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The Form of Practical Inference

biridans-assIn her essay on Practical Inference, Anscombe argued that practical reasoning is not formally distinct from theoretical reasoning.

The argument is relatively straightforward — relative, that is, to the average Anscombe argument. Suppose we have the inference pattern:

A→B

B→C

A

Therefore: C.

This looks like a piece of theoretical reasoning. From A, and from the relevant entailments, we’re able to conclude C. Suppose that A is “the potatoes have been in the oven for 20 minutes”, B is “the potatoes are cooked”, and C is “the potatoes are ready to eat”. If we know that A, we know that A entails B, and we know that B entails C, then we know that C.

Suppose, on the other hand, that C is something we‘re aiming at bringing about (we’re cooking potatoes). We can use the same inference to decide to bring about A. Now the inference looks like this:

Aiming at: C.

A→B

BC

Therefore: bring it about that A.

The formal inference is the same. What makes it practical is nothing about the logical form, but only what we’re using that inference for.

What prevents some logicians from seeing this, says Anscombe, is a misguided idea about necessity. In the theoretical case, there appears to be a logical compulsion that is absent in the practical case. No reasonable person can accept the premises without accepting the conclusion. In the practical case, by contrast, there does not appear to be the same necessity. There might, for all the inference shows, be a way to bring it about that C without bringing it about that A. Thus aiming at bringing about C does not compel bringing about A.

Anscombe argues that this is a false distinction. If “compulsion” means “compulsion according to the norms of inference”, then we can say that the norms of practical inference compel bringing it about that A when C is desired, just as the norms of theoretical inference compel believing C when A is believed. It might not represent the only way to bring about C, but then the theoretical inference might not represent the only way to conclude that C. Meanwhile if “compulsion” means “psychological compulsion”, then we must admit that neither the theoretical nor the practical inference is compelling: people reason badly both theoretically and practically.

There is much more to be said, and Anscombe deals with various objections. But the conclusion is that the form of the inference is the same in the practical and in the theoretical case. What makes the difference between practical and theoretical reasoning is what we use the inference for rather than its form.

Anscombe is discussing what Aristotle calls “practical syllogism” in the ‘common books’ of the Nichomachean and Eudemian Ethics. Aristotle uses “συλλογισμος” to mean simply “reasoning”; there is no strong compulsion to suppose him to be talking about the more specific syllogistic theory of inference found in the Prior Analytics. And yet the examples that Aristotle gives of practical syllogisms can be read in line with that theory.

Anscombe moves right away to a logic of propositions rather than to a logic of terms. But Aristotle’s examples can be analysed in terms of the logic of terms proposed in his syllogistic. Here is one of them (more or less):

Human beings benefit from dry food.

I am a human being.

This bread is dry food.

Therefore: I’ll eat this bread.

(Never mind what Anscombe calls Aristotle’s “curious dietary theory”. Replace “dry food” with “healthy food” if you like.)

As stated, the syllogism clearly isn’t valid under the rules of the Prior Analytics. But the obvious reason for this obscures the more interesting reason.

The obvious reason is that the conclusion mentions something that isn’t in any of the premises: my action of eating something. If the argument is a sorites, then the conclusion should be: “I benefit from dry food”. The moral philosopher can bring in all sorts of Humean quibbles about whether this is sufficient on its own to compel any action.

But the logician might be at least equally interested in the way the terms are divided up. Let me represent the inference, with the modified conclusion, putting subject-terms in round brackets and predicate-terms in square brackets. The copulas I leave out. Then we have:

(Human beings) [benefit from dry food].

(I) [human being].

(This bread) [dry food].

Therefore: (I) [benefit from dry food].

For the syllogism to be valid (as a sorites), we would need four terms, to match our four propositions. But what we have here is five terms. “Dry food” is not the same term as “benefit from dry food”. If we treat the two terms as equivalent, we can end up with one of the following valid but nonsensical soriteses:

Humans beings benefit from dry food.

I am a human being.

