The idea of a basic income guarantee is very popular with readers, more so that the notion of a job guarantee. Yet as we have mentioned in passing, this very sort of program was put in place on a large-scale basis in the past. Initially, it was very popular. However, in the long run it proved to be destructive to the recipients while tremendously beneficial to employers, who used the income support to further lower wages, thus increasing costs to the state and further reducing incentives to work. And when the system was dismantled, it was arguably the working poor, as opposed to the ones who had quit working altogether, who were hurt the most.
It is also intriguing that this historical precedent is likely to resemble a a contemporary version of a basic income guarantee. Even though some readers call for a stipend to everyone, that simply is not going to happen, at least in terms of net results. It is massively inflationary, since most of it would fuel consumption. More consumption means more environmental damage: more strip mining of the planet, more chemicals, more greenhouse gas emissions, more plastic containers and other waste. Increased consumption also means more profit for the CEO class without necessarily improving the wage share of national income, hence no better and likely worse income inequality.
Taxes would therefore need to be increased to offset those effects. The best tax outcome you could expect would be a progressive tax on income. Thus the end result in a best-case scenario would be tantamount to a means-tested BIG, graduated so as to avoid any sudden cutoff for someone who wanted to work. Thus the result (whether achieved directly or indirectly) is likely to resemble Milton Friedman’s negative income tax, with the zero tax rate set at a living wage level.
The experiment was the Speenhamland system, which was implemented in England 1795 and dismantled in 1834, was intended to make sure that country laborers had enough income to live. It was intended as an emergency measure to help the poor when grain prices had risen sharply due to meager harvests. The justices of Berkshire decided to offer income support to supplement wages, with the amount set in relation to the price of bread and the number of children in the household, so that the destitute would have a minimum income no matter what they earned.
Even though it was never codified as law, the Speenhamland approach was adopted in country towns all across England and in a weaker form in some factory towns. It was widely seen as a “right to live.” It was neither universal nor consistently implemented, but it nevertheless appears to have been fairly widespread. It reached its peak during the Napoleonic Wars, and was wound down in many small towns before it was effectively abolished by the new Poor Law of 1834. Not surprisingly, the Speenhamland system existed in its strongest and most durable embodiment in areas where the threat of violence by the impoverished was real. But another reason it lasted as long as it did despite the costs it imposed on local landlords was it kept the poor in place with their wages fixed at a bare subsistence level. Rural property owners wanted to keep workers from decamping to towns and cities in search of better paid employment. A smaller pool of local laborers would lead to higher wage levels.
Karl Polanyi explains how a well-indended program over time proved damaging to the very group it was intended to help. And it is critical to keep in mind that Polanyi is acutely aware of how treating labor and land as commodities is at odds with the needs of society. First, an overview from his book The Great Transformation:
During the most active period of the Industrial Revolution, from 1795 to 1834, the creating of a labor market in England was prevented through the Speenhamland Law.
The market for labor was, in effect, the last of the markets to be organized under the new industrial system, and this final step was taken only when the market economy was set to start, and when the absence of a market for labor was proving to be a greater evil even to the common people themselves that the calamities that were to accompany its introduction. In the end the free labor market, in spite of the inhuman methods employed in creating it, proved financially beneficial to all concerned.
Yet it was only now that the crucial problem appeared. The economic advantages of a free labor market could not make up for the social destruction wrought by it. Regulation of a new type had to be introduced under which labor was protected, only this time from the workings of the market mechanism itself. Though the new protective institutions, such as trade unions and factory laws, were adapted, as far as possible, to the requirement of the economic mechanism, they nevertheless interfered with its self-regulation and ultimately destroyed the system.
Polanyi depicts a dialectical process: the supposedly self-regulating market grinds forward, undermining the foundations of society. Individuals and groups push back and secure amelioration and reforms. But their victories interfere with the operation of the market, leading to more and more stresses on the market system.
But notice Polanyi’s verdict: that the effect of the Speenhamland system, which was to blunt the impact of industrialization on rural England, proved in the end to be too costly to the rural poor and laborers. How can he reach that conclusion? Polanyi again:
Under the Speenhamland Law, a man was relieved even if he was in employment, as long as his wages amounted to less than the family income granted to him by the scale. Hence no laborer had any financial interest in satisfying his employer….Within a few years, the productivity of labor declined to pauper level, thus providing an added reason for employers not to raise wages above the scale. For once the intensity of labor, the care and efficiency with which it was performed, dropped below a definite level, it became indistinguishable from “boondogling”…
No measure was more universally popular. Parents were free of the care of their children, and children were no more dependent on parents; employers could reduce wages at will and laborers were safe from hunger whether they were busy or slack; humanitarians applauded the measure as an act of mercy even though not of justice; and the selfish gladly consoled themselves with the thought that even though it was merciful it was not liberal; and even ratepayers were slow to realize what would happen to the rates under a system which claimed the “right to live” whether a man earned a living wage or not.
In the long run, the result was ghastly. Although it took some time till the respect of the common man sank to the point where he preferred poor relief to wages, his wages which were subsidized from the public funds were bound eventually to be bottomless, and to force him upon the rates….
On the face of it the “right to live” should have stopped wage labor altogether. Standard wages should have gradually dropped to zero, thus putting the entire wage bill wholly on the parish, a procedure that would have made the absurdity of the arrangement manifest. But….[t]he majority of the countryfolk…preferred any kind of existence to the status of a pauper.
The backlash against the Speenhamland system, which came via the Poor Law Reform of 1834, was the establishment of workhouses designed to force the poor to work. As Wikipedia explains: “The workhouses were to be made little more than prisons and families were normally separated upon entry.” “Outdoor relief,” which then meant aid to the poor without requiring that they enter an institution, was discouraged in the Poor Law Reform and then abolished in the 1840s. Polanyi again:
Never perhaps in all modern history has a more ruthless act of social reform been perpetrated; it crushed multitudes of lives while merely pretending to provide a criterion of genuine destitution in the workhouse test. Psychological torture was cooly advocated and smoothly put into place by mild philanthropist as a means of oiling the labor mill.
I’m at a loss to understand reader objection to the idea of a job guarantee. It would either price many McJobs out of existence or convert them back to their old form, of being part-time positions for young people still in school. It would similarly increase compensation for important jobs like home health care workers that now pay rock-bottom wages. It would make it harder for retailers to continue their abusive practice of requiring workers to be on call. And there is no dearth of meaningful work that needs to done: providing universal day care, better elder and hospice care; replanting forests; building wildlife tunnels; maintaining and improving parks; repairing and upgrading infrastructure with an eye to energy efficiency. These are all ways of increasing national output in a manner which can also improve the environment. If we had more enlightened leadership, a Marshall Plan to retool the economy to reduce energy consumption and convert more sources to cleaner ones would be a high-priority target for Job Guarantee workers.
People need a sense of purpose and social engagement. Employment provides that. History is rife with examples of the rich who fail to find a productive outlet and and whose lives were consumed by addictions or other self-destructive behavior. Ironically, we have the veneer of having less of that due to the prevalence of the new rich (CEOs, elite finaciers, tech titans) tend to be a workaholic lot* (that serves as the rationalization as to why they deserve their lucre).
Too many of the fantasies about a basic income guarantee seem to revolve around a tiny minority, like the individual who will write a great novel on his stipend. Let’s be real: the overwhelming majority of people who think they might like to write a book don’t have the self-displine to do so in the absence of external pressure. And that’s before you get to the question of whether it will turn out to be good enough for anyone but the author to want to read it.
When unions provided an wage anchor for factory labor, the US had less income disparity and more class mobility. Under Speenhamland, income disparity widened and real wages fell. Low end service jobs are the modern analogy to former blue collar work. Even with greater automation, many of those jobs will remain. The alternative of job choice with a job guarantee will force wages higher and improve working conditions. It would provide pressure on employers as labor unions once did. And it will add a bit more to individual freedom by giving them more employment options.
A jobs guarantee and a basic income guarantee are not either/or propositions, contrary to the claims of many readers. Job guarantee proponents see it as an addition to, not a substitute for, other social safety nets, such as unemployment insurance and Social Security. For instance, Joe Firestone has argued for a basic income guarantee in addition to a job guarantee, with the income level for the basic income guarantee set at 2/3 the rate of a full time job under the job guarantee.
As Randy Wray said via e-mail:
A job at a decent wage, set by public policy, will eliminate at least 2/3 of poverty. we can then work on eliminating the rest thru compassion. This is the high road that can increase productive capacity, making it easy to spread the extra production among those who cannot, should not, or do not want to work.
A jobs guarantee is the beginning of the de-commodification of labor and break the dynamic decried by Polanyi. Once productive, dignified work becomes fixed as a right in the minds of the people they will not tolerate being bought and sold like a stamp-machine. A job guarantee breaks the paradigm that workers, as in human beings, must accept whatever terms “the market” has on offer and starts us on a path toward a better society.
___
* I am mindful of the fact that being in a Master of the Universe role is vastly more gratifying than trying to patch together part-time work to make a living. However, CEOS,top financiers and top professionals typically work well over 55 hours a week.
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See also : John L. Hammond and Barbara (Bradby) Hammond–
authors of
The village labourer 1760-1832, a study in the government of England before the reform bill (1912)
The Town Labourer 1760-1832: The New Civilisation (1917)
The Skilled Labourer 1760-1832 (1919)
http://en.wikipedia.org/wiki/John_Lawrence_Hammond
Worth noting: this has precisely zero implications regarding a Basic Income.
Speenhamland was a “poverty trap” system where earning an extra dollar causes you to get a dollar less in welfare.
A Basic Income is like the Alaska Permanent Fund dividend; you get the same amount regardless of how much you work. So working more means you get more wages.
You don’t know what you’re talking about, but I’ve noticed you have come in many days alterward, spamming the same comment over and again to clutter up the thread.
The Speenhamland system was a Basic Income Guarantee, which means it guaranteed a level of income. That is by definition a means tested system which, as you repeat ad nauseam failed, just as a BIG today would fail for the very same reasons. If you remove the means testing it isn’t a BIG anymore, so please don’t come in trying to change the subject with an argument that is completely irrelevant.
You don’t require means-testing for a basic income guarantee, although it makes it cheaper at the expense of creating a poverty trap. You could just pay all adult citizens and legal residents a flat monthly stipend regardless of income – say, $1000/month adjusted for inflation – and it would do just as well. It wouldn’t discourage work, but it would also serve as a bottom floor against poverty.
Some BIG proposals have means-testing, some don’t. The terminology is not fixed. The means-tested or taxed ones are just “welfare” – we have it already. $1000/month, inflation-adjusted is on the low end of big BIG proposals, not really enough to live on. But since it is universal, it is extremely inflationary, more so because of the indexation. Universal, big BIGs are just impossible. As Wray says, they’re just something attractive to people who are very bad at economics.
If the Speenhamland system is an argument against Basic Income, the workhouses are an argument against a jobs guarantee. Frankly, both are experiments from another age. Mincome seems far more relevant.
That’s silly. The Jobs Guarantee does not force anyone to do anything.
using the libertarian definition of forced, I suppose that’s true as it is true today (noone is forced to work), but it;s not all that meaningful. It is possible it could expand choice in a non-libertarian (ie real) sense but that depends entirely on implementation.
A job’s guarantee would certainly expand choice, even in the real sense, compared to the status quo, in that you would have the additional choice of taking the job guarantee on top of all the choices you have now.
The issue is that if private sector jobs become steadily harder to get, you can end up in a situation where the job guarantee is the only kind of job a lot of people can get. Combined with the tendency to vilify the lower classes, and you can end up with a lot of people working for the government doing unproductive jobs at low wages: so not too different from the status quo, just shifting people from the public to private sector.
