Democracy is two wolves and a sheep deciding what to have for dinner. “Mutton” takes the popular vote, but “grass” wins in the Electoral College. The wolves wish they hadn’t all moved into the same few trendy coastal cities.
Democracy is two wolves and a sheep deciding what to have for dinner. The Timber Wolf Party and the Gray Wolf Party spend most of their energy pandering shamelessly to the tiebreaking vote.
Democracy is two wolves and a sheep deciding what to have for dinner. Everyone agrees to borrow money, go to a fancy French restaurant, and leave the debt to the next generation.
Democracy is two wolves and a sheep deciding what to have for dinner. The sheep votes for the Wolf Party, because he agrees with them on social issues.
Democracy is two wolves and a sheep deciding what to have for dinner. “Grass” wins the tenth election in a row, thanks to the dominance of special interests.
Democracy is two wolves and a sheep deciding what to have for dinner. FactCheck.org rates the Wolf Party’s claim that mutton can be made without harming sheep as “Mostly False”.
Democracy is two wolves and a sheep deciding what to have for dinner. The main issue this election is whether two more sheep should be allowed to immigrate.
Democracy is two wolves and a sheep deciding what to have for dinner. A government shutdown is narrowly averted when everyone agrees to what becomes known as the Mutton With A Side Of Grass Compromise; disappointed activists are urged to “keep their demands realistic”.
Democracy is two wolves and a sheep deciding what to have for dinner. They choose borscht. Election officials suspect foul play.
Democracy is two wolves and a sheep deciding what to have for dinner. They vote for free breadsticks. They go to the restaurant, which will only sell breadsticks at the usual price. The wolves say they voted for free breadsticks, and the choice of the populace must be obeyed. The sheep warns them that the breadsticks are getting cold and hard while they wait, and that if they don’t come to a decision soon then they are “sleepwalking into a disastrous hard breadstick” that will ruin their dinner. In an eleventh-hour vote, the wolves reject paying the restaurant’s price for breadsticks, and also reject leaving the restaurant without breadsticks. Eventually they all die of starvation.
Democracy is two wolves and a sheep deciding what to have for dinner. Talks between the Gray Wolf Party and the Timber Wolf Party break down over the issue of who gets the tastiest cuts of mutton. The Gray Wolf Party enters into a surprise “grand coalition” with the Sheep Party, and they agree to eat the second wolf.
Democracy is two wolves and a sheep deciding what to have for dinner. The sheep uses CEQA to stop the wolves from eating it until they pass an environmental review, so the wolves retaliate by using CEQA to stop the sheep from eating grass.
Democracy is two wolves and a sheep deciding what to have for dinner. Realizing this theoretical flaw with democracy, the sheep insists that they move to some other form of government, one which ensures that the government will never decide that the sheep be eaten for dinner. The wolves agree, and then promptly eat the sheep for dinner.
It’s funny because it’s true!
… sounds about right.
Democracy is two wolves and a sheep deciding what to have for dinner. The Dorset Horn party and Texel party split the wolf votes and alternate between clover and forbs, because the wolves are both too afraid that the wrong party will win to vote for a third party.
Democracy is two wolves and a sheep deciding what to have for dinner. Mutton is a reliable issue for mobilizing the Wolf Party base and they have no reason to spoil that situation by actually serving it up.
Democracy is two wolves and a sheep deciding what to have for dinner. “Grass” gets 99% of the vote. There’s a sheepdog death squad in case any wolves get too vocal about verifying the ballots.
Democracy is two wolves and a sheep deciding what to have for dinner. The Environmental Protection Agency declares “grass” invalid as an option, because it is a crucial habitat for an endangered animal, specifically the sheep.
All paragraphs generated by GPT-2?
I was curious, so I fed it the first five.
Thanks! Sounds like artificial intelligence still has some ways to go.
Note that this is the nerfed small-scale model.
I love “This Porky Local”.
That’s beautiful.
Sloshing around elite conferences making money sounds like a pretty good gig.
Anyone got an in?
Yes. But you need a degree from the right college.
If you
attendedbought in to the right kind of college, you’d already know how.Ha!
An actual “If you have to ask, you can’t afford it” kind of answer!
Concerning that, would anybody care to steelman Modern Monetary Theory, as espoused by the more fashionable progressives like AOC and Sanders? I’ve looked at the WP page, but Kelton, one of the main economists pushing MMT, clearly contradicts one of the tenets listed there, and after some reading, I’m not much wiser (though perhaps sadder).
Does MMT imply increased public spending? It sounds like AOC and Sanders think so, and the basic dogma is that budget defecits don’t matter (not much, anyway), so while I don’t hear Kelton explicitly say government should spend indiscriminately, I don’t see why that wouldn’t be the obvious consequence. And if it is not, what is the limiting factor if not budget constraints?
Also, it is not entirely clear to me how MMT thinks inflation is avoided. WP says taxes to remove “excess” money, but Kelton doesn’t think so. She claims inflation is not caused by increasing money supply, but rather by external factors like the oil price. If monetary policy can’t regulate inflation, then what will? What are her explanation for high inflation in some countries or periods, and not in others?
And: why is money the issue, and not resources? Increased government spending will mean increased resource use, and unless you wish to argue that government resource consumption increases wealth more than the private sector (and explain how the Soviet Union is the only remaining economic superpower), this will reduce the available resources for the private sector. So financial trickery and creative book-keeping aside, this is just a matter of distributing resources between the public and private, and there’s no free lunches. Or is there?
And: is government still supposed to incur debt, or should it just print money until its problems go away? Again, I find conflicting sources.
Finally, why is MMT always mentioned along with the adjective ‘heterodox’?
The core assertion of MMT is that as long as you have idle productive capacity in your economy, you can increase the amount of money in circulation without this translating directly into inflation, because the additional money will mobilize some of that idle capacity, thus increasing the total real wealth of your nation, which is what ultimately backs the currency.
This is not a statement you can always run the presses with no downsides! It is a statement that if, and only if, the key bottleneck in your economy is the amount of money in circulation, you can fix that by just running the presses until you hit the first limit imposed by physical reality, and you should do so. How do you tell if you have hit a real constraint? Well, inflation starts rising.
So in practical terms, the actual recommendation of MMT is simply that central banks need to stop putting the breaks on because they fear inflation, and wait until at least some inflation actually happens, because to do otherwise is to sacrifice growth in real economic output for no good reason.
This, frankly, seems to me to be both correct, and also to explain why the first world has done so poorly on the growth front for the last couple of decades – overly hawkish central banks are strangling the economy, and keeping people unemployed to no good end.
https://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/ says that CPI in January 2010 was 214.5 and in January 2019 it was 251.712.
That’s ~1.6% per year on average. So there was some actual inflation. in 2012 the Fed adopted a formal target of 2%.
In the US. Part of what convinced me that MMT is essentially correct is that the US has been a lot less hawkish on the money and deficit front than the EU has, and has had higher growth, despite starting from a higher baseline and having done fewer meaningful reforms than the EU has.
.. That is, europe has removed a whole lot of internal barriers to trade and industry over the past couple of decades, and transitioned 10 nations from a terribly inefficient command economy to a mixed market economy while doing a lot of work to crack down on corruption.
By rights, on a percentage basis, the EU should be growing faster than the US because it is changing the underlying circumstances in directions universally considered better, while the US is.. well, not doing anything much in the way of reform.
This has, well, not been the case. And one note worthy difference is that EU central banks are very hawkish. The EU consistently undershoots its inflation targets really, really badly.
EU countries are very different in terms of national GDP. Five countries (Germany, the UK, France, Italy and Spain) make up almost 70% of the GDP of all the Union, the Slavic countries still make a small fraction of it, though quickly growing.
As for Slavic countries, Slovakia, an Eurozone country, grows faster than the Czech Republic, a neighboring and culturally similar country with a national currency, so I don’t think that the Euro or the ECB policies are an issue per se.
Other noteworthy differences are that the EU governments tax and spend significantly more of GDP than the US does, and have done for decades. And those decades mostly favor the US in terms of growth.
You can only get to the MMT conclusion if you start from the assumption that government spending and private spending are equal from a growth standpoint, which is basically assuming the conclusion.
Depending on who you ask, that can be seen as a feature and not a bug. Net loaners of the Euro in the EU (i.e. the Germans) benefit the most from super-low inflation, at the expense of all debtors in the EU.
Net loaners benefit from unexpectedly low inflation at the expense of net borrowers. The ECB’s persistent hawkish tendencies have been on display for quite a while now.
Sure, holders of currency and bonds like it. The argument is that it is terrible for the overall economy. Which, well, it certainly seems to be. Because europe as a whole is terribly, ridiculously, atrociously far from the limits of the productive potential implied by its institutions and social settlement.
Scandinavia and Switzerland are arguably there, or at least not terribly far off, going by labor force participation. But the rest of the continent? No. Really, really not.
And no, the problem is not “The state is too big”. Scandinavia has a bigger state than most of the rest of the union, and yes, sure, that may be why it is not as rich as the new england states. But that really does not explain why Germany has labor force participation a full ten percentage points worse than Sweden.
Monetary theory totally fails here, especially MMT. What is France’s LFPR? Is it also right around Germany’s and 10 points below Sweden? Netherlands? Finland? Belgium?
