Shaun recommends that MMT professionals pay more attention to rhetoric and persuasion in their popular presentations instead of favoring technical rigor that involves using terms that are confusing or otherwise unpersuasive to non-professionals.
Read it at lowerleftlimit
Conveying the MMT message
by Shaun Hingston
21 comments:
I actually feel strongly in favour of MMT (and Post-Keynesian) messages being disseminated in the public domain. To that extent, I think Mike has done a great job.
In my mind, in order to get the message out into to the public, we need to bash TWO messages into the public's collective mind as a starting point.
1. The US government LITERALLY can never go broke, so long as it is the monopoly issuer of US dollars
2. The US Treasury is NOT a household or a firm - DO NOT DRAW THE COMPARISON
To a large extent, I think Mike has done a good job there. But why not any further? Paul Krugman has been on Martin Bashir and Rachel Maddow - why not Mike? I would love to see Mike on Real Time - Mike, you deserve the pleasure of meeting Bill Maher.
And why not. Mike, you have the facts on your side.
I think it's a good idea that Mike has yet to mention the job guarantee - let's first expose the nonsense of cutting social security and other government spending, and expose the blatant lies of rising Treasury rates and crippling tax burdens for future generations.
Unfortunately, Randy Wray and Bill Mitchell come across as lacking charisma. And Bill just does seem forceful enough.
Mike or Marshall Auerbach (or maybe both together) would be great to see on Bill Mahers show.
MMT just need one little place where it can enter the mainstream consciousness............ then BOOM!!
Even a TED Talk would be great.
I think TED could be a great move in any case.
I agree whole-heartedly.
Semantically-pure arguments have just been clouding the issues.
Math arguments haven't been getting the job done either. It appears most people don't/can't grasp abstract concepts no matter how simple if presented in math terms.
Somehow I/we have to figure out how to present the arguments that are more metaphor-based (like Warren).
This morning my wife was reading an article about a couple in Orlando that set a goal to build their new house out of materials and products made exclusively in the U.S.
This turned out to be a very difficult goal to achieve.
My wife read a passage in the article to me saying that American consumers are very price-conscious in their buying decisions without realizing that what is perceived as beneficial to them at the personal level is not necessarily good for the economy overall.
I replied that I have been trying to explain that to her for the past year and she has fought me tooth-and-nail.
Her response was, "you always try to use math to make your point.
This guy said it in a way that's easy to understand."
I guess that's the way it is.
Paul,
I think we have to carry both messages... both the semantic and the mathematical.
Just speaking for myself, I cant stand/understand semantic forms of communication, but Ive come to realize that not everybody has the same orientation/talents in this regard.
So we can maintain a two pronged attack so to speak...
Resp,
It's a problem. I have a friend who has an MBA. I've explained MMT to him on numerous occasions, he's read Warren's books, etc. and he still doesn't really get it. I was just talking to him again this AM and he said, "Tell me again how...."
The programming is really, really difficult to overcome, especially for those with training in economics, business, and finance.
"…Just speaking for myself, I cant stand/understand semantic forms of communication…"
Same here. For many threads where an idea or thought is presented it's often late in the thread before I start to figure out what point they are trying to make.
There are often many possible different points embedded in an argument, and it's not always easy to pick out which one is being focused on by the writer.
I think JG has to kick in later, when a person is familiar with operational facts in monetary system. Once you discuss what government can do and cannot do because It cannot go broke, interest rates will not go up etc, then JG follows, and It's only very logical policy option IMO. Average Joe six pack gets scared when he hears that government is printing money and guaranteeing full employment. This does sound crazy at first. As for words 7DIF doesn't sount complicated.
Paul,
Perhaps follow up with your wife on that process, seems like there is something to be learned there....
Resp,
I replied that I have been trying to explain that to her for the past year and she has fought me tooth-and-nail.
Her response was, "you always try to use math to make your point.
This guy said it in a way that's easy to understand."
I can definitely say that I have had a similar experience. :)
1. The US government LITERALLY can never go broke, so long as it is the monopoly issuer of US dollars
....
Once you discuss what government can do and cannot do because It cannot go broke, interest rates will not go up etc, then JG follows,
I definitely agree with explaining that any Sovereign currency issuer can never become insolvent should be the starting point. If we can make this simple to understand, then I think everything else flows a lot easier.
A different way of explaining the insolvency component is perhaps by arguing that all things are at one point in time created. E.g Apples come from trees, eggs come from hens, etc. Based on that premise, then money comes from paper which comes from trees. Since there are trees and there is paper, then the supply of money is also secure. I found that my explanations took this form as time went by. And these were explanations to lawyers, PhDs, etc. I found that if I could convince people that money must have been created - just like everything else - and the ingredients for money are abundant, then how could there be a money shortage? Kids understand this. This type of argument would only take people so far, as they need to know 'exactly' how it works. Meaning you have to put meat on the bones. Or try your best to explain the finer details of the monetary system.
Once people are partly convinced that money is created just like everything else, then I usually asked does a shortage in money mean a shortage in real resources?
