Does MMT trump Marxist theory?

There is an interesting article by Carlos Garciá Hernández here, arguing that Modern Monetary Theory (MMT) renders the Marxist theory of ownership redundant (I wonder if Paul Mason has read it?):

What happened when fiat money was introduced? As we have seen, the state that issues its own money is no longer dependent on any kind of restriction in spending its own money. In this scenario, the private sector can only save in the national currency if the state goes into public deficit, in other words, if the state decides to spend more than it collects through taxes. In this scheme, the “[…] collective or state administration of the production means and of the distribution of goods” doesn’t have to imply the direct ownership of the means of production. This could stay in private hands, because the level of accumulation in terms of national currency in hands of the owners of the means of production is determined by the state through its fiscal policy. Therefore, the administration of the means of production and the distribution of the goods is done by the state, but in an indirect way. This means that the owners of the means of production can only appropriate the amount of money that the state allows them through the collection of taxes, and this also means that the state can spend as much as it considers necessary, regardless of the level of money accumulation in the hands of the owners of the means of production (money is no longer a scarce commodity).

Basically the capture of excess resources by the capitalist class can be counteracted by taxes because the state has a monopoly on money issuance. Neatly he coins this idea ‘Fiat Socialism’.

There is a lot of truth in this idea.

But ownership is still important as it affects attitudes. Owning things, as distributism suggests, changes people’s outlook and encourages a less superficial membership of and a sense of increased belonging to, society. In the old slang people have more skin in the game.

So ownership actually alters values.

Realising where the money comes from is a big step on the way but to get our values right we need to allow everyone to have some ownership. As we accept that ideas influence the distribution of material things, so we need also to accept that distribution of material things influences ideas.



  1. Andrew Dickie -

    Peter, may I impishly suggest that your last sentence, starting “As we accept..” is a wonderfully Marxist (Marxian?) statement on the relationship between consciousness and ownership?

    For Marx held that our class consciousness was a function of our relationship to the means of production, distribution and exchange – that the concrete defined the abstract, and not the other way round.

  2. Peter May -

    You may! So he was half right because I’m trying to suggest that both scenarios are correct – that in life the concrete helps to define the abstract and the abstract helps to define the concrete.

    1. Andrew Dickie -

      Agreed. I’ve always been worried by Marx’s dismissal of ideology as a mere abstract reflection of the concrete, which, in his view, involved importing the concrete relations (I.e. the relations of each class to the means of production etc.) into an idealised projection of the same, wherein the class relations are obscured – all “divinised”, or assigned an almost, or fully, divine status, while at the same time “reifying” the real subjects of concrete reality = the wealth-producers/working class, into mere objects of a “natural” system, reflecting the divinised structure presented by an ideology.

      Of course, this lies at the heart of Marx’s opposition to religion, which he felt to be a projection of the power relations in society into a “divine” realm, which us then used to reflect back onto society, to create, and then justify, certain societal arrangements that also seek to hide the real workings of the economy and the distribution of power.

      It seems to me that Marx had a far too mechanistic view of the apparently automatic nature of this process, and – strangely for someone so very intelligent and aware of the power of ideas – with the result that he wrongly dismissed the role of ideology and ideas to change reality, and the fact that “in life the concrete helps to define the abstract and the abstract helps to define the concrete”

      Given the influence of his ideas and writing, he shouldn’t have been surprised.

  3. Peter May -

    I agree. I’ve never been a great fan – he was always difficult to read (probably a fault of the translators) and I confess, although I had sympathy with the direction, I gave up.
    But you’ve now told me exactly why I was not a fan:
    “Marx had a far too mechanistic view”.
    Quite so!
    It was sociology and economics as a machine – much the same as discredited Neoclassical economics.

  4. Bill Hughes -

    Marx saw religion as the opiate of the people. It has now been replaced by sport and pop music. A useful distraction from the sufferings and inequalities of capitalism that the working class has to endure, whether under a Tory or a Labour government.

    1. Peter May -

      There’s a lot in that…

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