‘Fallacious’ Theory
While Macmillan said it’s encouraged by early sales, the resistance MMT has encountered from inside economics shows that conquering the curriculum won’t be easy.
Larry Summers, who slammed the doctrine as a “fallacious’’ offer of free lunch, and Paul Krugman are among its heavyweight detractors. Many more have lined up to suggest it’s a recipe for runaway prices and public debt.
There have also been some more sympathetic assessments. And even economists who object to MMT -- Summers and Krugman among them -- agree that the U.S. has room to run budget deficits right now.
President Donald Trump is already doing so, without triggering inflation or flight from bond markets. Several of his potential opponents in 2020 have backed expensive plans such as Medicare for All and free college –- suggesting the climate is shifting in MMT’s favor.
How economics may be reinventing itself
Senator Bernie Sanders, one of the Democrat contenders, hired MMT economist Stephanie Kelton as an adviser on his 2016 campaign. Kelton has her own book coming out in the summer of 2020, titled: “The Deficit Myth: Modern Monetary Theory and Creating an Economy for the People.’’
‘Suddenly Realized’
At Westminster College in Utah, John Watkins said he’s adding the new MMT textbook to his syllabus next semester. A professor who’s been teaching macroeconomics for three decades, he says the field could use more intellectual diversity.
“Most macro texts copy each other,’’ he said. “So many professors have been schooled in mainstream economics, so they likely will continue teaching ideas that have little or no relevance to the world.’’
Mitchell, the textbook’s co-author, said there’s growing interest outside of academia too. Investors and politicians are reaching out.
He’s been invited to the U.K. Labour Party’s annual conference, and “I’m now giving workshops to the financial community,’’ he said. “They’ve suddenly realized this is something they need to understand.’’