Anti-MMT: The Errors of Modern Monetary Theory

Coming in December 2026 to the Mises bookstore.

Modern monetary theory turns conventional public finance on its head. For a government such as the United States, MMT argues, spending does not depend on first raising revenue through taxation or borrowing. A monetary sovereign creates the dollars by spending and then those dollars disappear when taxed or are transformed into government bonds when the government runs a deficit. The government, therefore, is not financially constrained. MMT proponents argue that government deficits are private-sector surpluses, public debt is private wealth, and big government programs shouldn’t be limited by questions such as “How will we pay for it?” The real constraint, they insist, is the availability of labor and other resources.

Anti-MMT: The Errors of Modern Monetary Theory presents an Austrian critique of that entire framework. The arguments go deeper than whether MMT policies would cause excessive price inflation. MMT and Austrian economics begin from fundamentally different starting points. MMT begins with a powerful state and uses accounting tautologies in misleading ways to promote big government. Austrian economics begins with human action, scarcity, voluntary exchange, market prices, entrepreneurship, and economic calculation. Government intervention enters the analysis only after the market process itself has been understood.

The eight chapters critique MMT from several directions. In the first chapter, Jonathan Newman challenges the chartalist claim that money is a “creature of the state,” arguing that the archeological evidence from ancient Mesopotamia is consistent with Carl Menger’s theory of the origins of money. Joseph T. Salerno then identifies a deep theoretical problem: MMT’s “spending illusion,” which treats aggregate spending flows as causal, severing monetary theory from the subjective theory of value.

Robert P. Murphy turns to one of MMT’s best-known claims—that the government’s red ink is our black ink. The conclusions MMT draws from the sectoral balance approach neglect the taxes and monetary depreciation ultimately required to service government debt. Patrick Newman examines government spending itself, arguing that it constitutes wasteful consumption rather than genuine investment, and that it distorts the economy’s structure of production.

Karl-Friedrich Israel takes up MMT’s proposed inflation constraint, arguing against the idea that price indices can accurately reflect economic reality. Per Bylund focuses on what MMT leaves out: entrepreneurship, opportunity cost, market prices, profit and loss, and economic calculation. Joshua Mawhorter argues that MMT takes monetary sovereignty for granted even though the policies it recommends would undermine the market institutions that make such sovereignty possible. Finally, Lucas Engelhardt applies William H. Hutt’s analysis of idle resources to MMT’s job guarantee proposal, showing why apparently idle resources cannot simply be treated as resources waiting for government planners to put them to work.

Taken together, these essays make the case that MMT’s problem is not just optimism about deficit spending. Its problems are deeper and pervade the entire framework. Accounting tautologies are no substitute for economic understanding.

MMT proponents see extraordinary possibilities in the state’s ability to issue fiat money. Ludwig von Mises dealt with similarly confused ideologies of his own day, as this book’s introduction notes: “MMT proponents, in the words of Ludwig von Mises (1953), see ‘something miraculous in the issuance of fiat money’—they see in the government a power that surpasses ‘the art of sorcerers, witches, and conjurors.’”

This book dispels the hocus pocus.