My exchange with Buddy Wells and the dangerous simplicity of MMT
This article was first published by BBrief on 25 June 2025
Some months back, I crossed words with Buddy Wells, one of South Africa’s more vocal cheerleaders for Modern Monetary Theory (MMT). In our debate, he pushed the tired argument that governments can print money to employ the jobless without triggering inflation, so long as those being hired weren’t already doing anything useful.
His example? Teachers. If they’re unemployed, he says, they’re “idle.” So print some money, hire them, and voilà, more education, no inflation.
It sounds neat. But only because it ignores how economies actually work. And worse, it’s built on a falsehood.
Why “idle” doesn’t mean useless
This idea that “idle” resources can be employed without cost is not new. It was peddled in the 1930s by John Maynard Keynes. But his view didn’t go unchallenged. One of his fiercest critics, W.H. Hutt, wrote a book in 1939 titled The Theory of Idle Resources; it shattered the lazy assumptions baked into Keynesian thought.
Hutt’s core insight is simple: just because something isn’t being used doesn’t mean it’s being wasted. Workers might reject low-paying jobs while waiting for something better. Businesses might sit on unused machines, waiting for clearer signals before committing capital. People may hoard cash because they don’t trust the future. These are not failures, they are actions. Calculated ones.
Take Charlize – the unemployed teacher. She might be retraining, relocating, or simply refusing to work for less than her skills deserve. Is that irrational? Hardly. It’s part of a bigger process of adjustment and self-preservation. Her labour is not idle because she’s lazy or forgotten. It’s idle because, given the current market setup – wages, regulations, alternatives – that’s where she chooses to be.
The chain reaction MMT ignores
Let’s say the government takes Buddy’s advice and prints rands to hire these teachers. What then?
Well, a teacher doesn’t work in a void. She needs a classroom, a desk, books, electricity, an admin staff, transport, maintenance – and in this internet age – maybe a digital platform. All those things come from elsewhere in the economy; from sectors already running, already using people, machines, and materials.
So, this new money doesn’t just fund labour that was waiting around twiddling its thumbs. It pushes into sectors that weren’t idle at all. It competes for inputs that were already being used. Prices rise. Not in the teacher’s salary perhaps, but in building materials, electricity, printing, paper, admin salaries – wherever that increased demand hits first. That is inflation.
The more government spends from freshly minted currency, the more these pressures build. It’s not a trickle. It’s a ripple. Sometimes a wave.
Legal shackles and market distortions
There’s another wrinkle. Sometimes what looks like unused labour isn’t the market’s fault at all. It’s the laws. Minimum wages might bar people from working for what they’re willing to accept. Hiring rules, union demands, licensing red tape, etc. All these can keep willing and able hands out of work.
Printing money to pay these people does not solve that. It papers over the real problem and props up an illusion. It tells the public the government is doing something, while the root causes of unemployment – bad regulation, bad policy, and perverse incentives – go untouched.
Savings, not printing, builds economies
Austrian Economics – the school of thought from which Hutt drew ideas – stresses something MMT theorists never seem to grasp: production and growth come from real savings. That means someone, somewhere, put off consuming today so capital could be formed and tomorrow’s wealth created.
You can’t cheat that with a printing press, or with the tapping of a keyboard. When money appears without corresponding goods and services, prices rise or quality falls. Either way, value is destroyed. Inflation is the quiet theft of purchasing power. It may hide itself for a while, masked by productivity or global deflationary forces, but it always shows up.
MMT celebrates this theft as a policy tool.
The unseen cost of easy money
MMT theorists often point to times when central banks printed heavily without triggering runaway inflation. But they forget – or choose not to see – what might have happened without that printing. Prices might have fallen. Standards might have improved. Investments could’ve been redirected toward more sustainable ends. Just because something didn’t explode doesn’t mean it didn’t rot.
There’s always a cost. It just hides behind headlines.
Final word
Buddy Wells – and the MMT crowd he echoes – make it sound like money is magic. Idle workers? Print and employ. Low demand? Print and spend. Reality doesn’t bend that easily.
Resources aren’t idle because the market failed. They’re idle because individuals make choices, often rational ones. Intervening with counterfeit currency only muddles those choices and scrambles the signals that guide them.
You don’t heal a sick economy by flooding it with paper and hoping it figures itself out.
