SPENCER GREENBERG: Lately, I’ve heard quite a bit about modern monetary theory. And I don’t know enough about it to kinda analyse it from an economics point of view but it does seem like some people are using it as a justification for massively increasing government spending. And so there seems to be at least a political element to it from the people who want to use the theory. So I’m wondering what your thoughts are on that theory.
TYLER COWEN: I don’t think modern monetary theory was coherently defined in terms of a model so I in turn could not coherently present it to you. It was a series of somewhat disassociated views with a largely political slant, the essence of which being you can inflate your way out of a lot of problems. There is not really a constraint on boosting aggregate demand. And the one specific claim that was made ‘well if inflation gets too high, you know the way out of that is to cut government spending’. Crout we’ve gotten into a world where inflation has clearly gotten too high and none of those people are calling for cutting government spending. So I would be negative on MMT. And even a lot of predominant economists on the left you know Paul Krugman, Larry Summers, Noah Smith looked at MMT and just couldn’t quite wrap their arms around what exactly what it was saying in terms of a coherent model. So I view it as kind of a marketing thing and a politics thing.
...I would say that the part of it that seemed to make sense to me was the claim that in many situations but not all you can monetize more of government debt than a lot of people had thought. And that has been true. It may not be true at this particular moment. But if you look at the last 30 years, it’s been true on average. And the MMT people have been right about that, but again I think they need to write it all out in terms of an understandable model. And I just think they’re not willing to do that’ because I don’t think the whole thing entirely makes sense.
I deliberately didn’t dive into the dimensions of political movements and democratic conversation in this post, because it could distract the conversation away from the more substantial concerns I had towards broadly conflicting ideologies and group affiliations. But guess now is a good time.
Here are summarising notes I took of a conversation with a smart family member last Wednesday:
• Political dynamics are actually really complex here. And rationalists have a tendency to think that they analysed it and know what is going on
◦ R: and OpenPhil doesn’t seem like they’re specialised/great at understanding political nuances
◦ ... was there something else I wanted to add to writing here?
• From my experience learning about economics, not one type of theory but a bunch of assorted ones and can use one for situation/problem (especially in hindsight as economists often tend to do)
• also democrats tend to be more for stimulus, and republicans against
• bad that EA is going into something that seems political (R: and about broad ideology)
◦ targeted like vitamin D policy seems more sensible
And here is a post I wrote on my concerns of EA field builders optimising for their views to be represented more by policy decision-makers.
I’m particularly concerned by that key OpenPhil staff decided to jump in late 2015 to boosting the Fed Up campaign while not seeming to more openly enter into dialogue with and clarify the views of other stakeholders around this complex debate.
I find their conclusions of the political landscape quite suspect in how simplifying they sound (while stating “As ever, we acknowledge that this is an unusually complex policy area, and we could be mistaken in our views.” for their grants write-up on the progressive Center for Popular Democracy campaign). The following sounds the least simplifying of their summary explanations but still seems quite off (in particular, in how it seems to write off concerns by well-informed conservative thinkers as ‘inflation aversion’):
We’ve come to the view that there is institutional bias in a particular direction. We believe that there is more inflation aversion than is consistent with a “most good for everyone” attitude.
I’m also concerned about the higher chance of getting carried away inadvertently by partisan arguments and of fuelling political conflicts – from entering into what seems to be like what Robin Hanson refers to as a ‘policy tug of war’.
From the arguments I’ve been able to read/hear from OpenPhil staff, I get the sense that their focus was centred rather narrowly on ‘tweaking’ the weighting of criteria used for monetary decisions by the Federal Reserve to be closer to optimised for the general good for everyone. In case that’s about right (do correct me), I can very much relate. And I think that way of thinking was insufficiently allocentric in covering a broader set of relevant perspectives for what they were getting into.
Just listening to this Clearer Thinking podcast with Tyler Cowen (at 9:00 mark) https://clearerthinkingpodcast.com/episode/084
Let me transcribe what I’m hearing them say:
I deliberately didn’t dive into the dimensions of political movements and democratic conversation in this post, because it could distract the conversation away from the more substantial concerns I had towards broadly conflicting ideologies and group affiliations. But guess now is a good time.
Here are summarising notes I took of a conversation with a smart family member last Wednesday:
And here is a post I wrote on my concerns of EA field builders optimising for their views to be represented more by policy decision-makers.
I’m particularly concerned by that key OpenPhil staff decided to jump in late 2015 to boosting the Fed Up campaign while not seeming to more openly enter into dialogue with and clarify the views of other stakeholders around this complex debate.
I find their conclusions of the political landscape quite suspect in how simplifying they sound (while stating “As ever, we acknowledge that this is an unusually complex policy area, and we could be mistaken in our views.” for their grants write-up on the progressive Center for Popular Democracy campaign). The following sounds the least simplifying of their summary explanations but still seems quite off (in particular, in how it seems to write off concerns by well-informed conservative thinkers as ‘inflation aversion’):
I’m also concerned about the higher chance of getting carried away inadvertently by partisan arguments and of fuelling political conflicts – from entering into what seems to be like what Robin Hanson refers to as a ‘policy tug of war’.
From the arguments I’ve been able to read/hear from OpenPhil staff, I get the sense that their focus was centred rather narrowly on ‘tweaking’ the weighting of criteria used for monetary decisions by the Federal Reserve to be closer to optimised for the general good for everyone. In case that’s about right (do correct me), I can very much relate. And I think that way of thinking was insufficiently allocentric in covering a broader set of relevant perspectives for what they were getting into.
Well, there you have it.