Response to Bill Mitchell

[UPDATE: There are a few updates to this post, marked as so in the text]

This blog post is a reply to what became and should have remained a Twitter spat, between myself and Bill Mitchell, over Chris Williamson and MMT. I would have liked to have replied just on Twitter and to keep it short and simple except that Bill has taken it to another level, responding on his blog in a highly questionable manner, so I am forced to reply this way too.

I do not know who will read this, even though this will probably be no one, since I do not promote this blog and it is pretty much inactive anyway (no posts for over a year), but on that basis I need to add some detail for those who do not know the parties involved.

Anyway, given this, I will first provide sufficient notes on our shared economic views, followed by my concerns on Labour in the UK. Then I will summarise the discussion between myself and another twitter MMT advocate which will also cover my concerns over Chris Williamson. I will then expand it to the discussion between myself and Bill which led to some questions for Bill to answer which he sort of answered in a post and to which this is the response. Still I will try and be as concise as possible hopefully without losing any nuance.

Modern Monetary Theory

Bill Mitchell is one of the founders of a macroeconomic framework called Modern Monetary Theory or MMT. This post is not about this theory per se. If one peruses previous posts here, in this dormant blog, you will see I support this approach.  My concern here is about PR and marketing of MMT in the UK, at this point in time in 2019.

For those of you who are unfamiliar with MMT, all you need to know for this discussion is that we argue it is a descriptive framework,  one that is available to anyone, whatever political values or location that they take in a political spectrum or compass: Left, centre or right; Authoritarian or libertarian; racist, including anti-semitism and also anti racist. Even if they are not consciously aware of this framework. That is, it is above and beyond any political value set anyone might have. Critics might disagree but that is beyond the scope of nor relevant to this discussion.

This is the same as a position over the theory of gravity. It does not matter what one’s political values are the theory of gravity still applies. There is an obvious difference to that analogy since, if one groks MMT, then one’s political values are likely to be altered or modified e.g. one could no longer use “neoliberalism” to support one’s position, however one could keep that position but need different arguments. (I put neoliberalism in scare quotes but again as to what that is not relevant to the substance of this discussion, I use it here and elsewhere for illustrative purposes only). Still the fundamental point remains, disputed by critics or not, that any political values can be congruent with MMT.

This means that differing MMT academics and advocates can operate within this framework with differing political values. So I fully expect to disagree with others within this framework.

A case in point is the UK remaining or leaving the EU. One cannot tell merely from knowing that one uses this framework, as to what their position is over the EU. In Bill’s case he is, what I call, a Hard Lexiter. Some founders of the first formal MMT advocacy group in the UK (I was in the meeting where the seeds for this were sown but was not involved in it’s creation) the Gower Initiative for Money Studies (GIMMS) voted Remain. I, if anyone is interested, support a soft Lexit position: Efta/EEA. Reasons why and for these differences are, again, not relevant and outside the scope of this post but the point is all these positions can be made within an MMT framework combined with everyone’s differing political values.

Labour and Antisemitism

That all being said both myself, Bill, GIMMS and others that might be mentioned here are of the left persuasion. I like to say I am  left but not of The Left. I am critical of Labour for the same reasons that Bill is, they are still under the influence of “neoliberalism”, not just what I call the social neoliberals – called by the democratic socialist wing of Labour e.g. Corbyn et al. “Blairites” – but also the democratic socialists themselves, with, for example, their Fiscal Rule.

Where we differ is that I am also concerned over Labour Antisemitism, on which Bill and GIMMS has pretty much remained silent. That is fine, he and they are making economic critiques of all parties, there is no need, expectation or obligation to get involved in that, certainly nothing within MMT should be affected by remaining silent on that. That issue, I would put it, is orthogonal to economics.

I have been more than happy for him and the official MMT body in the UK to ignore this and not take sides. The bone of contention that is the primary trigger for this post is that this is no longer the case.

