Australia – inflation still falling while the RBA governor keeps inventing ruses to keep hiking rates
It's Wednesday and there is a lot going on in the data release sense -…
Its Wednesday and so only a discursive type blog post (that is, very little actual research to report). I have been thinking about the so-called Marxist-inspired critiques of Modern Monetary Theory (MMT) and just the other day another one popped up in the form of the long article by Paul Mason. One of the things that I have noted about these critiques is that they deploy the same sort of attack against MMT that mainstream economics has traditionally deployed against Marxist economics. One would think they would at least be consistent. It won’t take me all that long to explain that.
I was attracted to the writing of Karl Marx was because I considered his brilliant discussion of the differences between the superficial relationships we see in the market (so-called ‘exchange relations’) and the essential relationships that tie worker to the capitalist and create the conditions for surplus value production.
A student studying neoclassical economics stays forever at the exchange relations level and can never appreciate the origins of profit. They think that somehow profit is created in the market via exchange of goods and services.
These students are indoctrinated into ‘free market'” myth, where we are all, essentially, free traders and own-producers at heart who agree (aided by market forces) to specialise into labour suppliers or capital providers. The myth continues that we are all free traders – everything is voluntary and all exchanges are mediated by market prices which deliver equalised use values to each party to the exchange, to be enjoyed upon completion of the same.
Capitalism is thus fair and efficient.
The ‘everything can be understood at the exchange level’ view falls in a hole when we focus on the labour market Marx’s analysis of the wage form.
I wrote about this in this blog post (among others) – The labour market is not like the market for bananas (August 17, 2012).
There is extensive analysis of this in our new textbook – Macroeconomics – despite some Marxists claiming MMT neglects any sense of class struggle.
The point is that the concept of a market for ‘labour’ is somewhat of a misnomer because if we try to analyse the transactions that occur in this arena in terms of a simple exchange of use values essential insights into the operations of the economy are obscured.
For Marx, one of the characteristic features of capitalism was that the workers only sell their capacity to work (“labour power”) to the capitalist in what we now term to be the labour market.
In his brilliant book – Wage, Labour and Capital – Chapter 2: What are Wages? How are they Determined? – Marx wrote:
Consequently, it appears that the capitalist buys their labour with money, and that for money they sell him their labour. But this is merely an illusion. What they actually sell to the capitalist for money is their labour-power. This labour-power the capitalist buys for a day, a week, a month, etc. And after he has bought it, he uses it up by letting the worker labour during the stipulated time.
Workers are not enslaved under capitalism nor do they sell what we might call labour services.
It is clear that capitalism has moved beyond slavery but why would he say that the labour market is not where labour services are sold?
For Marx, the major challenge facing capital is to ensure the labour power they purchase becomes a flow of labour services (or simply labour). This observation suggests that the capitalist firm faces a control problem pertaining to how the managers extract work from the potential they have bought.
In modern terms, the firm agrees to pay a wage to the worker for a given working day (which itself might vary according to various rules). At that point in the exchange the firm has purchases the labour power, which is the capacity to work. No actual labour services have been purchased in that transaction.
It looks as if the worker is being paid for the entire working day – say 8 hours. But that focus on the exchange relation is misleading.
The task of management then is to organise, muster and deploy that labour power in a controlled way to ensure that for the time the worker has agreed to work they are delivering the desired flow of labour services to the firm.
It is in that way that the firm ensures they produce enough output from the labour power purchased, which upon sale, will return the funds outlaid on wages (and other materials the workers use) and leave a sufficient residual – profits – which will satisfy the objectives of the owners of the firm.
A study of the modern labour market therefore has to be conducted within the context of the primacy of managerial control and the need for the capitalist firm to maximise the flow of labour they gain from the labour power they purchase.
Further, unlike a simple exchange of goods for money, the use-value of the labour power is enjoyed (extracted) within the actual exchange (that is, while the workers are still at work). The use-value – the source of profit – is uncertain and a control function is indicated.
Bosses have to control the realisation of that use value as production in an environment where the majority of workers would rather not be there. That is a very different dynamic environment to one where we go into a shop and buy a trinket to be enjoyed later.
Under capitalism, a worker might only need to work for 2 hours in a day to perform what we call ‘necessary labour’ (that required to maintain survival of the worker). For the rest of the working day, they are producing ‘surplus labour’.