LFPR doesn’t give you a good viewpoint anyway, hours per worker in the labor force doesn’t line up with LFPR either, nor with the monetary union vs non monetary union.
Comparing Germany to Sweden with LFPR makes no sense on its face. Population wise its like comparing Ohio to California+Texas+New York, culturally and historically there are more reasons to compare to other Euro countries, and there is nothing in MMT to suggest such a comparison is a good one.
Being consistently a fifth below their target over nine years is still pretty significant though.
This is a weird combination of a steelman and a strawman, because its a position no MMTer actually appears to hold. The logical conclusion would be that you would target zero, or negative, inflation rates, not positive ones. Central Banks are being far to loose said no MMTer ever (though there are economists who call for 0% inflation, but they aren’t MMters).
How do you figure? As far as I can tell it seems perfectly consistent with targeting a low, stable inflation rate, and as far as I’m aware about 2%/year is generally regarded as a good idea by the economics field.
The lower the (expected) inflation rate, the bigger the demand for currency.
If you think that issuing extra currency is a windfall, you want low expected inflation. Or even deflation.
(By the way, deflation by itself is not and and even good for the economy. What’s bad is collapsing nominal GDP.
At stable nominal GDP, falling prices are good. Think eg the effect of China opening up on the Americans economy, or the persistent price decreases in computing.)
@Matthias your first couple paragraphs still don’t make much sense to me. According to Thomas Jorgensen above, MMT claims that if there isn’t any inflation, there’s a strong chance your economy has unused productive capacity. Under that assumption I don’t see why you’d ever want inflation to be zero or negative unless you have some other way to be very sure you’re at full employment anyway.
Does your claim rest on differences between expected and unexpected inflation? If so can you explain how?
The statement made was that printing money first flows into unused/underused resources and then causes inflation when those are exhausted. Given this generating 2% inflation implies that you are printing more money than is necessary to generate full employment (I believe that Milton Friedman makes some of these points in his discussion of the optimal quantity of money, but I haven’t gotten around to reading that one).
It implies that you have printed to much money (there are efficiency costs with inflation), and the natural price curve is negative, so 0% inflation is actually positive inflation outside of recessions.
You can also (under this theory) ensure that you are at ‘full utilization’ by using a long run target of 0% inflation if you are worried. Go for 1% this year, 0.9% next year, 0.8% the year after, etc, etc.
.. in an economy made up of perfectly spherical cows, sure.
in practice, the economy is not that tidy.
As much of the untidiness points towards accepting lower than zero rates of inflation as it does higher than zero, probably more in fact.
There has been discussion of it recently.
From that discussion:
> […] It’s that the only reason we value the american dollar, japanese yen, or whatever sovereign money is that the american/japanese/whatever government is creating demand for it via the threat of charging taxes at the end of the fiscal year.
Alas, that’s not quite true: it ignores powerful network effects.
The only reason the Roman Denarii had value was because it could be used to pay taxes to Rome, but it was usable as currency even among people outside the empire.
Not sure that’s a good example, because it used to contain quite a bit of silver
I’m thinking more of governments whose ability to tax collapsed (like Somalia), but their currency’s value only crashed once much more money was printed.
Silver used as currency cannot be used for any of its valuable properties. The only effect putting a particular metal in a currency has is to make it more difficult for the government to make money. But with the recent discovery by MMT theorists that coinage can be debased, even that can be changed.
Unless you melt it down, right?
It’s not something that comes up much in modern society, but when you have a coin that contains silver, you have silver whenever you want it. If Rome collapses and the ability of the Denarii to pay taxes becomes useless, the coin itself is not useless.
Then it stops being usable as currency. Also, each Denarus has equal value as currency despite the silver content varying.
Agreed.
What I’m getting at is that the denarii actually has two uses: it can pay taxes to Rome, or it can be transformed into an amount of silver. Thus, independently of how useful paying taxes to Rome is, there’s a use for the denarii.
I’m mostly pushing back against “The only effect putting a particular metal in a currency has is to make it more difficult for the government to make money.”: having a lower bound to the value of a currency based on the precious metals in it provides a level of safety in investing in that currency. Even if the issuing government collapses and the “paying taxes to Rome” component becomes useless, you have your precious metals.
I wonder if the economy collapses from excessive inflation before the coinage is debased too much for the backup value of shiny metal to be irrelevant.
I know very little about MMT. However, what little I do know makes it sound remarkably similar to English social credit (as best as I could understand it… trust me, trying to understand social credit is hard!)
What English social credit (seems to) propose is that when a certain amount of savings is used to create capital, that amount gets added as a “pull” for debt-free savings on top of the usual sources, which requires a corresponding creation of money to offset.
Simplistically, money is created from loans, expensed to workers through business, creating costs, and then the costs are redeemed by workers, and the business redeems the loan, and takes out a new one- such is the cycle of money. Capital made through loans in this way presents no problems other than time-based ones – the costs being redeemed today were generated from the expensed loans (and spent money) of yesterday, paid for today by capital being created for tomorrow, and there can be variation in how much capital is being made today vs. yesterday. So if the rate of capital creation declines for some reason, we won’t have enough money to pay the costs of yesterday.
But the real stickler is when capital is created through savings instead of loans. Say Business 1 makes a profit, pays off its loans, and has enough left over to expand capital from its savings. It does so. This creates new costs which must be redeemed by the economy in the future. Now the workers who have just been paid with the savings buy goods from Business 2, the business which had taken out a loan, which money was expensed, got in the hands of workers, and then became the profit of Business 1. Business 2 pays off its loan and the cycle starts anew.
Except, now Business 1 has this capital sitting around, needing to be expensed in the future, but there’s no money left to pay for it! All the loans have been paid off, so there’s no money around.
There are probably other sources of a “gap” between costs and money as well – see the time-based variation mentioned earlier- but I believe English social crediters viewed this source as the most important one.
So the assertion of English social credit, and perhaps MMT as well, is that the creation of capital from savings must be offset by an equivalent creation of debt-free money (preferably put directly into the hands of consumers) by the currency monopolist (i.e. the State). The only other way to deal with the problem is to constantly expand loans; that way, the savings-made capital costs of yesterday turn into liabilities for tomorrow, and the crisis is averted temporarily. The loans need merely be kept outstanding long enough for the bigger loans of tomorrow to come in and stave off the problem even further.
The other other option is, of course, to let the business fail and have the capital written off so it doesn’t burden the economy. But if you do that enough, you tend to get these things called recessions and depressions, which tend to suck.
So under English social credit – I think -, you try to gauge how big the savings-made capital cost “gap” is becoming redeemable today – this week, this month, this year, etc.- and print debt-free money to offset it. To distribute it, social crediters held a “citizen’s dividend” in high esteem, for much the same reasons as UBIers do today, but they also liked a reverse sales tax as well, for much the same reasons as anti-UBIers might propose. Or you can just add it to the government’s budget, if you place an absurd amount of trust in the process you’re using to do so.
As for inflation – my already low confidence in my understanding becomes even lower here, but it’s definitely a valid force to reckon with. You very definitely can screw things up if you print too much, and it may be the best outcome comes from printing only a percentage of the “gap” coming due. But on the other hand, perhaps it would paradoxically stabilize price elevation, since the need for constantly expanding loans would be lessened. And there’s good old counter-cyclic spending, too – if loans expanded to fill in the “gap” on their own, you wouldn’t need to print as much, or any, money, and may even want to draw some out through taxes, to be put into a counter-cyclic stash. And then when the loans come due eventually, and a recession looms, you empty the stash and print money to make up the difference.
So yeah, it really is about financial trickery, viewed in a certain lens. Or perhaps more like there are lunches being left uneaten, in another. Or, maybe English social credit is just wrong!
I don’t know if the government should continue to take out debt. Ideally, the government would collect taxes equal to its expenditures. But I suspect the government budget is being shanghaied into a (perhaps *the*) source of “gap”-filling loans, which is why it takes out so much debt nowadays. I don’t believe printing this “gap” money should be a replacement for having a budget. There’s too many bad incentives there to be workable.
As for why it’s
hereticalheterodox? My intuition says helicopter money evokes the image of something from nothing, and big government, and a bunch of people disagree with it for philosophical reasons, and politicians with a money printing press just has been a bad idea in the past. Better to just stick to loans, in that view.> Say Business 1 makes a profit, pays off its loans, and has enough left over to expand capital from its savings. It does so.
Then either money was printed, or business 1a had to default on their loan and the lender lost. The money that Business 1 saved up had to come from somewhere.
Money isn’t consumed, so it doesn’t have to come from somewhere in the same sense as a commodity does. You can have faster monetary flows, or you can have decreasing costs to create a profit on the same dollar amount without either of those two effects happening.
Saving money takes it out of circulation.
Only if you stick it under your mattress.
@deciusbrutus
With the regular disclaimers, my understanding is that saving money creates a lot more money in circulation. You put the money in the bank, the bank will have that amount of real money as your savings, and using it as reserve is legally allowed to lend a multiple of that amount to others (10x is US, I think).
The money comes from the loan that was extended to Business 2, which was paid out to workers and charged as a cost, and the workers bought from Business 1 with that money. The scenario does ultimately mean either Business 1 can’t sucessfully charge off its capital, or that Business 2 defaults on the portion of its loan that became Business 1’s capital-savings.