James Tapper,the Brighton August and the GIMMS Fringe Labour Conference Meetings

The issue started when James Tapper, a Twitter advocate for MMT, drew my attention to a meeting on MMT to be held by Chris Williamson  in Brighton on August 8th 2019. Now, as most people are aware, in the UK at least, Chris Williamson is a highly controversial Labour MP who has been stirring the mud in the Labour Party over a range of antisemitic issues and more, but specifically was suspended over comments he made over Labour being “too apologetic” over anti-semitism.

Now since Chris Williamson is promoting MMT, it is inevitable that he will gain some converts to MMT in his talks. After all advocacy is one of his goals. This also means whether due to Chris directly or not there will be MMT twitter advocates who stand with Chris Williamson. It is to be expected. I don’t like it and will happily challenge them, in the hope that they are more rational than others of his supporters unaware of MMT.

So I was concerned that he promoted Chris Williamson without qualification. For myself, I often quote, with qualification, writers that I or just others  find problematic or controversial, who still make specific good and well supported arguments, ones  that I can endorse without meaning I endorse anything else they say. Far from wanting to qualify his support for Chris Williamson’s meeting, he made the absurd claim denying that Chris is not even controversial and that there was nothing to qualify!

Then it turns out that Chris is not only giving a talk on MMT but he is also substantiating the moniker applied to him by the many in the Jewish community of “Jew Baiter”, by auctioning the infamous antisemitic Steve Bell cartoon that the Guardian refused to publish!

It is a bone of contention as to whether Chris is currently the most notorious provocative (suspended) Labour MP when it comes to the issue of institutional antisemitism in Labour  but no one could deny that he is controversial. Anyway far from being contrite over his suspension, here was Chris belligerently clearly stepping over the line and linking what should have been a much valuable discussion and advocacy of MMT with his notorious Jew baiting behaviour. It was his choice to mix these two entirely distinct and orthogonal issues. This should have drawn pause by anyone seeking to promote an understanding of MMT in the public arena, even if this was not an officially supported meeting. There is still to date has been no condemnation even any comments about from any significant MMTers involved.

After all our banter James then posted a promotion of a a GIMMS organised Fringe (i.e. unofficial) Labour Conference event which was hosting Bill Mitchell and Chris Williamson! It was here that Bill got involved but I first want to complete my twitter discussion with James Tapper.

[UPDATE: The following paragraph is incorrect, I was trying to understand why I responded to that particular tweet and not another. I thought I was mistaken over the meeting it referred to hence that is why I  missed that Bill and GIMMS were included in the tweet. I will add the proper explanation after this paragraph]

After all our discussion James continued to promote the original August 8th meeting without qualification – when James undeniably knew that Chris was specifically and deliberately merging advocacy of MMT and Jew baiting in one meeting.  And he re-promoted the GIMMS meeting. I  got them confused (UPDATE: I literally only noticed this after I first published this post) but, regardless, I responded specifically to him with an acerbic and ironic piece of rhetoric.

[UPDATE: The previous paragraph is incorrect. I have reread the tweet flow and links after getting over the surprise of Bill’s over the top response.  I was specifically responding to James denial that Chris Williamson was controversial and my concern that I did not want that controversy to affect the GIMMS meeting. He then linked to that Independent article that made my case in both aspects! Everything else follows. I responded with an acerbic ironic joke not realising he would not be the only one directly addressed by it. If instead I had said “QED” or equivalent none of this mess would have occured. But it is twitter and was a individual spat between two no names.]

Here is the conclusion of our banter

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That I thought was that. Two no names on twitter, big deal. (Note it just looks like I am replying James alone. More on that later.)

Questions for Bill and GIMMS

Bill became involved in our discussion and provided two tweets, which led to these questions from me. His tweets are included in this tweet thread

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Bill’s Blog post response

So what was his answer? It was in a blog post not a tweet. The full post is here but here is the relevant section:

Thugs try to derail MMT presentation

We learned overnight that an event in Brighton tonight, where British Labour MP Chris Williamson will talk about Modern Monetary Theory (MMT) has been compromised by mindless thugs who have threatened violence to staff at the proposed venue should the event go ahead.