The worker appears to work say an 8-hour day for a certain hourly wage, which blurs the distinction between the two types of labour.
Why don’t they just leave after 2 hours? The reason is the workers do not possess the means of production and hence the means of subsistence.
A defining feature of capitalism is that the capitalist owns the productive means and the worker, while free to choose which capitalist to work for, has to work to survive. Survival requires the worker agree to work for, say 8 hours to get the wage which might be equivalent to 2 hours of production.
This is the wage form. It was a brilliant exegesis by Marx that provides a penetrating insight into the dynamics of our systems and continues to resonate.
It is why class (in Marx’s terms) has to be at the forefront of the analysis. Nothing in MMT denies that status!
Another way of thinking about this is that Marx lifted the veil of free market ideology to expose what is actually going on in the capital-labour exchange.
We should always being aware that these veils are often used to disguise power relations or other things that the elites do not want to be made transparent.
Now think about MMTs treatment of the government sector.
I explained that in an early blog posts (among others):
1. The consolidated government – treasury and central bank (August 20, 2010).
2. The sham of central bank independence (December 23, 2014).
Essentially, despite the appearance that central banks have become independent of the political process, an appearance that is reinforced by false statements from my profession, the fact is that at the level of substance, the central bank and the treasury departments work closely together on a daily basis.
Further, the politicians tend to appoint central bank management and set the legislative framework in which central banks operate.
Some of the critics of MMT have, however, focused on the independence issue as a sign that MMT is deeply flawed.
They claim that MMT presents a fictional account of the world that we live in and in that sense fails to advance our understanding of how the modern monetary system operates.
This fiction is centred on the way MMT ‘consolidates’ the central bank and treasury functions into the ‘government sector’ and juxtaposes this with the non-government sector.
Recent versions of this attack came from Gerald Epstein and Doug Henwood in separate papers. Both are avowed Left wingers who mention Marx a lot. Henwood’s article in Jacobin invoked Marx regularly.
I addressed the Epstein critique in this blog post – The conga line of MMT critics – marching into oblivion (March 7, 2019).
I didn’t address all the issues in that response – and so today I add to the list.
I didn’t bother addressing the Henwood attack as it was mostly a personal attack on particular people he seems not to like.
Epstein thought it was useful recycling the claim about central bank independence. He wrote:
… many other claims are based on a consolidated functioning (balance sheet) between the central bank and the government, a consolidation that does not exist in most countries …. In the US, specifically, monetary financing of deficits does not happen automatically.The Federal Reserve has to chose to monetize the debt by doing open market operations, and this choice is as much a political one as an economic one. In practice, the Fed has done this sparingly. Understanding the political economy of the Federal Reserve is therefore key to understanding the institutional limits of MMT
There are technical mistakes here – such as claiming that central banks can only “monetize the debt by doing open market operations”. That is incorrect. But not the point of today’s blog.
The point is that by focusing on the ‘institutional’ arrangements of a country and claiming that they become a binding constraint when in fact these arrangements are just choices of government is akin to criticising Marx for exposing the origins of profit.
We cannot see surplus value production. It is disguised by the wage form. In the same way, these voluntary constraints that government impose on themselves serve to disguise their intrinsic capacities and operations.
If we dig deeper into the production sphere we can see clearly that workers are not paid for 8 hours work but 2 or 3 or whatever is required to satisfy subsistence labour.
Similarly, if we understand that these ‘rules’ and ‘accounting’ conventions that governments erect are all political and ideological artifacts that keep most of us from seeing what the true arrangements and operations are.
The other example that is interesting is the claim that a government such as the US is financially constrained because in Henwood’s words:
But the government doesn’t do that. It spends only money gotten from tax revenues or bond sales. (If you don’t believe me, look at a Daily Treasury Statement, a daily accounting of the federal government’s income and outgo. It looks a lot like any normal financial statement, only with a lot more zeroes.) The Fed is forbidden by law to purchase bonds directly from the Treasury.
Well before these characters tried to jump on the bandwagon and start criticising MMT, I considered some of these claims in this series of blog posts:
1. Modern Monetary Theory – what is new about it? (August 22, 2016).
2. Modern Monetary Theory – what is new about it? – Part 2 (August 23, 2016).
3. Modern Monetary Theory – what is new about it? – Part 3 (August 25, 2016).
I wrote that the problem is that these critics have failed to understand the intent of the MMT consolidation of the central bank and treasury functions into a whole government sector.
