In this article Dean Baker argues that Bitcoin is incapable of producing anything in the real economy. Looked from the domestic economy’s point of view while cryptos won’t put food on your table, it will put food on its holders’ table but only by taking it away from everyone else’s table. “Crypto produces nothing, it is just a scheme to get money from the rest of us and hand it to the crypto bros.” However, in foreign trade he argues that cryptos could play a positive role. In a sense by accepting several of MMTers’ position that (especially for US) whereas imports are benefit and exports are cost, he notes that instead of paying for imports with dollars, using cryptos would convert the trading partners into fools. In this case Americans’ table will have more food but the Chinese and others will be fasting. The beneficial impact of imports is a point of serious disagreement between leading MMT advocates and our own Steve. It was the reason why Steve was not invited at their last annual gathering at the request of Mosler. It is not uncommon differences of opinions to push people apart. https://cepr.net/bitcoin-wont-put-food-on-the-table/

Comments from Hal Morris, about learning how to use Steve’s Ravel/Minsky software toolkit, triggered these thoughts. Lots of new members, with a broad range of backgrounds, have recently joined Skool. Therefore background issues of experience, around and about today's trend towards a widespread, non-specialist use of intricately-powerful kinds of software, might be more widely relevant. So I make my comment to Hal Morris as a more-visible top-level Post. It’s likely obvious from what follows that, even though I find intricate details fascinating at times, my underlying preference is to situate details in a ‘big-picture’ context. So my viewpoint here stands way back, trying to tackle how difficult it can be to see revolutions when you’re enmeshed in the very midst of them. I’d say three revolutions are involved, one inside the other. The innermost revolution is the potential for both substantial and substantive change, in economics, business, the media and in politics, through the widespread understanding and use of the Ravel/Minsky software toolkit. This kind of numerical-method, self-adaptive, complex-systems technology has largely swept the board in many parts of engineering and even some parts of science. Steve has applied it, in appropriately modified form, to economics and finance. However, this revolution is still much impeded by burdensome matters of user-skill and software-design usability - as encountered by many Skool members, including me, in getting a grasp on the software. Strangely, like a snake eating its own tail, these user-related matters of skill and familiarity arise because of, and can only be resolved within the territory of, the outermost revolution. The middle revolution is surely obvious to Skool members, since it’s why we’re all here. It’s the replacement of the fundamentally erroneous ideas of orthodox economics by truthful and realistic ones. The outermost revolution is the hardest one to see because it’s slow-acting - a slow-burn revolution, somewhat similar to that engendered by mechanical printing. In 1450, to own a few books as a private citizen was a mark of great wealth or high prestige. About two generations after Caxton's Press of 1476, there were more books in Europe than people. Subsequently, mechanically-printed books became a kind of mind-amplifier, a memory magnifier, a crowd multiplier and a distance annihilator all rolled into one.

In my judgement, the Austrian School is A LOT closer to Keens thinking about economics than neoclassical stuff. They claim that markets are usually in disequilibrium for example. How right am I? Also I think we should adress the two kinds of roles the government has in economics. People often link wealth redistribution or stuff like that going on in depressions to the government doing something. However, when the Austrian economists say that government intervention should be minimal I think they mean in terms of price controls and stuff rather than redistribution or altering of interest rates (central bank).

In his recent lecture about incorporating prices in a model, Steve made a relatively casual remark that I found distinctly insightful .He has a knack for that sort of thing, it seems. That remark detonated a specific preconception-destroying ‘bomb’ in my insufficiently understanding head. Often, when expressed in currency terms, economic quantities are nominal. To get to real values, inflation of the price system has to be taken into account. But GDP figures are real, said Steve, which tripped up my thought processes. Now, I think I’ve seen what he meant. GDP is really Gross Domestic Trade, measuring the flow of successful exchanges that have taken place. For a buyer and seller to decide to trade, both must be satisfied with the resultant exchange of real value. The inflated value of money is therefore already taken into account in such decisions. So GDP is a real measure, since it derives from exchange of real value not nominal value. Whoo-hoo ! Maybe that was already obvious to the rest of you folks at Skool …

Steve has explained the curious situation that’s apparently arisen in orthodox economics, where little or no attention at all is paid to how money is created. It is seemingly said to simply exist, in an essentially fixed or very slowly changing amount. Perhaps it’s possible to see where this rigid view - incorrect applied to modern money - comes from. It strikes me that these folk are treating the creation of money as impossible. They seem to see money as strictly commodity-based in form. Coins can be minted and notes printed as tokens of an existing stock of money, but no more of that stock can be created. Money, or rather the commodity that’s the basis of money, cannot be created only found, already existing in Nature as a finite stock. In this view, to say otherwise would be to violate the laws of physics and believe in magical transubstantiation, perhaps? Printing and minting are therefore risky activities, doomed to inflate the value of such tokens. For a government to spend more than it taxes and avoid inflation, it perforce must borrow. Such a view seems to reframe the meaning of the word ‘fiat’ to refer to the easy process of creating the tokens without necessarily undertaking the difficult, slow and haphazard process of finding more money in Nature, that would match those tokens. This view might also explain why these folk seem to think that banks can’t create money, because they’re not in the business of looking for the stuff in Nature. Oh, the long, long (and deep) shadow of commodity money - found not created …