English social credit believes that money – or balances, more specifically – generally only enters the economy through loans. It’s created by the extension of loans, and destroyed by their repayment. Physical cash money continues to exist, but from what I understand, it’s treated more as a commodity to be managed, to be distributed and received in exchange for account balances, rather than as actual money, when it’s in the banks’ hands.
> Except, now Business 1 has this capital sitting around, needing to be expensed in the future, but there’s no money left to pay for it! All the loans have been paid off, so there’s no money around.
You hear something similar expounded as to why the way money is currently made would cause / need an endless spiral of growth.
However that’s not an issues for several reasons. The most simplistic and mechanic is that the central banks around the world transfer all their profits to their governments’ treasuries.
(But arguably central banks obscure the picture. It’s easier to see with privately issued money.)
I think, but I’m not sure, that you’re referring to the “debt-virus” idea, where there’s not enough money from loans to pay off principal + interest. I don’t believe it to be much of a problem, since it can just be treated as another service charge, as the money goes towards running the business, except insofar as banks are required to permanently pare off some of that money as reserves.
The problem outlined here is that costs are duplicated through the creation of capital through savings.
In MMT’s theory the state creates money, and then creates demand for it by charging taxes. There’s no need that the state charges exactly the same amount of taxes as it created, and it’d be ridiculous that it’d charge more, or there would be a cash flux problem. This difference between the created money and the taxed money is the deficit, and thus, the revenue of the private sector. This basic summary ignores money created by lending, but the basic idea remains.
By the same token, the “borrowing from our kids” argument is ridiculous, unless it refers to actual finite resources. Government debt can always be paid off as long as the debt is in currency the government has control of.
Obviously, when Trump cut taxes and added 1 trillion to the deficit, he did not time travel and brought 1 trillion dollars worth of futuristic cars to the present, stealing it from future generations. Similarly, the wolves don’t time travel and go to future McDonalds and eat food from the future and leave the tab for the future kids.
There wouldn’t be a problem unless the state was destroying the money it brought in as tax revenue.
What is the alternative? Putting that money into a vault removes it from circulation, just like destroying it would. Taking money out of a vault costs the same as making new money, when the ‘money’ in question is digital fiat currency.
The alternative is spending that money on things the government buys.
Which is the same as the government making new money to pay for the things it buys, to the same amount as it destroys the debts that it pays off.
Yes, debts that it pays off. When currency was backed by gold, each banknote was a debt in gold owed by the backing institution. Receiving such a note in payment for goods or services, or as taxation, or in exchange for the amount of gold used to back the note, was repaying the debt. None of that changed when currency ceased to be backed by gold.
> By the same token, the “borrowing from our kids” argument is ridiculous, unless it refers to actual finite resources. Government debt can always be paid off as long as the debt is in currency the government has control of.
I’m not clear how it’s ridiculous.
Suppose when you’re 25 years old you vote for higher deficits and use the money received in government subsidies or not paid in taxes to buy a home. The difference isn’t whether the home exists or who got to use it for 40 years, it’s how much equity (if any) you have in it by the time you’re 65.
So now you’re 65, your generation own your homes and in order for that to happen the government has trillions in additional debt. Then you take out a reverse mortgage against that equity and use the money to buy a boat and go on a Disney vacation.
Wouldn’t those resources have been allocated differently if you had paid to balance the government budget when you were working? In particular, wouldn’t they have gone to future (now current) generations instead?
Saying that the next generation can print the debt, or just roll it over into new debt, doesn’t change the result. You got a boat and a Disney vacation and are still living in your home instead of moving to a smaller apartment, and that had to come from somewhere.
Moreover, the debt itself has consequences. Even if we can roll the debt over forever and never pay the principal, the people earning interest are still getting paid. Then current and future generations have to provide those creditors with whatever they choose to buy with that interest, when they otherwise wouldn’t have.
The money came from inflation; that is to say, creditors who lost value due to inflation paid for it, along with any other fixed-nominal-price transactions.
The loss to creditors was a transfer to their debtors. What paid for the resources purchased with new money was the reduction in the value of the money held by people–not assets valued in money but actual money.
Sure, the resources would have been alocated differently; say, I would have rented all my life, and once on a pension, I may have to move to a cheaper apartment or house that I still keep paying rent for; the money went instead to the guy who I rented from (probably more than he’d have gotten if I had bought it from him in a single lump, particularly if MMT caused more inflation in the other version).
In this, non MMT version, the original owner of the house is the one who goes to Disneyworld. NOT the younger generation, who is in turn trying to buy/rent houses, while also paying enough taxes to keep the deficit small. Younger generation doesn’t get to go to Disneyworld in either case.
Whether the deficit was paid for by the younger generations…well that still doesn’t ring true. If MMT can make good on their promise to use the deficit to make use of more idle production resources, then the economy grows, and maybe the younger generation can be brought along to Disneyworld by their grandparents, who had better jobs paid-for by the deficit in their time.
So yes, the resources may be allocated differently. But that does not mean that the grandparents took a Disney vacation their kids could have taken. Each generation takes as many vacations as can actually be provided for by the existing vacation-installations. At some point the kids will be able to pay their own vacation. Disneyworld will still be there. The question is whether the grandparents taking a vacation while they were still young causes their kids to not be able to take a vacation when these kids are adults. That only depends on whether that vacation money was the college fund for the kids.
Disneyworld is still there in either universe, and can be vacationed-to. It will be priced at a level where a lot of well-off people can take it.
Whether a MMT-led economy can make good use of otherwise idle resources by paying for them with deficit without exploding inflation, well, that remains to be seen. At least they say it is possible, unlike paygo, who considers debt balance to be more important than idle people/machinery.
Do note that the debt may not necessarily exist; MMT says to just run the prints. The current Trump-led-version says to run deficits while still creating more treasury bonds. So those “creditors” may not even exist, or be reduced in number. What will exist is a deficit, aka the difference between what the state took in as taxes and what it actually spent. Bonds may or may not be sold, depending on the needs of the economy. The problem today is that the totality of the deficit is debt, but that does not need to be true. Smaller countries implementing MMT may need to sell bonds in other currencies if they need to buy lots of stuff in currencies they don’t own.
No one thinks that borrowing from our kids refers to time travel. Money is a store of value. If we borrow a trillion dollars then at some point the creditors will want the money back with interest. If the government rolls that debt over then interest payments will rise and the future generations will be paying for debt service instead of things they actually want. If the government prints new money then inflation will rise and interest rates along with them. Future generations will have higher inflation and higher borrowing costs.
If we print new money once now that imposes a cost on current holders of money, since their cash is now worth less. It doesn’t cause inflation for our children.
If we continue printing money and the result is that prices go up by ten percent a year, that is a tax on people who hold wealth as cash. Interest rates will eventually increase by about ten percentage points, to compensate lenders for the fact that the money they are paid back in will be worth less than the money they lent. But that isn’t really a higher borrowing cost, since the borrower who is paying an extra percent is also reducing the real value of his debt by ten percent a year due to inflation, in effect paying off some of the principal along with the interest.
And if the debts are declared void, and the government will henceforth be printing money instead of borrowing it, what goes wrong?
All the people—many of them US citizens—who purchased bonds from the US government get screwed over, and the value of US bonds crashes. Other countries stop conducting trade denominated in dollars, US standing and standard of living decrease, and the sudden shock to the economic system creates a worldwide depression.
My comment was entirely in response to “debts are declared void.” Additional badness ensues when the money in circulation increases much more quickly than the amount of goods that it represents.
The value of US bonds goes to zero, instantly. That’s the proposal. Future US bonds aren’t issued.
Did you mean “Other countries stop accepting dollars in exchange for exports (to the US)”? Would that be as retaliation for their bonds crashing? Would they also stop buying US exports with dollars? Because if the dollar can be used to purchase US exports, it still has value overseas, and anyone who refuses to deal with dollars will just deal with more opportunistic people. (Those people will buy otherwise valueless dollars from local people with local currency, buy exports from dollar-denominated countries, and sell them for local currency, extracting rent from their willingness to deal with the taboo money).
No, MMT says nothing about the amount of public spending. It is in fact completely agnostic with regards to the total amount of money printed by the government.
I’ll try to badly explain some much simpler metaphors.
Suppose currency had zero creation cost for a government to create- whenever the government decided to spend, currency would be generated there. Further suppose that whenever the government took payment, either in taxes or in advance, the currency used to pay for that vanished. (these are merely rephrasings of what actually happens in electronic transfers, but instead of banknotes the ‘currency’ is an entry in a digital ledger).
With that one supposition, you’re most of the way there- inflation follows if the government creates much more money than it destroys, and the government can affect inflation by destroying more money (either by taxation or by selling bonds to destroy money).
There’s no need for the taxes or bonds to be done prior to the spending; the money need not be destroyed before it is made. This is merely an accounting difference from actual current practice.
The constraint on the amount of money the government can net create is set by how much inflation is desirable. If inflation is below the ideal, the government should increase net money creation (either by spending more or taxing less), and vice versa. That is substantially equal to the case where the government spending uses too much scarce resources; if the government tries to buy more than all of a given fixed-supply resource, the price of that resource tends towards infinity as remaining supply approaches zero when the assumptions that let us discuss ‘supply’ and ‘price’ break down; the government spending increases with no upper bound, and inflation increases with no upper bound.