Benefit from dry food is this bread.

Therefore I am this bread.

Or:

Human beings are dry food.

I am a human being.

This bread is dry food.

Therefore I am this bread.

The conclusion is the same in each sorites. And it is decidedly not what we want from our practical reasoning.

What causes us the trouble is that “benefits” belongs to the matter and not the form of the syllogism. It goes into one of the terms, giving us one too many terms for our sorites.

One way of getting “benefits” out of the matter of the syllogism would be to treat it as syncategorematic. Thus in “humans benefit from dry food”, we could say, the subject is “humans” and the predicate is “dry food”, while “benefits” expresses the way in which the predicate belongs to the subject.

But does “benefits” then express the quantity or the quality of the proposition? Since the proposition appears straightforwardly affirmative, “benefits” does not seem to express a new quality. It might, then, express quantity. But how? In addition to saying dry food belongs to all humans and dry food belongs to some humans, can we also say that dry food belongs tobenefit humans?

This seems bizarre on the face of it, but there might be something in it. Michael Thompson’s Life and Action proposes that in order to understand practical reasoning, we need a new “logical form”. From the way he describes it, what he seems to want is a new quantifier. To use Geach’s example, “acorns grow into trees” is a true proposition meaning neither thatall acorns grow into trees nor merely that some acorns grow into trees. The first is false; the second is not quite what is meant, since “grow into oaks” isn’t just something that happens to belong to acorns; it belongs to themessentially: it is part of the ‘life-form’ of acorns that they grow into oaks.

Most philosophers would say that the reference to ‘life-form’ here is categorematic; it expresses a non-logical relation between acorns and the activity of growing into oaks. But Thompson’s Hegelian proposal is that when we begin talking about living things, we introduce at least one newlogical form. There is a distinct logical relation between subject and predicate, when we predicate an activity that belongs to the ‘life-form’ of a living thing.

This works, I have proposed, like a quantifier. It is not that all acorns grow into oaks, nor merely that some acorns grow into oaks, nor even that mostacorns grow into oaks (they don’t). Rather, acorns grow into oaks ‘life-form-wise’, where the latter expression introduces a distinct quantifier not recognised in standard predicate or plurative logic.

In Aristotelian terms, it expresses a way in which the predicate belongs to the subject, a way that is neither universal nor particular.

This can, I think, be used to make sense of the Aristotelian practical syllogism. If we rush to the solution, here is what we might do. First, take “b” as a strange sort of belonging that a predicate can have to a subject, expressed by the word “benefits”. Now we can assign the terms of the sorites in this way:

A: humans

B: dry food

C: me

D: this bread

The form of the sorites will then be (taking the quantity of singular propositions to be universal): AbB, CaA, ∴CbB, DaB, ∴CbD. I represent the sorites again putting subjects in round brackets, predicates in square, and now syncategorematic terms in italics:

Benefit (human beings) [dry food]

All (I) [human being]

All (This bread) [dry food]

Benefit (I) [dry food]

Note that the form is the same as what it would be if the ‘quantity’-term “benefit” were replaced with “all”. But then we’d get the absurd conclusion that dry food belongs to me in the standard way that a predicate belongs to a subject — that “dry food” is either a class to which I belong or a property of me.

But since we have taken “benefit” out of the matter of the syllogism and placed it into the form, it can modify the copula. It modifies it by causing it to express a relation of benefiting rather than a relation of class-membership, identity, or predication.

This is extremely radical. It makes the relation of benefiting into a logical relation! And it is much more radical than what Thompson proposes. He wants activities to be predicated of subjects in the normal way, but subject to a strange quantifier.

We can get to something more like what he is after by going a bit more slowly. First, we replace “dry food” and “this bread” by “eating dry food” and “eating this bread”. We still need the extra quantifier, since what we want to say is that those activities belong to the subject in a very particular way, as pertaining to its ‘life-form’ and not just to some or all or most of its extension. But now it looks much more like a quantity-term than “benefits”, which seemed to change the relation of predication into something else entirely.