The job guarantee is a great policy and should be enacted ASAP, but it’s not a solution to automation and technological change in the way that the basic income is. Not surprising given that technological change is one of Yves’ bigger blind spots.
It’s a second-best policy, sort of like relying on the Minimum Wage. I’ll take it if I can’t the first best, but I won’t ignore its problems.
And there will be problems. Yves seems to be imagining this as some kind of New Deal Public Works Administration program, but that’s not how it would go. What it would probably be is a set of job subsidies and placement with private companies, with the government essentially bribing companies to take you on by offsetting part of your wages.
I highly doubt it would be generous – think $16/hr jobs, and lots of them. And of course, if you thought the Speenhamland System was underwriting low wages, then the Job Guarantee would definitely be doing so – and be complained about as such.
That’d be an improvement over the existing unemployment insurance system, but not over a Basic Income Stipend that wasn’t means-tested.
Uaing any definition not created by someone crazy. I challenge you to demonstrate where offering to purchase labor qualifies as a use of force.
Hardly. Workhouses were forced on the poor. JG would not be forced on anyone. Workhouses housed and fed people. JG gives people a wage. The analogy between the Poor Law and BIG holds; the analogy between workhouses and JG is mere rhetoric at best. Two entirely different creatures.
If the Speenhamland system is an argument against Basic Income
A reasonable comparison as the two are aimed at similar outcomes via similar means.
. . .the workhouses are an argument against a jobs guarantee.
Unreasonable as they have neither similar goals nor use similar means. Workhouses were used to provide forced labor for capitalist accumulation while JGs create the option to work meeting community needs. To remain consistent with your comparison of the real-world Speenhamland system and theoretical BIG, you must compare the theoretical Job Guarantee with a real-world example. Fortunately we have precedents, one dating from WWII called the Works Public Administration, and another from the present day in Argentina called the Jefes Program.
How have those fared?
Is there a rough framework that Jobs Guarantee advocates typically propose for who decides what sorts of work need to be done? I remember reading something on the Green Party web site advocating this organization at a community level before and always tried to picture how that might play out in the small, rural, conservative community where my parents live.
It seems awfully ripe for widespread small-scale corruption from the Sarah Palin tin-pot dictator types, but maybe that’s better than the current system of centralized corruption in DC.
Yes, see the work of Bill Mitchell for instance: http://bilbo.economicoutlook.net/blog/?cat=23
That’s a very good overview. The key point in regard to rusti’s concerns is that job decisions are decentralized to the local level and that profit-oriented work is forbidden by the Jobs Guarantee.
Good luck with that. Especially since we live in a government where tons of public work is already contracted out to private firms – if we ever did decide to go down the Job Guarantee route (and there are some programs that could eventually get there, albeit only at the municipal level right now), it’ll be through subsidies and assisted job placement, not through New Deal style PWA work.
I’m a fan of the WPA, but I’m not a fan of make-work. Currently, there are far more applicants than jobs. Basic Income is the simplest way to deal with that reality.
Here’s David Byrne at the Guardian on the Speenhamland system: “Speenhamland was not about providing incomes for the wholly unemployed, rather it used “poor rates” to subsidise the wages of farm workers. Thus it provided a labour force at low direct cost to employers, although at least they were taxed to pay for this approach. The great political economist Karl Polanyi identified Speenhamland as a crucial mechanism in the change towards a wholly market-dominated society.”
I’m a fan of the WPA, but I’m not a fan of make-work. Currently, there are far more applicants than jobs. Basic Income is the simplest way to deal with that reality.
There are far more applicants than jobs oriented at producing financial profits; you’re falling into the neoliberal/conservative trap that any work not generating profits isn’t worth doing. Have you heard of the Salton Sea? Saving it is necessary for protecting the country’s biological diversity, not to mention the health of humans living in proximity to it, but businesses aren’t lining up to do the work because environmental protection doesn’t generate a cash flow. It’s crazy to think that means the work isn’t worth doing, work that can be multiplied a thousand times across the country.
No capitalist gets to determine whether my work has value.
Very good comment. Indeed the profit motive is a far worse polluter than honest employment and its resulting consumption of basic things. So when Yves laments how irrational it is that many of us don’t want a jobs program because it will just cause a faster deterioration of the planet, she is making a deeper point. That basic consumption, consumerism, is sustainable compared to massive factory overproduction and waste for the sake of obsce profits. Of course she doesn’t put too fine a point on it. But it is worth thinking about because we have that killer-competition-profit-uber-alles mind set even now and it precludes clearer thinking.
Yes, we’ve been trained to think of ourselves as consumers, that freedom or liberation mean more of the same.
Your point is irrelevant. In capitalism, there are always more applicants than jobs.
Yes, capitalist systems tend toward mass unemployment and instability, therefore the government sector must stabilize.
In 1999, there was one applicant available for each available job. It’s 3.2 applicants for each available job now, from a macroeconomic pov. So the point is highly relevant.
Public Works Administration wasn’t really a JG. It was a jobs program. Noone was guaranteed a job and the objective wasn’t to eliminate involuntary unemployment. Some people got jobs and unemployment was reduced but I think it’s probably a flawed analogy as well. I can’t help but thinking if everyone must be guaranteed jobs that sooner or later it will be doing useless jobs, which is not to say there are NO constructive jobs that good be created (yea, yea, if we controlled the government of course).
Well it’s starting from it completely backward which is a bad enough sign as is. What we should ask is what public services we need and then create jobs as necessary. And whether or not it guarantees a job should not be the main focus. Because making it the main focus will lead to stupid jobs as it puts the cart before the horse. It makes central that which ought to be secondary. Labor for labors sake is stupid. It should never be first. Especially as most people would probably like to labor less if they could. Yea ask the average person if they like their job and like working! Maybe job sharing could make this more equal if there weren’t enough jobs, I certainly think job sharing could add to human happiness.
There is no labor for labor’s sake in the Jobs Guarantee. Why don’t you want to acknowledge that communities, localities and states are chronically underserved?
The problem with the Speenhamland system is that the government-provided income DROPPED if you went to work. This is means-testing and it’s ALWAYS a bad idea, for very obvious reasons.
If everyone is simply issued a fixed amount (as in the Alaska Permanent Fund), with all wage labor being “on top of that”, you get very different results. This is how a Basic Income should work.
Yves — you really need to reflect this. Because your article is completely misleading, otherwise. The problem with the Speenhamland system is the MEANS TESTING.
You don’t know what you’re talking about, but I’ve noticed you have come in many days alterward, spamming the same comment over and again to clutter up the thread.
The Speenhamland system was a Basic Income Guarantee, which means it guaranteed a level of income. That is by definition a means tested system which, as you repeat ad nauseam failed, just as a BIG today would fail for the very same reasons. If you remove the means testing it isn’t a BIG anymore, so please don’t come in trying to change the subject with an argument that is completely irrelevant.
No time but a quick point: your reference to productive, dignified work is heartening, but you have to remember that dignified is a social construct–the only truly dignified work we have in this society today is well-remunerated work. We would have to resurrect the concept that working to support oneself is a dignified occupation no matter what that work is. My father, who died at 91 in 2013, instilled that lesson in me (although I have often failed to abide by it). Any man (or woman) who worked to support himself was never beneath you. But I don’t think we honor work as Americans–we honor results, results measure in money.
Now I have to run to work!
Well said.
We value results, as that is what customers will pay for. There is no reason to honor “work” that doesn’t produce anything valuable.
NB This is different from work which actually is valuable not being profitable (i.e. there is a market failure). The problem is, non market solutions to determining what is valuable tend to be worse than market solutions.
Argument by assertion.
“non market solutions to determining what is valuable tend to be worse than market solutions.”
Right, right. That’s why, whenever I ask a stranger for directions, I offer, up front, to pay them (an inverted example of Graeber’s “everyday communism” IIRC). That is, after all, the only way to ensure trust.
Block and Somers’ The Power of Market Fundamentalism is an excellent overview of Polanyi, The Great Transformation, and the critiques pro and con of Speenhamland that you might be interested in as well.
I’m pretty agnostic on the issue of a basic wage/income, but I don’t think the failure of Speenhamland is necessarily relevant for the modern world. It was a constant complaint of employers up to the Industrial Revolution that the peasants would only work until they had enough to eat, then they would stop. The notion of working as an end in itself, and to accumulate consumer goods seems very much a modern concept. So I don’t think there is any reason to think that if people were given a guaranteed income, they would simply give up trying to work. There is every evidence that in countries with a basic unemployed ‘dole’ that the unemployed will still try to work, although there are many reasons of course that the long term unemployed find it difficult to re-culture themselves to the world of work.
I think there is also every evidence that linking social aid to the need to work has a consequence for the world of arts and creativity. Quite simply, it becomes dominated by the children of the rich. Its long been noted in the UK that since unemployment rules were tightened in the 1980’s the world of working class rock and roll gave way to public schoolboys (i.e. Radiohead to Coldplay). Working class film makers and actors in the UK seem increasingly to be an older cohort, the younger generation invariably being from wealthy backgrounds.
Its not of course a simple question – I don’t think a basic income which is not tied in some ways to a willingness to work would ever be politically tenable in the long term. But likewise, I find myself resisting the notion that somehow everyone in society must aspire to a paid job, and keep that job for life, or be otherwise ‘useful’. This seem to owe more to calvinism than socialism. Within reason, I think any society should have scope for dreamers and travellers – not living forever for free, but at least having some scope to avoid having to do a 9 to 5.
You beat me to it, but probably said it better than I could. I think people who have money above the poverty level expect people who have craified ones should be grateful and satisfied with their lesser rewards. I come from a background where everyone is working, but still poor. For the people putting in 8-10 hour days of labor just to stay poor there is no reward, or pride.
On the kids of the rich dominating arts: Thank you! Just look at Girls. The idea that only novels that become profitable are worthwhile is also confusing to me. Isn’t history full of great artists who lived and died dirt poor, while their works went on to become priceless?
And Calvanistic is a great point too. Personally, I sometimes I see a very old person still working, and shake my head at that. We only get one life, and it’s more than a shame to have to waste it working to make someone else rich at the top of the corporate ladder…
I believe a BIG is only a BIG if it frees people to choose what jobs they do, frees them to train to do the jobs that inspire them, frees them in other words to contribute passionately (from the heart) to society. If that is not effected, the programme is not a BIG, it’s welfare, which is what Speenhamland really was. BIG is a fundamental change, not a tweak. It would take a lot of getting used to for the vast majority of people. Who really knows what to do with freedom, how to handle it? Hardly anyone I’d guess. But that does not mean that BIG is not exactly what society needs; it means that almost everything has to change to make a BIG work. But what we face is fundamental change. It’s suprising how reluctant most people are to accept this.
In terms of unwanted work getting done thereafter, there would be, just as now, three options:
1. Do it yourself
2. Automate it
3. Pay people to do it.
If this means toilet cleaners would earn as much as lawyers, so be it. A real BIG would create a real job market, not the forced monstrosity capitalists prefer.
So as you say, PlutoKun, the failure of Speenhamland need not be all that relevant to our current predicament. What is really at issue here is how society values/rewards work, what is considered valuable, and what is considered unforgivable laziness and the punishment for it. Skimming reactions here (and at other sites where BIG is discussed) there’s this pervasive need to say that people won’t be lazy, as if there’s something wrong with laziness. But how much work that is both somehow strenuous and productive is there to be done? If consumerism and perpetal growth are ills and to be dumped at the next opportunty, and once restoration of various ecosystems is ticking along, how much productive work of the Calvinist variety is there? I don’t know, but I would think not very much at all.
What can’t work is simply crowbaring a BIG onto things exactly as they now are. It is not, nor is a job guarantee, a silver bullet. There are no silver bullets. Leaving consumerism and perpetual growth behind requires such profound and broad social change it’s hard to conceive what kind of a system that departure/change would produce, but I strongly doubt it would be a replica of early 19th C Britain.
