Friday, 20 February 2015

Cyber-georgists enjoy the strawman as much as the cyber-libertarians

A few thoughts on online-georgists, from my experience with them.
Ok, basic point. I tell them that you can have any tax scheme in place, even just the LVT (land value tax), but if you don't have proper fiscal policy to back it up - you're still going to end up with problems like permanent and involuntary unemployment, inequality, downward pressure on wages, poverty etc.
The cyber-georgists? Man, they don't want to hear anything on that. They just go in to strawman you (willfully or not misrepresenting your argument), and claim that LVT correlated with full reserve banking is going to work miracles on their own - and the government can embrace laissez-faire and everything will be great.
I ask them, so what happens if the government imposes a tax obligation on the private sector via the LVT worth 1,5 trillion, and the government only spends 1 trillion. I add, for the ease of argument, that the foreign sector is neutral, there is no net incoming or outgoing of aggregate demand. Naturally, I also answer my own question - the result will be vertical unemployment.
What's the cyber-georgist's answer? "When did I say that I support deflationary monetary policy"
First of all, lol at the sintagm "deflationary monetary policy". Secondly, again, I explain that I wasn't talking about inflation or deflation and I point out that permanent and involuntary unemployment can occur in both cycles (upwards and downwards). Then I go on to explain the purpose behind the NAIRU (the unemployed buffer stock of labor), I explain to another one what money taxation creates, aka unemployment of money paying jobs.
For all of my efforts, no reply is directed on my actual statements. They're directed parallel to the debate - the cyber-georgist goes on to moralize about how the LVT is considered the 'gold-standard' of fiscal policy. As if we were debating LVT vs all other forms of taxation, lol.
The cyber-georgist returns that MMTers should leave their computers and step outside into the real world.
Meanwhile, I'm trying to make a modest and more than reasonable statement, pointing out that even if you get the micro policies right, if you don't get the macro policies right too - you're gonna fail to achieve your aims. And trying to solve microeconomic problems with macrosolutions and vice-versa won't work. But again, the cyber-georgist completely ignores such statements, despite the fact that I said it was true for all other tax schemes. I wasn't trying to single out the LVT or attack the purpose behind it. On the contrary, I'm all in favor of it; and at the same time, I understand the sectoral balance and what improper fiscal policy can do to an economy.
When I stated the question, "Show me a line in which Henry George says that government spending finances taxation", the cyber-georgist gets really personal and defensive and replies back, "Show me an MMTer before 1972. Go"
And I immediately reply back with a smile (^_^) Abba Lerner.
Do I get to hear back on this particular note? No. The bloke fell into silence, and after a while proceeded to block me on twitter. LoL.
This post is not meant to be critical on Henry George, from a political-economic-ideological-historical stance or what not. If you want something like that, you might want to learn what Karl Marx thought of him. And if you want some critical material on Marx that doesn't contain strawman views of his work, then check out Yanis Varoufakis' Erratic Marxist vid - it's quite beautifully presented.
You can tell by now that I don't like to create a fetish out of politicians or economists. Minsky for instance made some brilliant contributions in the field like 'destabilizing finance and capitalism'; but that doesn't change the fact that the man had some pretty fucked up views on social policy.
I can say that while I do consider Henry George to be a very important figure in the history of economic thought, I don't regard him too much of a progressive as a reader of Jacobin mag would understand the word. ;)

I recommend Bill Mitchell's posts on Henry George and MMT:
part 1
part 2

PS: No, I don't think that all georgists are like that. Let's be honest, all 'sides' have their more or less annoying trolls (on forums, comment sections, and even in real life).


  1. This is an inaccurate description of the conversation.

    Far from trolling Serban, it was he who posted onto my timeline. The post linked a rather poor article that briefly touched on LVT (note: specifically LVT, not the broader political economy whence it derives), before the author entered into a long discussion with himself about 'MMT'.

    I told Serban I didn't care for the article much, at which point he sought to push his views onto me further. The impoliteness was his. I was not rude to him.

    I have no particular problem with 'MMT', indeed I am broadly supportive of money reform and follow thinkers on MMT *and* NCT. I do, however, understand that the right to Earth is a fundamental lesson from the Enlightenment. Not having a right to the Earth is very destructive to the individual, society and planet.

    'MMT' is a mere description of the current monetary system. It does a pretty good job. Does it trump my right to the Earth? No, of course not. We could have a government using MMT but denying people their rights. In all likelihood, this would be worse than another monetary system that was deployed amongst a society with economic rights.

    Serban, despite initiating the conversation and goading me, did not take kindly to this point of view. That's his choice. But I did not seek to engage with Serban on the matter. He sought the engagement and didn't like my response.

    Most "Georgists" take time to consider money. I would urge "MMTers" (I won't call them cyber-MMTers) to take time to consider political economy. There was only one side of the debate not engaging here. I'm sorry to say it was Serban.

    Despite his attitude, I wish him well for the future.

  2. Mitchell's article was called Henry George and MMT. So the MMT part was not irrelevant to the author's purpose.
    Secondly, I tried to say only one thing, that without the macros right, LVT won't solve all the problems georgists claim it will. And that goes for any other tax scheme. Those I talked with over twitter didn't want to hear such a thing; and they ignored my point out of spite? For they didn't provide any other arguments to combat my sensible example. What happens if the government taxes through the LVT alone 1,5 trillion, spends only 1 trillion in the economy, and the trade balance is neutral? People embraced the strawman or chose to say "I have to go to work", and either blocked or muted me.
    Michael Hudson himself is very critical of Henry George; but nonetheless agrees with the need of an LVT. Why are we making a fetish out of dead or living humans? I'm as flexible as I can be in regard to politics. If someone is an MMTer, that doesn't tell me anything about the person, except that he understands the monetary system and the banking system. It doesn't tell me anything of his personal values or social aims. Knowing that someone is an atheist, for instance, doesn't tell you anything about him except that he doesn't believe in religion and its claims.
    I can and have for that matter, explained the value of a LVT to people who didn't know about it - without having to "sell" it as the silver bullet for the evil werewolf economy. Without having to engage in morality or ideology on it, like that Nate guy who thinks anything outside LVT + Full reserve banking is a no-no.
    I don't debate opinions, I debate simple notions. And the fact of the matter is that microeconomic solutions cannot solve macroeconomic problems and vice-versa. There's no substitute for counter-cyclical fiscal policy aimed at achieving and maintaining full employment and price stability.
    In the debate on twitter, at no point was the "right to earth" raised or indeed questioned. Hell, if everyone on the planet would be granted land from which to draw sustenance and live off by simply trading their surplus, then I'd advocate laissez-faire all the way. Sadly, the world is not like the Steam platform.
    For more on this question, I recommend this audio with Yanis Varoufakis speaking about Valve, spontaneous order, and the European crisis: