Posts about linguistics, framing and the way to present arguments

The dislocation between the PMC and the rest of the working class – Part 2

I mentioned last week in this blog post – The dislocation between the PMC and the rest of the working class – Part 1 (November 11, 2024) – that I had been reading the 2021 book – Virtue Hoarders: The Case Against the Professional Managerial Class (published by Minneapolis: University of Minnesota Press) – written by US cultural theorist – Catherine Liu It is now an open access document. It provides a brutal critique of the professional-managerial class, which she thinks has become so associated with the aspirations of the capital class’ that it has lost any progressive force in society. Here is Part 2 of that discussion.

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The dislocation between the PMC and the rest of the working class – Part 1

A while ago, I caught up with an old friend who I was close to during our postgraduate studies. We hadn’t seen each other for some years as a result of pursuing different paths in different parts of the world and it was great to exchange notes. At one stage during the conversation, she said to me that I had become one of the ‘super elites’, a term that evaded definition but could be sort of teased out by referring to lifestyle choices etc. The most obvious manifestation was the fact that she was visiting my new home in an experimental sustainable housing estate, which apparently marked one demarcation between being an ordinary citizen and one of the ‘super elites’. That group also apparently doesn’t have any power in society like the real elites – the old and new money gang – but is privileged nonetheless. I understand the notion even if it somewhat amorphous. I was reflecting on that conversation as I have been trying to understand why the US voters chose Donald Trump over the seemingly more progressive and decent candidate Kamala Harris. I use that description of Harris guardedly, because if one digs below the surface, even just a bit, it becomes clear that the Democrats were not particularly progressive or decent (Gaza!) at all but more interested in lecturing people they look down on as to how they should behave and look. All that stuff about restoring joy – was really what ‘super elites’ think about and is far removed from the aspirations of the voters who went for Trump. Here are some additional thoughts on that topic.

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The 20 EMU Member States are not currency issuers in the MMT sense

For some years now (since the pandemic), I have been receiving E-mails from those interested in the Eurozone telling me that the analysis I presented in my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015) – was redundant because the European Commission and the ECB had embraced and was committed to Modern Monetary Theory (MMT) so there was no longer a basis for a critique along the lines I presented. I keep seeing that claim repeated and apparently it is being championed by MMT economists. While there are some MMTers who seem to think the original architecture of the Economic and Monetary Union has been ‘changed’ in such a way that the original constraints on Member States no longer apply, I think they have missed the point. They point to the fact that the ECB continues to control bond yield spreads across the EU through its bond-buying programs (yes) and that the Commission/Council relaxed the fiscal rules during the Pandemic (yes). But the bond-buying programs come with conditionality and the authorities have now ended the ‘general escape clause’ of the Stability and Growth Pact and are once again enforcing the Excessive Deficit procedure and imposing austerity on several Member States. The temporary relaxation of the SGP rules (via the general emergency clause) did not amount to a ‘change’ in the fiscal rules. Indeed, the EDP has been strengthened this year. The Member States still face credit risk on their debt, still use a foreign currency that is issued by the ECB and is beyond their legislative remit, and are still vulnerable to austerity impositions from the Commission and their technocrats. To compare that situation with a currency-issuing government such as the US or Japan or Australia, etc is to, in my view, commit the same sort of error that mainstream economists make when they say that ‘the UK is at risk of becoming like Greece’ or similar ridiculous threats to discipline fiscal authorities in currency-issuing nations.

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The Bank of England does not need a tiered reserve system for the Government to avoid austerity

There is an interesting debate going on in the UK at present about the concept of tiered bank reserves. The concept is now being used by commentators to argue that the new British government does not need to inflict the austerity that the Chancellor has now announced (even though she is denying that is what the government is up to) because the government can simply reduce outlays to the commercial banks in order to meet the fiscal rules. The discussion is rather asinine really and features all the missteps that commentators make when trying to appear progressive but falling into the usual mainstream macroeconomic fictions.