Finally, a BIG would, imo, also require a radically different money system (MMT does not go deep enough). But that’s another discussion in terms of space and attention spans.
Why resist a thing thst doesn’t exist? No one other than those arguing in bad faith has written anything of the sort. The JG makes a place for those who “dream and travel”; suggesting people will be required to “keep a job for life, or be otherwise useful” comes only from you.
I’m not sure how this proves that an forced labour is better than a stipend. The past isn’t always the future and that past doesn’t seem to line up with our current problems.
This seems to be a position of faith and fear. People need and must be forced to take the pill. What would people do without guidance and coercion, mad crazy things, excessive drug taking, get fat.
I don’t think they would necessarily do great things either, they are mostly hooked on the internet, themselves and each other.
We have an excess of population though, the majority are excess to requirements, not needed or required, it doesn’t really matter what they do. I’d prefer to get there consent, convince them do productive things, without any kind of perceived threat behind it.
“I’m not sure how this proves that an forced labour is better than a stipend.”
This is the sort of misrepresentation that stops debate in its tracks. You are either being deliberately misleading, or you don’t know what you’re talking about.
Was the WPA forced labor? Was the CCC forced labor? Was Jefes forced labor? Were the jobs programs in Australia that built the Great Ocean Road and other public goods forced labor?
Yes! If you wanted to eat that is.
That’s an extremely irresponsible, mean-spirited and ignorant thing to write. Those programs were enacted because people refused to accept welfare payments and wanted to work for their incomes. So no, they weren’t forced to work for food; they chose to do so.
I’m sorry that makes you angry, deal with it
Actually, those programs were instituted by wealthy people who wanted to make people work rather than give them money. The rich have always believed in giving money to their own children and work to the children of the poor.
Yeah, how dare they take care of their own families first.
I’m sure you lead by example, and in a show of selfless solidarity, you don’t permit your children to have shoes on their feet or food on the table until everyone down at the homeless shelter is fed and clothed.
Did you read the comment? It happens to be true. Many people in 1930s did not want to be on the dole. It was considered shameful.
Putting your fingers in your ears and repeating falsehoods does not make your statement true, nor does it persuade anyone.
Re the WPA:
“LIVING IN THE U.X.A.
The Self-Help Movement in California in the Great Depression”
By John Curl
…
The Works Progress Administration of 1935, promising a cash job at a decent wage to every unemployed person able to work, undercut the entire self-help movement. Members had to choose between the limitations of barter or an assured cash income. (Only one tenth of one percent of UXA transactions had been in cash.)
Carl Rhodehamel tried to prevent a mass exodus from the UXA by arguing that these government programs would be temporary, and members would have no cooperative to come back to when WPA was shut down. Nonetheless, the exodus took place. Hundreds of groups around the country collapsed. The UXA, like the rest, faced a sudden labor shortage. They now had difficulty delivering on work promised, and fell deeper and deeper into a hole. Rutzebeck describes the situation in his book Hell’s Paradise:
“Svend Norman made the rounds at the local relief centers. Here he saw, standing in line to be registered, workers and former workers from UXA, PCL, BUA, UCRA, and all the other groups; while at headquarters calls went unheeded for workers….”
Rhodehamel accused the federal government of wanting the cooperatives to fail, and Sinclair pleaded with Roosevelt and Harry Hopkins to get work in the cooperatives declared to count as WPA hours. It was all to no avail. Sinclair wound up calling WPA an “arch-enemy of self-help.”
…
http://red-coral.net/UXA_Article.html
Of course, we could just die instead of playing along with any group of posh twits that has convinced enough people that ceding control over all resources to a small group that has more right to operate with impunity than I have to exist.
I mean, ALL social organizations are backed by the denial of the ability to live. What exactly is accomplished by pretending that there is no coercion in that relationship?
Argumentum ad absurdum
Yes, they Joy Luck Club, Girl Scouts of America and The Church of the Flying Spaghetti Monster are backed by denying ability to live.
Take your meds, for your own good.
Calabi: you’re absolutely right. It doesn’t prove that forced labor (JG) is better than a stipend, because the Speenhamland system WAS NOT A STIPEND, it was “underemployment insurance”.
Another BIG Lie (felicitous combination, eh?) JG is “a job for anyone who wants one.” How is that “forced labor”?
The people who repeat this particular lie are broadcasting their own desires not to work. They are terrified if a JG becomes law, they themselves will be socially excluded, ostracized for staying home. To avoid being pressured to work (they know they’ll feel guilty watching everyone else be productive) they fight to maintain millions in unemployment, a crowd within which they can hide.
It’s all about their own neuroses.
An aside for the record: It is not only the MTUs who are a “workaholic lot”. In my retirement I’m teaching English to a boatload of Haitian immigrants. They also work well over 55 hours per week. There’s “plenty of work out there”, but one has to have been raised in Haiti to be motivated by the US minimum wage.
I’m lucky in that the more I work, the higher my income and can tell you that such a behavior is addicting and self-destructive. The same dynamic applies to the workaholic CEO class who routinely suffer from poor health and dysfunction in their personal lives.
On the topic of the “Executive’s Long Work Week,” I would point to the NY PD’s pseudo-work-stoppage and suggest that should most of the most senior managers also stop doing the annoying things they do, nobody would notice either. Certainly, the minions and the troops would be happier doing what they think is actually needed. I can rant about that one sufficiently to bore even myself.
On Speenhamland, it is difficult if not impossible to understand how hard a group of sociopaths will work to game any set of rules to crapify them and turn them to “personal” advantage (private or corporate). The British aristocracy (the rich who graced themselves with such prettified names as Capitalists and Industrialists) self-identified as a class of sociopaths through many programs like that one. They, and their globalized descendants, prey on such well-meaning initiatives when they can or quash them when they can’t. If it isn’t to the advantage (profit) of such a one, they will use all their resources to kill or corrupt it. I think we have plenty of obvious recent examples.
On nothing at all … it’s Thursday! I will be working even less than usual (so as not to be one of those useless 55-hour-a-week types) and rest up for the Meetup tomorrow night!
The men who were the Overseers of the Poor who put the Speenhamland System in place were far from aristocrats, and they were not acting as sociopaths. They were local notables who served without pay and tried to keep their neighbors alive in a time of booming population and bad harvests. The Speenhamland System was not intended to be punitive in any way, unlike the 1834 Poor Law that the Liberals replaced it with. That the System was quickly gamed is not a reflection on the System itself, but on the emerging capitalist wage labor regime and those who created it. We can start throwing around the term sociopath until it has absolutely no meaning other than “person of means I hate.”
Overall a good article. I will make one comment on this part above: so what they work long hours. Even if someone works 80 hours a week, its not even twice the real work hours of the people on the bottom, many of whom have to work 2 jobs to make ends meet. And yet the elite make 200-300x the salary of the average worker.
Also “long hours” are meaningless. I am certain we as a society would more productivity if jobs at the top were split up. No single person of the elite is so productive that we can find 3-4 people to do the same job for far less in total. And we have extensive academic studies which show that work productivity sinks dramatically once you top about 40 or 50 hours per week. This is even more true for so called “knowledge workers”.
I see you did not bother reading my footnote. Might help if you did so.
Not to defend CEOs, most of whom are sacks of no-longer-potable water, but try replacing a heart surgeon with 3-4 day laborers and see if you still get the same results on the operating table. Sometimes higher compensation is justified by higher skill. And sometimes jobs aren’t divisible. And sometimes it isn’t, such as in the case of golden parachutes for morons who destroy companies.
1) I was talking about CEOs so the heart surgeon story is not related to what I said. Not a single one of those CEO could not be replaced for cheaper. What they excel in is running cults of personality and then hijacking the takings. If there are thousands of people in a national or global company, many of them well trained, and things cant function well in without you putting in more than a normal work week, then you are poor manager AND a control freak. You should be docked in pay for that, not given more money.
2) But to go down your path about the heart surgeon, I would also say that is reflective of our inability to train people. Even a “heart surgeon” is subject to the law of declining marginal productivity. If you claim that guy knows so much that he must be working those house, then he is a bottleneck in the health system – TEACH it.
Off my soapbox now…
No such thing.
What happens when sales are hot? The manager should go home?
It’s been quoted a lot, but Hayek was a supporter of minimum income (not social justice/welfare):
http://www.amazon.com/Law-Legislation-Liberty-Volume-Political/dp/0226320901?tag=bleedheartlib-20
“Nobody has special claims on government because he is either rich or poor, beyond the assurance of protection against all violence from anybody and the assurance of a certain flat minimum income if things go wholly wrong.”
“the assurance of protection against all violence from anybody”
Not possible in a private property system, as in such a system violence is used to deny people access to resources that they need. Violence is an inherent part of the social system of private property. Hayek, like all right-wing ‘libertarians’ was a pathological liar on this issue.
And you’ve surrendered all your personal property to people who need it more, right?
Because if you haven’t, then you’re a hypocrite. Some amount of selfishness is necessary for life. And self-defense is not violence. Theft is violence, murder is violence, rape is violence. But defending yourself, that’s not violence. Self-defense is a fundamental human right.
Straight to ad hominem. Nice.
Of course, anyone who believes anything is basically a sucker. Nihilism is looking dangerously adaptive these days.
Ask all the 2nd and 3rd world countries that bondholders and other investors considered their private property how the violence thingy works out.
I don’t think your example holds up because the world of England of two centuries past has relatively little bearing on the middle class American culture of today with mandatory education, cable TV, and the Internet. Most people would work at something only a small minority would just want to get high. To put it another way, people that don’t want to work, for the most part,!are people who are in pain and suffer from low self-esteem usually due to abuse suffered in childhood. The only other people who don’t want to “work” are artists and musicians who want to work at their art. With our collective understanding of human nature and what motivates human beings I am confident that we can come up with a better system than jail for those most in pain and most dysfunctional–very expensive and ultimately unpleasant way of solving social problems.
We live at a historical moment that is utterly unique and without precedent in human history. Historical precedent is useful as long as we have a good understanding of the culture of that time including values and living conditions.
Banger,
Well done and a very good point. The fact remains, most people desire to “labour”, and under a capitalist system we are forced to sell this labour, and to undermine labour costs we have the notion of the “natural rate of unemployment” imposed upon us by our monetary policy setters, legislators, employers themselves and the mystics known as economists – I notice the employers/masters don’t like caps of any sort imposed on them, but the majority must just accept it, as its “natural”, and obviously we can’t have workers getting uppity and demanding a fair slice of the pie as that leads to inflation – but their huge salaries and yearly increases just contribute to the wealth – please go figure?
For what its worth, those who worked in heavy industry in the UK worked “continental shifts, namely nine days in a row, three mornings, three afternoons and three nights, with two days off before beginning the process, and I can assure you, they worked a bloody great deal harder than anyone on Wall Street – none of whom by the way ever actually needs to put 60 hr plus weeks, nor in reality, after the first few million are made do they need to actually work at all, but, like I said, lets blame the poor and the lazy working class – I wonder what those working in the financialised University system in the US would have to say about this, a system now mirrored in the UK, no doubt their 60-70 hours work per week are worth far less than the Masters, who are ordained from upon high to rip us all of as its Gods will!
Who is suggesting jail for those who won’t work, and why would we not consider artistry work? We paid people to paint and write plays and design beautiful buildings during the WPA.
Pavlina Tcherneva addresses a point that no one has made here about the fit of the JG jobs to JG participants.
So, In understanding the MMT JG you need to understand that its process would be minimally bureaucratic and that JG jobs would be defined by local non profits, local stakeholders, and the participants themselves, reinforcing the voluntary and freedom-expanding function of the MMT JG.