Suppose we use the adverb “ideally” to express this special sort of quantity (as we might say that “ideally” acorns grow into oak trees). The resulting sorites is:

Ideally (human beings) [eat dry food]

All (I) [human being]

All (Eat this bread) [eat dry food]

Ideally (I) [eat dry food]

The sorites would be equally valid if “ideally” were replaced by “all”, but then it wouldn’t look like a practical syllogism at all. The conclusion would be an assertion about what I do, whereas here the conclusion looks like a recommendation. And it would anyway be bad practical reasoning to move from what everyone does to what I ought to do: e.g., everyone screws up sometimes.

I do not mean to disagree with Anscombe, however (I rarely do). It is stillnot the case that it is the form that makes this syllogism practical. Having certain propositions in the form, “P belongs to S ideally” is a necessary but not a sufficient condition for a syllogism to be practical. Take, for instance, the syllogism:

Ideally swallows migrate for winter.

These birds are sparrows.

Therefore: Ideally they migrate for winter.

I might be using this inference to decide what to do, but I am more likely to be making a prediction about what the birds will do. It is still the case that what makes an inference practical is what we want to do with it and not its form as such. But now it is the case that practical inferences have to be of a certain form; they have to contain propositions of the right quantity.

Another question is whether an inference of the right form, of which I am the subject of the conclusion, is necessarily practical. Does a conclusion about what I ideally do have to involve some recommendation that I do something? Here moral philosophy begins, and I run away.

Inevitable Brexit Post

I am a citizen of Portugal. My mother is from Macau and was born there when it was still under Portuguese control. She went through the long and difficult process of claiming her Portuguese citizenship so that I could have it through legacy. This allows me to live and work in the UK without having to apply for visas every few years (my other passport is Australian).

The process of gaining Portuguese citizenship was long, arduous, and expensive. But the Portuguese government treated us ex-colonials with respect and dignity. It was worlds apart from the way I was treated by the UK Border Agency when I tried to apply for visas as an Australian.

The UKBA treats applicants like criminals. It makes it impossible to speak with anyone in the system. The forms warn that any attempts to contact the agency will not be successful but will result in delays to the processing of your application. The agency is fortified within a labyrinth of Kafkaesque runarounds. It charges outrageous fees. The process of bringing in dependents or applying for spousal visas requires submission to humiliating and invasive examinations.

The UKBA also rejects every application it possibly can by creative interpretation of the laws. A friend of mine had his application rejected because his pen mark went too far outside one of the boxes he ticked. One of mine was rejected because I included the wrong page on one of twenty bank statements I had to send with the application. When your application is rejected, you are told that you have 28 days to leave the country. You are not told that you are allowed to appeal the decision and provide the right documentation (or send another form with all the ticks exactly the correct size). I had to ring a lawyer to find this out. The UKBA also warns that the appeal process can take months. You are not informed that you cannot be deported while the appeal is pending – again, I needed a lawyer to tell me this.

When I had sent in the correct page on my bank statement, my application was eventually accepted after appeal. But from that point onwards, I could never cross the UK border without being made to wait while an agent investigated my sordid past of illegal immigration. I must say that every agent apologised to me after finding out the truth but told me that they are obliged to investigate any visa that has a ‘flag’ on it.

Strangely enough, I still have this problem when entering the UK on my Portuguese passport, since the UKBA has linked together my EU passport with my Australian one. I am told this is (was!) in direct contravention of its treaty obligations to the EU, but that is a different story.

My immigration story is incredibly benign compared with others I have heard. I have heard of people being detained, deported, and fined for the most absurd imaginable reasons. I have heard of children being separated from their families. I have heard worse than that.

Immigration was a core issue in the EU Referendum, possibly the deciding issue. Intelligent people have argued that one advantage of leaving the EU is that Britain will be able to pick and choose its immigrants rather than having them forced upon it. My friend Neil Wilson has made this argument eloquently.

