Mindorenyo

Monday, February 17, 2014

Modern Monetary Theory and Unitarian Universalism

The evolution of economic conventional wisdom is following a path similar to that of religious conventional wisdom.

Printing presses and improved global communications enabled enlightenment thinkers to question the religious dogma of the Middle Ages.  Over hundreds of years, many reformed Christian movements, including Unitarianism and Universalism, emerged as more reality-based and compassionate alternatives to the authoritarian and superstitious religions of yore.  In the current era, many people have discarded organized religion altogether as the reformed Christian churches are increasingly seen to rely upon dubious historical and ethical foundations. Unitarian Universalism is one denomination that has made a clean break with Christian dogma, while at the same recognizing the value of organized religion in addressing a variety of human needs and aspirations.

In the realm of economics, the conventional wisdom is a hodgepodge of supposed economic laws that bear little relation to reality and serve mainly to uphold the economic status quo.  Beneath the fiction, however, the conventional wisdom is based upon the "common sense" of the prevailing ethos and thus captures real moral and practical conventions.

Just as religion has evolved by way of various reform and reactionary movements, economics has seen its share of revolutions and counterrevolutions.  One of the most significant was the Keynesian revolution during and after the Great Depression.  For the last thirty-some years, however, the conventional wisdom has moved back in the fundamentalist direction where the invisible hand of the marketplace and other supposed laws of nature are believed to limit our economic opportunities.  Neoliberal economists play a role similar to the reformed Christian churches in reaction to the more radical reformers, such as the Modern Monetary Theorists.  The MMTers believe that economic laws and institutions need not be cast in concrete and subject to arbitrary mathematical constraints, and that the "economy" is a human creation which can be improved upon.

Modern Monetary Theory is indeed a left leaning economic school, just as Unitarian Universalism is a left leaning religious denomination.  UUs claim that our religious foundation is based upon principles that transcend politics, such as freedom of conscience, justice, and compassion.  But in practice we tend to be political liberals.  MMTers claim that our economic school is based upon observation as to how the economy actually works, which should transcend politics.  But in practice we tend to be political liberals.

There are no doubt many other religions and economic schools that have followed similar trajectories, but these are the two that I know and love the best...

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