How many people agree with MR/MT theory described on the forum

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Do you agree with MT/MR advocates on how money and debt work?

Poll runs till Fri Jul 06, 2057 4:03 am

I agree
14
41%
I disagree
8
24%
I don't know and I don't care
12
35%
 
Total votes: 34
Mdraf
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How many people agree with MR/MT theory described on the forum

Post by Mdraf » Wed Sep 18, 2013 12:01 pm

Just for fun let's see what the non-posting members think about this controversy.
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Re: How many people agree with MR/MT theory described on the forum

Post by TennPaGa » Wed Sep 18, 2013 12:04 pm

Mdraf wrote: Just for fun let's see what the non-posting members think about this controversy.
You should probably add an "I don't know" and an "I don't care".
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Re: How many people agree with MR/MT theory described on the forum

Post by doodle » Wed Sep 18, 2013 12:05 pm

What part of MR is a "theory"....it seems to me to simply describe how the present monetary system is set up to work.

When people talk about MR they aren't saying one system is better or worse than the other, they are just trying to describe reality as it exists.
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Re: How many people agree with MR/MT theory described on the forum

Post by Gumby » Wed Sep 18, 2013 12:13 pm

doodle wrote:What part of MR is a "theory"....it seems to me to simply describe how the present monetary system is set up to work.

When people talk about MR they aren't saying one system is better or worse than the other, they are just trying to describe reality as it exists.
While it's true that MR is simply descriptive of the debt-based credit-based monetary system, Monetarists think that the description is false because these Monetarists believe in a form of Metalism and they don't really understand what "Credit Money" is.

See: http://en.wikipedia.org/wiki/Metallism
Wikipedia.org wrote:Metallism is the economic principle that money derives its value from the purchasing power of the commodity upon which it is based. The currency in a metallist monetary system may be made from the commodity itself (commodity money) or use tokens such as national banknotes redeemable in that commodity. The term was coined by Georg Friedrich Knapp to describe monetary systems using coin minted in silver, gold or other metals.

In metallist economic theory, the value of the currency derives from the market value of the commodity upon which it is based independent of its monetary role.


Source: http://en.wikipedia.org/wiki/Metallism
..versus the Credit Theory of Money...
Wikipedia.org wrote:Credit theories of money (also called debt theories of money) are concerned with the relationship between credit and money. Proponents of these theories, such as Alfred Mitchell-Innes, sometimes emphasize that credit and debt are the same thing, seen from different points of view. Proponents assert that the essential nature of money is credit (debt), at least in eras where money is not backed by a commodity such as gold. Two common strands of thought within these theories are the idea that money originated as a unit of account for debt, and the position that money creation involves the simultaneous creation of money and debt. Some proponents of credit theories of money argue that money is best understood as debt even in systems often understood as using commodity money. Others hold that money equates to credit only in a system based on fiat money, where they argue that all forms of money including cash can be considered as forms of credit money.

... According to Joseph Schumpeter, the first known advocate of a credit theory of money was Plato. Schumpeter describes Metallism as the other of "two fundamental theories of money", saying the first known advocate of metallism was Aristotle.


Source: http://en.wikipedia.org/wiki/Credit_theory_of_money
The problem is that our currency isn't based on metal anymore. It's fiat now. The Monetarists have simply swapped out metal for fiat and never updated their models.

Silly Monetarists.
Last edited by Gumby on Wed Sep 18, 2013 12:25 pm, edited 1 time in total.
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Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex » Wed Sep 18, 2013 12:18 pm

In these discussions I sometimes feel like I am trying to describe the idea that the sun rises in the east and sets in the west and the retort is: "But some day the sun is going to explode, and then what you are saying will no longer be true."

Even though the retort is accurate, it's not really what I was getting at in my initial description, which was basically to provide the sunlight information we might need in order to plan our day tomorrow, next week and next month.
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Re: How many people agree with MR/MT theory described on the forum

Post by Gumby » Wed Sep 18, 2013 12:21 pm

By the way, what the heck is an "MT/MR" advocate?

I assume you are trying to say MMT (not "MT") — which is the belief in a liberal theoretical "Job Guarantee" that nobody discusses here. "Descriptive MMT" — the part of MMT that describes how the monetary system works is slightly different than MR (Monetary Realism), and both are the descriptive understanding of modern credit-based and debt-based money.

But, since we rarely discuss Descriptive MMT here, I think just defining it as simply "MR" is a better choice.
Last edited by Gumby on Wed Sep 18, 2013 12:24 pm, edited 1 time in total.
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Re: How many people agree with MR/MT theory described on the forum

Post by Gumby » Wed Sep 18, 2013 12:30 pm

MediumTex wrote: In these discussions I sometimes feel like I am trying to describe the idea that the sun rises in the east and sets in the west and the retort is: "But some day the sun is going to explode, and then what you are saying will no longer be true."

Even though the retort is accurate, it's not really what I was getting at in my initial description, which was basically to provide the sunlight information we might need in order to plan our day tomorrow, next week and next month.
Terrific analogy. Well said.

It's worth noting that if you had asked us this question two or three years ago, the results would have been very different. Most of us would have dismissed MR back then.
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Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex » Wed Sep 18, 2013 12:59 pm

Gumby wrote:
MediumTex wrote: In these discussions I sometimes feel like I am trying to describe the idea that the sun rises in the east and sets in the west and the retort is: "But some day the sun is going to explode, and then what you are saying will no longer be true."

Even though the retort is accurate, it's not really what I was getting at in my initial description, which was basically to provide the sunlight information we might need in order to plan our day tomorrow, next week and next month.
Terrific analogy. Well said.

It's worth noting that if you had asked us this question two or three years ago, the results would have been very different. Most of us would have dismissed MR back then.
I would have said that it was irreverent, irrelevant, and moronical.
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Re: How many people agree with MR/MT theory described on the forum

Post by Xan » Wed Sep 18, 2013 1:03 pm

MediumTex wrote:I would have said that it was irreverent, irrelevant, and moronical.
And it may well be some or all of those things, but regardless, it describes how our monetary system in fact functions.
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Re: How many people agree with MR/MT theory described on the forum

Post by Mdraf » Wed Sep 18, 2013 1:35 pm

It's unfair. Only the devotees are lobbying on this thread. We  should have a rule. You can't stand near the polling place holding clubs.
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Re: How many people agree with MR/MT theory described on the forum

Post by edsanville » Wed Sep 18, 2013 1:36 pm

I buy that it mostly describes reality, but I disagree that taxation is what gives a fiat currency value.  Which option do I choose for that?
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Re: How many people agree with MR/MT theory described on the forum

Post by l82start » Wed Sep 18, 2013 7:49 pm

i voted disagree in spite of the fact that i find the description of monetary mechanics, and reality's of debt they describe to be accurate. the reason voted this way is that MR refuses to look at the bigger picture human nature, and the corrupting  influence, aspect of fiat economics in their discussions.  while i now tend to agree that debt and even incomprehensibly large debt numbers may not cause inflation or loss of faith in the dollar, i still believe that a government that must spend to feed the economy must expand to spend, and that such endless expansion is the real measure of how long till that faith is lost, an ever expanding ever spending ever corrupting government cannot survive indefinitely, no matter what the mechanics of being a currency issuer has to say about the book keeping...
Last edited by l82start on Wed Sep 18, 2013 7:52 pm, edited 1 time in total.
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