Modern Monetary Theory as post-neoliberal economics: the role of methodology-philosophy

In this chapter, we show how methodology and philosophy support Modern Monetary Theory (MMT) within broader heterodoxy. We set out preliminaries regarding the meaning, scope and role of methodology informed by philosophy. We then examine a prominent variety of methodological-philosophical interventions, critical realism, before drawing links between realist argument and MMT. We argue that MMT constitutes a form of contingent 'depth-realist' theory of historically produced open systems and that it has various features that might be derived from and explored in terms of exploratory practices, identifying 'demi-regularity' and using 'contrast explanation' and 'retroduction'. Suggesting that MMT is a variant of open systems theory speaks to James K. Galbraith's claim that 'useful economists' understand that human institutions are man-made, mutable and potentially subject to democratic control. We recognise the importance of paying due attention to the embedded nature of an economy, especially basic biophysical limits; we conclude by commenting on this.