Thread by @andresintheory

Inflation thread 🧵
Beneath the models, mainstream economists make huge assumptions about the nature of individuals allegedly constituting “the market”. Yet they have never made any robust or close intellectual contact with the field of psychology and don’t care to do so

Instead, it has always relied on a poor imitation of 19th century energy physics. It is this ideological and religious attachment to outdated science disguised as a theory of the market that tells us “printing money” causes inflation, like magic or gravity

“Printing money” is rhetorical code for excess, linked to social unrest and many of the bigotries/scapegoating we project onto marginalized people (gay, women, POC, immigrants, etc) in times of collective anxiety and hardship to associate with economic volatility w/ the “Other”

Any reasonable person knows most money exists as numbers on computer screens. But even the “moderate” mainstream economists are telling us that it is the deficit (federal spending into economy that remains after taxes) that has created too much demand and made wages too high! 👻

There is now a bipartisan effort, led by these pseudo mystics (economists) to slow down the economy to address price increases by throwing people out of work and bringing wages down. Then they will all act surprised when we have both price issues AND a recession

The truth is there is no relationship between “excess demand” and any kind of predictable regular dynamics. This is because prices are SET not overdetermined. As Alan Kirman points out “one cannot talk of equilibrium prices independently of market *organization*”

He goes on to say, “Demand is not defined in any simple general way but depends upon the institutional framework in which it is expressed”. Let’s compare that to the vapid nonsense dominating policy discourse and trying to reduce society’s complexity to two intersecting lines 🥴

Market composition/institutional structure is what #MMTers & people like @IsabellaMWeber & @owenslindsay1 emphasize when we discuss the pandemic’s impact on supply ⛓s, price gauging, the awful state of infrastructure, abuse faced by today’s work force & fossil fuels re: prices

This is where the real and intellectually honest debate is at. How do we reshape the structure of markets and the public in order to start moving towards resiliency sustainability and maybe some God damn equity and justice for a change

In my opinion MMT successfully shifted a lot of the conversation away from budgets and towards inflation. But we still have a lot of work to do to really internalize what that actually means in the social imaginary

Shout out to Phillip Mirowski for inspiring this thread 👍🏼