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Monday, March 29, 2021

Econwars Blogging Is Back, Or What?

I have seen a few articles discussing the rise of the new economics debates, MMT, and blogging versus Twitter econ. I just want to make a few scattered observations.

The underlying story is the debate about inflation risks that relate to Biden's fiscal package. My bias is to expect inflation to be low and stable, but there are a lot of disruptions hitting global supply chains (the blockage of the Suez being the latest).  I do not have enough conviction to take a strong stance. Meanwhile, the inflation nutters will seize on practically any rise in inflation or bond yields as a signal to take victory. As such, I am dodging that fundamental debate.

The rest of this article is jumping between related topics.

Position of MMT

One argument that has been floating around is that the debate has largely shifted in the direction of Modern Monetary Theory (MMT). Given the topic of my last book, I should probably pushing this story loudly. 

As always, I am somewhat cautious. It is a good thing that the debate about fiscal policy has swung towards the MMT line -- what matters is inflation, not nominal debt figures. My concern is that the continued bald-faced lying by conventional economists (for example) is putting MMT into an awkward position. If more expansive fiscal policy succeeds, then the story was that this was "just conventional Keynesian policy." But if anything goes wrong. the line will be "this proves MMT does not work!"

In other words, do not count your paradigm shift chickens before they hatch.

Theory Less Central

Another observation about the current economic debate is that it is less explicitly about theory. Instead, the divisions are straight political economy: the free markets and a group of neoliberals gathered around Larry Summers are taking on progressive-leaning economists, both mainstream and heterodox.

When you can roughly guess what someone is going to say based on their party affiliation (with Summers' defection being the only interesting divergence), it is a safe bet that theoretical issues are less importance. The general incoherence of neoclassical analysis of fiscal policy means that the neoclassical versus heterodox split does not generate much friction.

Econ Blogs Versus Twitter

Finally, some of the inflation worriers are contrasting the allegedly younger and too optimistic fans of active fiscal policy being on Twitter instead of producing "serious" long form content on blogs (lol). 

The switch towards Twitter reduces the relative stature of bloggers who were previously more prominent, and my feeling is that this is just sour grapes.

Twitter (and to a lesser extent, Facebook, which I do not really use) acts as an open comment section for economic and financial discourse. Rather than going to a large website and make comments there, one fires the comments off into the ether on Twitter. The experience on Twitter is far superior to that of blog comment sections. Trolls can be blocked or muted, and the format forces people to be brief. A 5,000 word rant that every single economist is wrong about accounting is easily ignored, since only the first tweet of a thread is displayed. Conversely, a lengthy rant on a blog fills up a large amount of screen space, and thus ends up having disproportionate weight on readers' impressions.

Most of the high profile accounts in economics on Twitter have means to publish long-form content, even if they do not have a blog. That content is then linked to from Twitter, and then discussed. As such, the argument that the switch to Twitter has "dumbed down" the debate does not really hold water; there were always dumb debates in comments sections.

Blog Proliferation

It does not surprise that the blog scene (including hosted solutions like Medium) are not growing to the extent that they were during the econ blog wars. (Substack has made it easier to set up paid mailing lists, which has generated some interest. Although this has attracted some higher profile writers, I would guess that overall numbers of people setting up sites is still lower than that era.) 

The payoff to launching a small blog is somewhat limited. If one wants to write long form content on a sporadic basis, it probably makes more sense to find another site to post. A small blog with sporadic content production will not register with search engines, and advertising revenues are negligible unless you have a lot of traffic. (I ran regular ads an experiment when the blog was new; royalties from a sale of a single one of my books is more than I got from a few months of ad revenues. Meanwhile, you want to curate the ads being served.)

Relatively big blogs (e.g., Mike Norman Economics within the area of MMT) generate a steady flow of links within a domain of interest, and this flow of information drives regular readers who then leave comments. Flame wars erupt in comment sections, driving more engagement. The issue with that model is that it is usually a team effort. A solo blogger is going to have a hard time generating such a flow of content, and once comment volume is large, moderation takes time. For myself, almost all comments received are spam generated by bots. Although those comments are easy to spot, they still generate messages that clog my inbox.

In my case, the reason to keep blogging is that I need my own website to support my books.  A blog fits my workflow: putting draft content out to get feedback before I place it into my manuscript. 

(c) Brian Romanchuk 2021

3 comments:

  1. You write a really good blog. I am not a bot!

    I will backread some of your earlier posts.

    Question to toss out: Michael Woodfood says that QE, in combo with fiscal deficits, is a helicopter drop, or money-financed fiscal policy (MFFP).

    True?

    Is MFFP different from MMT, in practice?

    Also, I find people let their politics get in the way. That is, MMT is not necessarily a liberal, or left-wing idea. Japan militarized all through the 1930s-40s through MMT, and sidestepped the Great Depression.

    ReplyDelete
    Replies
    1. The QE idea resembles a MMT policy idea, but the key point with regards to policy is MMTers suggest locking rates at 0%, which goes beyond QE. The theory goes far beyond that. I never saw the Woodford comment, but mist neoclassicals refuse to read any MMT material, so they have no idea what the theory says. This is covered in my latest book “MMT and the recovery.”

      I also discuss the political angle. The theory isn’t tied to a political party. However, MMT is a theory and not something you do, so your statement about Japan doesn’t really work.

      Delete
  2. OK, I will read your book.

    Right, I understand there is a difference between an economic theory and the way in which policy tools are implemented, in accordance with a theory.

    ReplyDelete

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