If the public uses of the resources that the government buys with printed money are economically beneficial (e.g. producing infrastructure, positive regulatory environments, and an educated workforce), they might create more resources than they consumed. If the public uses of resources are economically harmful (e.g. building and maintaining nuclear missile silos, prohibiting private development of housing, and giving schools very strong incentives to provide education that maximizes a standardized test score), then they will probably not generate more resources over time.
None of this is even remotely new. All of it has been in effect at some scale ever since governments realized that debasing coinage was possible. The ‘modern’ part is that governments no longer need to buy lead or even paper, and the currency no longer claims to have any official relationship to shiny metals.
+1, this is my understanding as well.
My tl;dr is that MMT is an alternative way of looking at fiscal and monetary policy. The thing about changing the way you look at something is, it doesn’t actually change the thing you’re looking at.
If nothing is new, then what’s the fuss? And why are people citing them to justify lack of concern about deficits?
@Eponymous
MMT is considered heterodox. I’ve been following the debates closely for well over a decade. The way I see it is that conventional economics is a very confusing and often erroneous description of how money and banking works. For example, Paul Krugman will often label a post as “wonkish” when trying to explain something. The MMT description of how the monetary world is much more straightforward, and invalidates conventional thinking as to why we can’t solve problems.
It’s very much analogous to medieval religious dogma. Only the priest who know Latin can tell us God’s laws. If we don’t agree on that, then the cat is out of the bag and all hell will break loose. And to some extent that has happened! As philosophers contested the iron laws of the Christian orthodoxy, certain norms of behavior were no longer sacrosanct.
So, with economics, the conventional thinking is that if we realize that money is created by governments out of thin air, then it will only be a matter of time before the money is worthless. The elites would like to maintain the fiction that government’s have to borrow money from rich people, but that is hard to do in the wake of the recent (2008-2009) bailout of the financial system by the central bank.
MMT is not a magic bullet solution to all our problems. Rather it’s a clear description of how the monetary world works, which is a good first step toward proposing workable solutions to problems.
MMT is not a clear description of how the monetary system works, it neither accurately represents the history of money nor do most (any) MMTers follow their claims to their logical conclusions.
@baconbits9
What don’t you agree with with regard to MMT? I’m confident that MMT is much better at explaining the monetary system than any other school of economics, but it’s hard to respond to your comments when you offer no specifics.
Cheers
That is written in the form of a claim and some supporting claims, but the phrases that are in the place where supporting phrases should be do not support the phrase that is where the claim should be.
The history of money is not how the monetary system currently works.
The history of money is about how monetary systems work, the current system in the US was built off those other systems.
The history of money is like the history of physics: We used to think it works that way, but now we think it works in a more nuanced way.
Aristotle was wrong about a lot of things, but he was not even wrong about quantum entanglement; likewise much of past economics was wrong about lots of things, but not even wrong about modern money.
New physics theories have to both describe interactions that have been observed in the past and interactions that are happening now, MMT skips the whole ‘all the stuff we have observed in the past’ and then presents a simplified view of what is happening now.
Quantum mechanics does not explain why we see sap and smoke and flame coming from a burning log. It just rounds to Newtonian physics, which has tractable math at that scale.
@detroitdan
I don’t see any difference between deciusbrutus’ description of MMT and what “conventional economics” says. So how does MMT differ from conventional thinking?
Yes, these facts are “hidden” from the public in boring economics lectures and textbooks. Clever!
So, the above is the motte of MMT. Not wrong, but not new/interesting
“The government can spend as much as it wants without restraint”is sometimes claimed as a bailey.
A better weak man would be “There is no obvious bright line indicating the maximum amount that the government can spend before catastrophe results.”
Better because it’s true and a thing implied by MMT.
Is anyone claiming the existence of such an “obvious bright line”?
There are people who claim that the government must tax or borrow before it can spend; the amount of tax and credit the government has is one such bright line that is claimed to exist.
Nobody has ever claimed this; “printing money” in various forms has always been understood as a third option for government spending.
Usually as a very bad, dangerous option, often as one whose danger and badness is sufficiently obvious that it does not need to be explicitly brought up and dismissed every time. But, perhaps more importantly to the question at hand, one whose danger is characterized as a cliff unmarked by any bright line or other warning. One wanders slowly away from the hard and narrow path, saying “There doesn’t seem to be any problem here, we appear to be slowly edging towards prosperitAIEEEEEE! (splat)”.
So, no obvious bright line, but that’s not a good thing.
>Nobody has ever claimed this
The strong statement that you used there is clearly false. But if I want to steelman it, it’s pretty easy:
>The mainstream economics thinking hasn’t ever believed that unbacked fiat currency can’t be printed in arbitrarily high denominations.
The phenomenon of hyperinflation is known; the assertion that hyperinflation would occur with even the slightest additional amount of printing money is technically untested (by definition) but clearly false; MMT points that out by removing the pretense that the fiat money has to ‘come from somewhere’.
Can someone explain to me how MMT differ from a simple Keynesian use of deficit-funded gvt. spending in recessions/depressions/subpar growth environments?
They seem to be the same thing and relying on exactly the same argument : If there are idle resources in the economy, mobilising them will generate more growth AND will not trigger inflation.
Only if Demand is already plentiful and capacity utilisation high do you run the very real and very well understood risk of “guns and butter” inflation…
In the Keynsian version, the government mostly commits to eventually paying back the incurred debts with future tax surpluses, rather than with freshly-printed money. Almost nobody seriously believes in the Keynsian version any more, but many people will invoke Keynes as a Serious Respected Mainstream Economist when they are narrowly and specifically trying to gain support for the deficit-spending part of the plan.
Right but that’s truly just an artifact of politics i.e. politicians lack the will to raise taxes in good times coz, well, taxes are never popular.
So, in essence, MMT is Keynesianism with monetization of deficits instead of fiscal discipline in good times. Hm.
I can see where this would lead to problems down the line, assuming the deficit spending part of the plan does work out and you do get growth.
Not that I’m worried about that. With inequality being what it is and private debt load being what they are, I don’t think we got much private growth in our likely future…
Not quite. MMT says repaying the debts can be a terrible idea.
Its the inverse of the mobilization of resources argument.
If you are in a boom period with full utilization of productive capacity, but low inflation, that means the amount of money in circulation is a good match for the current needs of the economy. If you use such a boom period to pay back government loans you are pulling money out of the economy, which will very shortly end the boom you are enjoying, because there is suddenly no longer enough money to facilitate the exchange of goods and services.
This is, in fact, a thing there is historical examples of – The US government has paid down debts in the past, which each time was followed by a major economic crash.
Thus, MMT says the government should only ever run surpluses to lower inflation.
I love the quality of evidence here. Norway’s 1994 depression really messed that country up, or the UK over the last decade.
MMT doesn’t just imply an economic crash either, it implies a LACK OF RECOVERY after the crashes without massive expansion of debt by governments, so early 1920s USA shouldn’t have been possible.
Norway has a constant inflow of foreign money. That lets – of if you like, forces – the Norwegian government to run surpluses to keep the amount of cash in circulation down.
This is, btw, also an undesirable state of affairs – Constant trade surpluses are bad economics, because they mean you are enjoying a lower standard of living than you could, and all you are getting out of it is money.. which you could, and should, just create out of thin air if you are short.
The government of Norway could easily replace those surpluses by buying foreign luxury goods or services and selling them below cost. Or possibly in funding international research, aid, or some such.
That’s possible, if for some reason the country is accumulating foreign money.
But the usual reason for a trade surplus is a capital inflow. Foreigners are investing in the country, which means they need Norwegian money, which they get from sales of foreign goods in Norway and spend buying Norwegian goods that stay in Norway and so are not counted in the trade calculations.
To Thomas Jorgensen : Thanks for clarifying that. And, yes, I guess that fiscal tightening can trigger a recession too, if it’s badly calibrated.
Still, monetizing deficits in good times when supply is tight could also easily lead to runaway inflation…
Bottom line : it’s a balancing act and it still feels like a small variant of Keynesianism so I don’t quite get why everybody gets so agitated about it…
@Thomas Jorgensen
Um, how else would one repay debts but by running surpluses?
ETA: Oh, I misread. You only run surpluses to control inflation. That…still makes no sense.
How does reducing government debt contract the money supply?
Case A: Raise taxes, pay off all existing bonds, issue no more bonds.
Case B: Keep tax revenue constant, pay off all existing bonds, issue more bonds.
Case C: Keep tax revenue constant, Print money, pay off all existing bonds, issue no more bonds.
All three cases involve paying off all existing bonds, so no change between them there.
Case A and B differ only in that case A collects money in taxes while B sells bonds; the same amount of money leaves the private sector this year either way; in case B an amount slightly higher re-enters the private sector next year, but it gets complicated.
Case C differs from case B in that the money doesn’t leave the private sector.
@db:
No, the money supply is constant in your cases A and B.
In A, the government collects tax revenue (if you like, money flows from private sector to the government), but then the government uses that money to buy back the outstanding bonds. So the money returns to the private sector. (Unless you count bonds held by the private sector as “money”).
In B, the end result is just a straight swap of old bonds for new bonds. This is called rolling over the debt.
In C, the government pays down its debt by printing money (this is called seigniorage). This is an increase in the money supply. Standard theory, backed up by a lot of historical evidence, suggests this results in inflation.
