more minds in an hour than B&B can flip in a decade. And that's what ultimately matters.
Amen Charles,
Attribution issues aside, the book doubles down on stupid.
It is not helpful. We already have the Humphrey Hawkins FEA, the issue remains that morons do not know how to implement full employment due to out of paradigm thinking, thinking that this book DOES NOTHING to eradicate and in fact helps many on the left remain morons on this.
I'm glad MMT wasn't mentioned because then we would be discussing how embarrassing that was vice the attribution issues.
I think it's worth having a little tussle with B&B about this because the media loves a tussle.
Wasn't Keynes the JG originator?
Matt, isn't their biblical support for a JG?
"However, there should be no poor among you, for in the land the LORD your God is giving you to possess as your inheritance, he will richly bless you." Deuteronomy 15:4
Tyler,
I think that refers to the Israelites, just before they invaded and took over Canaan, destroyed loads of cities and killed loads of Canaanites.
Charles, I think I agree. Everyone is grown adults here. Why do we need kid gloves? This is serious stuff that has a huge impact on people's lives and standard of living. Peer-Professionals should have enough maturity to respect harsh criticism.
Like I said about… "it's only embarassing if you think this is all about YOU, and not the people who's lives are affected by the policies."
"
Wasn't Keynes the JG originator?
Keynes’s Approach to Full Employment: Aggregate or Targeted Demand? by Pavlina R. Tcherneva
Keynes's targeted approach led to New Deal government-run employment programs like WPA and CCC. Remember the UE rate was 25% then. There was enormous political pressure to do something immediately in order to obviate social dysfunction from erupting into large-scale revolt over political dysfunction. People expect the government to keep the trains running, so to speak, and at this time Hitler and Mussolini realized this. There was also the socialist specter, not to mention the "red scare." So, a very different environment from now.
Even with the extreme situation at the time, these programs were opposed out the gate by business interests.
BTW, getting wrapped up in in fighting with people basically in agreement is just aiding the enemy, which always attempts to sow discord among the opposition to weaken it. Why help at this.
We have to realize that the avowed goal of the opposition is to reduce workers as close as possible to slavery as modern civilization will allow.
The present danger is that there are no alternative system that threaten TPTB given US global hegemony. They see their power as unlimited and are going for the whole enchilada.
The trend is toward the debasement of the value labor at the same time that TPTB also focus on preventing the debasement of money through "social profligacy." The EZ is the poster child of this at the moment, and the UK and US are not far behind.
This is a crisis situation and all eyes have to fixed on the goal. All knives (minds) need to be sharpened and spines staunched in the fight for survival as free people.
The numbers are on the side of the workers, and the resources and control levers are on the side of TPTB. The side with superior organization, strategy and tactics will prevail. Either democracy as government of the people, by the people and for the people will triumph or neoliberal capitalism as the equation of economic liberalism with political liberalism will carry the day.
This is the context of the early years of this century and it will be decisive. One scenario would be catastrophic for most people given the emerging challenges the world will face in the coming years. If TPTB prevail there will be not only a great leveling but a great culling.
Tom, when you talk about in-fighting helping the enemy, I think you neglect another aspect; specifically: having a consistent message.
The austerity crowd has a consistent message and they stick to it; i.e. the houshold analogy. That message gets amplified through consistency and it then resonates.
This is why it's so important for Krugman, Baker, etc. to stop half-assing their approach to MMT. Progressives have a disjointed message. This sends mixed signals. It's confusing. As a result there isn't increasing amplification and resonation.
We need this in-fighting, we need it now, and the establishment progressives are preventing progress for the progresive movement because they are basically unwilling to publicly acknowledge, give attribution and even spar with MMT. Why are they unwilling?
Do they think MMT is just wrong and not worthy of attention. I don't think so. take a look at the Modern Money Public Purpose Q&A session with Scott Fullwiler and Dean Baker. Scott is trying to explain to Baker simple Reserve operations that EVERYONE in this comment section understands. It is flying over Baker's head. He looks baffled, shakes his head, even acknowledges that he doesn't understand what Fullwiler is saying. That's INSANE. This stuff is not difficult.
What's left? Maybe their Ego?
I am not in favor of airing dirty laundry on social media and blogs. These issues are best argued in papers, and when there are personal differences, interpersonally via private communication.
There is private communication going on to some I realize that there is private communication going on already to some degree. I'd be for amping up the behind scenes push for presenting a united front against neoliberalism to the degree possible.
This is matter of survival now and people have to get into survival mode.
Airing what dirty laundry? Do you mean Kelton's tweet and Mosler post?
The way I see it Baker & Bernstein are inside the political establishment. Both of them know that MMT has been writing about an ELR/JG for what, 10, 15, 20 years now? They could have extended a simple olive branch with a citation, at minimum to Minsky. They purposely chose not to.
What does that say?
I don't buy your argument that associating with heterodox economics is akin to quoting Marx. Baker & Bernstein (and Krugman, et al) are "gatekeepers" to the status quo of the state of knowledge in progressive politics. Where they go, others will follow. They are playing politics and therefore we should treat them as politicians -> apply pressure, publicly.
First, some of the MMT economists are known as testy, and this has led to their isolation. Better to build bridges rather than erect walls. That course of action is not working.
Secondly, these people know each other personally and, I think, are on good terms. Why not connect personally over issues like this?
Regarding some MMT people being testy and leading to their isolation. If establishment progressives care more about that than the content of the MMT argument then they don't deserve the label "progressive"... they are simply establishment. This isn't a high school popularity contest. Millions of people in America, and billions of people around the world, need better policy.
