MMTers need to check their privilege. Chapter 7: "'Check Your Privilege': MMT's Privilege Position and Economic Destructionism," by Joshua Mawhorter. MMTers point to the United States as the monetary sovereign par excellence. Kelton: "When a country issues its own nonconvertible (fiat) currency and only borrows in its own currency, that country has attained monetary sovereignty." But Mawhorter asks a question MMTers rarely consider: How did the US achieve this privileged position in the first place? "MMT gained intellectual traction in wealthy countries—wealthy in production, with a stronger record of respecting free trade, property rights, and sound money." - p. 166 Mawhorter argues that the US attained this status through centuries of capital accumulation, private investment, and relatively sound money—not by following MMT's prescriptions. And there's another problem. MMT's chartalist theory claims that money originates with the state, particularly through taxation. But American colonial "governments could only get people to accept paper money substitutes because there was a preexisting link between the paper and the commodity money." - p. 168 MMT takes for granted the very economic institutions and accumulated wealth that its policies would undermine. This brings us to the Mawhorter's most important point: capital doesn't automatically sustain itself. As Mises put it, "Capital does not reproduce itself." - quoted on p. 172 Capital goods must be maintained, replaced, and accumulated through saving and investment. Diverting resources toward present consumption (see Patrick Newman's chapter) can create the appearance of prosperity while actually consuming the economy's capital stock. Mises called this economic destructionism. MMTers pay lip service to the fact that the government cannot print real resources. But they ignore how monetary expansion, taxation, and government spending can distort economic calculation, discourage capital accumulation, and waste productive resources. MMT "is a theory of unacknowledged privilege built atop foundations it would destroy." - p. 183 What happens to the dollar's privileged position if those foundations are gradually eroded? Read the full chapter here: mises.org/library/book/anti-…

"Coming up with the money is the easy part," says @StephanieKelton. Per Bylund agrees. For a government that issues its own fiat currency, creating money is easy. But what does this tell us about creating wealth? Chapter 6: "'Coming Up with the Money Is the Easy Part': MMT and the Economy," by @PerBylund. "An economy does not need more money to increase its valued production—it needs more, or more valuable, production." - p. 146 Dr. Bylund argues that MMT's fixation on sectoral balances causes them to ignore the economizing market process. Consider a carpenter buying hammers from a hardware store. The transaction adds nothing to the private sector’s net financial assets. But both parties expect to benefit: the seller values the money more, and the carpenter values the hammers more. The carpenter now has increased productivity. You can have more productive investment, better resource allocation, and greater wealth without any increase in aggregate net financial assets. Accounting identities cannot tell us whether resources are being economized. MMTers often reply that the real question isn't "How will we pay for it?" but "How will we resource it?" Do we have the steel, engineers, workers, and equipment to carry out the government's plans? But availability isn't the same thing as economic justification. "That something can be done and has value does not mean it should be done, because that depends on what else of value those resources could be used to create." - p. 149 The missing concept is opportunity cost. (This is why I summarized Bylund's chapter as him pointing out "the economics-shaped hole in MMT" in the Introduction.) Entrepreneurs bid for scarce factors based on anticipated consumer demand. Profit and loss reveal whether they used those resources productively. A government that can create its own currency can outbid private producers, but that doesn't tell us whether its projects are worth the resources diverted from other uses. "Goods are not valuable simply because they are produced; rather, it is their expected value that justifies engaging in costly production." - p. 155 This is why entrepreneurship, prices, and economic calculation matter. The economic problem isn't merely putting resources to work; it's discovering which uses of those resources best satisfy consumers. Read the full chapter here: mises.org/library/book/anti-…