Discussion points
MMT ignores private property, money’s material origins, and claims it solves capitalism’s inherent contradictions and class antagonisms
Prior to the 2020 lockdowns, bourgeois governments rejected MMT. When the lockdowns happened, the same governments largely embraced it in a desperate attempt to keep the economy from crashing. With fewer people working in 2020 due to the lockdowns, the economy’s productive capacity could not keep up with the supply of money being dumped into the economy, and the state unable to direct the flow of money, created the conditions for high inflation today
Comrades, the reformist and revisionist tendencies within the workers' movement never cease in their struggle to subjugate the working class to the bourgeoisie, confining reforms to the limits of capitalism and always at risk of being taken away. Without a thoroughly educated and principled revolutionary Marxist leadership, careerist trade unionists and performative democratic socialists dominate the labor movement, finding their ideological support from petite bourgeois academics. In the early 20th century, these academics were political figures, such as Karl Kautsky, and led the Second International to abandon the class struggle for a world socialist revolution. Instead, the task of social democracy became to work with the bourgeoisie to gradually introduce socialism, erroneously claiming that capitalism had found a way to solve its contradictions through credit and "imperialist policy."
Today, these "Marxist" academics swim in a vast ocean of recycled and rebranded reformist bile. Fortunately for the working class, it's not very deep. With a dialectical materialist analysis, this fact becomes easy to see. For example, Modern Monetary Theory (MMT) has quickly become a go-to answer for democratic socialists and radical liberals when conservatives ask how they intend to pay for their reforms, like Universal Basic Income and Medicare for All. But much like Kautsky's notion of ultra-imperialism, Modern Monetary Theory is anything but scientific, and its proponents claim it solves capitalism's inequalities!
What is MMT?
Modern Monetary Theory (MMT) is difficult to define as there are as many different versions. However, at its core, MMT asserts that:
A government that issues its own sovereign, “independent” currency can never run out of money, since it can always choose to pay for any debts by creating more money.
Inflation will not kick in if such a government spends lavishly and runs a budget deficit, as long as there is spare productive capacity in the economy.
Taxes do not fund public spending. Governments, therefore, do not need to tax first in order to spend later. Indeed, the real process at play (we are told) is the opposite—governments spend on goods and services, and then adjust tax rates in order to manage demand in the economy (Booth, 2019).
In short, MMT means that balancing the government's books is a thing of the past and illogical to attempt to do with a fiat currency. It is a magic money tree that bourgeois governments can use to fund social programs and reforms if we ignore everything we know about money, imperialism, and the class struggle.
Money, taxes, and the state
The main problem with MMT lies in its theory of money. While it is true that the state can create money, it is entirely false to claim that the state manages demand. To understand why this theory is incorrect, we first need to grasp money's material origins with the rise of commodity production and exchange. Long before capitalism and the state, men and women had figured out how to engage in commerce, bartering and trading for goods and services, and thus understood that all commodities possess an exchange value.
As Marx explains, a commodity's exchange value is determined by the total amount of "socially necessary labor" to produce it. For example, on average, it takes six to eight weeks to raise a chicken and 28-30 months to raise a cow; this means that for one cow, you would need to trade about 15 chickens. Over time, as the means of production developed, with trade connecting more of the ancient world, the merchant class was born; and society had to reckon with the irrationality between the old system and society's higher level of development. Society could advance no further by trading chickens for cows. Enter money: the ultimate expression of the generalization of the law of value and the only logical conclusion of the historical development of commodity production and exchange (Booth, 2019). Simply put, money represents a claim to a portion of the total social wealth created in production, produced by the working class.
While the state is free to determine how to measure this value within its economy, 97 percent of all money in the economy is created by private banks in the form of bank deposits, materializing through credit and loans to consumers and investors (Booth, 2019). This demand for money dries up whenever household income and business investments fall. As Marx explains, the profit motive drives the capitalist class to secure its way of life by investing in profitable sectors of the economy and siphoning wages, creating the conditions for falling household income and less than fruitful business investments. This inevitably drives down demand in these sectors of the market forcing the capitalist class to invest in more profitable branches of the economy until demand dries up, creating a cycle of economic crisis.
Nonetheless, money only holds its worth in so far as it reflects the value that is in circulation in the economy in the form of commodity production and exchange. Inflation results when the values in circulation fail to equal the sum of the prices of these commodities, meaning that while crisis dominates the lives of the majority who have no choice but to pay rent and buy groceries, the bourgeoisie benefits from their toil and misery. But not so fast, says MMT.
According to the theory, it is the state's responsibility to keep the economy from "overheating" and uses taxes to suck money out of the economy to prevent crises, including inflation. Instead of addressing the root cause of the problem, private property, MMT, perceives the symptoms in the abstract, ignoring that the numbers in the economy represent living, breathing people divided by class society and generally driven by their class interests. And under capitalism, the profit motive drives demand. Therefore, the state cannot manage demand through taxes without creating people out of thin air to enable the possibility for demand management and using some other magic to force people overall to overlook their class interests to actualize control over demand.
In summary, MMT’s theory of money is not only flat out wrong when analyzed against the real world, but is definitively incompatible with Marxism, upholding private property as a priori while quietly dismissing its inherent class antagonisms.
Imperialism and the class struggle
To embrace MMT, we must also ignore the historical development of Imperialism, which expresses itself through the domination of finance capital over world trade. We must forget that literally every country in the world market deals and values its own currencies against petrodollars. Under such conditions, a government can issue its own sovereign "independent" currency just as much as any capitalist state can indefinitely maintain its position as the leading world power. Today it's the American dollar; tomorrow the Chinese Yuan.
For the liberation of the international working class, the movement must struggle for political and economic power over the bourgeoisie across national borders. Society can only enter into cyclical crises and re-divisions of the world market when the means of production are socialized yet remain in the hands of a diminishing few. From here, it is only logical for the working class to work with and support their respective nation's bourgeoisie to dominate the world market and struggle for bigger crumbs at the expense of the rest of the working class around the world. Only through subjugation to the bourgeoisie's class interests can any nation hope to replace the leading world power and print its own "independent" currency.
This subjugation led to the first and second World Wars, countless proxy wars, and the overthrow of democratically elected progressive governments at the behest of private corporations controlled by monopoly banks. Instead of calling out the US for its imperialist ambitions in Ukraine, and pushing the movement to mobilize against the Russian, Ukrainian, and NATO oligarchs, Sanders, AOC, and the squad vote in favor of the capitalist's interests sending weapons and billions of dollars to the capitalist state of Ukraine. An openly anti-worker state that hopes to become the United States’ next bottom bitch, with Zelensky announcing in September that Ukraine is "open for business" and a ripe opportunity for foreign capital to exploit Ukraine's natural resources and low wages.
Conclusion
In the words of a pro-MMT blog, "We don’t need to go through the rich; we can go right around them... MMT renders the rich irrelevant." It is little wonder why AOC and radical liberals like Elizabeth Warren believe that the government doesn't need to worry about balancing its books. To the opportunists, MMT offers not only an "academic" answer to how the present government can afford the sweeping reforms they propose but simultaneously reimagines the class struggle into numbers on a screen. It ignores money's historical development, takes private property for granted, and subjugates the working class to the ruling bourgeoisie and their governments. Most significantly, MMT provides a method of struggle to maintain capitalism and the privileges it allows its political and academic representatives, cloaked under the guise of revolutionary language.
Source: socialistrevolution.org/marxism-vs-modern-monetary-theory/