Neil claims that “every other advanced civilised nation on earth, outside the EU” runs a points-based system of selective immigration. I respectfully disagree. Face down the Australian Department of Immigration or the US Department of Homeland Security and tell me if you see evidence of civilisation.

I see a process that is deliberately made as expensive and dehumanising as possible. At times I barely managed it, and I am well off and a native speaker of English, with friends in high places. I cannot imagine what it would be like for somebody less privileged.

Do I believe in open borders? No. I believe, as Michael Dummett argued (please read his book), that just as anyone prosecuted for a crime should be treated as innocent until proven guilty, anyone seeking to migrate to a nation should be treated as legitimate until proven otherwise. We should not be treated as criminals trying to prove our innocence.

Now let me explain one reason why I voted for Britain to remain in the EU. The inhumanity of the UKBA and its counterparts in other nations did not emerge out of nothing. Such procedures are brought in on a wave of popular support, among native populations that always will harbour resentment against immigrants – including the ‘good’ (high point-scoring) sort of immigrants: fancypantses like me with higher degrees, often mixed ethnicity, middle-class jobs, and the requisite impressive bank balance. This popular resentment will always be a rich seam from which votes can be mined. The television stations make documentaries about heavily armed border guards chasing foreigners around, and the native populations squeal with delight. When one nation does it to the immigrants of another nation, that nation retaliates in kind. An accelerating arms race of nastiness between the UKBA and the Australian Department of Immigration has got us to where we are today. Immigrants become cannon fodder in a battle of national egos.

There is one and only one way to escape this vicious cycle. It is for nations to give up their sovereignty over immigration and enter into mutually binding international agreements, overseen by transnational bodies not subject to the ugly identity politics from which no national government can escape on its own. Nations must compromise on core principles of immigration to which they can all agree. The EU’s Free Movement of People might not have been the right principle, and I personally disagreed with its approach to non-EU migrants. But that is a matter that should have been argued within the EU Parliament or, in the ideal case, a Parliament of all the stakeholder nations.

Neil argues that: “People want nations for the same reason they want family and not just friends. People like their friends but want to live with their family – behind their own front door. Demonising nations is like demonising family, and needs to stop.

I strongly repudiate the analogy. We all struggle to get on with our families at times, but if you’re lucky enough to have a good family you know they’ll always be there for you when you need them most. Nations are not like this. The ex-industrial regions of England needed the more affluent regions to support them during the 1980s. Instead they got Thatcher telling them they weren’t getting their grubby hands anywhere near the family jewels, to wild popular acclaim. The resentment builds to boiling point, and the only escape valve for it blows straight through the hearts of immigrants and their families. That is what we have just seen. I’m sorry for being unoriginal, but it is true.

Thoughts on Direct Democracy

I don’t like bureaucrats in Brussels making decisions that affect my life.

For that matter, I don’t like Westminster MPs making decisions that affect my life.

But you know who I really, REALLY don’t want making decisions that affect my life?

The general public of Britain and the Commonwealth nations.

Some explanation on my last post

I was extremely surprised and touched by the supportive responses I had on my previous post where I declared my intention not to blog about economics anymore.

I had no idea how many people took an interest in my blog. I was also flattered by having very intelligent people write to tell me that my contributions are valued. Some even asked me if I was doing ok. I am moved by all this show of support.

I suppose what has happened is that I feel that I’ve run up against a problem I don’t know how to solve.

When I met Warren Mosler, I noticed how often he uses the phrase “the public purpose”. I think it’s a very good phrase – John Kenneth Galbraith’s Economics and the Public Purpose is likewise a very good book. But to use it opens up some deep philosophical questions. I have every intention of continuing to think and write about these questions. But I no longer think (if I ever thought it) that economics is the right way to approach them.

The questions are: What is the public purpose? Who gets to decide what it is? And what institutions are required to serve it?

It is good to make logical arguments in favour of certain answers to these questions. But they’re for everyone to think about, not for me to pontificate upon. Speaking to people in Britain has revealed to me that I just don’t know what people want.