People should also note, and Ben says above that JG jobs could well involve work in the arts as work in the WPA did. MMT economists have worked hard to shape the JG proposal so that it is not workfare.
“Fit the job to the worker.” Wotta concept. Wait, that would mean JG jobs don’t have to be crap jobs, by definition.
Reclaiming progressive income taxation would be fantastic policy. I’m not a fan of BIG myself, although I do find it interesting how dismissive people like Wray have been of it. If we got decent tax policy out of BIG, I’d happily accept that as a compromise.
This really gets to the heart of the issue, what MMT intellectuals won’t really give a straight answer to: namely, should social insurance and workplace regulations ultimately be replaced by government guaranteed full employment? In the US context, the Social Security Act and the Fair Labor Standards Act perform the non-monetary functions ascribed to a job guarantee (setting the minimum wage, providing income to people not working in the private sector, setting minimum conditions of work, providing healthcare, etc.).
This question has been answered a gazillion times, and yet with each new MMT post you’re back in the comments section claiming no one will answer you. It’s a transparent tactic to confuse newer NC readers unfamiliar with your behavior and no matter how often you try, won’t be given a pass.
The Jobs Guarantee is added to existing workplace regulation and social insurance, it does not replace them. A JG will actually enhance these things by establishing a much higher minimum wage and guaranteeing health benefits, forcing employers to match or exceed so as to retain their workers.
“claiming no one will answer you.” A rather shopworn tactic by MMT h8terz, seen over and over again, as here.
Lambert, I find it increasingly interesting how you dismiss criticism as hate and call critics haters. Those are not tactics of people interested in holding an idea up to scrutiny. Those are tactics utilized when trying to prevent scrutiny of the underlying idea.
Look at the contradictions just here between Ben’s post and stf. Stf is calling me a liar for talking directly about SSA and FLSA. Then the comment proceeds to explain multiple policy areas where JG replaces them.
You know that’s funny, right?
Also funny, that stf references Wray work from a few years ago. The last time I did that, someone critiqued me for using stuff that was too old.
Well, when the same old talking points and Big Lies, refuted a squillion times keep coming up, and the ad hominem starts about one exchange in, it’s hard to figure out what other motive there might be. Intellectual honesty? Glad to hold your interest, however.
Yeah, I guess that is a pretty good description. You appear to view this as a game of power. These are talking points to you, not actual arguments. If you outlast them with your own talking points, then your talking points are winning.
No, it’s a situation where you keep bringing up the same supposed criticisms you’ve brought up before. We respond or provide links to blogs or publications that have dealt with your points. Then you move on to the next blog post and post the same criticisms as if the previous responses to you never occurred. Until you engage honestly, don’t expect the same in return. You’ve had too many chances already.
I generally try to avoid arguments where I can’t see the good faith or intelligence from people I don’t understand or agree with, but occasionally I do want to indicate my support for the efforts of people trying to engage in a serious discussion. I find the following procedure problematic: “You are a liar. Here’s a link to an article that proves you wrong. Go figure out why you’re wrong. Now if you don’t agree with me that proves you’re a liar!”
When I’m right, I don’t mind explaining my position to those who disagree. The anger, condescension, and tribalism infusing the anti-GBI comments is counterproductive.
Nihil Obstet: For what it is worth, I do not consider Washunate or anybody else here to be lying. Liars – except for a few plutocroids like Pete Peterson are not the problem. The problem is not with what people don’t know, but what they know that ain’t so. Jumping to conclusions, accepting invalid arguments and false concepts, thinking too quickly is. More than a few MMTers – apart from the academics – do this themselves and do not understand the JG & MMT imho. As for myself, I know what an idiot I am.
When I’m right, I don’t mind explaining my position to those who disagree. Right. While I confess I can find it trying to answer things I have answered before to the same person, and not receiving responses, I recognize I usually answer after the thread has died and everyone’s attention has moved elsewhere.
Methinks you step beyond yoir knowledge here.
Ben, I’ve been arguing with Washunate for a long time here on such points. Perhaps more than anyone else, as he might confirm. Unfortunately, as I have said, whenever I feel we are getting somewhere – with him or some other people here – I find I have no time or my comments get lost. In any case, “what they know that ain’t so” is the primary, nearly the sole problem, the cause of the rest.
Yep, I think that’s the key insight/difficulty. To exchange in sound bites and short snippets doesn’t convey the deeper nuances, but the time and logistics involved in going back to older posts gets a little unwieldy. So I’m hoping that that last one gives a good overview of one perspective of ideal and pragmatic concerns while still beng sufficiently concise enough to not require whole books back and forth.
I’m not offended in the meantime by being called a liar or whatever – I mean, this is the intertubes and all. Rather, I find it amusing, and a little perplexing. It makes it seem like it’s Ben’s job to discuss this stuff instead of something he enjoys.
It’s almost as if some MMT advocates view political economy as a statement of fact rather than a set of preferences where people can legitimately possess different opinions.
It’s almost as if some MMT advocates view political economy as a statement of fact rather than a set of preferences where people can legitimately possess different opinions.
Well, I am one of them. It is not a matter of preferences. but of lack of logical understanding, of ‘thinking’ 2+2 = 5. Which is why the only human organization in which mass unemployment is seen, is “preferred” is the national monetary economy, which people are incessantly propagandized into misunderstanding.
If opponents or belittlers of the JG understood what they were saying, they would not say it. Scott Fullwiler says below: “I’ve never seen you actually represent the MMT view correctly.” That’s because you and many others do not understand the MMT view, and why (most?) criticism is aimed at things MMT simply doesn’t say. The cure is to slow down. What people know that ain’t so leads them to jump to wild and invalid conclusions & absurd criticisms, and this leads to presumptions of bad faith, which is not the real problem.
As I have said before, a monetary economy without a JG, including one with all the half-baked ideas proposed in this thread, is insane. Anybody, who wants to get money in return for his labor, who is unemployed by this sadistic design has every moral right to simply “rob” this crazy society (within reason). This observation is centuries old, by the way.
The only “logical” reason to oppose a JG – the only end for which unemployment is a rational means – is to express sadism. “Splendid blond beasts” want a class of sacrificial victims to blight the lives of to keep the splendid beast class on top. Unfortunately, it is mainly the beasts & their most unfortunate victims who understand how simple things really are, and why substitutes for a JG are just sadistic predator class fakery.
Deliberate mischaracterization, obfuscation, moving the goalposts, refusal to acknowledge counterarguments and lying are all. . .lying.
Washunate is thoroughly dishonest and frequents MMT posts for the sole purpose of sowing confusion. This conception you have of the world where one can never be called to account no matter how dismal their morals is pure nihilism, but I suppose that suits given your chosen pseudonym.
I’ve never seen you actually represent the MMT view correctly. Your two short paragraphs are filled with several outright lies–yes, lies, as you’ve been at this long enough to know better.
“I’m not a fan of BIG myself, although I do find it interesting how dismissive people like Wray have been of it.”
Lots of publications on objections to a BIG–have you read 1? See Pavlina’s stuff at CFEPS. Regardless, MMT has been clear–BIG and JG can be complementary. That doesn’t sound “dismissive” to me. Does “complementary” sound “dismissive” to you? Stop lying.
“This really gets to the heart of the issue, what MMT intellectuals won’t really give a straight answer to: namely, should social insurance and workplace regulations ultimately be replaced by government guaranteed full employment? In the US context”
Again, lies. Here’s Randy Wray from 2000 (i.e., 15 YEARS AGO–since you said “won’t really give a straight answer”). http://www.cfeps.org/pubs/wp/wp9.html
“The first component of the proposal is relatively simple: the government acts as the employer of last resort, offering to hire all the labor that cannot find private sector employment. The government simply announces the wage at which it will hire anyone who wants to work, and then hires all who seek employment at that wage. A package of benefits could include healthcare, childcare, sick leave, vacations, and contributions to Social Security so that years spent in ELR would count toward retirement.”
“The ELR will eliminate the need for a minimum wage, as the ELR wage will become an effective minimum wage. It could also establish the base package of benefits that private employers would have to supply. It could replace unemployment compensation, although it could be simply added on to give workers who have lost their jobs more choices. In the US well under half of the officially unemployed even qualify for unemployment compensation. The point is that no matter what social safety net exists, ELR can be added to allow people to choose to work over whatever package of benefits might be made available to those who choose not to work. ”
OBVIOUSLY, if you are given a living wage w/ benefits package, you now have the actual choice to walk away from abusive labor practices. DUH.
Stop lying.
I guess I hit a nerve? Perhaps you view me as dangerous because I’m not an ardent BIG proponent? At any rate, let me just quote Wray verbatim:
It doesn’t fit what Mosler and Wray believe – that a price anchor must be tied to the currency – and thus alternatives to JG are simply swept aside.
http://www.economonitor.com/lrwray/2013/12/28/bop-a-mole-1-does-modern-money-theory-need-a-job-guarantee/
You just lied again.
Literally, verbatim, from Wray’s article:
You just lied. Again. Nothing in that quote even touches on social insurance and workplace regulation, the question you posed and which was answered twice in this thread.
How are needing a price anchor and providing social safety net with a JG inconsistent? They aren’t. The piece I quoted above from Wray 2000 deals with both.
You’re completely lost–you have no idea what we mean by price anchor or you wouldn’t be writing such nonsense. There’s no inconsistency.
I don’t recall seeing you write anything about BIG and I didn’t respond whatsoever about BIG above.
How does “a price anchor must be tied to the currency” have anything to do with me refuting your point above that MMT hasn’t dealt with the social safety net in regard to JG? You’ve moved the goalposts so far I have no idea what you’re referring to now. Not to mention that my refutation above was a quote from Wray–how does my point that was a quote from Wray not square with Wray?
Are we reading the same comments here? You called me a liar for claiming that Wray has been dismissive of BIG.
So I answered by linking to an article written by Wray for the express purpose of communicating MMT ideas to a lay audience wherein Wray dismisses BIG. The exact word he uses is fallacious. I didn’t use my interpretation of Wray’s writing. I quoted him directly.
****
I really like Professor Wray because he will tell you what he is thinking. I’ve been reading stuff of his off and on for a couple decades. What I find interesting is when people don’t seem to like how straightforward he can be, as if semantics are more interesting than substantive exchanges?
Now, the reason that BIG/social insurance and JG are mutually exclusive is not because they can’t co-exist. Rather, it’s because they address the same non-monetary purposes. There is no point in co-existing. The FLSA sets the minimum wage. The JG sets the minimum wage. The BIG sets the minimum wage. They are three different approaches to the same problem, not three complementary approaches that work together to solve the problem better.
But perhaps most relevant here, I’m not making the claim that they are mutually exclusive. Professor Wray is. I happen to agree with him on that point, one of many points where I agree with him.
Which, by the way, is exactly why I said that in my original comment. So that Ben can’t say I’m moving the goal posts. I literally used the phrase non-monetary functions.
You’re confused because MMT is still within mainstream economics. And since Wray is very much within academia, he has spent much of his career defending against the rather far right intellectual movement, and I’d say he’s done a pretty good job at that. But in doing so, in getting taken seriously, he also has a bit of a blind spot, because he accepts the mainstream thinking in a very important way. I’m approaching political economy from outside the mainstream thinking. I don’t accept the ‘MMT Insight’ as Wray and Mosler call it – that you must choose one (gold, unemployment, full employment, etc.)
I reject it.
To me, buffer stocks have fundamentally failed in American political economy. The answer is not to be found within monetary policy.
Rather, the answer is external constraints, systems and procedures outside the realm of the money system. The focus on money itself is part of the problem. Money isn’t magic; it just is. Constitutional governance – checks and balances, individual rights, international treaties, etc. – are what keep the money system in line. The money system itself is quite incapable of restraining its own excesses.