But I've given up starting from Treasury,FED operations. There is atleast 10 treasury-fed operations/concepts that people must understand in order to realize that there is an endless supply of money. And if they can hold that many new concepts in their head then they have probably already know about MMT.
While the money issue is important, I don't think it is the most important. Money is the broadest sense is just for keeping score; money not yet spent is a claim on resources not yet allocated, and money spent is the accounting record of how resources were allocated.
The actual issue is availability of real resources and their allocation. Money is about distribution of real resources between supply (investment) and demand (consumption). In a capitalistic economy distribution is through markets, both capital markets for investment and consumer markets for consumption.
Banks and the financial sector play an intermediary role in money creation, chiefly through credit extension, which creates money on the basis of risking owners/shareholders' equity and debt holders stake. Government plays a key role in that its currency is the unit of account over which government maintains control.
Understanding the production, distribution, and consumption cycle is the subject of micro and macroeconomics, and concerns real resources.
Monetary economics, money & banking and finance concern money and money-like instruments and their creation (not "production"), distribution, and use (not "consumption").
The economic and financial meet at the level of distribution and determine the allocation of real resources, influencing future production and consumption.
Most people more or less get this intuitively just by participating in the economy. But very few, even economists, understand how the system works as a system. They may understand parts, but few have the big picture.
Presenting the big picture is the challenge. If we focus too much on the money side, then we risk missing the forest for the trees. The economists who focus only on the production, distribution and consumption of real resources get it wrong, too, because they ignore monetary economics, money & banking, and finance, which make it all happen the way it does — or doesn't.
When one understands the system in terms of stocks and flows as shown by the accounting record, then one can see the abject ridiculousness of policy and management that leaves vast real resources chronically idle and also uses resource and environmental depletion and degradation as a tool for enrichment of a few at the expense of many.
One also comes to understand that the explanation offered to the public is simply propaganda for a biased system that is actually dysfunctional in that encourages parasitism on the circular flow of production, distribution, and consumption through both control of the means of production and media of distribution.
The objective of this dysfunctional system is to disadvantage workers and advantage the parasites preying upon them through artificial, i.e., constructed, institutional arrangements that are present as "natural," although they are predatory in nature.
Ordinary people need to come to see not only how things could be better through reformed policy, but also how they are being taken in and taken. This is not a matter of reforming a broken system, but seeing that the system is institutionally biased against workers. Otherwise, reforms will be at the margin instead of replacing the rotten core, and the rot will soon creep out to the margins again.
That is to say, MMT devoid of the institutional aspects is just an invitation reorganize on the basis of what is already happening. Government has been funding "military Keynesianism" through deficits and off-budget appropriation since WWII, supported by both political parties, the apparatus of the state has been captured by corporate interests with the resulting parasitism of economic rents, and central banking has been established as a command system for controlling the economy based on keeping labor in line. It's a tidy package that is working just as it is supposed to for the people in charge, and crises are just an excuse to tighten the screws, through, e.g., "expansionary fiscal austerity."
This enterprise has been so successful that TPTB are now taking it global. This is an institutional problem, and it is resulting in a new type of fascism, institutional fascism rather than leader fascism. But the result is the same, that is, social, political, and economy control of the population by the corporate state, or now super-state of multinational corporations and international institutions, e.g., NATO and the IMF.
Noam Chomsky, Michael Hudson and many others have warning about this for decades. Now the world is entering the critical stage. I'm planning a post on this, and many of my posts here have documented this dangerous trend that has been building since WWII and that is galloping forward on many fronts toward "the last empire" of global hegemony under the banner of "freedom."
The Libertarian Right and the radical Left have been warning about this for some time, but they have been marginalized as extremists and conspiracy theorists, but now the trend is clear enough for anyone who looks to see.
Tom,
Money is one of those things that should be discussed more on our end at least in terms of presenting arguments.
The definition or meaning conveyed when using the term "money" is so squishy that it's mention invariably invites more side arguments than anything else.
I tend to think of money held as financial wealth as "persistent" in comparison to credit money, which is not persistent.
From the point of view of the closed system, credit money doesn't exist in the mathematical sense, but it's components can be tracked through accounting.
It's effect influences flows but not stocks.
My point is that ordinary people are not so much interested in money (which way they don't know much about it) but rather in real stuff and they see money as a means of getting it. The point to make is that they are are right, the actual issue is real stuff and it is measured in terms of money (accounting).
Most people understand stock and flow in terms of money, i.e., wealth or net worth, and income and expenses. These are things that most people have a handle on — how much they make versus the monthly nut and necessary expenses like food, gas, etc. They also know about what their house is worth and how much they owe on it.
We need to build on this basic knowledge.
What most people face is, "I know what I want, but I don't have enough money to be able to afford, not enough of a credit line, too much debt to take on more, etc."
From there, they intuitively reason about the economy and finance — incorrectly, of course, because they are using the metaphor of their own very limited knowledge.
One has to start where they are and work to where they want to be.
The best way to proceed is through metaphors that they can relate to, while disabusing them of incorrect metaphors, like the currency issuer being the same a currency users like themselves.
Look at the metaphors that they are using and also confusing them. Replace those metaphors with appropriate one.
