(3) Is Taxation Theft?

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Continued from here.

Nick Johnson replies to my comment:

Thanks for your comments. If MMT-inspired policies can achieve all that you say, including the full employment that is one goals of many of its adherents, then these can be included in the category of ‘public goods’. While I support the use of fiscal policy as an automatic stabilizer, I am not entirely convinced of its efficacy in achieving and sustaining full employment. 

As far as I’m aware, MMT does not have a convincing explanation for the stagflation of the 1970s. The proposed solution by post-Keynesians and MMTers to concomitant rising inflation and unemployment is incomes policies and demand expansion. In some countries with more consensual labour relations, this may have worked for a time, but it did not work in all countries; the reason for which is perhaps more political than economic. But MMT and post-Keynesian economics do I think neglect the role of profitability that Marxist thinkers focus on. 

This has rather gotten away from the original post and your comments, but I remain sceptical about MMT. Having said that, its ideas have become very popular and are worth exploring.

My reply to this comment:

Thank you for your stimulating reply: 

(1) You write: 

“If MMT-inspired policies can achieve all that you say, including the full employment that is one goals of many of its adherents, then these can be included in the category of ‘public goods’.” 

I agree. 

(2) You write: 

“While I support the use of fiscal policy as an automatic stabilizer, I am not entirely convinced of its efficacy in achieving and sustaining full employment.” 

Nor am I. Which is not to deny the possibility of its working. (See points (4), (5) and (7)). 

(3) You write: 

“As far as I’m aware, MMT does not have a convincing explanation for the stagflation of the 1970s.” 

Presently, I have no opinion on this issue. I would have to study it. 

(4) You write: 

“[T]he reason [why] … incomes policies and demand expansion … may have worked for a time, but […] did not work in all countries [is] perhaps more political than economic.” 

I agree. See also point (7).

(5) You write:

“But MMT and post-Keynesian economics do[,] I think[,] neglect the role of profitability that Marxist thinkers focus on.”

I am not sure I understand this point. 

(6) You write: 

“I remain sceptical about MMT.” 

The right kind of approach, in my view, especially if you give the school a fair shot, considering 

“its ideas … worth exploring.” 

(7) I remain constructively sceptical of the full employment policy thrust of MMT for at least two reasons: 

• I am not conversant with the MMT argument in all its facets, having just a broad understanding of it, i. e. I cannot support something that I do not fully grasp.  

• Even if the (full employment ensuring) mechanism did work, it involves highly explosive political variables — just think of the question which projects are to be pursued by beneficiaries of a job guarantee and how they (projects and beneficiaries) are monitored or sanctioned etc.