Long before any of them entered the debate, I had observed that governments had erected elaborate voluntary contraints on their operational freedom to obscure the intrinsic capacities that the monopoly issuer of the fiat currency possessed.
Please read my blog post – On voluntary constraints that undermine public purpose (December 25, 2009) – for more discussion on this point.
In the same way that Marx considered the exchange relations to be an ideological veil obscuring the intrinsic value relations in capitalist production and the creation of surplus value, MMT identifies two levels of reality.
The first level defines the intrinsic characteristics of the the monopoly fiat currency issuer which clearly lead us to understand that such a government can never run out of the currency it issues and has to first spend that currency into existence before it can ever raise taxes or sell bonds to the users of the currency – the non-government sector.
There should be no question about that.
Once that level of understanding is achieved then MMT recognises the second level of reality – the voluntary institutional framework that governments have put in place to regulate their own behaviour.
These accounting frameworks and fiscal rules are designed to give the (false) impression that the government is financially constrained like a household – that is, in context, has to either raise taxes to spend or issue debt to spend more than it raises in taxes.
Importantly, by introducing the consolidated government sector, MMT strips way the veil of neo-liberal ideology that mainstream macroeconomists use to restrict government spending.
We learn that these constraints are purely voluntary and have no intrinsic status. This allows us to understand that governments lie when they claim they have run out of money and therefore are justified in cutting programs that advance the well-being of the general population.
By exposing the voluntary nature of these constraints, MMT pushes these austerity-type statements back into the ideological and political level and rejects them as financial verities.
I could cite more Left critiques which also fall into the same trap of taking the ‘exchange level’ reality as the end of the story.
Which is exactly what Marx railed against.
After spending the last three years as Shadow Treasurer raving on about the “fiscal recklessness” of the Conservative government (at a time they’ve been imposing austerity) because in his view the fiscal deficit was too high and there was an urgent need for “budget repair” (as if the fiscal position was a car that had broken down), the Shadow Treasurer is now claiming that, if elected, a Labor government will move Australia into ‘healthy surpluses’.
The number of times I’ve heard Chris Bowen talk about ‘budget repair’ over the last several years his countless.
He never mentions that Australia has run an external deficit of around 3.5 to 4 per cent of GDP since the 1970s.
He ignores the fact that the household saving ratio is well below historical levels and that sector is enduring record levels of household debt that has placed it in a highly vulnerable and precarious position.
He does not seem to twig that the fiscal austerity the conservatives have been inflicting while in government has driven Australia’s growth rate towards zero and we currently have a broad labour underutilisation rate of 13.5 per cent (unemployment plus underemployment).
He also has consistently refused to support an increase in the unemployment benefit despite income recipients being forced to live well below the acceptable poverty line.
And now, the man who would be Australia’s Treasurer if they win the election in May, wants to cut the fiscal deficit even more and push for big fiscal surpluses
He told the press that he would be proposing to reimpose the so-called “temporary deficit levy” (a tax levy on high income earners) to fast track the nation back into fiscal surplus.
He should have said it was a policy that would fast track the nation into recession.
He recently also said:
Well you shouldn’t levy any more tax than you need to fund important services and see important Budget repair and healthy Budget surpluses.
Pray tell, what the hell is a “healthy Budget surplus”?
Context to establish:
1. Is Australia at full employment? Answer: nowhere near it.
2. Are Australian household saving consistent with their desires? Answer: no, they are being squeezed for liquidity by the fiscal austerity and flat wages growth and keeping spending growing (at a slowing rate) by credit.
3. Does Australia have an export surplus? Answer: nowhere near it.
4. Does Australia have an inflationary problem? Answer: no, the inflation rate is consistently below the central bank’s lower bound target level. If anything, we are facing a deflationary period as housing prices fall substantially, household consumption spending growth is in decline, and business investment is sluggish.
So no responsible government would try to run a fiscal surplus under these conditions.
The Government isn’t there to run surpluses or deficits. Its role is to ensure that economic conditions advance the well-being of the population by ensuring there are enough jobs to satisfy the demand for work, that inequality is declining, that the environment is being protected, and that inflation is stable.
