A 🧵on my đź’s & influences
Let's start with my definition of #fullemployment
Full Employment: when aggregate spending is sufficient to elicit output levels, which at current productivity levels will provide enough jobs (measured in working hours) for all the workers who desire to work and all who want to work #econtwitter #econ #economics
I could arguably accept 5% under utilisation as “full employment”
You know how the NMC/NEC like to on average to call 5% unemployment full employment, if we change that to 5% underutilisation t(unemployed + underemployed) I can live with that (it won’t be technically accurate but I can deal). Call 5% underutilisation full employment, I can deal #employment #econ
In some economic circles there are complaints about price controls saying they don’t work but price controls are everywhere right now & work correctly everyday.
Price controls are everywhere
Minimum wage
Bulk billing medicare
Reserve bank discount rate
Maximum penalty in a fine
Medication on the PBS
Concession Eligibility for PBS
Can you think of more?
Maybe
Minimum "award" wages
NDIS vouchers
HECS/HELP fees
#ozmmt #ausecon #econ #postkeynesian #mmt #econtwitter #econmastodon
And don’t forget back in June 22 AEMO did implement price caps (ceiling) aka price controls
https://aemo.com.au/newsroom/media-release/price-caps-administered-across-multiple-states
They worked. We might have them again soon. #auspol
Now for some thoughts on poverty through an #MMT lens 🔍
Amartya Sen proposed five general freedoms that underpin capabilities and whose violation results in deprivation or poverty:
1 Political freedom including civil rights;
2 Economic facilities which includes access to credit;
3 Social opportunities which include arrangements for access to health care, education and other social services;
4 Transparency in relations between people and between people and governments; and
5 Protective security which includes social and economic safety nets such as unemployment benefits and famine and emergency relief.
Through this lens, poverty is no longer confined to the issue of income and education but rather looks at the idea of whether an individual is able to enjoy the full range of choices and then have the actual ability to realise the choice that the individual has made.
In this lens, poverty is now seen as deprivation of choices available for an individual to live the life they have reason to value and also the deprivation of the individual’s abilities to exercise that choice.
You will note it does not deny income being a specific factor but not the only factor.
For me this leads to Philippe Van Parijs and his idea of “real freedom” - https://en.m.wikipedia.org/wiki/Real_freedom usually associated with #basicincome
This to my mind makes the case for Universal Basic Services as described by
@[email protected] #ubs
https://www.wiley.com/en-au/The+Case+for+Universal+Basic+Services-p-9781509539840
I believe the UK is now calling it a Social Guarantee
https://neweconomics.org/uploads/files/Universal-services-paper-final-draft_V3.pdf
Along with
@[email protected]
The case for a Job Guarantee
https://www.wiley.com/en-us/The+Case+for+a+Job+Guarantee-p-9781509542109
all leads to in my opinion, to
@[email protected]’s
Real Freedom
and that largely addresses humanistic economics & social economic ideology from Sismondi to Lutz to #leftmmt #mmt #hetecon #postkeynesian
Economics for the Common Good #socialeconomics
A lot of the arguments against #MMT seem to ignore or not accept the clear counterargument for MMT
And some just object to the politics of achieving a policy goal or the communication method
It ultimately amounts to what I call the 5 Ps & framing the understanding
1. Power
2. Prestige (status)
3. Property (wealth)
4. Privilege
5. Persuasion (influence)
Look at which of the 5 Ps they are protecting or combination thereof and why.
Or it could be misunderstood nuance due to their priors
(usually New Keynesian) & they cannot make the conceptual leap
#econtwitter #econ #econmastodon #inflation #capacity
I think the best response is this
“MMT is saying we have this additional spending capacity
It is not infinite...it is limited by the risk of inflation.
It is lack of productive capacity, logistical capacity, supply chains capacity, labour skills available.
When we run out of this we will have inflation”
And should be understood in line with this:
“In fact, post-Keynesians argue that if full employment were reached, innovations will likely push back the natural frontier...” - Marc Lavoie: Intro to PK
AusMMT