Treasuries are money. You can tell this is true because if you buy a house and present a treasury bond of the correct size as payment, this will settle your debt and not incur any noteworthy transaction costs.
Destroying them destroys money.
This also means issuing bonds is very nearly exactly equivalent to printing, except you are giving private sector actors claims to future tax revenue at the same time for some nonsensical reason.
A thus pulls an amount of money from circulation equivalent to the bonds you retire, while B and C are equivalent.
The primary actual difference between printing and bond issuance is that retiring a bond is politically easier than voiding money – Because people do not grok the equivalence very well, repaying a billion dollar T-bill bond without rolling it over is not met with howls of outrage, which collecting a billion dollars in cash taxes and then pulling that money from circulation might well be.
@TJ
If bonds and currency are equivalent assets, why do bonds yield a higher interest rate? This implies a positive liquidity premium for money relative to bonds.
There are many transactions one cannot complete using Tbills. Try buying a cup of coffee using one.
That would be roughly accurate, if all public sector expenses could be paid directly with T-bills.
T-bills have cash value that is literally almost as secure as FDIC-insured bank accounts, so they are accepted by financial institutions at their commodity value.
Also, I was under the impression that when the government issued a bond, the purchaser of the bond paid for it; if the bond is instantly completely liquid at its commodity value, then the purchaser gains nothing instantly, and so the amount of cash paid for the bond is exactly equal to the commodity value of the bond (it it were more, then they would buy the bond from the commodity market; if it were less, the commodity market would buy them until the value equalized. Since there is, in fact, a commodity market for bonds, and since bonds are not quite as liquid as money, there is some small friction where these things are true to a very close approximation)
Retiring a bond by printing money is adding money into circulation; retiring the bond with tax revenue (as governments that don’t have the power of the mint must) is neutral. The only difference is in the amount of money taxed, therefore it is the taxation that creates force towards reducing the money supply.
Also, the only differences between retiring a bond by printing money and paying for services with taxes and retiring a bond by taxes and printing money for services are non-numeric and exist only in the narrative, not the economics. Therefore, assuming money is transitive, paying for services by printing money (instead of paying for services by issuing bonds that are later retired by some means) creates force towards increasing the money supply.
Yes, increasing the money supply causes inflation. But I think that it would be an error to say “more inflation is always worse”.
MMT basically seems to be a giant exercise in rearranging the equations of standard economics, moving “You can’t get something for nothing” from equation #3 to equation #5, and then trumpeting your glorious new version of equation #3 that now allows you to get something for nothing. It’s Keynes with a side of scam. What’s new about it isn’t interesting, and what’s interesting about it isn’t new.
/r/badeconomics has had some pretty scathing reviews of MMT over the past few weeks/months. It’s considered heterodox because it’s well outside the mainstream economic view.
Yep. Debasing the currency to fund government programs has never been studied empirically.
I can’t do that for you, but I did ask about it the other day on r/AskEconomics and nobody was able to give me an answer from the perspective of MMT. Those who bothered to answer seemed to think MMT, while maybe not exactly wrong, has nothing really new to offer and is just a complication of more mainstream economics. Admittedly this response could have something to do with the framing of my question.
If you’d like to read the responses (I only got a few) here’s the question.
I don’t know enough about the subject to steelman the complex stuff… but I know at least one example of when it made total sense for the US to take on as much debt as it could, even following more intuative financial models.
For a short time after the 2008 crash people were looking for safe places to store cash.
For a while US 10 year tresury bonds effectively went negative in terms of expected real bond yield.
As such people were litterally paying the US government to hold their money for them.
So if people are willing to give you their money for close enough to zero or even negative returns for them…. it makes total sense to accept it with a smile and use the cash to help deal with whatever crisis left people looking for somewhere safe to put their money.
Real bond yield is meaningless in this conversation. The US government wasn’t investing that money at a > rate of return and so was not being paid to hold people’s money for them. the 10 year yield was always positive and returned more than zero, and so the US government was always paying people to borrow.
For a time, people who were being paid to loan their money were losing money on the deal.
People who were just holding on to the same amount of money lost more.
A recession is generally speaking a time when you expect a zero or negative return on investments, if the US government is taking and holding that money then they are the ones eating the majority of the losses. If they are taking it and spending/investing it they should expect a negative return on the money. The US government is not just taking the money with a smile and providing a safe haven, they have to be absorbing some those losses you claim exist.
Yes, they absorbed an amount of the losses equal to the difference between the face value and price of the bond, over the period of the bond.
When bond yields are positive, they pay the same amount.
The government would also have the same gains from inflation that any other debtor would gain, if their ability to repay their debts was limited by the same kinds of factors that nonissuers of currency are limited by.
If inflation is 2% and you borrow money at 1%, then stick that money in your mattress you are not making any gains. Period, none. You are just absorbing half of the losses that the loaner would have made if you hadn’t borrowed from them.
But if you destroy $1M today and print $1010K next year, while inflation is 2%, the reduction in real money supply has been reduced by $10K.
A private bond issuer is going to have a plan to repay their bond, or it won’t get bought.
@Ketil
Here’s my elevator speech on MMT: MMT Brief Description
To avoid inflation, MMT leans toward the use of automatic fiscal stabilizers such as income tax (which goes up when economy is booming), and welfare benefits (which go up when economy is depressed).
In my opinion (as I just wrote elsewhere in this thread (sigh)), MMT is considered heterodox because the establishment does not trust people with the truth about how the monetary system works, much in the same way that medieval rulers insisted upon the orthodoxy of Christian priests with regard to laws. Heterodox philosophers might have better explanations than the archaic religious explanations, but if we were to undermine the authority of the church, then a Pandora’s box would be opened.
Anyway, I hope you’ve learned a little about MMT. I know it really well and have a ton of resources (see link above to get started), but don’t have infinite time (c:
Not so much an anas a speculation
It isn’t a steelman, but my friend Jeff Hummel has recently written a fairly detailed explanation and critique of MMT and webbed it.
Democracy is two wolves and a sheep deciding what to have for dinner. It used to be just two wolves, but then one wolf bit the other until he agreed to become vegetarian and let the sheep vote. Any proposed menu with too much protein in it is attacked as an echo of the horrors of mutton.
Democracy is two wolves and a sheep deciding what to have for dinner. Each one tries to bring his district home as much pork as possible.
Democracy is two wolves and a sheep deciding what to have for dinner. The Wolf Party candidate is smeared as a Communist sympathizer, “Red in tooth and claw”. The Sheep Party candidate’s capitalist credentials are impeccable, as he founded a popular chain of mutton restaurants.
Frankly, I’m surprised Scott didn’t think of the pork one himself.
Democracy is two wolves and a sheep deciding what’s for dinner. One hot issue in the current election cycle is what to do about a certain Green Nude Eel.
Democracy is two wolves and a sheep deciding what’s for dinner. The sheep’s attempts to secede have yet to reach a satisfying conclusion.
Democracy is two wolves and a sheep deciding what’s for dinner. However, most of the electorate is too enthralled by “Keeping Up with the Cattle” to bother with voting.
Democracy is two wolves and a sheep deciding what’s for dinner. Thankfully, society has progressed past the time when sheep only had 3/5 of a vote.
Democracy is two wolves and a sheep deciding what’s for dinner. Some have lingering fears that the most recent election was subject to foreign interference by bears…
The one I’m about to pick on was actually quite funny and you probably know this, but it’s a pet peeve of mine, so:
One day a wolf requested two votes in the animal assembly: one for himself, and one for the sheep in his belly. The animals debated this and decided the sheep should only count for 60% of a vote. Later generations would look back in shame that they had only given the poor sheep 3/5 of a vote.
Yup, far truer to the actual history. Good one 🙂
Side question: Are other people able to gloss over the repeating bits and only read from the second sentence on? I tried very hard and failed miserably.
Not fully. I look at the beginning of the line, recognize “Democracy is..” and the rest of the sentence is fully formed in my mind, while the eye jumps to the beginning of the second sentence.
I can do it, but I find that the reading experience is less pleasant. The same intro sentence for each helps re-ground me in the joke’s format, and therefore the punch lines are better for me. (This is probably only the case because the intro is so short, however)
You might think the second-to-last one is a very thinly disguised analogy for a specific situation, but no, it’s meant literally, to stand on its own merits. Breadsticks means breadsticks.
Thanks, I needed that laugh 🙂
Democracy is two wolves and twenty sheep voting on what to have for dinner, because there are always actually more sheep than wolves. Half of the sheep vote for the wolf candidate because they think he “tells it like it is” and “is anti-establishment.”
https://imgur.com/gallery/JLGRk
Timber Wolf is more or less a synonym for Grey Wolf (as opposed to a different species of wolf, as one might think if he weren’t acquainted with the specific terms and didn’t look them up). This makes a difference to how I read the metaphor. I assume that Scott chose his words deliberately.
He probably did. After all, he lives in a country where two major antagonistic parties are named with more or less synonymous terms describing “rule of the public”.
Politics would be 1% more fun if we renamed the parties Romans and Greeks.
Just to be clear, we’re all in agreement that the Romans would be the Republicans and the Greeks the Democrats, right? It works on military policy, the actual names of their systems, starting letters for the GOP, and even gay rights.
(I’m joking, mostly, but I’m surprised at how well that fits together)
That was my general thought, though there are nuances and exceptions, of course.
