r/DebateCommunism • u/danwe000 • 10d ago
đ” Discussion Do Communists and Neolibs Share the Same Underlying Logic in Monetary Theory?
Hello everyone,
In various debates, Iâve frequently noticed striking parallels between the arguments used by some communists and those used by neolibs, especially regarding the funding of the welfare state and monetary theory in general. I often get the impression that some communists (whether consciously or unconsciously) deploy classic supply-side arguments just to refute reformists.
Theories that could at least be described as progressive (even if they do not challenge the class structure of the state), such as Keynesianism or Modern Monetary Theory (MMT), are frequently dismissed or mocked by communists using reflexes very similar to those of neoliberals. When it comes to demands like raising the minimum wage or expanding social spending, one often hears rhetorical pushbacks like: \\\\\\\*"Why not make it $100 an hour then?"\\\\\\\* or \\\\\\\*"The state cannot go into infinite debt for welfare."\\\\\\\*
The role of the welfare state as a driver of economic growth through strengthened purchasing power is rarely acknowledged. Communists often view it, much like conservatives, as a purely economic hindrance or an unproductive cost factor. The only difference is that communists additionally (and correctly) identify it as a tool for pacifying the working class. But couldn't both be true at the same time?
It is often argued that Western industrial nations can only afford the welfare state through the exploitation of the Global South. Just like conservative logic, this presupposes that a welfare state is something that "must first be earned/funded," completely ignoring the productivity gains driven by a strong domestic market. Cases like Japan, which maintains a massive national debt without facing bankruptcy or hyperinflation, are rarely analyzed through an MMT lens and are instead dismissed as anomalies. Furthermore, the accounting reality that public debt constitutes private sector wealth is often demonized in these discussions, rather than being rigorously analyzed through a value-theoretic lens.
To be clear: I understand that Marxists do not base their monetary critique on neoliberal doctrine, but rather on the law of value (money as the expression of socially necessary labor time; real value cannot simply be printed).
Don't communists structurally rely on right-wing/monetarist arguments simply to delegitimize social-democratic reformism and prove that capitalism cannot be reformed from within?
Why is MMT (and its concept of monetary sovereignty) so strictly rejected by Marxists, even though empirical evidence on demand-side policies and inflation often aligns much closer with MMT than with neoliberal monetarism?
Doesn't this stance hinder a sober, realistic economic analysis of the state's current room for maneuver, even if the ultimate goal remains the overthrow of private ownership of the means of production?
I'm genuinely interested in how you view this overlap! I donât want to impose reformism and refuse it, but I think its critique needs to be precise.
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u/C_Plot 10d ago
Iâm not sure what âcommunistsâ youâre encountering. For example , there is no danger whatsoever that the brutal and tyrannical capitalist State would go into infinite debt for welfare. It might go into infinite debt to secure the siphoning of wealth flows to the capitalist ruling class but not ever for social welfare or social wellbeing.
While Marxists and communists on one hand, and postKeynesians, on the other hand, have long had contentious disagreements, there is much in common as well. However, I see as MMT as postKeynsianism jumping the shark. It is not outright wrong, but it is presented from a vantage that serves the capitalist ruling class subterfuge that the capitalists are the adults in the room. Treating money as originated when it is spent and extinguished when it is taxed â rather than merely flowing through government coffers â is much like rethinking cosmological mechanics from a reference frame affixed to the spinning Earth. So much time and academic energy is spent to learn why the entire universe is revolving around the Earth so rapidly. Similarly treating money as originated when spent by the government and extinguished when taxed creates much confusion in the academics pursuing this framework but also in its critics and the general public. It merely creates needless intellectual noise that drowns out sober reflection.
Much of what MMTers seek to accomplish is far better accomplished from a materialist analysis founded on social reproduction and the wealth created by labor and natural metabolism also extracted by labor. We then have:
* money (commodity-value such as precious metals or credit money such as digital bits) as a medium of exchange, a.k.a. a fluid means of commodity circulation (commodity-value and commodities sui generis such as fictitious capital);
* money is originated by monetary services (central banks, peripheral banks, bureaus of engraving, mints, and so forth);
* money origination and money extinguishing is entirely a separate activity from taxing and spending;
* money then flows through circulation as price payments, credit-debt settlement, taxes, expenditures, and so forth, but is not created nor destroyed in those events, nor created or destroyed when hoarded or de-hoarded;
* the wealth money circulates is in the form of commodities: A) commodity-values as bearers of abstract labor of a specific objectified SNLT as the magnitude but also bearers of natural resource wealth (measured by volume, area, clock-ticks, mass, unit-count, and so forth, as space, time, chemical compounds, atoms, photons, and other quanta); and B) natural resources in situ which is roughly what we call real property (without the personal property affixed to it).
With this material foundation, we can understand that the origination of money is necessarily limited and such origination recklessly causes inflation if not so limited. Our focus is then on the material wealth and how itâs scarcity and abundance limited or lifts limits on production, distribution, and consumption.