Right at the exact moment when the price anchor is needed, the rules are changed. After all, we have experienced massive unemployment and massive increases in the cost of a middle class standard of living in the US over the past couple decades. Those are inherently conflicting conditions with the premise of buffer stock policy. Therefore, either the theory is wrong, or things aren’t actually as bad as some of us would say they are.
One final comment, what I really like about Wray’s writings from the time period you quote, is that it shows the fundamental premise of the JG specifically. The way it creates a price anchor is by entrenching inequality. There is a policy-enforced wage differential between JG workers and high-wage public sector workers.
This is a matter of personal preference, not scientific fact. People can have legitimate differences of opinion about whether such a two-tiered labor market is a good idea or not.
Nice try moving the goalposts, but you didn’t ask whether Wray supports the BIG, you asked whether the Jobs Guarantee will sweep away existing social insurance programs (the answer to which was no.) You then jump to a post in which Wray criticizes BIG proposals for failing to implement a mechanism for controlling inflation. As usual you’re all over the place:
1) make an argument
2) get shot down with responses to which you have no direct answer
3) jump to another subject
4) get shot down there
5) return to original subject
6) repeat ad nauseam
It’s lame.
Exactly. Washunate lies, and when called on it, he/she moves the goalposts. No difference from that and just being a troll, really.
So if I say the same thing over and over again, I’m not learning anything. And if I try and put things in a new way, I’m moving the goal posts.
That is clever I grant. But it continues to pique my curiosity about why so much energy is put into the semantics.
I reject this notion that monetary policy is responsible for restraining inflation. The gold standard didn’t maintain price stability. Silver didn’t. Fixed international exchange rates didn’t. Unemployment didn’t. These aren’t failures over thousands of years. This all happened in the US in just the past century.
The way full employment restrains inflation is by entrenching inequality. One can agree or disagree with that approach.
Plus, there is the hilarity that the premise of Yves’ post is that there is some choice to make among different options. To say that BIG is bad and that it is complimentary to JG is interesting.
“Are we reading the same comments here? You called me a liar for claiming that Wray has been dismissive of BIG.”
As I said, though, he and Pavlina have said repeatedly that some versions of BIG + JG could definitely work. “Potentially complementary” doesn’t sound like “dismissive.”
Here’s Randy http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big-enough-would-the-basic-income-guarantee-satisfy-the-unemployed/
“Finally, before delving into the details let me stress the position that the JG/ELR supporters hold: BIG IS COMPATIBLE WITH THE JG/ELR. We can have both. What we object to is the BIG claim that “we don’t need no stinking jobs” or that BIG makes work somehow obsolete. Our position is this: once the JG/ELR program is in place, we can add a form of BIG.”
So, clearly your claim here is incorrect: “But perhaps most relevant here, I’m not making the claim that they are mutually exclusive. Professor Wray is.”
So, yes, you are wrong to say MMT is dismissive of BIG. You are wrong to say Wray thinks that JG and BIG are mutually exclusive. We believe that for certain types of BIGs proponents have some (significant and important) flaws in their analysis, but we also stress that JG + some forms of BIG can work complementarily. So, I’ll repeat what I said above, without the inflammatory language–please stop suggesting MMT says things that it has been clearly shown it does not say.
My bigger problem though was when you said this:
“This really gets to the heart of the issue, what MMT intellectuals won’t really give a straight answer to: namely, should social insurance and workplace regulations ultimately be replaced by government guaranteed full employment? In the US context”
If it “gets to the heart of the issue,” then it’s the more important point to consider. You haven’t responded to my quotes from Wray 2000 that clearly show MMT has most definitely provided “a straight answer to” our position on safety nets. Again, please stop suggesting MMT hasn’t explained its positions in cases where it is clear that the opposite is in fact the truth.
Finally, I’m not sure why you said “The answer is not to be found within monetary policy” unless that is just a typo. There’s probably no group of economists anywhere that have less faith in monetary policy than MMT.
This is why I quoted Wray directly. As to the details, let me see if I can figure out where we disagree. I’m going to state first why social insurance renders JG superfluous, then go into detail.
Here’s why it’s the heart of the matter: if we provide universal health insurance and universal unemployment insurance, then unemployment stops being a problem. Of course a JG could also be offered in such a world, but it wouldn’t make unemployment any less of a problem. As Wray describes one of the justifications for JG:
With social insurance, and with BIG, people wouldn’t be going without adequate food, clothing and shelter.
***
Are you reading those sentences? “We object” isn’t a statement of agreement. It’s a statement of disagreement. The stinking jobs is exactly what is at issue. Both BIG and JG say that people should be given currency units by the national government. The difference is in whether the recipients have to show up to work to receive them. Work that is controlled by Someone Else, not the employee.
We very much agree here. I have mentioned Wray’s work before and it has generally been dismissed as too old. But I think those writings are very important in laying out the basic ideas. There are two I would highlight:
1) The mechanism by which the government should provide income is through wages.
2) The wages that the JG should pay are less than what other workers make – in other words, it is a minimum or marginal wage.
The level of course differs from proponent to proponent (one of the major challenges in actually discussing MMT in any detail), but what does not differ is the idea that whatever the JG pays, it should be less than what is earned by economists and doctors and lawyers and other technocrats in government supported jobs.
Wray called this idea the Basic Public Sector Wage (BPSW).
In fact, let me quote two things directly again from him to make sure there is no interpretation of mine getting in the way:
And secondly:
Note that Wray feels so strongly about the two-tiered labor market that he puts a comment in parentheses making it explicitly clear. And it is also notable that Wray didn’t use a high level of wages for his exploration. He used the existing minimum wage of $6.25 per hour.
The other part of that document I would highlight are the objections. There are 7 Wray addresses.
Guess what is missing? The objection that formal employment shouldn’t have a monopoly on income.
And the other interesting feature is the very first one – administration of the program. The actors Wray lists are exactly what is wrong with our system. But when there are attempts made to go into detail about the actual logistical details, the response is that people don’t understand.
Again, without interpretation, here is what Wray writes:
And then to reinforce the entrenched inequality and the belief that paid employment should have a monopoly on income:
Now I agree there should be some limits on government payouts, which is why I support social insurance instead of BIG. But at a fundamental level, MMT differs from both BIG and social insurance in that it makes a value statement that workers ought to sell their time in order to receive income. BIG and social insurance approaches believe the opposite – that the best system is one in which individual people choose what to do with their time.
As far as your last point:
That’s what’s ironic about it, though. MMT is within mainstream monetary theory. Wray and Mosler and others are writing in defense of the idea of the buffer stock, that there needs to be some artificial link within the money system between the transactional uses of money and the savings uses of money. This link is in the very name of the effort at UMKC – the Center for Full Employment and Price Stability. This link is what Wray and Mosler call the MMT Insight.
I reject that linkage. Buffer stocks have nothing to do with Price Stability. You don’t have to choose any buffer stock policy at all. The action is in fiscal policy. The matter is what we spend money on, not how much money is spent.
Look at what people like Joe Firestone have been saying for years. He literally called high value platinum coins a game changer. They may or may not be, but that is clearly a monetary statement. There have been repeated postings even here on NC on how sector financial balances means the government needs to run a bigger deficit. Yet when pushed for details, instead of proposing specific taxation and spending, the discussion falls back on aggregates as if the quantity of money is what matters.
Again, it may well be that the quantity is what matters. It is possible. But clearly that is debatable. It’s an opinion, not a fact. It is also possible that the quantity isn’t what matters.
Here’s why it’s the heart of the matter: if we provide universal health insurance and universal unemployment insurance, then unemployment stops being a problem.
Insurance does not provide employment to those who wish to work. So long as people who wish to work cannot, unemployment is a problem. Because you lack theory of mind, you assume everyone is just like you and desires to avoid work. You cannot comprehend that others have thoughts and desires differing from your own.
Of course a JG could also be offered in such a world, but it wouldn’t make unemployment any less of a problem.
Giving every citizen a job offer eliminates involuntary unemployment, and you provide no evidence whatsoever to the contrary.
As Wray describes one of the justifications for JG:
One sentence ago you claimed the Jobs Guarantee would not end our unemployment problem and then, without substantiating that claim, immediately move on to a totally unrelated subject
With social insurance, and with BIG, people wouldn’t be going without adequate food, clothing and shelter.
Social insurance and BIG do not provide food, clothing and shelter. Those things are provided by work. You cannot eat, wear or live in a dollar.
Are you reading those sentences? “We object” isn’t a statement of agreement. It’s a statement of disagreement.
“Wray doesn’t perfectly agree with my personal opinion so he is wrong” is an invalid line of argumentation and a failure of logical pragmatics.
Both BIG and JG say that people should be given currency units by the national government. The difference is in whether the recipients have to show up to work to receive them.
False. Your Basic Income Guarantee requires everyone receive a minimum level of income measured in the government’s unit of account. The Jobs Guarantee offers to purchase the labor of anyone wishing to sell it at the prevailing wage.
Work that is controlled by Someone Else, not the employee.
This reads as a reflection of your personal fears. Just because you can’t hold down a job does not give you the right to deny jobs to others.
I have mentioned Wray’s work before and it has generally been dismissed as too old.
This is called “cherry-picking” in which you repeatedly reference only those materials which you believe can be used to make your desired point.
The level of course differs from proponent to proponent (one of the major challenges in actually discussing MMT in any detail), but what does not differ is the idea that whatever the JG pays, it should be less than what is earned by economists and doctors and lawyers and other technocrats in government supported jobs.
Everyone regardless of job will earn an equivalent wage in the Jobs Guarantee. The Jobs Guarantee is for providing employment, real wealth and rising living standards. If you wish to adjust what government employees earn then you should propose reforms to the civil service.
Note that Wray feels so strongly about the two-tiered labor market that he puts a comment in parentheses making it explicitly clear.
Category error. There cannot be a two-tiered labor market as labor markets do not exist other than in the minds of conservatives.
And it is also notable that Wray didn’t use a high level of wages for his exploration.
You provide no justification for this claim. “It is notable because it is notable” is an invalid conditional argument.
He used the existing minimum wage of $6.25 per hour.
Which was the minimum wage in the year 2000.
Guess what is missing? The objection that formal employment shouldn’t have a monopoly on income.
“It is missing because it is missing” is an invalid conditional argument. Something is not missing just because you personally want to see it.
And the other interesting feature is the very first one – administration of the program. The actors Wray lists are exactly what is wrong with our system.
Your statement is a logical fallacy called argument by assertion, as you make no effort to support your claim. What actors? What system? Which are “wrong?” Why are they “wrong?”
But when there are attempts made to go into detail about the actual logistical details, the response is that people don’t understand.
This is inverse argument from ignorance. You cannot logically claim that because unspecified “others” tell you that you don’t understand administration, you are unable to discuss logistics.
Again, without interpretation, here is what Wray writes:
By picking and choosing only parts of Wray’s work you believe can be used to support your argumentation, you are putting your own spin and interpretation on the selected quotes.
And then to reinforce the entrenched inequality and the belief that paid employment should have a monopoly on income:
You have combined three failures of logical pragmatics into one sentence: argument by assertion, appeal to emotion and fallacy of irrelevant conclusion.
Now I agree there should be some limits on government payouts, which is why I support social insurance instead of BIG.
Agree with whom? What limits? Previously you argued it wasn’t fair that some were paid more than others but now you support “limits”, limits which you implicitly state are different with social insurance than with a Basic Income Guarantee. How are they different?
But at a fundamental level, MMT differs from both BIG and social insurance in that it makes a value statement that workers ought to sell their time in order to receive income.
False conclusion. The Jobs Guarantee states that anyone wishing to sell their labor will have the right to do so.
BIG and social insurance approaches believe the opposite – that the best system is one in which individual people choose what to do with their time.
