The Thrust of MMT

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I am trying to wrap up my extensive research into MMT and get a perspective on the overall picture, the thrust of the theory, the main conclusions it is driving at.

The upshot: MMT is the theory of a civilisation built by a state-driven economy. Pu differently: it explains how by organising the economy and interfering with it the state is able to create the economic conditions for a modern civilisation.

Hence, the central position of categories such as the public purpose and functional finance. The public purpose refers to civilisational attainments that are not possible to achieve unless government operates in tune with the logic of the system of fiat money described by MMT.

Functional finance describes the most fundamental and most generic hallmark of the public purpose — fiscal management that does not balance the budget (or whatever else) but the economy. It is functional in that it is dedicated to certain functional aims — notably, government's function as a guarantor of economic development freed from the extremes of the business cycle, inflation and less than full employment of all resources, including human resources. 

MMT is an answer to the systematic misrepresentation of the economy by mainstream economics. This correction relates to the construction of equilibria by  mainstream economics and another errors of that school. The central lever in debunking established economics and retrieving an authentic account of the economy is MMT's analysis of the role of money in a modern economy. This analysis renders  intelligible the special status of government in the economy, which enables it to regulate the business cycle and ensure full employment of all resources available to those engaged in economic activities. 

As we shall see in further posts, pivotal is the ability of the state to create money out of nothing and thereby boost the non-government sector's net worth, i. e. enhance its assets without burdening it with offsetting liabilities. When this is needed, government is capable of organising  an injection of net asset (net financial assets) into the non-government part of the economy, thus enabling it to save and spend beyond what was possible for it prior to government intervention.

Also, having set itself up as the "owner"/originator/ sole and sovereign issuer of currency in its sphere of power and jurisdiction, the state is uniquely capable of adding or subtracting purchasing power to the economy at large, which puts it in a position to boost or restrain growth in the economy and regulate the business cycle.

MMT's message, therefore, extends to two areas of emphasis: the description of (1) how money operates in a modern economy (a task neglected or completely botched by mainstream economics) and (2) how utilisation of the modern money system makes it possible for government to keep the economy permanently balanced, contain inflation and guarantee enduring full employment of all resources available to the economy.