Modern Monetary Theory and the crisis of capitalism: Part one

The World Socialist Web Site has the article Modern Monetary Theory and the crisis of capitalism: Part one.

Throughout the history of capitalism and its recurrent crises, various theories have been brought forward by “left” theorists who maintain that these crises and the social ills they generate can be ameliorated, if not entirely eliminated, by changing the monetary system without touching the foundations of capitalist production itself.

While presenting themselves as “leftist” and “progressive,” advocating reform of the capitalist system, history shows that in periods of great crisis they seek to divert the working class from the program of socialist revolution while at the same time providing the ideological foundations for political forces that advance a counterrevolutionary solution to the crisis.

Modern Monetary Theory (MMT), the essential principles of which are outlined in this book by one of its foremost advocates, is the latest expression of this phenomenon.

This part one of this two-part article is full of promises with no delivery. It provides a more or less accurate description of MMT, promises there is an alternative, but gives almost no deep description of that alternative. It hints at the idea that the labor theory of value is a good foundation for the alternative. However, I have never seen a presentation of the labor theory of value that addresses its own contradictions. Do labor theory of value proponents seriously want us to believe that the value of the labor of a master crafts person has no more value than the same labor of someone who has no skill at the job?

The problem of assigning value to anything is not an easy one to solve. I am waiting to see how the second part answers this basic question.

October 26, 2020

The second part has been published – Modern Monetary Theory and the crisis of capitalism: Part two.

The way forward is not the false perspective of some reform of the capitalist system via the “tricks of circulation,” but its overthrow by the working class to establish a workers’ government in order to open the way for the establishment of a democratically controlled and organised socialist economy in which the vast productive forces are used to meet human need.

This part is as vacuous as the first. If the above paragraph is all the author has to describe the deep workings of his proposed alternative, then he has nothing.

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