The full story is here in the Morning Star (August 6, 2019) – Williamson refuses to bow to thuggery after venue threatened by two men.

One of the tactics fascists deploy is to bully people with threats of violence in order to curb ideas they cannot counter.

The last week on Twitter has seen a continuation of the barrage of anti-Semitic accusations being made.

They seem to keep coming. I wrote about them recently in this blog post – When the Left disgraces itself(July 30, 2019).

But the dirt continues to be aired.

One creep went so far as to Tweet this week:

So apparently MMT is “For the many, not the Jew”.

I have been roped into the fuss because I am appearing at an upcoming – GIMMS Fringe Event – at the British Labour Party Conference in Brighton on September 23, 2019.

I will be sharing the stage with Chris Williamson to discuss MMT and the Green New Deal.

Chris is a friend and a dedicated Labour MP who has been courageous in embracing MMT and seeking to advance those ideas within the policy space.

Apparently, for all these diehard defenders of freedom, my association to Chris proves I hold anti-Semitic views, and, in turn, proves that Modern Monetary Theory (MMT) comes out of the same dark origins.

It is an absurd proposition and reflects the desperation that people within the Labour Party or sympathetic to it are willing to go to undermine the leadership and purge progressive economic thinking.

The Tweet was grossly disrespectful of my academic work and the work of my MMT academic colleagues.

It was plain wrong because in the body of literature that defines our work you will never find anything that one could remotely infer as being consistent with that statement.

After all, MMT is not a regime (“for the many” or otherwise).

But to try to slur our work with the anti-Semitic tag is disgusting and the person should be ashamed of himself.

As is clear – the hate talk of US Republicans against minorities has spawned gun massacres – the ‘manifesto’ of the El Paso murderer contains sentences that you can trace to various Tweets from Trump and his gang.

Relentless misuse of anti-Semitic accusations to make political points not only degrades the Jewish people but also spawns more extreme behaviour.

We cannot rule out the proposition that these thugs in the UK have been emboldened by this Twitter and social media onslaught against Chris and MMT (dragging me into the fray).

Let me state this clearly – the event that I am involved in on September 23 will go ahead, even if we have to stand on Brighton beach or in a park with a loud hailer.

Interlude

Before I respond to what was addressed to me, here is a comment I made on Labour Reddit:

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There had been some speculation there and elsewhere that Chris or Greg Hadfield – the organiser of this event and also twice suspended from Labour over… go on guess… antisemitism issues – had been making this up. Unlike many on Twitter, I did my best to actually find out. Only 10 minutes and two phone calls is all it took.  (By the way both Chris and Greg have blocked me so I have no idea what they might be tweeting.)

UPDATE: I still have seen no evidence for the “two thugs” claim and nothing Bill provided supported that allegation. This been further exaggerated by Jackie Walker claiming there was a bomb threat, although that is quite independent from anything Bill asserted – presumably his claim was via the ever reliable unbiased Morning Star. Note  the Holiday Inn Brighton has not confirmed to any journalist that the email was real, were they telling me the truth but then instructed to remain silent after my query? I will assume that is the case. Still one cannot infer the “two thugs” claim from that.

What happened

Well I was very surprised that Bill even saw my tweet to James. I know he has an impressive and  prodigious capacity for high quality work but where would he find the time to even see this tweet? I assumed that James Tapper had been a cry baby and DM’d the tweet saying look what Martin said to me.

I was wrong. 

After my cynical comment and long after his post the tweet thread continued:

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The penny dropped on my second reply.  Usually when, such as in this case, a tweet is misread in some form or other, the injured party responds, politely or not and I can redress it there and then.

Now realising that Bill received this directly he would understandably be extremely upset. In his shoes, I would be too. However it would never occur to me to amplify it to a blog (if I had an active one) without first seeking a response or redress on the original medium. Even more so if I had a far greater reach than my respondent. If he had responded, however irately, I am sure we could have quickly unravelled that that comment was not aimed at him nor the MMT community, that him seeing it all was an innocent mistake due to replying too swiftly to the wrong post on twitter and that I would have more than happily apologised for any confusion or upset caused, including deleted this tweet. 

He did not do that. Instead he responded in a quite despicable fashion in that post quoted above.

That is a real dick move.

Given the way he did respond, I will not delete the text but it should be quite clear it is not aimed at him nor the MMT community. 

He owes me an apology for his appalling behaviour, in particular insinuating that this tweet  was somehow contributed or helped trigger the obnoxious behaviour that led to the event being cancelled. Apart from anything else,  look how many people have even read that tweet:

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He adds a most disgusting and near libellous rant when he knows I have defended him from accusations of anti-semitism from well know economists on Twitter. I have also said that I have never seen any antisemitism from any MMT academic (I have done enough screenshots for one post but you can check my timeline).

All I have said is that it is not a good look for MMT officially to be associated with  someone as controversial as Chris Williams.  The fact that he might be only Labour MP who groks MMT and defend it is sad. Bill has spent many years of effort trying to gain traction but I fear and hope that this has just blinded him to Chris’ other failings.

Whatever has happened between myself and Bill,  I am and will be an advocate for the best realistic macroeconomic theory and to date I hold that is Modern Monetary Theory. I will continue to refer to the 20 odd years’ body of work including papers, posts and tweets by Bill.

I do not need to repeat the questions already stated above. Has he or GIMMS answered them? I think not but I will let you be the judge.

UPDATE: Given the disaster of the August 8th Brighton meeting, I fear for the GIMMS Fringe Labour Party meeting.

Whilst I think both Bill and GIMMS are one the wrong side of history on this, I also sincerely hope that the issue remains solely on the Jew Baiting of Chris Williamson. I hope it does not spill over to give critics giving  ammunition and another excuse to dismiss MMT, GIMMS and/or Bill. That was and is my primary concern.

I have no active interest in Labour Antisemitism, suffice that I wish it will eventually be dealt with and resolved, until then I cannot support Labour. I track it due to the sterling work of a few diligent volunteers. However since I repeatedly see support for Chris Williamson across my MMT timeline, I will address that as and when it occurs.

UPDATE 2:

So Bill  has deleted my reply merely pointing to this post to  resolve the confusion He has never done this before. Bill claims to support Freedom of Speech and is against No Platforming yet he he denies me the right to reply on the medium that he chose. In all my 30 years+ online debating, I have never been denied the right to reply on the medium of choice of my opponent. This is a first.

Further he has allowed at least two comments that look very antisemitic (but we have no idea if he blocked anything more blatantly antisemitic but there is a clear bias here) . This is getting beyond me complaining it is “not a good look”. The evidence is there for all to see.

Hypocrisy or what?

 

 

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Steve Keen’s ” Can we avoid another finacial crisis?”: A review (Updated)

[UPDATE: This is a heavily revised and improved review]

Steve Keen is one of the few economists to have warned about the impending Global Financial Crash (GFC) of 2008.  Here he  shows the core reasoning that helped him make that call. Using the same approach, what can he say about the present in 2017 going forward?  Whether one ultimately agrees with his arguments or not, surely he has better earned a position at the high table than many others who failed to call the GFC, who  undeservedly remain at that table without merit? Would we not all benefit by having him and his arguments as part of the core debate of economic policy? This book is a bold, accessible and provocative attempt to remedy that sorry situation.

The Professor and Head of the School of Economics, History and Politics at Kingston University in London,  “Can we avoid another financial crisis” is his second book after “Debunking Economics” (He also has a collection of his papers in
“Developing an economics for the post-crisis world”). It is far more accessible than his first book and clearly his intended audience is different and broader. Indeed, even MPs and political journalists should be able to understand this except, maybe, it is still beyond George Osborne … since this is not a Ladybird book.