How about naming one party after Irish horse thieves and the other after a fake hairpiece?
When people complain about “the pirate party” I love to point to the history of british political party names.
Robbers, thieves, bandits, pirates would fit right in!
Actually “Whig” is from “whiggamore”, which meant a Scottish rebel.
In modern Greek the word demokratia means both “republic” and “democracy”.
The GOP are referred to as Repoublikanoi in Greek newspaper articles about US politics, and there are various weird translations for the names of countries that are “Democratic Republics”.
I feel like the proper translation of “Democratic (People’s) Republic of [X]” as a proper noun is identical to the proper translation of “[X]”.
You still need a method for telling the Congos apart, although I suppose you could call them Congo-Kinshasa and Congo-Brazzaville.
Democracy is two wolves and a sheep deciding what to have for dinner. The wolves insist that their alliance with a government that viciously kills sheep to make mutton is justified because they need to win a war against a government that viciously kills sheep to make mutton. They vote to kill the sheep to make mutton for the war effort.
Democracy is two wolves and a sheep deciding what to have for dinner. They use an innovative ranked-choice voting system specifically designed to allow the sheep’s strong preference against mutton to override the wolves’ weak preference for mutton over pizza. But the ballot is too complicated and the sheep end up voting for mutton by accident.
Democracy is two wolves and a sheep deciding what to have for dinner. The Sheep Party has been supporting mutton ever since a political realignment years ago that left it consisting almost entirely of wolves, but it still bills itself as The Party of Dolly.
Democracy is two wolves and a sheep deciding what to have for dinner, while everything around them is on fire but that’s fine. This is fine.
Democracy is two wolves and a sheep deciding what to have for dinner. Naturally they do this by choosing among several candidates for the position of Chef, each of whom carefully equivocates about exactly what they would serve. The sheep tries to detect which candidates are subtly signaling cultural affinity with the wolves, a practice known as “wolf-whistling.”
Democracy is two wolves and a sheep deciding what to have for dinner. The have to pick either A, B or C. The Gray Wolf’s preference are A>B>C, the Timber Wolf’s B>C>A and the sheep’s C>A>B. Collectively, they would vote for A over B, B over C, and C over A. No matter what they vote for, they always find another choice a majority would prefer and so go round-and-round and die of non-transitive starvation.
Or a hunter shoots them with his arrows while they debate the results.
Isn’t the simple solution here to eat dinner at the Olive Garden?
Since when has democracy ever chosen a simple solution?
You go to Olive Garden and eat a bunch of unlimited breadsticks without ordering anything or paying for anything and report back.
To quote the gentleman in the barbershop in Coming to America:
“Aha!”
Unfortunately in an earlier indicative vote they voted no to Olive Garden.
They also voted no in turn to every single restraunt or eatery in the entire town, they’re actually now sitting in the dark in an abandoned warehouse screaming at the homeless people to bring them the breadsticks they voted for.
Alternatively, democracy is nothing like 2 wolves and a sheep voting on what to have for dinner?
Given that my 3 months ban has just been lifted, I’m wary of linking to an old blogpost of mine (not sure what’s the etiquette on that according to Scott Alexander) but tl;dr summary – even the rich benefit (eventually) from the poor not being (too) poor. It just requires acknowledging it’s an iterative game we’re playing…
Sure, and wolves don’t benefit in a world where all their prey animals have been eaten.
it still might suck to be the sheep and see what sollution they come up with.
Based on this reply I feel like I understand why you were banned.
How so? I felt it was unfair… 🙂
Though, to be fully transparent, I wasn’t that crossed. I like this blog and the comments are usually worth reading but I often have relatively little to contribute i.e. I wasn’t too bothered with being forced into passiveness.
Not to mention that comments just don’t work as well as forums for lengthy discussions.
Isn’t the point the second sentence of that Ben Franklin quote (“Liberty is a well-armed lamb contesting the vote.”)?
I always found the “quote” a little too on-the-nose re modern gun politics and wasn’t surprised to learn it was apocryphal. Besides which, you think the wolves aren’t armed?
Democracy is two sheep and a wolf deciding what to have for dinner. The first sheep votes for the wolf because he finds the second sheep’s bigoted anti-carnivore rhetoric offensive.
Democracy is two wolves and a sheep deciding what to have for dinner. Chicken Little comes by and tells them the sky is falling, and they must drop everything and cover the entire pasture with solar panels.
Democracy is two wolves and a sheep deciding what to have for dinner. While they argue, the farmer shoots both wolves and shears the sheep.
Democracy is a flock of sheep deciding what to eat. They are all killed by wolves after the sheep president decides that the pasture fence is speciesest.
Democracy is a flock of sheep deciding what to eat. They are all killed by wolves when the fence falls into disrepair, because fence maintenance costs 10 times what it used to for reasons no one can quite figure out. Also the sheep dog union is on strike over their retirement age.
Democracy is a flock of sheep arguing about whether the sheep with more wool should be forced to trim some of it off so the less wooly sheep don’t feel bad.
Democracy is a flock of sheep spread across multiple pastures with varying grass quality. The sheep in greener pastures are very smug about their more luxurious wool, insisting that it is due to their superior intelligence and hard work.
Democracy is a flock of sheep. They are fat and happy in a green pasture with no cares in the world. Some of the sheep are very concerned about the effect of this easy living on sheep work ethic, and insist things were better when they had to wander for miles to find good grass, fighting wolves off the whole way.
Democracy is a flock of sheep. The farmer’s engineer brother invents an automated process for producing synthetic wool and every pasture is replaced by an artificial wool maximization factory. The remaining flocks are sold for mutton.
> Democracy is a flock of sheep arguing about whether the sheep with more wool should be forced to trim some of it off so the less wooly sheep don’t feel bad.
C’mon man, the last word of this joke clearly should’ve been baaad.
Democracy is two wolves and a sheep deciding what to have for dinner. By tradition, the President is a Sheep and the Prime Minister is a Wolf. The angry wolf who doesn’t get the job starts a civil war and blames the sheep.
The Gray Wolf Party?
Fucking Brexit.
No no, not brexit. Breadsticks, because breadsticks means breadsticks.
(shamelessly stolen from another post)
Democracy is two wolves and a sheep deciding what to have for dinner. Due to an unwritten agreement, the first course must be mutton, the second course wolf, the third course mushroom, and dessert Roomba.
I’m not sure if this a comment on Trump losing the popular vote and winning the EC, and the current effort by Democrats to repeal the EC. In any event, I would view the repeal of the EC as a clear reason for the US to separate in at least two separate entities, corresponding roughly to red states and blue states. I understand that’s easier said than done, but I expect the outcome of that to be better than having red states governed by NY and LA indefinitely.
This is probably the biggest issue with democracy at the moment. It has become clear that discussing immigration policy honestly is beyond our capacity as a species. Trump is labeled a nazi for wanting to curtail illegal immigration. It seems to me that there are good arguments for further immigration, and also good arguments for reducing immigration. But we’re not having that discussion because reducing immigration is beyond the pale of acceptable discourse. Add to that the fact that upon becoming citizens immigrants vote mostly for Democrats, I dont see how this gets resolved anytime soon.
Annoyingly necessary disclaimer: My personal experience with immigrants has been overwhelmingly positive. I live in Canada, where we do a reasonably good job of integrating newcomers. I understand that immigration is a very sensitive topic unlike other government policy because it has a huge direct impact on millions of people’s lives. Also, because racists oppose immigration, opposing immigration looks like a racist thing to do. OTOH, any government policy which cannot be discussed honestly is certainly sub-optimal. In fact my view is that the rise of the alt-right is directly related not so much to immigration per se, but to our inability to discuss immigration policy.
FWIW, many (most?) American immigration-restrictionists would be thrilled if we had the same immigration policies as Canada.
Potentially. I’m not sure. In terms of sheer numbers, Canada lets in more people per capita. On average we accept 200,000 immigrants per year, and the US accepts 1 million per year (source: quick google search, please correct me if im wrong). US has 10x the population of Canada, so it accepts half the number of immigrants per capita as Canada does.
However, we have a merit based immigration system and my understanding is that it’s easier to have family reunification in the US.
Instituting the same restrictions as Canada has (if effectively enforced) would lead to a great reduction in the immigration rate for the US. Canada (and Australia who I believe has a similar effective system) can let in a high % of its population with stringent standards because it has such a low relative population. It can skim the cream of the immigrant population in a way that the US couldn’t (relative to size).
Ah. That makes sense.
I’ve always wondered how much developed countries harm the 3d world by getting a large chunk of its well educated, entrepreneur-type population to leave. I dont think it’s trivial.
In Canada we have many medical doctors trained in the 3d world (presumably at great expense to that country, I’m not sure, might depend on the country), who are driving taxis. Our medical colleges dont recognize their degrees but we figure if they managed to get them they’re smart conscientious people.
The merit-based system just so happens to give you bonus points for being a family-member, though.
Functionally a family member of someone with an advanced degree.
I think the split should be much more local than by states.
Have two entirely different legislative environments, roughly “urban” and “rural”. All things that don’t have direct impact on the other can be different in each environment- workplace safety standards, immigration (just because you’re a US city resident doesn’t mean you are a rural resident!), gun ownership standards, minimum wage, requirements to vote…
Environmental regulations and taxes would be complicated between the two regimes, and there would have to be completely automatic extradition and other police powers.