Almost everybody here in the UK complains about greedy, corrupt bankers. Mosler has a very simple policy outline: give banks a list of what they can do – what serves the public purpose – and ban them from doing anything else. Ban them from taking financial assets as collateral, from selling debt to third parties, and other things that are not in the public purpose. Yet this direct and simple solution has zero uptake in the UK. Nobody writes about it in the newspapers. I haven’t heard a single politician even mention it. And activist organisations specifically focussed on banking reform, such as Positive Money UK, are fixated on far more radical solutions that seem aimed at centralising and consolidating the power of banking interests rather than regulating it.

Again, almost everybody here says they want people off welfare and into work and that they want better public services. There is obviously a very simple way of solving both problems at once: offer public sector jobs to anyone currently on welfare who would rather work for a living wage. Again, zero uptake in the UK. Instead, a growing number of people support the idea of a universal basic income. So almost the whole population thinks that one problem for the UK is too many people on welfare and too few people in work, and then half of them think the solution is just to take away the welfare while the other half think it’s to give welfare to everybody. Almost nobody thinks the solution is to offer work to the people on welfare. I just don’t get it.

Neil Wilson suggested to me that maybe it’s politics rather than economics that I don’t understand. I think it’s deeper than that: I just don’t understand the British public. They say they want a banking system that doesn’t just serve the greed of the few. Ok, here’s how to make banking work in the interests of the many instead. No interest. They say they want people to have the chance to work rather than living on government handouts. Ok, here’s how to effect that change simply and straightforwardly. No interest.

I know what I think the public purpose should be. But I have no idea what people in general think it is. And clearly I can’t take what they say they think it is at face value, since they completely ignore the most obvious policies for bringing that about.

To explain my previous point about MMT: I don’t think the problem is that people don’t understand how government spending works. The two policies above don’t even seem like they’d be particularly costly – not in comparison with the status quo. So it’s not that people think they would like these things but believe them to be unaffordable (look at the number of people that support universal basic income). The problem is much deeper and weirder. Are the policies too good – too effective at serving what the public declares to be the public purpose? Are the British worried they might not have enough to complain about if such things are implemented? I just don’t know.

Until I work this out, I don’t know how to contribute anymore. Any help is greatly appreciated.

Apologising to Simon Wren-Lewis and Nick Rowe

This is probably going to be my last post on the philosophy of economics. Some recent events have led me to reassess my priorities.

I’m not abandoning politics or economics. I would just rather use this blog to write about the history of logic, and philosophy more generally. That fits my title better anyway. I’ve also come to the unwelcome conclusion that I’m quite bad at economics, whereas I have to hope that I’m not a terrible historian of philosophy.

What I’d like to do here is concede how much I now think I was wrong about and how much Simon Wren-Lewis was right about. A lot of this also applies to Nick Rowe, who has also been kind enough to engage with me over the last year or so.

First, I think that Wren-Lewis was probably largely right about MMT. His complaints were directed against the hard core of MMT supporters online, not the actual developers of the theory. He had two complaints:

  1. MMT seems obsessed with the accounting detail of government transactions
  2. This seemed to lead to ideas that I thought were standard bits of macroeconomics

Now I think both complaints are quite fair, again if applied to the MMT fan base online rather than to Mosler, Kelton, Wray, Mitchell, Tcherneva, and the rest of the proper MMT theorists. In the blogosphere, I would add that they don’t apply to people like Eric Tymoigne, Brian Romanchuk, and Neil Wilson.

Let me say something, however, about “standard bits of macroeconomics”. Wren-Lewis later pointed out that he is writing about “a world where monetary policy did successfully control demand and inflation”. That is the world of mainstream macro. And he is absolutely right that in that world – given that premise – all the accounting details in the world don’t show his story to be deficient in any way.

In that world, fiscal policy is neither needed nor effective as a macroeconomic stabilisation tool. It is not needed, since by definition demand is managed by monetary policy. And it is not effective, since monetary policy will just adjust to counteract any effects of fiscal policy on demand and inflation that diverge from its targets.

