You can create money to pay people to do government jobs ala the Civil Conservation Corps, which increases employment. Nobody can guarantee full employment under any neoliberal system that guarantees and indeed demands unemployment for the purpose of reducing labor value, by the way, so not sure why the hang up on it.
Modern Monetary Theory discussion
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You can create money to pay people to do government jobs ala the Civil Conservation Corps, which increases employment. Nobody can guarantee full employment under any neoliberal system that guarantees and indeed demands unemployment for the purpose of reducing labor value, by the way, so not sure why the hang up on it.
Hygro
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We all understand that wealth is what matters. And productivity is a factor of wealth. But to handwave money while also claiming certain money policies are better is self contradictory. We know a shortage money causes problems for wealth, primarily in that people are idle and stressed and not being productive. And we know too much money cannot make people work better than their physical limits.
So now you know we know this, luiz, you can stop arguing with imagined bean counters.
So now you know we know this, luiz, you can stop arguing with imagined bean counters.
Patine
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I'm saying that Capitalism, as an economic system, has failed utterly, as surely as Communism, Mercantilism, Colonialism, Feudalism, and Proprietary Absolutism (the monarch, theocrat, or dictator own all property and methods of endeavour, is what that last one means) - it's just that small minority TRULY benefiting from the retention of Capitalism have enough power, influence, and clout to stop any replacement economic system from being established, or even SERIOUSLY considered.
Except that money is just a representation of the real resources that exist. Just printing money won't magically make the country richer. Ask Zimbabwe. Ask Brazil or Argentina.
If the government employs people at the Civil conservation corps, and these people are paid with money that can be exchanged for real resources, then the government shifted real resources that would be allocated somewhere towards these people it employed.
hobbsyoyo
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Really odd thing to say in a discussion about economics.
Patine
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I completely disagree. I take a Humanist point of view here. All the money and non-liquid assets of wealth in the whole world, in collectivity, are automatically and always worthy far less to me than ANY ONE human life.
OK, I'm with you so far but where do we go from here and why does it need a backed currency?
It sounds like where we go from here means super communism.
Certain money policies are better, but they are not a magical solution to economic growth and employment.
And BTW I'm not saying running a surplus reduces unemployment. I'm saying there is no long term relation between running a surplus or deficit and employment, within some non extreme parameters.
And again, you don't disagree with me, you disagree with the virtual entirety of the economic profession aand agree with some discredited fringe elements.
Patine
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OK, I'm with you so far but where do we go from here and why does it need a backed currency?
It sounds like where we go from here means super communism.
So, Communism's flaws are just as glaring and crippling, just of a different sort.
Yes, well, I never argues otherwise.
We had drifted into accounting. It's probably the greatest weakness of the Chicago school, its students can't flit their intuitions between economics and accounting, so sometimes the conversation slows down
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OK, that's fair (we can quibble about the allocation that such a jobs program replaces, but that's minor details). Did you see my other edit to the post you quoted? You might have missed it.
Patine
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I've never attended school in Chicago, or even set foot in the city, in my life.
Hygro
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Well I certainly disagree with economists who never studied money and think they can handwave its role away. But I certainly agree with my largely mainstream monetary economics education. But ultimately it’s much simpler: which is that if you want people to do things with the things you have, you need to pay them.
It’s good to have you back. You too @amadeus and @Tristan_C you said some interesting things about savings rates I would like to discuss later.
Lexicus
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The peak of a business cycle in a small country with very high economic equality (it's worth noting that both Iceland and Denmark are in the top 3 lowest gini coefficients in the world) and lots of active labor market programs to give people employment opportunities.
Lexicus
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Money is not just a "representation of real resources". That is the key problem here. @Hygro and I subscribe to a financial theory of investment. The key point that MMT makes is not that deficits automatically lead to prosperity (only someone who has never engaged with anything actually written by an MMT economist would say such a thing) but that there is a crucial difference between financial wealth and real wealth, and that we can't handwave away all the institutional and political questions by saying "money is a representation of real resources" or "the extra money came from a growth in productivity"
All MMT does is apply rigor to macro analysis by looking at where financial assets actually come from, and where they go. Because what happens with financial assets, far from being only a "representation" of what happens in the real economy, actually determine what happens in the real economy to a significant degree....and that is, as Hygro says, because sometimes if you want people to do something you just pay them to do it. In modern capitalist economies "pay people to do the thing" is the main way real wealth is generated...
All MMT does is apply rigor to macro analysis by looking at where financial assets actually come from, and where they go. Because what happens with financial assets, far from being only a "representation" of what happens in the real economy, actually determine what happens in the real economy to a significant degree....and that is, as Hygro says, because sometimes if you want people to do something you just pay them to do it. In modern capitalist economies "pay people to do the thing" is the main way real wealth is generated...
If you agree with your mainstream monetary education then you'd know that you can run a surplus without being a significant net exporter and still have full employment.
As I said, this peak has being going on for such a long time that it can't be called peak.
And it was just an example. The Czech Republic, which is not a Scandinavian economy, also runs a government surplus and has full employment. They are net exporters but only by a very tiny margin that doesn't really explain anything.
Then we're back full circle. Where do you think the money comes from that pays down the debt? I asked for your instinctive answer, but I mean it in the bean counter sense
In Czech it could play a role that they are at a high investment rate since 1990 and roughly guessing also scrapping "old" equipment with low production capacity and capability of Soviet era (the latter reduces the GDCF).
If you look at the GFCF as amount and % of (the strongly) increasing GDP you can see that back.
Importing a lot of modern machinery-assets will lower your trade surplus and current account.
When in full investing mode using imports, if not balanced yet with the fruits of that capacity, current accounts have normally a deficit.