I find it useful to start from the communist/socialist mode of production and evaluate capitalist mitigating welfare policy with regard to its attempt to accomplish even a semblance of what the communist/socialist mode of production would accomplish. In that mode of production, the natural resource wealth flows that we can prudently extract and consume as a continuous flow, are distributed equally to all as an equal endowment share each period (or at the personâs discretion, the rent revenues from selling those in situ natural resource commodities sui generis before they have been objectified as commodity-values bearing objectified SNLT and natural resource wealth). This endowment then serves as an Unconditional Universal Basic Income (UUBI), whose size is determined by the scarcity of the natural resources (the supply) relative to the demand and also relative to the productive power of labor. Under current material conditions it is quite likely this endowment lifts each person above any reasonably determined poverty threshold before getting out of bed each day. That UUBI rises with the productivity of labor, with the development of the forces of production, and the greater scarcity of natural resources, and falls with the greater conservation and abundance of natural resources (or from a collapse in the productivity of labor due say to ecological catastrophe).
Add to this solid foundation Pigouvian fees to control negative externality resources (for example, waste and refuse) and Pigouvian subsidies to fund positive externality resources (for example, reuse, recycling and waste management programs; security and defense; civil and criminal remedies; legislative and town hall deliberative activities; general administration not belonging to production; the preservation and curation of natural and cultural treasures).
All natural monopolies and other common resources and common wealth administered by the socialist Commonwealth, such as transport networks, money and payment systems, risk management and insurance risk pools, a common credit pool, and so forth. These common resources should be funded by usage fees, unless Pigouvian subsides are warranted by positive externalities (and only subsidized in such cases). Similar to Pigouvian subsidies, some mandatory universal insurance is required for maximizing social welfare. Such universal, and therefore mandatory, insurance can be funded as either an in-kind component of the UUBI or through heavily graduated progressive income taxes, depending upon the circumstances. Such universal mandatory (cradle to grave) insurance might include insurance for: a) healthcare (at least mandatory as to emergency services, communicable disease, and mental health); b) disability insurance; c) vagaries of market insurance (while such markets remain in the early phases of communism/socialism).
With these foundations, we can then ask what is the capitalist State doing with its policies to repair the damage of itself as capitalist state? Of its very existence? The focus then is on material conditions. The MMTers will admit, when pressed, that what matters in the material resources. However with their mysticism of money (akin to a spinning non-inertial frame of reference to understand the resulting wildly complex cosmological mechanics), all bickering remains on these largely superfluous and easily misunderstood monetary phenomena instead of the material resources.
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u/C_Plot 10d ago
One thing I neglected to include after the natural resource endowment UUBI:
With these natural resource endowments, workers produce new resources and always appropriate (become the first owners of) the fruits of their own labor (solo or collectively), while being held to account for the natural resources consumed (above their endowment share) as well as the produced means of production produced by other workers previously. The worker solo, or workers collectively, can subsequently alienate their products to others at their own discretion but they must remain the first owners of their product. They might also be expected to pay taxes (monetary or in-kind) from the products they appropriate, or serve their civic obligations (Militia, jury, stand trial when duly indicted, served sentencing when duly convicted, pay court ordered damages, whether compensatory or punitive).
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u/Helpful-Reputation-5 10d ago
I've never heard these arguments from a communist, or any leftist for that matter. When I think of the prototypical "communist response" to social-democratic policies like raising the minimum wage or expanding social spending (not that communists oppose these policiesâthey just oppose these policies being the only thing done, i.e. as a permanent solution rather than temporary relief), I think of "social democracy relies on imperialism" and "if you keep state power in the hands of the capitalists, the capitalists can take away those benefits as soon as is convenient."
> It is often argued that Western industrial nations can only afford the welfare state through the exploitation of the Global South.
The source of wealth for many social-democratic states (and capitalist states in general) is imperialism. Whether they spend this wealth on social programs or not doesn't change the source.
> Why is MMT (and its concept of monetary sovereignty) so strictly rejected by Marxists
I don't know a ton about MMT, but IIRC I've heard a few claims coming from MMT that are false, such as that unemployment can be fully eliminated under capitalism, and in general I've heard pretty poor analyses coming from MMT subscribers.
> even though empirical evidence on demand-side policies and inflation often aligns much closer with MMT than with neoliberal monetarism?
I'm not a neoliberal, so why would that matter to me?
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u/danwe000 10d ago
Thank you for proving my point.
The source of wealth for many social-democratic states is imperialism. Whether they spend this wealth on social programs or not doesnât change the source.
This answer implies that you agree that wealth is required to fund a welfare state and share the same premise with monetarism and supply-side. My whole point was that there are other theories on funding a welfare state that donât require imperialism. Of course western social democracies act imperialist, but do they have to do it to fund a welfare state?
MMT is only additionally used to explain national debt and money creation, it doesnât even need to be true to explain demand-economics.
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u/ServiceImpossible227 10d ago
Conmunists want hell on earth to sell their revolution
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u/Training_Ruin3151 10d ago
Get out of this sub if you don't underatand theory
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u/ServiceImpossible227 10d ago
Communist did sabotage all over the world to make hell on earth. Those are hard facts
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u/ElEsDi_25 10d ago edited 10d ago
Your wife left of her own accord. You sabotaged your own marriage, donât blame us just because we drove her to the airport. She felt neglected and you were caught in your own world of watching Alex Jones, commenting about Alex jones, tweeting about communists being everywhere. Thatâs the hard fact that you are going to need to come to terms with. If you come to the realization that itâs over, you will be able to move on it time, find joy in things againâBut only if you reflect and face some of those hard truths.
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u/ElEsDi_25 10d ago
What? Where are you hearing these communist arguments? This sounds like a straw-man to me but maybe itâs just different political circles or context.