Making Money Real

Agreeing to Disagree

MMT is quite clear in its assertions that money is created as account-based currency and that it exists as an accounting identity. Debt and Credit are created simultaneously, and there is no limit to the creation of dollars so long as the resources of the nation are not entirely consumed. Mahinism agrees that this can be a way to implement money as long as the Laws of Thermodynamics are applied to the resulting money. The State is the source of the money, and it can create more at will. That is the agreement.

In the MMT formulations, the resulting money is created by debit/credit accounting, and the money represents debt. MMT stops there, while Mahinism asks, “What is finally owed?”; this is the disagreement about the underlying definition. MMT resolves a deficit problem; Mahinism resolves that same deficit problem and goes on to address the Capitalism problem.

Mahinism says money represents the work required to earn the money to pay the debt, or simplifies debt out of the picture entirely, giving the state the power to create unlimited dollars directly as account-based currency that represents work, never counting any debt. Mahinism counts the “debt” when it measures the amount of money in circulation. Until running into MMT, it never even considered this quantity as a “debt,” as it is never intended to be repaid. However, the effect is the same as far as the availability of money and the responsibility for its creation are concerned; MMT is embedded in Mahinism.

As a result, Mahinist analysis is quite compatible with MMT, except for the existence of an underlying, philosophically real definition of money.

“Money is a commodity—and it can be anything—that a society agrees to accept in exchange for every other commodity or service within that society. It ultimately represents the work that the holder of the money exchanged with that society to get it.” In simple words, real money represents work done.

The existence of the layer of monetary debt and credit that MMT relies on isn’t relevant to the underlying work the money represents, but it hides the relationship to the Laws of Thermodynamics. Without the Laws, MMT has no reason to reject interest on the debt, money that “stores value,” or money from ownership. It can only reform the method of creating money and the reason for paying tax. It provides a solution confined to our monetary system and resolves a horrible error of neoclassical economics, but leaves the largest errors intact. The errors that give us capitalism, billionaires, bullshit jobs, and the need for infinite growth are not addressed.

“Finding the Money” is an excellent presentation from the supporters of MMT. The discussion of the details of money creation is excellent, and there is an urgent need to overthrow the existing errors of neoclassical and neoliberal economics.

https://mmtaction.com/share/screenings/finding-the-money-movie/

This book argues alongside them, and Mahinism solves those same monetary problems in many of the same ways, but the definition of money as work brings in the Laws of Thermodynamics and addresses the environmental catastrophe of our demand for perpetual and unlimited growth. Mahinism demands that our money adhere to both the First and Second Laws, reforms all of human society, and includes MMT, while MMT alone merely resolves the foolishness of neoclassical economists.

The consequences of that demand and those laws comprise the bulk of the book. As the new Cover and Title proclaim, my book is not about money, and this discussion is merely an appendix.