His concern is over the growth and change in growth of private debt as a threat to economic growth and financial stability. His main argument is that when the debt grows too large, its maintenance becomes unsustainable, and the process of us repairing our balance sheets leads to a reduction in the demand for credit, which, in turn, reduces total demand the economy and, especially if the debt is large enough, this can stall the economy and lead to a recession. This makes it even harder to repair our balance sheets and a vicious cycle can ensue.

He argues that a demonstrably erroneous and almost anti-empirical design and application  of mainstream neoclassical macroeconomics has rendered this perspective invisible, until recently mostly denying any importance or significance of private debt, as they must, given that their core models, as Steve says, excludes “banks, debt and money”! This  is why they all missed calling the GFC. This, in turn, misinformed and misinforms its ideological neoliberal sibling, so policies since the GFC have not enabled us to sufficiently repair our balance sheets and slow or negative credit growth has turned some economies into “zombies”.

Now  whether one agrees with him or not, can one reasonably deny that this should be part of the Overton window (the window of discourse)?  and, if nothing else, this book is a highly forceful and concisely readable argument to make this a central focus of future economic and populist debate.

Given modern attention spans this is a short book and certainly readable in a few hours but possibly quite dense in new ideas if one if unfamiliar with his work. This is probably easier to get with the background of  a decent scientific understanding but far less so if one is already immersed in (or corrupted by?) mainstream dogma or, even worse, educated in a  PPE course at university as far too many of our politicians and commentators have been.

There are many things he does not address (but maybe I read it too quickly) such as criticising the erroneous application of the household analogy to governments nor does he specifically mention the Loanable Funds doctrine although he does discuss this foundational mistake of mainstream economics at length and very clearly. Overall he amply argues for and demonstrates his theme that one of the main concerns of policy makers should the growth and change in growth of private debt – worryingly still not a concern of the UK Treasury and OBR. He shows, in very elegant fashion, without a single equation in sight (some are verbally stated to describe the most simple of his pure credit models) why this is likely the case. He also makes some very concise and clear arguments as to why the mainstream neoclassicals and New Keynesians – the backbone of neoliberal political ideology – repeatedly miss the point. I, in particular, liked his simple and profound verbalisation of the Sonnenschein–Mantel–Debreu theorem  which really demolishes the micro-foundation argument for macro economic DSGE models. However  he does not mention issues such as the Arrow Debreu model which was one response to this, although he does note Gorman‘s arguments. The point is this work will suffice to get you to understand the main issues involved, but would not be sufficient to argue with someone suitably informed but there are other sources, including his first book to take you further, if you are so inclined.

He is relatively pessimistic over the final outcomes that are possible or, certainly, politically feasible and, sadly, I have to agree. I wonder if he does not dwell enough on policy space and bank reform. He does discuss his debt forgiveness jubilee approach and how to circumvent the moral hazard issue of only rewarding debtors. Still he does not mention say, MMT’s Job Guarantee whilst possibly too fleetingly discusses MMT’s Godley inspired sectoral balances approach to clarify what Government or Public debt really is.  Futher, as two off the cuff examples, both Bill Mitchell‘s argument that banks should not on sell their originated loans and Richard Werner‘s argument over how to direct banking to more productive financing (he does discuss that though) could have augmented his arguments without much addition, focus or loss of clarity.

All in all this feels like a well-edited if not, possibly, an over edited book. By this I mean some other points including some as just noted could have been also simply argued but this might have detracted from the overall force of the book.

Still what results is a very important and accessible work. We need to insure that every MP, journalist and pundit is familiar with this.  I hope if you read this and you happen to know such a person you send them a copy in return for them giving you their informed opinion on it. If they are unable to do so then they really have no business being involved in politics.  What would result is that no-one could claim ignorance of the issue of private debt and that it becomes a key focus of the economic debate going to forward.