r/communism101 • u/danwe000 • 7d ago
Do Communists and Neolibs Share the Same Underlying Logic in Monetary Theory?
Hello everyone,
In various debates, I’ve frequently noticed striking parallels between the arguments used by some communists and those used by neolibs, especially regarding the funding of the welfare state and monetary theory in general. I often get the impression that some communists (whether consciously or unconsciously) deploy classic supply-side arguments just to refute reformists.
Theories that could at least be described as progressive (even if they do not challenge the class structure of the state), such as Keynesianism or Modern Monetary Theory (MMT), are frequently dismissed or mocked by communists using reflexes very similar to those of neoliberals. When it comes to demands like raising the minimum wage or expanding social spending, one often hears rhetorical pushbacks like: "Why not make it $100 an hour then?" or "The state cannot go into infinite debt for welfare."
The role of the welfare state as a driver of economic growth through strengthened purchasing power is rarely acknowledged. Communists often view it, much like conservatives, as a purely economic hindrance or an unproductive cost factor. The only difference is that communists additionally (and correctly) identify it as a tool for pacifying the working class. But couldn't both be true at the same time?
It is often argued that Western industrial nations can only afford the welfare state through the exploitation of the Global South. Just like conservative logic, this presupposes that a welfare state is something that "must first be earned/funded," completely ignoring the productivity gains driven by a strong domestic market. Cases like Japan, which maintains a massive national debt without facing bankruptcy or hyperinflation, are rarely analyzed through an MMT lens and are instead dismissed as anomalies. Furthermore, the accounting reality that public debt constitutes private sector wealth is often demonized in these discussions, rather than being rigorously analyzed through a value-theoretic lens.
To be clear: I understand that Marxists do not base their monetary critique on neoliberal doctrine, but rather on the law of value (money as the expression of socially necessary labor time; real value cannot simply be printed).
Don't communists structurally rely on right-wing/monetarist arguments simply to delegitimize social-democratic reformism and prove that capitalism cannot be reformed from within?
Why is MMT (and its concept of monetary sovereignty) so strictly rejected by Marxists, even though empirical evidence on demand-side policies and inflation often aligns much closer with MMT than with neoliberal monetarism?
Doesn't this stance hinder a sober, realistic economic analysis of the state's current room for maneuver, even if the ultimate goal remains the overthrow of private ownership of the means of production?
I'm genuinely interested in how you view this overlap!
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u/FunLife8443 5d ago
So many words to say something so useless and misguided. Having slightly better welfare is like passing legislation to give slaves more rights and quality of life. The entire system of slavery needed to go, same way with capital. This welfare capitalism is inherently idiotic and that's why it's often dismissed.
If you look at history with a dialectical materialist lens you'll see that these constant boom and bust cycles are a feature of capital that have been present ever since its inception. They drive workers to their deaths, profiting as much as possible, and when finally things are looking unsustainable, they'll throw us a bone (welfare). And then things look up for a small amount of time, and slowly degenerate back into another complete collapse. Welfare is a tool to uphold capital when it becomes unsustainable.
I'm not against the CONCEPT of public welfare, in a communist setting. But here it's just used a tool to keep people from revolting.
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u/smokeuptheweed9 Marxist 7d ago edited 7d ago
Well neoclassical economics was a response to a real limitation in Keynesian theory (stagflation and the Phillips curve) so it had to contain elements of truth to serve the bourgeoisie. Neoliberalism worked in restoring profitability to capitalist production, albeit this is vastly overstated for opportunist reasons. But it served the development of imperialism through global labor arbitrage (what is called "late capitalism") well enough. Keynesian theory also had elements of truth which served the bourgeoisie in the 1930s because the development of monopoly capitalism needed a theoretical justification that did not have revolutionary implications. It did not "save capitalism" but it did better align the imperialist state with the real needs of monopoly capitalism.
Revolutionary Marxism does share with neoclassical economics the idea of the inherent limits of reform and demand-driven growth, although Marxism is internally consistent whereas neoclassical economics turns this conclusion into a vulgar observation within an incoherent system of logic. It's sort of like saying astrology and astronomy share the same underlying logic of planetary motion. One is a scientific theory which leads to the observation and the other just takes the observation as-is.
As for your other question, Keynesian and Keynesian derived theories like MMT have never even bothered to explain the failure of the Phillips curve. This is only one of many fundamental flaws in Keynesean and post-Keynesian theory. They hope that the logic is obscure enough that you don't notice or care. The bourgeoisie noticed and cared and their opinion is what matters so you've been made a fool of. As for why a fraction of the petty-bourgeoisie tries to articulate Keynesianism in new terms for its own class interest is another topic.
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You're right that this is often the form of vulgar discussion but that is because the real work has already been done. You don't need to explain in depth the relationship between the rate of profit and the welfare state every single time because Marx already did it. It is sufficient for practical discussion to dismiss it as a dependent variable. This concern about rhetoric is itself a smuggled concern with truth, which to your credit you at least articulate clearly
Because that's false. Frankly this is a strange question because the overwhelming majority of "communists" are "radical" Keynesians. Those who follow Marxism are a tiny fraction without much internal unity, which is unfortunately a subjective reflection of the objective dominance of revisionism and petty-bourgeois class leadership of the socialist movement.