False. Neither the Basic Income Guarantee nor Social Insurance state anything about the “best system”, “individuals” or “choos[ing] what to do with their time.”
Finally, I’m not sure why you said “The answer is not to be found within monetary policy” unless that is just a typo. There’s probably no group of economists anywhere that have less faith in monetary policy than MMT.
Reading comprehension failure. The two sentences above are in agreement with each other.
That’s what’s ironic about it, though. MMT is within mainstream monetary theory. Wray and Mosler and others are writing in defense of the idea of the buffer stock, that there needs to be some artificial link within the money system between the transactional uses of money and the savings uses of money.
Category error. The buffer stock, savings and fiscal policy are not monetary policies.
I reject that linkage. Buffer stocks have nothing to do with Price Stability. You don’t have to choose any buffer stock policy at all. The action is in fiscal policy. The matter is what we spend money on, not how much money is spent.
Invalid appeal to authority, as the above claims rely solely on your own opinion. You provide no evidence to substantiate your claim spending is irrelevant to the general price level.
Look at what people like Joe Firestone have been saying for years. He literally called high value platinum coins a game changer. They may or may not be, but that is clearly a monetary statement.
You are confusing fiscal with monetary policies. Platinum coin seigniorage is a matter of the former, not the latter.
There have been repeated postings even here on NC on how sector financial balances means the government needs to run a bigger deficit. Yet when pushed for details, instead of proposing specific taxation and spending
You provide no evidence you have, in the past, ever asked for any details on deficit spending, nor do you ask any such question here.
. . .the discussion falls back on aggregates as if the quantity of money is what matters.
False. MMT is not concerned with monetary aggregates. You have confused MMT with Monetarism.
Again, it may well be that the quantity is what matters. It is possible. But clearly that is debatable. It’s an opinion, not a fact. It is also possible that the quantity isn’t what matters.
You have once again confused monetary aggregates with turnover rate.
Sorry, but given the numerous logical errors, misunderstood concepts and incorrect use of terminology you simply aren’t competent to be engaged in this discussion. Please see Dunning-Kruger Effect
Ben, I was hoping stf would respond, since this comment was a discussion with him rather than you. You are saying things quite different from stf, which I find rather interesting. You are clearly intelligent enough to understand what you are doing, from hilarious personal attacks – who exactly are you worried about reading my comments that you even need to smear me? – to statements that are completely non-responsive to the points I’m making. For example, you say:
I love this response. The point is there are different opinions. That’s why I reference the ‘we object’ line from stf. Your comment supports what I’m saying. And then you throw in the lovely semantics of failure of logical pragmatics.
But perhaps my favorite tidbit in your comment is these two:
and
You sure write an awful lot of words to counter some random commenter so stupid they’re not even capable of engaging this discussion.
Now, the reason that BIG/social insurance and JG are mutually exclusive is not because they can’t co-exist. Rather, it’s because they address the same non-monetary purposes. There is no point in co-existing. The FLSA sets the minimum wage. The JG sets the minimum wage. The BIG sets the minimum wage. They are three different approaches to the same problem, not three complementary approaches that work together to solve the problem better.
No, no, no. These approaches are NOT approaches to the same problem. They can be complementary, they are not mutually exclusive, and Wray doesn’t say they are. In any of their variants, the FLSA, the BIG, “Social Insurance” do not set a real, positive minimum wage. When there is unemployment, the effective minimum wage is zero. (Minsky). Only the JG (or full employment, which only the state can ensure) truly sets a positive minimum wage.
The way it creates a price anchor is by entrenching inequality. There is a policy-enforced wage differential between JG workers and high-wage public sector workers.
No, there isn’t. The way that a JG creates a price anchor has nothing to do with “entrenching inequality”, which it must decrease, rather than entrench. The JG proposal says nothing about what non-JG workers are paid. All public sector workers could be paid the same amount. All public spending could be through the JG, even. JG proposals not saying this does not mean they exclude this. They are just something for societies to decide. The JG is a minimal proposal, for minimal morality and sanity in economics. Opposing a JG means would-be JG workers, the unemployed are paid nothing. The positive JG wage, whatever it is, is closer to any government wage than nothing, zero, 0 is. That is first grade arithmetic. So opposing a JG = entrenching more inequality. So opposing a JG for this “reason” is astoundingly, uniquely illogical.
As I have been saying, people who oppose MMT and the JG do so because their minds have been “fuddled with nonsense” – probably not just “for years and years” (Keynes). but from birth. Wigforss said “It may seem strange to repeat such simple and well-known things. But it is necessary, as long as they are constantly reforgotten..” “Simple & well-known things” are exactly the things most in danger of being belittled, forgotten in any sphere, in any discipline. And nowadays, never even learnt. For the learned ignorance is stronger and more widespread than it was in Keynes & Wigforss’s day.
To earn the JG, one must go to work.
To earn social insurance, one does not need to go to work, and one must meet certain other eligibility requirements.
To earn the BIG, one does not need to go to work, and one does not need to meet other eligibility requirements.
If you don’t see those as contrasting approaches, I’mprobably not going to convince you otherwise at this point. But clearly Yves sees these as contrasting approaches. She wrote an article about a BIG that went awry.
As far as inequality, nothing you are saying is disagreeing with what I’m saying. Of course JG workers could be paid like other workers such as econ profs and doctors and judges and prosecutors. Who actually advocates that? The point of price stability is that the JG workers won’t be paid that much.
Wray specifically wrote about a Basic Public Sector Wage. Mosler wrote a piece calling for an $8 wage.
You are welcome to say my mind is fuddled with nonsense. But if you want it unfuddled, you have to give details that would actually be convincing to me. I want to end the monopoly that work has on income, not make the monopoly a little softer around the edges.
Washunate: If you don’t see those as contrasting approaches, I’m probably not going to convince you otherwise at this point.
? This is very hard to understand. I say the approaches contrast more than you do. You say “Rather, it’s because they address the same non-monetary purposes. There is no point in co-existing.” Consistently with Yves, and practically everyone else – I say they address different purposes, and they don’t have the same effects at all.
The way full employment restrains inflation is by entrenching inequality
Completely wrong in theory and in practice. Full employment always decreases inequality. The above is a unique view, which I don’t think anybody else has ever held, so we differ greatly about inequality.
The point of price stability is that the JG workers won’t be paid that much. Not at all. Wage differentials between JG workers and other government workers have nothing to do with price stability. Econ profs, doctors, judges, prosecutors and JG workers could all be paid the same wage. There is even an old Wray NEP that suggests or comes close to that- as a way to sell MMT to Austrians.
As I said above, insisting on different government wages is something you are reading into MMT & the JG that is not there. So somebody proposes $8 / hour, $1,000,000 / hour. Who cares? It is like saying there should be one MMT theory, one accounting theory, for Denmark and another for Mongolia. These, as usual, are theoretical confusions. Details cannot be understood or intelligently discussed with this kind of confusion.
I want to end the monopoly that work has on income, Work does not have a monopoly on income, and never did. MMT/JG does not propose such a monopoly. It just says: if you work, then you get an income. Not the converse.
As Keynes said in the General Theory, the old (bad) ideas have worked themselves into every corner of one’s mind. Keynes etc have had trouble unfuddling their minds. I have too, So I don’t think anybody should be surprised at having to work at unfuddling.
I heartily agree with this! BIG and social insurance are addressing the problem of ensuring that the unemployed have access to quality medical care and housing and food and so forth. That’s the problem with unemployment – the lack of household income, not an insufficient amount of hours worked in the formal economy.
Then why doesn’t MMT propose that all government employment be through the JG program?
And it’s my mind that is befuddled? I didn’t mention $8 an hour lightly. Mosler himself wrote a piece about it in the midst of the most recent financial crash.
Agreed. If we don’t agree in theory that the wage level matters, discussing the details of the wage level doesn’t get very far.
I notice you are trying to minimize the philosophy behind MMT. Yet that philosophy is where the debate is – are centralized jobs in the formal economy a good thing, or not? This isn’t a lack of understanding. It’s a fundamental difference of opinion.
Let me quote Wray again:
And here:
And here:
Very interesting.
I hope you can point me to a book or something that describes how you, not someone else, would reform our economic system so that it is fair to all and gives all a chance to have a long life worth living. I would love to read all about it.
Well a wonderful post, regrettably one does not approve of the notion that anyone should be “coerced” to work, neither do I hold a candle to all the “masters of the universe” working long hours, more than 55 hrs my God, and being paid an obscene sum, or should that read: “plundering an obscene sum”, to gain more wealth – much of it not needed, in their pursuit of power and status – me I give them none!
By our very nature, humans are programmed to eke out an existence, and seem to do fairly well at it in the most remotest of places on our little planet – obviously, much of this is achieved via high levels of cooperation, with scant regard for money.
Funny is it not, that the timeline you and Polanyi invoke is that which coincides with the move into full capitalism, namely post 1750, of further interest is the fact that this form of capitalism and industrialisation, originating out of the UK, was a result of the British navy coppering the bottoms of its frigates, which gave it a considerable edge post 1789 struggles.
As for our Masters of the Universe working considerable hours – many workers are forced to work more hours than they do and for far less reward, something to do with the destruction of the workers movement and requirement of our masters to extract as much coin out others labour that is humanly possible.
God help us when machines take over, although it may rid us of the pestilence of the monied elite, many of whom, as C. Wright Mills observed in the late 40’s and 50’s were born into their wealth – they were not self made.
Further, it seems absurd to have this post based on the very fact that much that passes for monetary policy nowadays implicitly is conducted with a natural unemployment rate in mind to stop wage inflation, with a figure of 7-8% doing the rounds of late, which actually itself would be an achievement given the fact that unemployment in the USA today is above 10%, and far higher in most countries within the EU. I wonder how the peasants in rural India get by?
Luckily, and not being American, one does not purchase into the notion of the “self made” man, the notion that people must be coerced into work, rather difficult when the actual paid jobs do not exist, this despite the huge need for massive infrastructure repair in much of the Western World – the rich won’t paid for it via the private sector, nor will the state pay for it because the rich won’t pay taxes.
No, lets look at the system of Capitalism itself, its bastardisation after nearly 40 years of rampant neoliberalism and huge wealth inequality, but heck, lets blame the poor and the unemployed.
As a reminder, both the USA and much of Western Europe post-1945 enjoyed low unemployment rates – in the UK anything above 2% being considered a disaster, and this came to an end with the rise of the Petro-Dollar and ascent of the Chicago Boys – some coincidence.
So, there are some basic human rights we should abide by, namely a right to food in our bellies, a right to a roof over our heads and a right to light and heat for those of us living in Northern regions, or Southern regions where its a little chilly.
The crass hypocrisy being, with so much “real” work needed to be undertaken – and I don’t put finance in the realm of real work – why, oh why do we have so much unemployment, poverty and massive wealth inequality – but to claim rather erroneously that a “living wage”, “right-to-work” or right to a national income is at fault seems laughable.
You’d not be too popular in the more traditional working class parts of Europe making statements like this, but at least its clear to me, its capitalism thats at fault, and not those who suffer under it, which is quite a lot presently, and thats before we turn our attention to finacialisation/neoliberalism.
Heres a link to make us all think, but in reality it touches upon much that is discussed in the post and in a few words:
Does anyone know why the link feature is not working, or do we just “cut and paste” – rather annoying when you desire to share some info/detail from another site and nothing appears?
I haven’t tried the link feature and cut-paste out of habit. Usually works.
Here’s the link one mentioned earlier, whilst it really does seem outside the reservation in relation to this post, on closer inspection, and reading, it actually adds to the dialogue, its helps that it is brief and concise:http://triplecrisis.com/bretton-woods-after-70-years/
Thanks Chris, well said and will read this.
