Re: Chartalism as Alternative to Neo-liberalism

[William F Hummel <wfhummel@xxxxxxxxxxxx>]

Henry Liu wrote:

>The level of corruption (crony capitalism) is fairly constant in most
>countries in boom times as well as in bust times. But corruption gets
>attention only when the trouble begins. Crruption, while undesirable was
>not the cause of financial crises around the world, but it was used as a
>conenient excuse.

I would not define corruption as merely crony capitalism.  It can
be far broader and more serious than that, as evident in Japan
and Indonesia and many countries in Latin America.  The US has
its own problem with corruption but its institutions have been
strong enough to keep it from becoming pervasive.  Political and
financial corruption, if allowed to go unchecked, can destroy the
fabric of an economy.

>Chartalism is not a cure all. But under current conditions of
>overcapacity and deflation caused by lack of demand, the Chartalist
>approach offers much promise.  Of course, it can be abused like any
>other approaches. Neo-liberal monetarism found a window of opportunity
>from the excesses of Keynesian fiscal policies which continued through
>business cycles instead of merely leaning against the wind.
>
Henry, I am puzzled by your definition "chartalism".  You seem to
believe it is in the nature of a prescription.  I consider it to
be just a description.  I don't see chartalism per se as the
solution to a country's economic problems, including Argentina.
Without the institutions and the culture to support the monetary
and fiscal discipline required, and the fair enforcement of
contracts, no system will remain viable.

William F Hummel