Have each census tract decide which environment they choose to be in every 10 years, with a two-thirds majority of all people over 18 required (and sufficient) to change after the initial selection.
Unfortunately, I’m not sure that solution is workable. Urban and rural areas are pretty closely interlinked and somewhat dependent on each other.
Hell, on immigration, that’s already happened. Sanctuary cities are essentially the Blue Tribe declaring that they’re going to take on all the immigration themselves, because they really don’t care what the Red Tribe is doing so long as they can at least uphold their own ideals in their own cities. Thus far, the Red Tribe seems to be outraged by this proposed compromised for reasons I still don’t quite get.
“I’m not sure that’s workable”
“That’s already happened”
I can’t tell if you’re trying to identify a flaw in my proposal, or suggest that it’s already working?
The former. I got two different drafts of the post confused, sorry.
The way I should have phrased it is that I think that if we adopt this strategy, it would fail, and that in fact we have already partially adopted this strategy, and it has already failed.
@Galle: it’s not obvious to me that “certain people are de facto allowed to stay in US cities, where city dwellers are okay with them, but not in the US countryside, where countryside dwellers don’t want them” should count as a failure. (Yeah, I think it would be nice if it was also like that de jure, but disregarding what the jure says I don’t think the current situation is that much worse than either de facto allowing them everywhere or not de factoallowing them anywhere.)
A1987dM:
I might be more inclined to go along with you if I were sure that those cities, when they fall apart because they can’t provide social services to those hordes, won’t come crying to the rest of us to bail them out, and wouldn’t be a breeding ground for problems that get exported to other towns that haven’t made that mistake.
I’m more or less inclined to let Germany go to hell in its own way, if it really wants to; while tragic, I don’t see how it will directly hurt me. San Francisco is another matter.
>Urban and rural areas are pretty closely interlinked and somewhat dependent on each other.
Sure. Does that mean that we must allow completely free migration between them? Does that mean that they must have the same firearm ownership rights? Minimum wage? Workplace safety standards? Overtime laws?
There’s too great a difference between the red counties and the blue counties to pretend that they are the same. It’s not even a per-state thing; the so-called ‘Red States’ are, weighted by land area, almost exactly the same as the ‘Blue States’; the difference is that a tiny minority of the land area in Blue States contains most of their population.
@A1987dM: Sorry if I’ve caused any confusion. The reason I believe sanctuary cities have failed to reconcile the Blue and Red Tribes on immigration is because the Red Tribe is actively hostile to the concept and frequently attempts to use political power to punish sanctuary cities or force them to abandon their sanctuary laws.
@deciusbrutus: You’re right, of course, but I still think you have to address the existence of people like Doctor Mist, who believe that the Red Tribe has the right to dictate the Blue Tribe’s way of life.
There’s a simple way to address the existence of Red. You kill him and everyone who subscribes to his ideas.
We literally fought that war 80 years ago.
@deciusbrutus: You seem to be equating “Red Tribe” as the term is normally used here, with Literally Hitler. I don’t think that’s a good idea, but I’m not seeing what else you could mean.
No, I was talking specifically about Dr. Red Mist, who I confused with a portmanteau of Dr Doom and Red Skull.
Checking my sources, Red Mist is merely a competitor to Kick-Ass, and it would be completely inappropriate to engage in total war against him.
Doctor Mist is an entirely different character. And he does not “believe that the Red Tribe has the right to dictate the Blue Tribe’s way of life”.
I don’t think that the Red Tribe believes that either, and if you do, we probably are very close to finding a double crux in a factual matter.
Idle thought:
What would it look like if, in the US, the law was written in such a way that once a
citymetropolitan area hits a certain population threshold, let’s say 2 million people, that they’re automatically split off into their own state with allocated House, Senate, and electoral college votes?This would give the cities more direct control over the legislators they send to Washington, but also would allow the same for the rural/town/small cities and hopefully defray some of the antagonism that has arisen from entire states being dominated by one or two very large cities.
I haven’t thought this through much, so would be interested to know what everyone here would think.
Checking the Wikipedia page that ranks metro areas by population, this plan would create something like 34 new city states.
Can you define “metropolitan area” to a sufficient degree that the Supreme Court can rule on how many states are on Long Island?
Evidently the Office of Management and Budget has already worked this out. According to Wikipedia, anyway.
https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas
Apparently New York has 9 areas, but I’m not sure I’m reading the information correctly.
Can you trust the OMB with the ability to gerrymander the Senate?
Right now I would say that it isn’t very corrupt, because whistleblower rewards and protections and their inability to control the legislature. But if you give them a significant power over the legislature by virtue of their decisions about “adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.”, you cannot expect them to remain less corrupt than the state legislatures who gerrymander the House districts.
Democracy is three sheep deciding on what to have for dinner. One of the sheep keeps protesting that they don’t actually have to decide as a group, flocks are an illusion, and every sheep should look after itself; that sheep is roundly dismissed as some kind of extremist.
Democracy is three sheep deciding on what to have for dinner. The debate is dominated by accusations that one of them is actually a wolf in sheep’s clothing.
Democracy is a wolf, a sheepdog, and a sheep deciding what to have for dinner. The sheepdog demands lots of concessions from the sheep for its vote, even though it gets dogfood from the shepherd independently of the vote results.
Democracy is two wolves and a sheep deciding what to have for dinner. They agree to vote for either the fox or the cow to decide what dinner will be every day for the next 4 years. Because the vote is so impactful, everyone becomes convinced that any tactic is worth winning the election and quickly alienate all their friends who disagree, creating stronger and stronger echo chambers. The fox and cow are actually just the farmer and his wife wearing onesies.
Democracy is two wolves and two sheep deciding what’s for dinner. The two sheep both vote for mutton, believing that the wolves will eat the other guy first and won’t be hungry afterwards.
Democracy is two wolves and a sheep deciding what’s for dinner. A fox comes along and says he can provide dinner for everybody. Two hours later he hasn’t been able to present a meal that satisfies everybody, and they’re all still hungry, so they eat the fox.
Democracy is two wolves and a sheep deciding what to have for dinner. The wolves devour the sheep, but the sheep poisoned itself so that wolves would die too.
Democracy is a Sheep, a Wolf, and a Cabbage trying to cross a river. Everyone is worried that either they or their dinner will be left behind, except the cabbage. The cabbage never votes and loathes the whole system.
Democracy is two wolves and a sheep voting on what to have for dinner. The wolves are sympathetic to the plight of the sheep on their pasture, so they vote to eat the sheep in the next pasture down instead.
The last joke is good. But this is brilliant https://twitter.com/k_niemietz/status/1110996043418738688?s=21
E did nothing wrong.
Democracy is two wolves and a sheep deciding what to have for dinner, except no one can agree on who the sheep is.
Just in time for our general elections!
Israeli democracy is two wolves and a sheep somehow managing to split into 47 parties. Half the sheep votes “mutton” just to piss off the other half, and 73% of a wolf votes “pizza”.
Democracy is a flock of sheep at the rodeo who just learned it’s time for Mutton Bustin’. The sheep just want to be left alone, and then everybody is expecting it to carry some child around on its back, and afterwards, even if it all goes well, everyone praises the child, and the sheep gets nothing.
“What would you like for dinner?” Tom asked the wolf, sheepishly.
Democracy may be two wolves and a sheep, but there is a bear in the woods.
Why is there always the assumption that the wolves outnumber the sheep? Is that how food chains usually work?
Wolves are pack hunters, so at the point when they’re deciding what to have for dinner they may well outvote their prey animal. Of course this situation is not sustainable without immigration or imperial expansion.
Because the joke doesn’t work if the sheep win the vote.
This analogy always bugged me. What ecosystem has twice as many predators as prey? There should be like twenty sheep, and the wolves should always lose. Which brings up the point that in a metaphor with both anthropomorphized carnivores and herbivores, someone’s guaranteed to die. If you ‘arm the lamb’ you just end up with two starving wolves.
Taken literally, it doesn’t make sense; sheep should outnumber wolves, and also animals don’t vote. But it’s really about people, and how democracy can become a problem if the majority wants to screw over a minority. (Of course, other forms of government can become problems if the people in charge want to screw someone over.)
It doesn’t make sense metaphorically either. Metaphorical sheep also are more numerical than metaphorical wolves.
Monarchy is 1 king deciding for 1,000,000 peasants who should till the fields. But democracy is 2 kings and 1 peasant deciding who should till the field?
Anti-democracy sentiment is a two wolves making up one meme that fools a thousand sheep.
Who died and made you King of Metaphorical Sheep Population Counts?
Guys, this is supposed to be amusing. Now it’s just making me sleepy….
Democracy is two wolves and a sheep deciding what to have for dinner. Every time the wolves try to put venison up for a vote, the sheep filibusters it by yelling “Four legs good! Two legs baaad!”, because the sheep doesn’t want any of the wolves to get anything they want.
Yes… i snorted at “Hard Breadstick”.
Democracy is two wolves and a sheep deciding what to have for dinner. The sheep think the cats rigged the election.
Democracy is 3,000,000 wolves and 300,000,000 sheep deciding what to have for dinner. The leaders of their respective parties broker a grand compromise: wolves get an all-you-can-eat mutton buffet, in exchange for using the correct sheep-related pronouns in their diversity seminars.
The wolves are somehow more outraged by this compromise than the sheep.
