Michel, the difference is more a matter of history and focus, because generally speaking they are integrated. MMT is derived from J. M. Keynes's later work related to money as an institution and as related to his advocacy of macro-economics. Functional Finance is based upon work of Abba Lerner (the New School for Social research through the 1960s and 1970s plus) others. It is based upon the experience with deficit based government spending during the "Great Depression/FDR's New Deal and into the transition after US Pres Nixon "closed" the Gold "window" on the redemption of US Dollars into gold in 1971. It is functional in the sense of how monetary and fiscal policy works relative to its outcomes. MMT includes substantial historical research into the history of the origin and issuance of money. Functional finance is more about the effects of the macroeconomics of Keynes and related people. Here is a fairly clear and accessible essay by Abba Lerner on FF http://k.web.umkc.edu/keltons/Papers/501/functional%20finance.pdf At this point they are often merged under the MMT heading. As before the major source of mischief in understanding MMT/FF is in the acceptance of neo-classical economics as the default paradigm, when it is more of a positivist/positing perspective (sciencism not actual science in the manner of science being based upon a running open discourse. The difference between fitting real time practice and fiscal policy into an ideology, as compared to related direct research by a community of discourse. If this doesn't sort out well for you, please, say so, and I will approach it again. Using MMT/FF as a straw man and expecting the perspective to fit into posited ideology and assumptions of neo-classical economics, actually points to the problems and contradictions buried within neo-classical/positivist economism (ie not economics conducted as a science) as promoted by courtiers to wealth. In some sense the difference between neo-classical economism and MMT/FF is also reflected in the difference between assuming that the banking sector (not at all actually a productive industry) is the center of sovereign economies, and the banking sector as a utility serving to develop the productivity of an economy. This is also reflected in the contradiction involved in bailing out casino banking rather than the productive participants in an economy, as also representing the "demand" portion/perspective on sovereign economis. These clashes are rather well represented in the current political stir regarding the future of the EMU. I recommend the Michael Hudson interview as a massive critique of the courtier advocacies of neo-classical/imperial economics. ...and I stray. in open-ness Tadit On Sat, 01 Oct 2011 01:57:08 -0400, Michel Bauwens <[email protected]> wrote:
hi tadit, how are mmt and functional finance related to each other, see http://p2pfoundation.net/Functional_Finance