The logic here is faultless. But I, like many others, fell into the trap of trying to pick holes in it by way of facts about accounting. The truth is, if there is a problem with what Wren-Lewis says, it is not with the internal logic of his model; it is with its applicability to the real world.

What Wren-Lewis didn’t know about MMT, and couldn’t have known given the typical comments on his blog, is that it takes for granted a belief (implicitly founded I think on Post-Keynesian microeconomic theory) that interest rates just don’t work the way that they’re assumed to work in standard economics. This was then pointed out to him; he acknowledged it and then implied that it seems to be belied by the empirical evidence.

Again, the proper MMT reply here is subtle. The point is that even if monetary policy does work in the way presumed, it can have terrible unforeseen consequences. Another part of MMT that Wren-Lewis couldn’t possibly have seen (because nobody showed it to him) is its dependence on a Minksyan theory of financial instability: if loose monetary policy works to increase demand, for instance, it also increases instability in the financial markets, because those markets are inherently unstable. Randall Wray’s recent book on Minsky makes this case with admirable clarity.

The proper answer to Wren-Lewis, then, is that he should not be writing about a world in which monetary policy succeeds in controlling demand and inflation. Even if monetary policy is able to do that, the cost is too high: it sets up the conditions for financial collapse. But proving this requires an awful lot of Minskyan and Post-Keynesian theory, about how market signalling doesn’t work in the way assumed, about how people are not rational in the textbook sense, about how prices are largely set through convention rather than through competitive pressure, and so on. In other words, digging below the macro and into the micro is the only way to prove the case against mainstream macro.

What does not work is repeated assertions about the way that government spending works. Wren-Lewis gets this absolutely right. Such facts might be surprising to the general public and probably many micro- and applied economists. They undermine what he calls “mediamacro”. But they are not surprising to macroeconomists. MMTers are wasting an awful lot of time and energy on pointing out such facts when what they need is to promote the pricing theory, capital theory, and theory of financial instability that underpins their fundamental claims.

Again, let me be clear. The main MMT theorists have been making this case for a long time. And they are trying to get it out into the public; just look at Eric Tymoigne’s recent blog series on money and banking. But it hasn’t sunk in with the online MMT fanbase, who still think the problem is that macroeconomists don’t understand government accounting.

I know this because I made the same mistake myself for a long time. The trouble, I think, was that I wanted to have something to contribute to the conversation, and price theory, capital theory, and theories of asset pricing are really beyond my understanding. Accounting I do understand, and so I hoped that that might be enough to make the case for what I believe on instinct. I think a lot of others in the MMT fanbase fall into the same trap. But it is a trap.

I still believe the same things about policy – again, largely on instinct. And I do think that philosophy is useful in terms of clarifying concepts and arranging our moral and social priorities. I also still think that there is an interesting political philosophy contained in MMT that deserves more discussion. But frankly I lack the expertise to make the case I wanted to make. Luckily there are others to do so, but no intellectual shortcuts please. All excellent things are as difficult as they are rare.

Follow-up Post: Some Philosophy Lessons for Economists…

Long ago I took a course called “Economic Analysis for Political Philosophers” with Jo Wolff and Shepley Orr at University College, London.

think I remember Wolff saying something to the effect that he often felt a suspicion that economists don’t know the difference between necessary and sufficient conditions, but charity bid him put the thought out of his mind. If that is what he said, I’m beginning to know how he feels.

All that neochartalists claim – all that we need to claim to support our further claims – is that the imposition of tax in a currency is a sufficient condition for the currency being accepted in payment for goods and services.

Suppose the state wants to buy labour from us using its currency. If we have no inherent desire for the currency, then the state can create one for us, by imposing a tax payable only in the currency and threatening imprisonment for non-payment. Now we need to sell labour for the currency in order to pay the tax and stay out of prison. This is the standard neochartalist story. Taxation is a sufficient condition for the acceptance of the currency in exchange for goods and services. (Is it a sufficient condition for the general acceptance of the currency? Maybe not, but what business is that of the state? If we want our own medium of exchange to use for private purposes, we can create it.)

