If there's a key, foundational insight from MMT, it's probably NOT that "taxes don't pay for gov spending," but rather the rejection of money as an impartial medium. In the mainstream view, money plays an a-political role, whose job is merely to help us measure value and (1/)
ease transactions. This is based on the premise that the market "invented" money as an alternative to barter. But logically this fails at explaining many aspects of money, and historically we know it's not true. A better narrative is Christine Desan's "stakeholder" story of (2/)
money, which begins when an authority of some kind ("the state" or its precursor) demands goods and labor, to be put to work for "the public purpose." This initially takes the form of tribute, where, say, the stakeholder demands that each person work for him 1 day per week, (3/)
or else face a punishment. This is the origin of taxes. If some people decide they'd like to do their work for the week early, before tax day, the stakeholder will issue a token to that person. This token is an IOU, signifying that the person has already done the work. (4/)
The citizen can present that IOU on tax day, and it will satisfy the tribute. If the stakeholder further allows the tokens to change hands in private exchange, and will accept them from anybody, then viola, it's money. (5/)
In this conception, money is inherently political. The money comes from the state, and exists in order to get people to sell to the state. The measuring unit is chosen by the state, and the value of the money unit is based on what you have to do to get it from the state. (6/)
Yes, you can use it in private exchange if you like, but that's not what it was "designed" for, and so we shouldn't be surprised if doing so creates problems, like mass unemployment. (7/)
This view also hints at why we don't need to be scared of national debt: don't forget, the state is the one with the power in this relationship, creating acceptability of its money through threat of punishment by force. (8/)
So if you're thinking about how money and debt work, remember: you cannot consider money separate from its government. And if you're thinking about proposals for government policy, remember: you cannot consider government separate from its money. Money is not impartial. (Fine)