“Coerced” to work? Was the WPA coercion? Was the CCC coercion? Was Jefes coercion? Were the jobs programs in Australia that built the Great Ocean Road and many other public goods coercion?
Please stop misrepresenting the job guarantee. As noted even in the post, MMT sees BIG and JG as potentially complementary. Goes BIG + JG sound like “being ‘coerced’ to work”?
Please stop misrepresenting so actual debate can occur.
STF,
For my own sins, I’m smitten by the notion of a national minimum income guaranteed by the state, to me this invokes classic Marxist theory, whereby the fruits of all our combined labours can be shared and to quote Marx from The German Ideology:”In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic. ”
That it is the Swiss actually going with this notion, namely a national minimum income for all beggars belief, particularly given they are not the most romantic or leftward-leaning country in Europe.
All you have posted on past “workfare”programmes is all very laudable, but should we not be raising the issue and enquiring why in a world with such abundance and wealth, we are even having this dialogue?
As for misconstruing or attacking MMT theory, why the hell would I do that when I cooperate with many of the leading heterodox economists, of which MMT is a branch. But, let us not be mistaken for twice within a few generations we have witnessed an absolute and fundamental breakdown within capitalism itself, namely the 1929 Wall Street Crash, and 2008 Lehman-inspired Great Financial Crisis, or Great Depression as many are now referring too it.
Now, I stand resolute in being a Socialist, and given I’m European, actually know what it means and what it entails, just a shame we don’t have a Socialist-inspired socio-economic society, we have a Hobbesian society presently with the originators of this disaster blaming the victims – is that clear enough?
“why the hell would I do that when I cooperate with many of the leading heterodox economists”
Um, you just did that, as I pointed out above. You suggested the JG was coercion. That’s “misconstruing or attacking MMT” by completely misrepresenting the JG, not to mention the MMT view that the JG and BIG can be complementary.
STF,
I’ve made it clear I support a national minimum income period, which is a little different to a Jobs Guarantee (what jobs exactly are we talking about) or a BGI, which by the way we had in the UK, it was called Social Security and was not “means tested”.
Further, and if BGI as proposed is a fully comprehensive monthly payment to each citizen, obviously I’m in full agreement, I just don’t like the idea of linking said income to actual work, it smell of workfare and is demeaning to those who work more than 55 hours per week caring for family members or relatives, which brings us to the notion of what is “WORK” and what is mean’t by it. Now I have no bug bear with the MMT brigade, it just so happens I’m personally somewhat more to the left of them and have never hidden said fact. Indeed, I’m anti-capitalist period, which is what a Socialist is, but if one cannot have an egalitarian society, I’ll take the mixed economy any day of the week with basic state guarantees, which is where my cherished Labour Party once stood. But, this is a system issue is it not, and our present bastardised capitalistic system is a far cry from what I believe in or desire for my child, hence my own political move to a Red/Green banner, which ticks all of my boxes shall I say.
Now I have no bug bear with the MMT brigade, it just so happens I’m personally somewhat more to the left of them and have never hidden said fact.
Well, this MMTer considers the ideas above to the “right” of MMT. The JG is the leftie idea. The BIG / NMI / UBI /NIT / welfare is “rightie”. I’m for some form of both – because the Truth has both leftie (JG) & a little bit of rightie (BIG) in it. But the JG is zillions of times more important now, because it encompasses the economic understanding that poor people + rich people + MMTish economists + sharp-eyed philosophers through the ages have had.
The JG is what “right wing”, plutocrats hate above all, have always hated. But the plutocrats are OK with the others because they can do the accounting. They know that those things that sound so nice cannot work for “the lesser people” for more than a little while, without a JG/full employment. But those not in the categories I listed above rarely understand the economics. That is how plutocrats like it and work hard to keep it.
Christopher,
Good for you (seriously). Note that I didn’t criticize any of your views. They don’t sound unreasonable. I just said stop misrepresenting the JG. thanks.
STF,
No issue, its just part of the dialogue, and, if you read the entire thread, which I have, what a lot we have learned, and we achieved this by sharing opinion and knowledge. And, while it may get heated a little, and yes we all make mistakes, it’s the outcome that counts, and the outcome here is very positive indeed – if only TPTB would have this dialogue, but that’s another question I suppose.
All you have posted on past “workfare”programmes is all very laudable, but should we not be raising the issue and enquiring why in a world with such abundance and wealth, we are even having this dialogue?
We have abundance of Blu-ray players, plastic bottles and cheap, nutritionless foods. We don’t have an abundance of health care, quality education, clean streets, renewable energy, integrity of biological systems. This discussion is necessary because the BIG does nothing to remedy this and may even exacerbate the problems by simultaneously fueling consumption and increasing scarcity. Desperate people are far more destructive than well-paid people working in society’s interests.
I have this argument with my father (an extreme right-wing free marketer) all the time. In his view every instance of employment is a contract “freely” entered into, and since the employee is “completely free” to walk away or reject the offered terms, there is no coercion involved in the labor market and all low level compensation is completely justified by the employee’s willingness to accept the terms. It is beyond his capacity to see that when money is a requirement for life, there is an inescapable universal element of coercion in every employment contract. I agree that “forced employment” is not a good way to describe this, as it conjures up images of prisoners on chain gangs… you are certainly correct that public works programs are not that. However, unless you know of some way for the working class to make a living and feed their kids other than accepting whatever work they can get, than you must concede an element of coercion in every non-management employment contract (and in many management contracts as well, IMO), whether offered at a decent wage by the state or at a pitance by private capital.
In wealthy countries, basically no-one starves to death, including those who do not work. So yes we are genuinely free to enter into contracts or not.
WTF???!!!?? There are homeless people dying of starvation and exposure to the elements every month right here in the U.S., the wealthiest country on earth.
Notice Owen’s implication that if you can live at least five minutes away from death, say getting by when getting by on a peanut, you aren’t being coerced. In other words only the threat of death is coercion, which means we’re free to take all the property we want so long as we don’t kill the owner.
Glibertarians also seem to believe that unions are unnecessary. The argument they often make is that any individual worth his or her salt can just march right into the boss’s office and get a raise without any help from a union. “If your employer doesn’t believe that your work deserves more than $8/hour that must be because what you do really isn’t worth more than $8/hour!”
The essential misunderstanding that glibertarians have, is that they (and many of them just happen to be wealthy white people) believe there are no power imbalances in our world. Their understanding of social power dynamics is as shallow as the caption on a poster in a life insurance sales-training room: “Your attitude determines your altitude!”
I have heard glibertarians tell me (with a straight face!) that if they could bounce back from getting kicked out of Dartmouth for dealing coke, then some poor child of color, being raised by his grandmother in Camden, has no excuse– “what with all that affirmative action nowadays!”
If you meekly point out that maybe the fact that rich white kids at Dartmouth don’t do prison time for dealing coke, while a poor slum resident will often get thrown into jail for years– merely for being at a location where crack is being smoked, you’re looked at as if you have 3 heads.
A bit off this specific subject but I think Polanyi made a number of interesting points that are still relevant today. He was interested in how we can maintain a sense of freedom and still be socially responsible. He liked the idea of global interconnectedness but not on an artificial monetary level. This seems to have relevance to how we address climate change which is affecting the poorest and those least responsible first.
He was very interested in how the international finance and economic systems led to the two world wars. Re people at the time trying to understand WWI “in other words, the failure of market economy itself still escaped them” And considering the factors leading to WWII “The intellectual middle class was literally pauperized; financial sharks heaped up revolting fortunes. A factor of incalculable integrating and disintegrating forces had entered the scene.” (He was talking mainly about currencies. He wrote this in 1944 but has implications for our current situation.)
He ends the book by coming around to what he considered a guiding principle for organizing our interactions:
“Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom. As long as he is true to his task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality. This is the meaning of freedom in a complex society; it gives us all the certainty that we need.”
@financial matters,
I’d not call your post “off the reservation”, quite the reverse, I’d say its spot on in adding to the dialogue, and much I suppose we can all add, like discussing “social contracts”, issues of sovereignty (personal) and such like.
However, first point of fact that should be made is that many are opposed to exploitation, and yet many a man desires to exploit another, this despite our collaborative/cooperative wiring.
And Yves touched upon some raw nerves for me at least, for as I don’t subscribe to notions of the “deserving rich”, neither do I buy in to notions of the “deserving poor”, societies very structure imposes this, and our prevailing culture/society is based upon capitalism, and a very bastardised form of capitalism that we have today.
However, and back to encouraging the poor to work, or guaranteed minimum wages, or indeed the notion of a shared “national income” as proposed in Switzerland recently, the fact remains in the UK at least, that when the national minimum wage was proposed it would be disastrous for the economy and lead to increased unemployment – this was not the case. However, one warning born out true is the fact that a “mandated” minimum wage would result in more wage poverty in the long run, rather than an increased standard of living for the wage poor, based on the fact that Capital/bosses could fix wages at the lowest denominator, which they have done so, as a glance at any jobs section in a paper will tell you – in Wales, about 90% of advertised jobs are minimum wage, as such, work does not pay, particularly if you have a child or two.
Now the obvious answer is workers trades unions, but many see these as the “enemy”, Mrs. Thatcher certainly did and spent a considerable part of the UK’s GDP destroying them. Is the UK a better place now, well not if you are poor, and it’s not much better being lower middle class. The elite do fine though, despite most of their wealth being stolen off the backs of the poor and disadvantaged, so who are we to grumble!
“However, one warning born out true is the fact that a “mandated” minimum wage would result in more wage poverty in the long run, rather than an increased standard of living for the wage poor, based on the fact that Capital/bosses could fix wages at the lowest denominator, which they have done so, as a glance at any jobs section in a paper will tell you – in Wales, about 90% of advertised jobs are minimum wage, as such, work does not pay, particularly if you have a child or two.”
This is surely an artifact of a social program designed to fail rather than being an inherent flaw. Same mindset as defunding NHS or the US Post, to create the misimpression that the institutions are failing as opposed to being deliberately destroyed, so as to grease the skids for privitazation and looting.
The obvious takeaway from what you describe isn’t that ” [a] minimum wage would result in more wage poverty in the long run, rather than an increased standard of living for the wage poor” but rather that a MW set to a level deliberately designed to create wage poverty will, in fact, create wage poverty as intended. The “failure” is a feature rather than a bug, just as all social programs are being deliberately crapified to discredit and ultimately destroy them. Nothing very clever or opaque about it, it’s all done in full view.
Well said.
Kurt Sperry,
I could not agree further with you, the UK national minimum wage when introduced by Labour in the tailed of the 90’s was set at such a low rate that it was bound to have the opposite effect of reducing poverty, indeed, look no further than the introduction of Working Tax Credits to get an angle on this travesty – all the wailing by the monied elite and employers organisations was just smoke and mirrors, a jolly Punch and Judy show for the gullible public.
Had the wage been set at £10.00 to begin with and then tied to RPI and not CPI one may have given Labour the benefit of the doubt, but the fact remains the floor was put in at minimum damage to the Masters, and to make the pill easier to swallow, working tax credits and a staggered PAYE income system starting at 10% introduced instead, which effectively was a massive state handout to the employers – another case of Socialism and endless State welfarism for the rich, and a FU for the rest.
Another reason I’m joining the Wales Green Party in February and making sure I vote in May.
“Workfare” (understood as forcing single moms formerly on the dole – outside the formal workforce – into low-paid retail, food service, and healthcare/childcare jobs with industry being the biggest beneficiary of the public subsidies attached to such jobs) seems to be a reverse-engineering of Speenhamland. But the effect seems to be the same: Employers no longer have an incentive to offer higher wages and better benefits. Employees know they are working demeaning, dead-end jobs, are disposable, and are still dependent on public assistance with no chance of becoming self-sufficient, to there is little incentive to try harder.
