Neo-chartalist or Marxist Vision of the Modern Money? Critical Comparison

ABSTRACT The set of neo-chartalist views on the functioning of money in the economic circulation advertised as Modern Monetary Theory is becoming increasingly popular on the left. Marxist economists usually dispose of this theory as another incarnation of Keynesian reformism. However, because of its growing popularity, confronting this theory with the Marxist theory of money seems to have considerable political significance. A comparison of the two in the descriptive area indicates that there are some similarities between the two theories, but they are very general. On the other hand, my analysis shows that Marxist theory of money is not only compatible with the assumptions of Modern Monetary Theory concerning the functioning of modern money, but also gives a much more complete picture of its significance in the historically limited specificity of capitalism. Therefore, this comparison shows that it is worth promoting the Marxist theory of money as a true, actual theory of modern money, which is in its essence much more practical than alleged pragmatism of the Modern Monetary Theory.