Love me, love me, love me!; I’m a liberal!
And they never run out of sheep, as they keep trying to sneak their way into the field.
Democracy is two wolves and a sheep deciding what to have for dinner. The first wolf convinces the sheep and the other wolf that, rather than choking on the bitter taste of tyranny, everyone should be free to make whatever dinner they choose for themselves.
The sheep predictably eats some grass like the predictable sheep that he is.
The first wolf kills the sheep, eats as much as she wants, locks up the rest of the meat, and tells the other wolf that he is free to choose between starving to death, working for the first wolf under horrible slave-like conditions for the bare minimum of food needed to survive, or finding a better job offer from another employer (of which there are none).
The second wolf ponders the nature of the world he finds himself in, and thinks that while it would normally seem like a pretty good idea to emigrate at this point, how could he go anywhere… when there aren’t any roads?
It’s true that the joke would work better as a slam against democracy if it was clearer that there was in fact any system under which the sheep wouldn’t get eaten…
Dictatorship is a sheep telling the wolves to eat grass.
I’ve generally seen this metaphor deployed in discussions illustrating the differences between a Democracy and a Constitutional Republic.
The explanation goes that under a Constitutional Republic certain things are not up for discussion or repeal by vote.
In the sheep/wolf context, under a Constitutional Republic governing both wolves and sheep, eating sheep is not allowed, no matter what the wolf majority wants.
Likewise, the argument in the real world goes, certain things should not be up for vote, e.g. the right to assemble, free expression, trial by jury, etc.
>In the sheep/wolf context, under a Constitutional Republic governing both wolves and sheep, eating sheep is not allowed, no matter what the wolf majority wants.
And the wolf majority eats the sheep anyway, if we want to consider the metapirical evidence.
The values in a constitution are only words on paper if no one has the will to back them up.
If a society decides a constitition isn’t worth enforcing, it will die.
Indeed. That’s why prohibition was repealed. That’s why a Constitutional Republic overturned the Confederation. And that’s why Mary Antoinette got shorter.
The wolf majority lacks the will to follow through on all of the promises extracted from them, and destroys some or all of what they have created.
It gets a little bit more complex when power is substituted for numbers, but the idea is the same: When enough power decides that they are not going to pay grazing fees, the grazing fees are, in fact, waived.
Democracy is a few million humans trying to solve difficult coordination problems that could decide the fate of their entire civilization. After discovering that this is hard, they come up with a pithy joke about wolves and sheep so they won’t have to think about it.
I think people here are thinking about it.
Yeah, but the people here are part of a movement that’s dedicated specifically to thinking about hard problems. We’re hardly representative.
Yes, clearly no one outside of The Rationalist movement has ever given deep thought to these sorts of issues.
There are a lot of smart people here, saying a lot of smart things, but sanctimonious bullshit like this gets posted often enough that it really illustrates that there are blind spots amongst Rationalists.
That’s not what I meant. What I meant was that most people do not give deep thought to these sorts of issues, and the ones who do often don’t use that deep thought properly. Everyone keeps trying to claim “the will of the people” as a shortcut to having their own preferred policies adopted without regard for the fact that “the people” are individuals and don’t actually have a collective will. There’s no consideration of the possibility that somebody could genuinely disagree – political opponents are treated like defective versions of yourself, rather than distinct people who might actually have wildly different beliefs and values. And so no nothing gets done.
Things like the two-wolves-and-a-sheep metaphor play into this. What it’s trying to say about democracy, presumably, is “democracy allows majorities to exploit minorities” or something of that nature, but the whole thing is grounded in the assumption that conflict theory is unambiguously true and the only reason anything ever goes wrong is because someone made it happen on purpose. It ignores the possibility that wolves and sheep might not be coherent categories in the first place.
That’s quite an ahistorical perspective.
I’d describe it as more of a mistake theory perspective.
Democracy is two wolves and a sheep deciding what to have for dinner. The plants protest their exclusion. Ragweed and poison ivy run a terrorist campaign.
https://www.youtube.com/watch?v=kOvwc8_QXiY
And the angel of the lord came unto me, snatching me up from my place of slumber. And took me on high, and higher still until we moved to the spaces betwixt the air itself. And he brought me into a vast farmlands of our own Midwest. And as we descended, cries of impending doom rose from the soil. One thousand, nay a million voices full of fear. And terror possessed me then
And I begged, “Angel of the Lord, what are these tortured screams?”
And the angel said unto me, “These are the cries of the carrots, the cries of the carrots! You see, Reverend Maynard, tomorrow is harvest day and to them it is the holocaust.”
And I sprang from my slumber drenched in sweat like the tears of one million terrified brothers and roared, “Hear me now, I have seen the light! They have a consciousness, they have a life, they have a soul! Damn you! Let the rabbits wear glasses! Save our brothers!”
Can I get an amen? Can I get a hallelujah? Thank you Jesus
Libertarianism is two wolves and a sheep each deciding what they want to eat for dinner. The sheep insists that the wolves cannot eat him without violating his rights. The wolves agree, and eat the sheep anyway.
Libertarianism is two wolves and a sheep each deciding what they want to eat for dinner. The sheep insists that the wolves cannot eat him without violating his rights. The wolves agree, and attempt to eat the sheep, who promptly defends himself by killing them both with a handgun.
Libertarianism is two wolves and a sheep each deciding what they want to eat for dinner. The sheep insists that the wolves cannot eat him without violating his rights. The wolves agree, and attempt to eat the sheep, who promptly defends himself by killing them both with a handgun. The wolves’ close air support arrives seconds too late to save them, but a short burst creates medium rare rabbit burger.
Yes, if guns are illegal only criminals will have guns. But if all armaments are legal, the people with the best arsenals will be the people who gain the most value by using them.
So if the wolves are going to win anyway, the sheep should all simply submit to such a fate from the outset?
The sheep should have considered their numbers and capabilities, and not used a measure of force insufficient to prevail in direct action, either initiating with a saturation attack to disable all of the wolves’ infrastructure in the initial strike, or using covert means to attack the wolves’ will to fight in a protracted insurgency.
Or alternately, enact a MAD policy, where if a wolf eats a sheep everyone dies in thermonuclear fire. Optionally, create a system of forgiveness where danegeld or retribution of some form can forgive isolated incidents, to reduce the existential risk associated with sheep and wolves being able to coexist.
The sheep then retrieves his handgun from the rabbit he’d donated it to…
No, the rabbit here is a metaphor for collateral damage due to an editorial error.
Dammit, Scott
FOWL play.
The wolves win the election by promising breadsticks but say they will take two years to bake. By the time the two years are up, the wolves are claiming that breadsticks don’t exist (despite the sheep giving several examples of breadsticks around the world), denying that they ever promised breadsticks despite being on film doing so, and also saying that anyone who demands breadsticks is a racist molophobe. (It doesn’t help that a bunch of anti-mole activists have taken over the Grissini Party, causing everyone who originally fought for breadsticks to leave it.) The alpha wolf has gone to the restaurant and ordered a stick of dynamite with “bredstik” written on the side, and can’t understand why the sheep won’t eat it. Meanwhile, the other wolf is declaring that he absolutely won’t positively not vote against not having the alpha wolf’s breadstick unless it doesn’t not avoid being voted on again, and also he wants custard with it. Meanwhile, the Grey Wolf Tribe go around claiming that the populace had voted for free breadsticks even though the breadstick voters made it clear that they would rather be out of pocket than remain hungry.
Also, no-one really wants soft breadsticks. The soft-breadstick option was invented by the baguette faction with the intention that, once the voters tried it and found it unappetising, they could be fooled into thinking they didn’t like breadsticks at all. In the run-up to the original vote the baguettists were all saying “If you vote for breadsticks, they will be hard as a rock” in the hope that that would scare the populace into voting against. This, too, was conveniently memory-holed.
Not that I’m bitter.Ok, fine, I am bitter.Democracy is two wolves and a sheep deciding what to have for dinner. The sheep votes along with the wolves for mutton pie, convinced of his personal safety by the argument that life is not a zero-sum game.
Democracy is two wolves and a sheep deciding what to have for dinner. They vote to stop purchasing breadsticks. But the sheep screams that without the purchase agreement, his “free breadsticks” are disappearing. Economists who are other animals are almost unanimously in favor of free breadsticks, asking who could oppose something that is “free?” Curiously, however, the other animals show very little interest in concluding their own free breadsticks agreement with the restaurant. It’s too far away, they say. Free breadsticks are always good, but trying to negotiate the shipping of free breadsticks over such distances would be too much of a hassle.
Democracy is two wolves and a sheep deciding what to have for dinner. They buy an expensive microwave on credit.
Democracy is two wolves and a sheep deciding what to have for dinner. One day a dog shows up and says to the wolves: “how do you do, fellow canine?”
Democracy is two wolves and a sheep deciding what to have for dinner. They somehow blunder into electing the candidate of the Carnivore Sheep Dog Wool Party. On taking office, it announces that it knows the relevant issues better than either wolves or sheep do, and abolishes democracy as superfluous. (It also tries to kill all the ravens because it cannot believe they are just that smart and aren’t conspiring.)
Communism is two wolves and a sheep going hungry, because some far-away bureaucrat decided the single wolf should eat the two chicken, and the three sheep should graze the hillside, but there are no chicken and the terrain is flat.