Now is taxation a necessary condition of currency acceptance? It need not be. We might have our own reasons for wanting the currency, in which case we would sell our labour for it regardless of the tax.

Has any neochartalist ever suggested that taxation is a necessary condition for acceptance of the currency? On the contrary, we actively deny it. If it were a necessary condition then balanced budgets would be incompatible with unemployment in the state currency at a given wage.

After all, if we had a total tax liability of £X/year, and the state spent a total of £X/year buying our labour, and nobody wanted pounds for any other reason than paying tax, then there would be no unsatisfied demand for the currency and nobody would be seeking more paid work in the currency. If the state either increased its spending or reduced the tax burden, then the excess supply of currency would drive down its purchasing power with regard to labour, and there would be inflation.

The reason why balanced budgets can and usually do lead to unemployment is precisely that taxation, within a given period, is not a necessary condition of demand for the currency within a given period. Suppose the state spends £X/year and people hold onto some portion of it for their own purposes. If the state also taxes £X/year then there will be some people needing pounds to pay taxes who aren’t able to get them. They will be willing to sell goods and services in exchange for pounds, but they won’t be able to get them if the state won’t increase its spending and others holding onto pounds aren’t willing to part with them.

Some people reply that this can’t be the right explanation in real life, since people who are unemployed aren’t the ones with tax liabilities. I’m not sure if this is deliberate obtuseness, but I can only reply: Don’t be silly!

Think of the following case. A has a tax liability that she can’t service out of current income. She borrows enough to pay her tax from B, who has a collected surplus of currency. Now C comes along needing food. A sells it to her on credit. C is now unemployed – she needs to earn currency to repay her debt to A – even though A was the one with the tax liability.

The real situation is much more complex, but the structure is fundamentally like that. And so neochartalists say that unemployment is caused by the state running deficits that are too small for people’s combined tax liabilities and savings desires.

Are they right to say that? Of course the situation could be resolved without the state increasing its deficit. B could, for instance, simply donate the currency to A; and A could donate the food to C. So the state’s small deficit is not a necessary condition of the unemployment. Nor, for the same reason, can it be said to be a sufficient condition.

So why do neochartalists call it a cause? I don’t want to give a lecture on the philosophy of science, but the notion that causes are equivalent to necessary and sufficient conditions faces grave and, in most contexts, thoroughly unnecessary difficulties.

R.G. Collingwood once gave the example of the AA man telling you that the cause of your engine overheating as you drove up a steep hill was a loose high-tension lead. To this, Collingwood notes, one could reply that the loose lead was not a sufficient condition of the engine’s overheating, on the grounds that you could have flattened the hill by stamping on it and then driven up comfortably on three cylinders. Nor was the loose lead a necessary condition of overheating, since even with the lead properly connected you could overheat the engine, say by setting fire to it.

So is the AA man wrong? Well, he is speaking in a context where it is obvious which things you are and are not likely to wish or be able to control. You can (I hope) control your impulse to set fire to your engine, and you can’t easily control the gradient of the hill. If you’ll permit me some jargon, causal statements are in many contexts interest-relative. Right now you’re interested in mechanical adjustments to your engine, not in the possibility of flattening hills or lighting fires.

The neochartalists find the operation of a currency to be one of these contexts in which causation is interest-relative. There might be various ways in which full employment in the state currency, along with price stability, can be achieved. But the most easy and reliable one is to scale the deficit to the right size. We’re interested in what can be easily and reliably done. And so we say that the cause of unemployment is the state – the currency-issuer – failing to spend enough to cover tax liabilities and savings desires.

I won’t say it’s as simple as that. What I will say is that it’s as simple as you want it to be. And for my part I have bad digestion when it comes to overcomplicated recipes.