The Hydra-Headed Model of Social Change – OpEd – Eurasia Review

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By Keith Weiner*

Many people want to change the world. Depending on the direction they want to go, they have to select an appropriate strategy.

For me, my desired change is to return to a free market in money and credit. So I founded Monetary Metals, to make investing in the gold standard profitable. We provide capital to productive enterprises and pay savers interest on their gold. We earn money while helping the world. The strategy depends on a voluntary choice of all the participants, which they make because of their own interest.

However, many want a different kind of change. Not a system that benefits everyone, but free goodies and the power to distribute them. In other words, a flavor of socialism.

For Joe to get something for nothing, then Mary must get nothing for something. Obviously, Marie will not volunteer for the role of sacrificial animal. Therefore, the aspiring socialist cannot start a business that makes money by accomplishing this kind of change. There is no equivalent of a Monetary Metals for a socialist cause.

The truth only needs to be told once, but a lie needs to be told and repeated over and over to reinforce it. The same goes for an unfair and dishonest policy. A socialist policy needs a diverse group of promoters to sell it and the lies on which it is based.

Let’s look at Modern Monetary Theory (MMT) as a case study. MMT is based on frivolous claims. I’ll shed some light on them, but my goal here isn’t to demystify MMT. It’s about looking at the social movement that has sprung up around MMT.

Socialist ideas are not new. Indeed, the world does not want to go back to Karl Marx, Joseph Stalin, Mao Zedong or Adolf Hitler. Or the 20th century economist whose book was hailed by Mussolini as a “useful introduction to fascist economics”: John Maynard Keynes. 1

At least not under these banners. If a socialist policy is to gain ground in America today, it must be rebranded.

The first step is therefore a founding article, written by someone serious enough to get away with it. It could be a well-placed professor emeritus. In the case of MMT, it is a successful businessman and veteran statesman, Warren Mosler. The journal and the body of work inspired by it serve as the basis for the platform of a new, revitalized socialist social movement.

MMT’s seminal paper is Warren Mosler’s 1994 “Soft Currency Economics”, the foundations of which rest on a swamp of demystified ideas.

But this article isn’t about debunking wishful thinking or bad economics, it’s about how a movement is forming around a socialist idea like MMT. The first step is to ask a notorious person, with enough seriousness, to write the founding article. The second stage is when other scholars create an aura of respectability around him.

So far in the process, the idea is not understandable by voters. And therefore, it does not interest the media.

They must move on to the third stage, form a cadre of forensic economists. They are soldiers of the movement, and their job is to sell propaganda – not to the public – but to those who influence the public. In times of war, true soldiers are ready to sacrifice their lives for their country. In socialist propagation, ideological soldiers are willing to sacrifice their reputation for their agenda.

Most court economists lack the eminence of an older statesman. Thus, even if they could invent new arguments, they would be challenged. However, the movement does not need original thinkers at this stage. He just needs more promoters. And there are a lot of voluntary hacks.

The seminal article must offer at least a facade of intellectual rigor. Academic followers rigorously refer to this article and all the work they create around it.

Court economists usually pretend to talk about this material. But, in step four, the popularizers join the movement. Popularizers are talking heads, celebrities, politicians, etc. And they are freed from these constraints. Indeed, the monetary value of something like MMT is that it gives them carte blanche to indulge their worst political fantasies, like the Green New Deal.

Popularizers benefit from their association with a cherished theory, whose wrapper is adorned with a star saying “New!” To take just the Green New Deal as an example, is it really a new idea to subsidize companies that cannot make a profit?

As a social movement, MMTers make a sort of informal logical fallacy. They can promise a seemingly magical benefit such as unlimited energy from unreliable wind power. Their theory gives it the credibility of science, if you don’t examine it too closely.

And when things don’t work out, the theory – and therefore the movement – ​​gets immunity from backlash. Academics can simply say that the academic literature on MMT does not offer these policies.

That may be true, but it’s extremely hypocritical. As a movement, MMTers support exactly that. The upper echelon of MMT—the senior statesman himself, the faculty, and the cadre of court economists—are aggressively indifferent when the popularizers publicly promise magical benefits.

Those who fight MMT politics in the political trenches may find they are fighting a hydra. They can cut off one head, but two more go into battle.

For example, they can say that the MMT policy of printing billions of dollars in the wake of Covid has led to inflation. Then the top echelon of MMT counters that the current administration is not keen on MMT. And besides, they claim that MMT is a theory, not a policy prescription!

MMT academics provide intellectual cover for MMT popularizers, with their eminent reputations. And MMT popularizers cover academics, by their apparent separation from said academics. It is the division of labour, applied to a socialist social movement. It’s like organized crime, when the police arrest the soldiers and the head of the organization is safe.

Whenever Senator Elizabeth Warren or Rep. Alexandria Ocasio-Cortez need to push their empty ideas and destructive policies, they trotted out MMT and an MMT court economist. They can count on the upper echelon of MMT not to oppose it. No, these eminences will reserve their protests, for when the foreseeable consequences come, and people will direct their anger at MMT.

“Oh, no, MMT isn’t about that.”

  • 1. James Strachey Barnes, Universal Aspects of Fascism, Williams and Norgate, London: UK, 1929, pp. 113-114

*About the author: Keith Weiner is the CEO and founder of Monetary Metals, and is president of the Gold Standard Institute USA.

Source: This article was published by the MISES Institute

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