While I agree it makes sense to try to build bridges and connect, it makes even more sense to make the #1 priorty truth telling. If allies aren't interested in that, if they're more interested in political tip toeing, then maybe they don't deserve the positions of power and influence they hold?
'With great power comes great responsibility' (paraphrase)
JK, I have learned over the years that a key to getting ideals adopted is to convince people capable of implementing them that they are their own ideas, especially when one is not a position to implement them oneself. Usually big ideas and visions have to be sold strategically and pragmatically, and often that means sacrificing ownership. Anyway, the record is there and eventually come out.
Most people don't yet understand that without the MMT JG, knowledge of the monetary economics doesn't get one very far with respect to macroeconomic (policy) results.
Government has to offset non-government saving desire and without creating a buffer stock of employed, inflation will be a problem as the economy nears full employment. TINA. See Peter Cooper's heteconomist post today that I linked to here at MNE.
While I agree it makes sense to try to build bridges and connect, it makes even more sense to make the #1 priorty truth telling. If allies aren't interested in that, if they're more interested in political tip toeing, then maybe they don't deserve the positions of power and influence they hold?
Well, that's one point of view. In my view, it is wise to adopt different strategies and tactics. We don't all need to sing same notes if we are singing in the same key. Harmony is good, and some discordance and counterpoint can be useful too.
I think anything that gets the discussion moving away from the neoliberal market-based approach to UE, as well from NAIRU and a buffer stock of unemployed is useful overall. We should be having a lot discussion of options, from the MMT to other ideas about a JG, a BIG, and also Friedman's permanent income. People on the right are already surfacing the latter now.
We don't need to get hung up in supply side/investment v. demand side/consumption either. There's room to integrate both approaches.
"My way or the highway" seldom works over time. Without achieving substantial consensus, the opposition will always be nipping at your ankles until they see an opportunity to go for the throat.
Points well taken Tom. Thanks for the thoughts.
I don't think we should start with the economics either. That's the neoliberal approach that sees economics dictating policy. We should start with policy and they develop the economic rationale for achieving it.
First and foremost it is an ethical issue regarding doing what's right even though it is hard and there will be tradeoffs.
Second, it is a social issue having to do with the good society.
Third, it is a political issue having to do with articulating a policy with respect to which it is possible to achieve sufficient consensus to enact.
Fourth, it is an economic issue having to do with how to achieve the objectives set by policy goals efficiently and effectively.
In my view, this requires a comprehensive treatment of major issues rather than starting with some fix for some problems that happen to be to the fore at the moment.
The opposition will consist of powerful forces that want to limit the role of government in order "encourage market-based solutions," which, of course, are dictated by TPTB "for the good of the country." The problem is that "what's good for America" isn't necessarily good for either the vast majority of Americans or the world either. At the moment, TPTB hold the upper hand.
Best comment on this whole topic was from last May, by Ed Harrison, ironically.
"So I just want to make that point because it seems to me that Krugman's straw-manning in 2011 was just an attempt to create rhetorical space between himself and other economists he believes are not sufficiently credible within the body of mainstream economists."
http://www.creditwritedowns.com/2013/05/how-bond-market-vigilantes-force-rates-higher.html
the rest of Ed's post goes on to indicated that egos trump logic? in nearly every corner?
I think that Ed Harrison got that right to some degree, but I's also pretty clear that Krugman is not a Post Keynesian, let alone having an understanding of currency system at the level of MMT. He is monetarist that believes in loanable funds, which is why he is wedded to ISLM, and he is somewhere between a bastard Keynesian and a New Keynesian. He is an unreconstructed conventional economist with a liberal political stance.
So that's exactly why the Nobel Prize in Economics absolutely MUST be replaced
by the
Marriner Eccles Prize in Functional Finance
I see this has pretty much run its course, but some might find a few things of interest regarding the highly misinformed comments by Lars--whom I noticed stopped commenting here after Tom posted the paragraphs by RAndy and Bill (from 2004, by the way).
First, most were unaware that Minsky pushed ELR until Wray started pointing it out. Bell/Wray in fact pushed Minsky in a highly visible way back in 2004 (if not earlier--but this one was particularly significant)
http://www.levyinstitute.org/pubs/ppb78.pdf
Wray also recently published several Minsky papers on ELR in a book
http://www.amazon.com/Ending-Poverty-Jobs-Not-Welfare-ebook/dp/B00CC2KEPA/ref=sr_1_1?ie=UTF8&qid=1385310493&sr=8-1&keywords=minsky+jobs
The suggestion that MMT has "stolen" the idea from Minsky is simply preposterous and something only someone with a chip on their shoulder against MMT would say. The evidence is so overwhelmingly against such a statement that it's simply disingenuous and not worth engaging.
(This is all not to mention that Levy--largely if not exclusively due to the efforts Wray, Papadimitriou, and Kregel--has pushed the full range of Minsky's work more than anyone, from publishing new editions his 3 books (which were very difficult to find before this reissue), to posting archives of all of his finished and unfinished work, to holding a major academic and policy conference and another major graduate/Ph.D summer school on Minsky each year.)
Second, there is NO difference between what is meant by ELR, JG, PSE, etc. The idea we are pushing is and has been exactly the same throughout (the first time I encountered it was in Warren's paper he mentions above) though at various times we have preferred to use these different labels. They all mean the same thing and are essentially interchangeable. The quote from Bill and Randy above is simply noting this point, not suggesting there is any difference of significance between the respective views--though there might be differences in some instances (between Bill and the rest, largely) regarding some preferred program details, this has nothing to do with the particular label being used.
Best,
Scott Fullwiler
Thanks for burying that one, Scott.
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