Macro● Neutral
MMT's Academic Emptiness: A Core Theory in Retreat
Stephanie Kelton challenged Per Bylund to find a hole in MMT's core theory. He published a peer-reviewed critique. Four years later, no one has seriously defended it.
Continue with
Four years ago, Stephanie Kelton publicly dared Per Bylund to find a hole in L. Randall Wray's argument for chartalism, the claim that money is largely a state invention. Bylund took the challenge. He published a peer-reviewed article in the Quarterly Journal of Austrian Economics that took Wray's argument apart piece by piece. Kelton went silent.
Bylund's critique was not a grand theoretical battle. It was a focused, logical assessment. He examined Wray's reasoning, its internal consistency, and whether the historical examples Wray cited actually supported his claims. The verdict was direct: Wray's examples undercut his own case, his version of monetary history was wrong, and the argument suffered from several contradictions. The article has been cited only three times since publication. Only one attempt at a rebuttal exists.
Philip Armstrong wrote that rebuttal for the Real World Economics Review. Armstrong's article did not defend chartalism or address the specific flaws Bylund identified. Instead, it framed Bylund's work as an "Austrian" attack on MMT, a move that let Armstrong avoid engaging with the substance of the critique. Bylund said the approach was not particularly Austrian. Assessing an argument on its own merits is standard academic practice, not a school-specific method. "Assessing an argument on its own merit is hardly an Austrian approach, although Austrians have always excelled at this particular activity," Bylund wrote. He pointed to Böhm-Bawerk's takedown of Marx as the classic example.
Armstrong's framing served several purposes. It suggested the critique was invalid because it supposedly transposed a different framework onto Wray's argument. It deflected from the actual critique by making it part of a fabricated larger debate. And it let Armstrong assess Bylund's paper not on its own merit but as a piece of a supposed Austrian attack. Bylund said Armstrong's failure to understand the nature of the critique is symptomatic of how MMTers argue and why they are not taken seriously.