Given the context that fiscal policy is being framed at present in Australia, no right minded economist would advocate cutting the fiscal deficit and pushing toward surplus.
He must be getting terrible advice to persist in running this ridiculous austerity line.
His utterances alone should disqualify the Australian Labor Party from ever taking office while they run this ridiculous neoliberal narrative.
I also had an interchange with the Shadow Assistant Treasurer recently. He had been writing that MMT believed there were no constraints on government spending and had appeared at a Fabian event in Adelaide last year saying MMT was crazy.
He used the criticisms that Paul Krugman and Larry Summers had recently made of MMT as an authority.
When I challenged both the claim and his use of Krugman and Summers to back up his claim, his response to me was that he is happy to stand alongside the two and remain in the “sensible social democratic mainstream”.
He is a surplus maven without any seeming comprehension of why fiscal surpluses are so inappropriate now for Australia and typically for most nations. Obviously challenging that view, which I do, places one outside that “mainstream” and one becomes ‘non sensible’.
But that so-called mainstream has seen the electoral fortunes of these formerly progressive political parties dramatically decline in most nations over the last decades. Trump is a product of that decline. Social democracy was never about neoliberalism, which is what these views about fiscal policy echo.
Another reason not to vote for the ALP at the upcoming election.
I am also reliably informed that the ALP is getting economic advice from the person who wrote this piece of lies – Printing more money isn’t the answer to all economic ills – which just goes to show where the “sensible social democratic mainstream” has gone to.
Another reason not to vote for the ALP at the upcoming election.
I am speaking tonight at a Climate Action Newcastle event at the Croatian Wickham Sports Club from 18:30. The event is to raise some funds to keep the community club going (it is in dire financial trouble) – it is a valuable community asset.
I will be talking MMT (of course), Green New Deal and answering questions.
Appropriately, it is May Day and a time for celebration for all Left-thinking people, even those confused Marxists.
More details are available on my – Events Page.
Today I dug out an album that I haven’t listened to for a little while. It is the 2003 album from Mighty Sam McClain – One More Bridge To Cross.
It is a somewhat unknown album and was recorded in early August 2002 in the Cedarhouse Sound & Mastering studio in New Hampshire
The song is – Dont leave me behind – and is standard electric guitar-driven soul-blues that McClain specialises in.
His career goes back to late 1950s when he sang alongside Otis Redding, Solomon Burke, Bobby Bland etc. But it wasn’t until the 1990s that his profile became more well-known (and when I cottoned on to him).
He began singing in a Gospel church choir in Louisiana and has had a tough life in the South of the USA.
Here is an – extended interview – with him from 1998.
He died suddenly in June 2015 (aged 72).
He was a journey man singer who could really sing.
The musicians on this album were: Chris Tofield – guitar, Dave Smith – bass, Jim Arnold – drums, Barry Seelen – keyboards, and The Mighty Horns.
Part 2 of my study of British local government finances is coming tomorrow!
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.
This Post Has 24 Comments
The Australian Labor Party appears to have been entirely captured by neoliberalism.
What, then, are the sane electoral choices in “the lucky country”?
(Canuck here, for context)
It seems like these people think MMT stands for “Mr Mugabe’s Theory”.
Enjoyed Mighty Sam McClain muchly. Thanks.
In Spite of Bowen’s incompetence, the ALP is still a preferable option . After Rudd’s stimulus we had the unedifying sight of Wayne Swan saying he was going to get the budget into surplus. it should have been clear to him, But, like you say, Neo-liberal policies have the ALP completely saturated.
While in a blues vein, and hidden labour relations, I remember sitting in a milk bar in ’66 with a mate, on our way to evening classes, and thinking this may be our fate.
Understated guitar work, and sparse keyboards. I think it’s a Vox Continental, one of which I owned for a while in the late 60s/early 70s. They were good while they were working.
Unlikely to be elected but the good news is the Australian Pirate Party and the Australian Workers Party have a Job Guarantee as part of their platform.
Hopefully the new MMT text book “Macroeconomics” will assist in the adoption of MMT by the “mainstream”
Meanwhile, Prof. Steve Keen’s critique of MMT is informative: he is mostly in agreement but sees loose ends in relation to overseas trade.
