Call to Order

‘Cartesian doubt’ enables a person to “beat the skeptics at their own game” by resorting to what is essentially “hyperbolic doubt.” By virtue of ‘hyperbolic doubt,’ one is essentially doubting everything until there is nothing left to doubt, and what is left over after doubting everything until there is nothing left to doubt has to be basic, essential, and foundational for a proper understanding of reality. What is left over after ‘hyperbolic doubt’ is in turn the foundation for engaging in philosophy and the proper exercise of philosophical thought, with philosophical thought serving as the foundation for both effective and legitimate intellectual discourse in general. 

It is worth attempting to extend this method of ‘Cartesian doubt’ into our general understanding of modern monetary theory amidst some of the economic and social upheavals that have occurred in various parts of the world as of late. Modern monetary theory is ultimately derived from the “Austrian School” of economics, the pioneers of which were Ludwig Von Mises and Friedrich Hayek. Money, as Von Mises contended, has to be a creation of the market, not the state. Thus, money is both a creation and instrument of the market rather than a public good that is generated and regulated by the state, according to modern monetary theory. After all, one of the most basic elements or precepts of the basic ‘free-market’ economic theory from which modern monetary theory is borne out of is that the state must be subject to the market, and that the market cannot be subject to the state. As Von Mises wrote:

“The position of the State in the market differs in no way from that of any other parties to commercial transactions. Like these others, the State exchanges commodities and money on terms which are governed by the Laws of Price. It exercises its sovereign rights over its subjects to levy compulsory contributions from them; but in all other respects it adapts itself like everybody else to the commercial organization of society.” 

There are “functional limitations” in any government, according to Von Mises, which prevent governments from properly managing, organizing, and regulating the market. Thorough and meticulous management, organization, and regulation of the market can be achieved “only in a socialistic State with a centralized organization of production and distribution.” It follows that: “In a State that leaves production and distribution to individual enterprise, such measures must necessarily fail of their effect.”

Hence, as it pertains to the modern monetary theory which is derived from a more basic or foundational economic theory of ‘neoclassical’ free-market economics, the idea is that:

“The concept of money as a creature of Law and the State is clearly untenable. It is not justified by a single phenomenon of the market. To ascribe to the State the power of dictating the laws of exchange, is to ignore the fundamental principles of money-using society.”

The continuation of the “Austrian School” or its extension into the United States was facilitated by the economist Milton Friedman in the 20th century. Why government had to bow and submit to the dictates and functions and “invisible hand” of the ‘free market,’ according to Friedman, is due to the dictates of human nature itself and the fact that those who are in government are driven by “self-interest” just as much as people in the markets, if not more. Greed is the name of the game, and it is greed which is the basis or the foundation of human nature, as contended by neoclassical ‘free-market’ economic theory.

And when all is said and done, profit-seeking, selfishness, and greed are what drive both governments and the markets rather than the desire for cooperation, mutual benefit, and social consciousness. Arguably, the basic logic is that the main reason for why markets cannot be regulated is because human nature cannot be regulated, even by those who claim the authority to regulate it, given that the basic nature of those in the market is inherent and is perhaps worse within those who are in the state. There is nothing which sets those who are in the state apart from those who are in the market by virtue of human nature and its inability to be regulated by anyone else.

Whether these presuppositions of ‘neoclassical’ free-market economists can withstand the test of ‘Cartesian doubt’ or ‘hyperbolic doubt’ and scrutiny may become clear if we boil everything down to the basic assumptions and beliefs which are implicit in these neoclassical presuppositions, namely, that anarchy and chaos is the natural state of our environment and our surroundings, and that this natural state of anarchy and chaos in turn shapes human nature. And because of human nature, anarchy and chaos cannot be offset or reigned in on by any sort of inherent or commonly agreed-upon and understandable notion of order and social tranquility

And many of us would contend that this basic assumption or belief of the inability to offset or reign in on anarchy and chaos through a commonly agreed-upon or mutually understandable notion of order and social tranquility does not withstand the test of ‘hyperbolic doubt’ and scrutiny, given that the consequences and the economic, political, and social outcomes of a general situation that is void of any commonly agreed-upon or mutually understandable notion of order and social tranquility are too dangerous and grave to accept, as recent and modern European history has shown. Notwithstanding the chance or the possibility that this recent history can then repeat itself. 

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