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British Chancellor fails the basic test – language is meant to impart meaning

Language is meant to bring meaning to discourse. That means we want to use terms that convey information that is of use to us in making our way in the world. The problem is that economists have perverted that process and introduced a metaphorical language that is intended to persuade the reader/listener to accept a particular view of the world but which undermines their ability to actually understand the phenomenon in question. Marx knew long ago how language could be constructed to advance the interests of the ruling class. The mainstream economics commentary that is also used by politicians falls into this category. Terms are used that have no meaning in an elemental sense but provide support for ideological agendas. We, the public, allow that to happen because we are ignorant about the context. It becomes a vicious cycle of lies and fictions which undermine human and environmental sustainability but certainly transfer income to the top-end-of-town. A recent path setting address to the House of Commons by the new Chancellor is a classic example of this reality denial.

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IMF holds a religious gathering in Tokyo – to keep the troops in line

The IMF joint hosted a conference in Tokyo last week – Fiscal Policy and Sovereign Debt – and the continues its misinformation campaign on the ‘dangers’ of public debt. The conference claimed that it brought together ‘leading scholars and senior policymakers’ and upon examination of the agenda it was clear that there was very little diversity in the speakers. The organ started playing and all sessions sang from the same hymn sheet. That is how Groupthink works. Repeat and rinse, repeat and rinse, and, never confront views that are contrary to the message. Groupthink is about avoiding cognitive dissonance for fear that at least some of the ‘parishioners’ might lose the faith. The famous British economist, Joan Robinson likened mainstream economics to a branch of theology and these conferences that the IMF convene around the world are like evangelical crusades, to keep the troops in line so they can continue to keep all of us in line – for fear that we might all start seeing through the veil and discover the rotten core.

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Government debt fears – more fiction from the mainstream media

After all these years of trying, the insights provided by Modern Monetary Theory (MMT) still haven’t cut through. One doesn’t even need to accept the complete box of MMT knowledge to know that, at least, some of it must be factual. For example, how much brainpower does a person need to realise that a government that issues its own currency surely doesn’t need to call on the users of that currency in order to spend that currency? Even if we could get that simple truth to be more widely understood it would change things. But every day, economists and the journalists demonstrate a lack of understanding of how the monetary system actually works. Are they stupid? Some. Are they venal? Some. What other reason is there for continuing to use major media platforms to to pump out fiction masquerading as informed economic commentary? And the gullibility and wilful indifference of the readerships just extends the licence of these liars. Some days I think I should just hang out down the beach and forget all of it.

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From the archives – my early statements on the need for degrowth and the resistance they received from progressives

As part of a another current project, which I will have more to say about soon, I was trawling through early Internet archives of the Post Keynesian Thought (PKT) listserv archives and was reminded that I began my degrowth journey many years ago. Going back in time and coming across things that one has written is an interesting experience. In this case, I reflected on my changing narrative style, my naivety in places, and the continuity of my thinking over the course of my academic career. The following discussion is the product of my archival research for another project of the Post Keynesian Thought (PKT) discussion list archives. It has been an interesting exercise and brought back interactions, personalities and the like that I have forgotten about. Many on that list have since died (sadly). But what is established is that 30 or more years ago there was widespread resistance still within the progressive economics community to the idea that the destruction of the planet would require major systemic change. This resistance bears on the debates now between the dominant ‘green growth’ group who think capitalism aided by global financial capital can achieve the changes necessary to meet the climate challenge and the degrowth camp who want fundamental system and behavioural change. My writings in 1995 placed me firmly in the latter cohort.

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What is responsible government spending?

Today, I am fully engaged in work commitments and so we have a guest blogger in the guise of Professor Scott Baum from Griffith University, who has been one of my regular research colleagues over a long period of time. He indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he is going to talk about what responsible government spending should look like. Anyway, over to Scott …

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Anything we can actually do, we can afford

I often make the point in talks that the fictional world that mainstream economists promote leads to poor decisions in the real world by our policy makers. We saw that in the 1980s and 1990s with the large scale privatisations of public enterprises, touted as employment-enriching, productivity-boosting strategies to provide ‘more money for government to spend on welfare’. We now have enough data to know that in almost all the examples the promises have not been fulfilled and the outcomes worse than what would have been had the enterprises been maintained in the public sector and motivated to provide public service rather than private profit. The same mistake is being made with the response to the climate emergency. Economists and commentators are claiming we need to ‘repeat the privatisations’ to get enough investment cash to facilitate the necessary restructuring. They are wrong and if governments, operating on the assumption that they do not have ‘enough cash’, rely on private funding for climate initiatives then the outcome will be poor for societies.

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