(Note the reference to Keynes’ Bretton Woods ‘clearing union’ and ‘bankor’ proposals, near the end. of his talk).
Speaking of international trade (after Prof. Keen’s concerns re (his perceived) lack of analysis on this matter by MMT):
How much simpler life would be if the UN could authorise the IMF to fund the global transition from fossil to green energy; surely the resources exist to build the infrastructure and compensate the fossil industry, enabling free electricity around the globe (since free sunshine – the ‘fuel’ – shines on half the world’s surface 24/7 (and the once-off cost of the IMF-funded infrastructure build could be written off without inflationary effects).
Well there you go, I learned something new. The Epstein and Henwood economists willing to stray into flawed mainstream understanding of central bank treasury operations in order to try and lay a finger on a critique of MMT.
Especially in that Henwood quote where he ends by saying (as if we don’t already know) “The Fed is forbidden by law to purchase bonds directly from the Treasury.”
This is that captain picard ‘face-palm’ internet meme moment.
So in order for him to think he’s onto a winner with this one he has to ignore everything that MMT has said, has to have ‘not’ observed what is in plain sight on most central bank websites (which MMT is an observation of). Then he has to ignore how open market operations work. Has to ignore that FED can/does (with switch on-off ability) directly pay interest on excess. He has to ignore how even in euroland where sovereignty is doled out by the troika how secondary dealers allow ECB to target yields for their given pet member state. Then he has to ignore OMF and ingore why people like Mosler write in their mini-book setting interest rates to zero is less work. (which hint is central bank treasury interaction) .
That’s onion layers of ignore to make that critique. And he’s done it using neoclassical ideology so good on him for being a marxist 😉
I understand and agree with what you are saying in this post about the neoliberal capture of the Labor Party, but we have no choice if we want to remove the venal grubs who currently run the country.
Purity in beliefs re economics, will leave us with the status quo, and as a 56 year old labourer who earns the minimum wage this would be intolerable.
So from your position as a well paid academic ( from where I stand),
what other option is there ?
Here in the US, even mentioning Marx puts you into the bowl with mothers who won’t vaccinate their kids. You are dead on arrival, in other words. And there is no chance of resurrection. It has its benefits, of course, because I don’t have to even try to explain Marx. Explaining the operational benefits of MMT is advantage enough. MMT explains how to pay the bills and how to save some money, because it is a more elegant and efficient way to finance a monetary sovereign government. And a more elegant and efficient way to produce full employment and stable prices. I’m going to stick to those narratives. For me, Marx is not part of the conversation.
I can understand your frustration with no options to choose from.
This has been the greatest success of neoliberalism.
Have an illusion of choice with political parties through ignorance or deliberate deliver greater income to the capitalist class (free market nonsense, suppress unions, abandon full employment) all while the working class fight to deliver a growing share of national income to capital through their own ignorance. (Think mandatory super, debates to allow accumulation of wealth e.g rising land values and capital gains)
The only means to ‘fight back’ is for the masses to understand governments issue currency, spending must occur before taxation, inflation is the result of excess spending from any source, spending at the bottom of the income spectrum (e.g a Job Guarantee) is not inflationary.
I think with some simple anaoglies the above sort of statements can become used in the mainstream and we can then have hope of progressive change.
Despite the ALP’s failure to eschew neo-liberal economics, it still represents a much better option for Australia than the completely chaotic, punitive and increasingly extremist Liberal National coalition. And I have hope that if more progressive elements in the party are strengthened, greater opportunities for progressive policies are possible. Besides, the union movement seems to be embracing MMT, which will have an effect on ALP policy. At a meeting to welcome the new ACTU President in Canberra a Jobs Guarantee was definitely approved by the large audience. While I agree there is a lot to criticise in ALP economic policy, part of the reason is that the electorate has been comprehensively convinced by a captive media that deficits are definitely bad. it will take time to change this story. Keep on keeping on and we’ll get there.
Bill Mitchell’s argument that the particular institutional arrangements by which a country implements monetary policy ideologically veil the underlying real relationships is for me surprisingly timely.
This Saturday, a Deficit Owls colleague and I will be defending MMT in a “debate” in New York City in which the other side in the debate will be people coming from the “monetary reform” school. We believe that they will argue that (i) fractional-reserve banking and the consequent creation of credit money by banks is the root of our economic problems; and (ii) the Federal Reserve is currently not part of the government but needs to be abolished and have its functions “brought back into” the Treasury.