Tom,
I was alluding to discussions amongst ourselves and those commenting that have some understanding of MMT.
If we aren't all talking about the same thing when we refer to money in our discussions how will we be able to present consistent explanations (as metaphors perhaps) to the average man on the street?
I thought that Shaun's post was about presenting MMT to non-economists, which most of us are. Shaun is saying that the MMT pro's presentation is too recondite even in its "popular" form. I am saying that we need to think of the social, political and economic system as a whole, which is how non-economists relate to it. and build appropriate metaphors for understanding it. instead of trying to change standard terms of economics, accounting, and finance in order to simply the explanation,, since that will just compound confusion. Ideally, it should also be a graphic presentation. Think in terms of a Power Point presentation, for instance. I think that simple aphorisms that are easy to remember. We also need sets of talking points for non-economists to follow, with references for follow-up.
In other words we have the economists and financial experts. Now we need PR types to present the info in way that can be used on a lot of different levels. Remember that the neoliberal programming begins in grade school.
Tom,
I kind of got the idea that Shaun was talking about us communicating with friends and family about these things.
I feel like we and many like us, although not economists, understand these things pretty well.
Still, there's a lot lost in the translation because we aren't all speaking the same language.
One thing that I try to point out often is that the basic principles underlying economics from the MMT point of view are not very complex.
The MMT paradigm is based on several very simple a ideas that are, because they are based in math, infallible.
They seem more complex than they are because they require a logical chain of thought to connect the dots, but the basic principles are not difficult to grasp. It is probably the system that is the most puzzling part.
I see mainstream economics as purposefully complex and opaque to give it an air of something only a select few of the brightest minds can understand it. Practitioners tie themselves and others up in knots learning these complicated mathematical puzzles (models) they set up and never really understand the underlying system in which those things exist.
They, in creating this Rube-Goldbergesque discipline have succeeded in confusing themselves along with everyone else.
"Do you not know, my son, with how little wisdom the world is governed?" - Axel Oxenstierna
Shaun initiated the discussion in some previous comments prior to his post in which he offered that the MMT professionals needed to less "professional" and more accessible, e.g., by changing technical terminology to something more understandable, especially where the technical terminology has a different meaning in ordinary parlance. This is not a singular criticism of MMT professionals, but has been made by others as well. On the other hand, yet others complain that MMT pros don't stick closely enough to technical usage.
e.g., by changing technical terminology to something more understandable, especially where the technical terminology has a different meaning in ordinary parlance.
I think this is a good summary of what I'm trying to get across on this particular MMT issue.
Tom makes the point that 'professional' MMTers believe they should stick to 'accepted' terminology. I have three basic points against this -
--MMT is preaching to a disfunctional group of academics that won't even listen to MMT. Seems an impossible battle to win.
--Which group of people are most likely to lead to widespread acceptance of MMT, general public or academics? I think based on point 1, general public.
-- Therefore when disseminating a concept - how a concept is disseminated should be orientated to the general public first, and academics second.
Also I'm not asking MMTers to sacrifice truth or meaning. Simply using different words that convey the same truths(concepts).
I used the example of "Taxes drive money". As a metaphor for the literal process, I believe it is poor. It should be something like
--"Spending (pushes | supplies | drives ) money"
--"Taxes ( demand | suck | pull) money"
--"(Government | State) (creates | issues | makes ) money when spending"--"(Government | State ) (destroys | shreds | removes) money when taxing"
These phrases convey more meaning, are true, and easily understood by most people. It is one thing to suggest such phrases, it is another to get them accepted by the MMT community. Which is why I believe that professional MMTers need to be more open to this.
Such phrases would become the focus of MMT posts/conversations. All MMTers would need to show is that such phrases are true. The phrases would frame discussions. It would be a form of 'standardization", which may or may not be a good thing.
Tom,
Seems like we have been disagreeing about something we don't really disagree on.
As far as the communication between professional issue, I'm not sure a pure standardization on terminology is going to help that much.
As I've said before the principles involved here are pretty simple - this isn't rocket science math.
If the academics involved in these discussions are missing the point due to semantics then I have to conclude they don't understand systems very well.
More accurately, they may understand systems at some level but don't believe those laws are applicable to the problems they face in economics.
It is almost like being aware of gravity but thinking that it is a 2nd or 3rd-order consideration in the design of aircraft.
Much of economics ignores the closed-system constraints ON THE CLOSED SYSTEM.
Economic growth within a closed system can occur without net growth in the supply of financial assets for a while much like a human doesn't starve to death on the day he starts a hunger strike.
Economists seem to WANT to believe that free-market forces CAUSE growth, when if anything expansion of spending, which can only come from the government is the cause.
Entrepreneurs competing for financial wealth in the hands of consumers makes the economy grow.
I know I'm preaching to the choir here. I'm just practicing my presentation skills. Something I'm not very good at.
I know I'm preaching to the choir here. I'm just practicing my presentation skills. Something I'm not very good at.
Keep trying, somehow we must learn.
I kind of got the idea that Shaun was talking about us communicating with friends and family about these things.
This is probabably the best way to learn - talking to people from different occupational backgrounds.
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