Modern Monetary Progression without Communist Preclusions
Countering cynicism on selective left critiques of Modern Monetary Theory and the Green New Deal.
This post responds directly to 'Grim New Deal: A communist critique' by Dexter Duckett and Himath Siriniwasafrom 18 months ago, which argues Modern Monetary Theory and a Green New Deal cannot address inequality or environmental crises within capitalism due to profit-seeking dynamics and the tendency of the profit rate to fall.
While there are real challenges to sustainability and equality, judgments about what is necessarily precluded should not rest on assumptions, and theoretical arguments detached from what responsible policy interventions may be able to achieve in practice. This essay argues for assessing feasibility based on evaluating policy on its merits and learning from diverse experiences, instead of visions of impossibility, relying on selective applications of theory, and notions of system constraints.
Modern Monetary Theory (MMT) argues that governments controlling their currency can fund progressive programs with sovereign money creation. While critiques claim capitalism's profit-seeking dynamics necessarily preclude reform, a closer analysis shows their assumptions misconstrue monetary sovereignty and policy potential.
According to MMT, governments can afford investing in public purpose given available resources, without taxation or borrowing. As Duckett and Siriniwasa notes, MMT sees money as a public monopoly for public purpose; responsible policy can deploy funds for full employment and price stability, reducing spending if demand outpaces productivity. Yet the article claims a Green New Deal would necessarily spur inflation, ignoring how specific programs and conditions affect consequences. One cannot legitimately conclude reform is impossible based on misrepresenting sovereignty rather than analysing suggested and potential interventions.
MMT describes monetary dynamics and does not suggest profit motives will or should disappear. Policy could seek to redirect profit-seeking for sustainability if proactively attempted. Whether regulating, incentivising, and investing for public purpose could sufficiently change the system is unclear without trials; but cannot be ruled out by assertions of inescapable constraints. If capitalism's core logic strictly precludes resilience or prosperity, how have other economies with strong welfare states and environmental policies long persisted? While progress may face difficulties, focusing on inevitable failure deters reform towards austerity.
Possibilities depend on trials of policies designed to responsibly achieve social purposes, not assumptions of iron-clad laws dictating what is out of reach. To address sustainability and equality challenges will require responsible policy ingenuity, and guided by real-world insights, not arbitrary impossibility arguments. Rather than making assumptions about what is feasible or precluded, progressive reform should rely on responsible, iterative policy trials and ongoing learning. What matters is what kinds of reforms might achieve, not what is assumed to be impossible. With continuous feedback and adaptation, policies that currently seem unfeasible may turn out to be viable if we are willing to learn and adjust course as we go, rather than sticking to presuppositions about what cannot work.
The merits of specific interventions, not theoretical limits, should determine what societies pursue.
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