We will argue that the Fed is part of the state and always has been. Hence, while the entire banking and finance sector needs a complete shake-up, breaking up the Fed is no panacea and will actually contribute little to “monetary reform.”
I find it interesting and sometimes amusing, that many, not all but many, focus on the structure of the “F.E.D” as an example, when discussing Central Bank/ government consolidation. There are many countries in the world(including mine, unimportant as it is in world affairs) which give the Central Bank a degree of operational autonomy without it being independent by statute. For any such country, Central Bank/ Ministry of Finance/Treasury consolidation is the rule; not the exception. The higher authority is indeed, the Ministry of Finance….. No ifs or buts…..
“The Fed is forbidden by law to purchase bonds directly from the Treasury. ”
It’s like these people think those laws are immutable commandments handed down by their deity of choice, and not something that can be changed as easily as they were made.
I’ve heard he’s a personal friend of the Shadow Assistant Treasurer.
When “The Conversation” ran that article by Holden they had to shut comments prematurely to protect him from a phalanx of very well-informed MMTers determined to counter his lies.
It was a blatant piece of censorship that turned me off from TC.
“..the Shadow Treasurer is now claiming that, if elected, a Labor government will move Australia into ‘healthy surpluses” is deplorable as is his advice.
Rather than vote for some equally dopey and dangerous mob, I have joined my local ALP branch and have had several of my papers about my understanding of MMT circulated for discussion.
I have provided links to your Blog, Bill – hopefully some more will become informed rather than retarded.
Maybe this is a better way to go?
In an economically developed, currency-sovereign country, nothing would promote the Marxist or socialist cause more quickly and effectively than the JG of MMT. While it would initially address only under-utilized labor, it could easily become a beachhead for the expansion of the public sector into other areas of the economy. Such a natural progression was laid out quite clearly in Edward Bellamy’s “Equality,” the sequel to his “Looking Backward,” which caused an American and world sensation as the 19th Century drew to a close. Both of Bellamy’s novels, now largely forgotten, are free to read on the internet and together provide an exhilarating ride into a near-utopian world within our grasp but not, as yet, within our vision. The price is right, we’re drowning in dystopias, so why not give two brilliantly uplifting books a whirl?
Without changing any laws at all (although I don’t have completely satisfactory documentation for this), If the Fed really needs to buy Treasury bonds, it seems to be the done thing to loan money to private banks under the Primary Credit Program, which the banks can use to buy Treasuries, which they can sell into the Fed’s Open Market Operations.
‘Bosses have to control the realisation of that use value as production in an environment where the majority of workers would rather not be there. ‘
This raises the fundamental point of work and purpose. Capitalism has to fight against the ‘threat’ of the disutility of work. Indeed, in the UK, the private debt levels combined with housing costs raised this threat so Government had to introduce punitive sanctions (like the Harz reforms in Germany) to lower this threat to capitalism.
It seems that during the 2nd W.War (as documented by Huxley in his remarkable book ‘Grey Eminence’) an underlying sense of social cohesion and meaning was created – can environmental/climate change issues do the same?
The ALP is interested in winning an election, and it believes it’s realpolitik not to scare the punters, the media and its business supporters, which includes a segment of the finance sector. Its economic policy position was glaringly obvious to me last year when it invited Larry Summers to give a talk at The McKell Institute. This party which was set up to represent ordinary workers has sold its soul to the high priests of capitalism. Sadly here in Australia we lack a third political force and I believe it can only be born out of the hearts, souls and minds of ordinary workers. Where do we start ? At the workplace, the local community and any where else workers meet and socialise. Of course if the Australian Union movement continues to support the
ALP in its current position, then we need new worker organisations to represent the bulk of Australian workers. The ALP will never support ordinary working people, whilst we have political careerists controlling it.
If a fiscal expression of an understanding of MMT governed who I voted for, I would just pay the fine. I’m stuck with voting for the bastards who want to spend money where I want it spent. Where they get it from is a secondary concern. If some relatively wealthy people have to eat into their principle to maintain their lifestyles through the twilight years, then so be it. I bet they’d rapidly gain an understanding of modern monetary theory if it meant their unused franking credit refunds.
In what way did monetarist not work,or why did it fail