I would say rather that workfare corresponds to the poorhouses while the modern Speenhamland scheme equivalent in the US would be SNAP (food stamps). One of the effects is that low wage employers are subsidized by the larger society.
A more recent example.
Nice link, thanks. Great experiment that actually worked in recent history. Studies have concluded that the maximum happiness an individual can achieve comes at a cost of around $75k a year and that making above that amount does not bring more happiness or contentedness. Would people want to work for the maximum happiness they can get? I certainly think it would be a prime motivator to work. I suppose that we’re supposed to believe that a minimum income would cause inflation because it’s given to the lower classes that would spend it right away, rather than to the banksters and the elites because they don’t spend it and cause inflation so therefore it’s safer to give it to them. hahahahaah. Some kind of twisted logic to justify growing wage disparity. Because inflation don’tyaknow.
The corporate welfare state needs to go at any cost IMHO. A nation this wealthy also should not have the levels of poverty and incarceration we’re seeing. Unemployable? Seriously? No one forgets how to work. It’s part of our DNA to work. I like the mincome experiment. It worked. Poverty causes all kinds of lingering for generations social, mental and physical ills. If the pursuit of happiness means making $75k a year, no one should be denied a chance to see what that’s like whether through assistance with a minimum stipend, minimum income and/or job guarantees.
Yes, what isn’t widely appreciated is that poverty and wealth well above the mean both force those operating within them into spending a lot of their time worrying about money and segregated from mainstream life and culture. Obviously it’s hard to feel sorry for the rich, but the fact is that being wealthy causes a lot of anxiety and alienation. For wealthy people all social interactions are poisoned by paranoia about the motives of people they interact with. “Are they who they seem or are they after my wealth?” is a question the wealthy must constantly face daily. The wealthy cannot trust others without feeling exposed to what feels to them like existential peril. Thus they become socially withdrawn and crippled by fear. If you have spent much time around the rich, you’ll know what I’m talking about, they live a very limited, fearful and narrow existence. I honestly doubt many are actually very happy or fulfilled, but they obviously cannot acknowledge this–they are the lucky, the deserving, they possess what they assume everyone else lusts after–to admit being unhappy would betray their entire world view. People are surely happiest around the median, if that median is sufficient to provide a feeling of security.
Every comment on NC about the poor, paranoid rich people who work so hard they die early of heart attacks reads like classic class warfare propaganda. The rich would love for you to believe that, many people would rather believe it so they don’t feel as bad about being less rich. The truth is that they are as happy or happier than we (“average” folks). Anyone who tells you otherwise is fooling you…
A means-tested program in one city for five years doesn’t provide enough data for a useful comparison. BIG rolls out such a system across an entire nation, and historical evidence for this is not encouraging.
Yves, in your conception of a job guarantee, do you think there would be fewer ‘bullshit jobs’ as defined by David Graeber?
The post is all about saying how bad BIG is and how wonderful the JG is and then there is surprise that people see JG/BIG as either or?
“A jobs guarantee and a basic income guarantee are not either/or propositions, contrary to the claims of many readers.”
If they are complementary then write about how they compliment each other.
I would be interested as well how they complement each other.
Is there an example of a past success of Job Guarantee?
Can we say a successful example of past Basic Income Guarantee was intuition free college education? Here, instead of a student working multiple part time jobs to afford the cost of going to college, the government (and the university) gives him/her the exact amount of Basic Income Guarantee to offset tuition, so that, effectively, he/she pays no college tuition?
Another question is this: How many examples of past failures (or successes) do we need to disprove or prove a theory (or a point)? Are we dealing with the Scientific Method here or a scientific discipline here? How much can we do with one data point, under one set of conditions?
“intuition free college education” – I like that, though I think perhaps “intuition-free” is more grammatically correct.
Thanks.:)
I don’t know whether to blame my fingers or my brain.
But I will find out soon enough, and the responsible party will be severely disciplined.
Can’t control your fingers, can’t control your brain?
http://www.youtube.com/watch?v=ZLlLtSG7xe4
When the world ends, I don’t want to be sedated.
MyLessThanPrimeBeef: Is there an example of a past success of Job Guarantee?
Yes, looked at rightly, the whole world at all time is an example. God, or someone, the Flying Spaghetti Monster? – guaranteed that you would obtain your daily bread by the sweat of your brow – job.
Looked at from a lesser height, the whole world in the “Keynesian” Postwar Full Employment Era provides an overwhelming example. People worldwide understood that ensuring that everyone had a job was a government responsibility. As always, societies simply deciding to have decent-wage full employment was the sole cause of decent-wage full employment.
Result 1: The greatest, most egalitarian prosperity that the world had ever seen. Result 2: By the 70s, the masters of mankind saw Result 1 & Did Not Like It. So they said: “Everything for ourselves, nothing for other people”. Let’s force unemployment on the lesser people. They really need our boot in their face. The US middle class has to accept a lower standard of living (Volcker, Business Week)
And of course the usual example of the New Deal programs & other similar programs, if one wants even more detail. Always better the bad new days than the good old days (Brecht) – but don’t forget how and why those old days were gooder.
Can we say a successful example of past Basic Income Guarantee was intuition free college education? No. That is better described as a successful example of a Job Guarantee. You do something – you get money.
Unfortunately, some people work on their jobs and still can’t afford bread everyday for their families. Maybe they have to skip it to pay for, say health care.
And if tuition free college education is Job Guarantee, that would be great. I like to work on a job (to do something) that is to attend classes. Maybe we can broaden it (definition of a job) to include gazing at nature – much to learn there – and get paid – this time, not to a college, but the gazer himself (he is teaching himself by himself). I would also call that Basic Income Guarantee.
And that’s what we need – to realize what is different is in fact the same and we do, after all, have something in common, that when we pay people to gaze into nothingness, it’s both Job Guarantee and Basic Income Guarantee.
Hopefully, this insight will unite all the posters here.
Unfortunately, some people work on their jobs and still can’t afford bread everyday for their families. Maybe they have to skip it to pay for, say health care. That is because modern societies are organized in an insane manner, even compared to how they were organized 40 years ago. The JG is a universal moral imperative for any sane money using society. The BIG isn’t. Genuine education, work toward obtaining the only good – knowledge most definitely deserves to be a JG job. Aside – we don’t need to broaden the definition of “job” or “work” – we just need to see how these words are actually used in practice right now. Observing that people often think wrongly on such definitions, and getting them to understand the meaning of what they say every day is the business of philosophy.
Gazing into oneself, thinking yourself is what it is all about. MMT economists & philosophers have understood that forever. But you can’t do it with an empty belly. Philosophers also understood that you can’t think yourself, understand yourself by yourself alone. “Subjective” and “objective” without the opposite concept is meaningless. One of my favorite fun facts is the original meaning of those two words for the off the wall medieval philosophers who invented them.
Many societies are, have been and still are too poor to pay people to command others to fill their bellies while these gaze into themselves. For navel-gazers to say that that some of those who fill the navel-gazers’ too-good-to-work bellies with food should have no food themselves is obscene – these navel-gazers who ordain that there be one person forcibly unemployed so deserve a kick in their ample stomachs, not food.
Finally, that navel-gazing and ordering other people to fill your belly while not allowing the people who do the real work of filling people’s bellies sufficient food when THEY want it – that this will magically make everyone’s belly full – the universal BIG – is simply insane.
Bravo ~infinity
From the anthro view you had the deity backed heraldic ruler who utilized the navel gazing class, for meta narrative production, and enforce by the warrior class, which then required everyone else to feed and service them.
Skippy… so they could do their yobs at creating efficacy and groaf.
Bravo and thank you.
Now I see, genuine education is work, attending one is a job, and so, it’s JG and not BIG for tuition free college education.
Navel gazing, not so much. Searching for wisdom in an informal setting is or is not a job. How about learning to communicate with birds? Let’s check with philosophers.
And learning to serve the machine? How to program software so one day one can spy on people on the internet? Is that genuine education?
Oh, well. I gave a try, to see if it’s possible BIG does complement JG or if under some situations where BIG = JG.
Thanks, skippy.
Beef: I feel I my phrasing may have been too harsh on what I called “navel-gazing.” I believe in uniting through insight too. Thinking philosophically, scientifically, logically, rationally, mystically, mathematically about the meaning of it all is what it is all about. But there is NO way that everyone can have this opportunity to “navel-gaze” – the right to be lazy, without a JG, without a right to work when they want to or don’t want to. A BIG does not and cannot do this, as the poor & the rich have always known. BIG do-gooders are duped by the rich to foist something on the poor that the poor are much too smart to want/ prefer.
These posts are always kind of like a meeting of the Platypus Society.
http://filbendemarty.wordpress.com/2013/06/13/mostly-harmless
Which is not to say that factionalism is not inherently interesting.
Interesting stuff, but the whole discussion is a bit incoherent until the REASONS people work, or, maybe more to the point, why “we” want/need them to work, are established.
Per Yves: “People need a sense of purpose and social engagement. Employment provides that.” Per Randy Wray: “A job at a decent wage, set by public policy, will eliminate at least 2/3 of poverty.” Per commenter PlutoKun: ” It was a constant complaint of employers up to the Industrial Revolution that the peasants would only work until they had enough to eat, then they would stop.”
So, from the “elimination 2/3 of poverty” to “a sense of purpose” and everything in between. Apparently it’s a problem if people only “work” until they have enough to eat, but 55 hours per week is too much. There are “jobs” to be done that are going undone, but “creativity” does not fit the 9 to 5 “work” profile.
So what, EXACTLY, is the problem this discussion is attempting to solve? What IS the very basic amount of money a person “needs,” and how is that amount established? And does it REALLY matter how they get it? If so, why?
So, from the “elimination 2/3 of poverty” to “a sense of purpose” and everything in between.
I don’t understand why reducing poverty and improving personal wellbeing is objectionable.
Apparently it’s a problem if people only “work” until they have enough to eat, but 55 hours per week is too much.
A problem to whom?
There are “jobs” to be done that are going undone, but “creativity” does not fit the 9 to 5 “work” profile.
What do these two independent clauses have to do with each other?
So what, EXACTLY, is the problem this discussion is attempting to solve?
I’m confused as to why you would ask this, as you yourself in your comment stated the Jobs Guarantee is intended to reduce poverty and provide services that enhance social outcomes.
What IS the very basic amount of money a person “needs,” and how is that amount established?
You can use MITs living wage calculator: http://livingwage.mit.edu/
And does it REALLY matter how they get it? If so, why?
Did you not read the post? It laid out multiple reasons why the Speenhamland system failed, from falling wages to declining productivity to growing poverty. It isn’t enough to give out money, you have to have things to buy with it and that means production/work.
That calculator is absurd. One glaring low-ball error in my county (Carroll County, AR) it says healthcare for a single adult cost 111.00 a month. Another is the glaring misrepresentation of taxes. Withholding’s does not include sales taxation which for low income folk is ten percent of gross income since we spend damn near everything. I could easily add clothing, even if most is purchased from thrift shops and a half dozen other necessities not mentioned in their calculation at all.
I would say the calculator is wrong by at least half.
EPI has updated its Family Budget Calculator: http://www.epi.org/resources/budget/
It includes realistic child care and health care expenses, and as a result it yields a minimum necessary budget that, if I recall correctly, fewer than half of U.S. families reach.
One glaring low-ball error in my county (Carroll County, AR) it says healthcare for a single adult cost 111.00 a month.
Doesn’t say the cost is 111.00 per month, says this is the typical expenditure.
Withholding’s does not include sales taxation which for low income folk is ten percent of gross income since we spend damn near everything.
As there isn’t an entry in the tables for “withholding”, just an estimate of total taxes over the year, I’m not sure what you’re referring to.
Hey, cool your jets.
All I’m trying to say is that having a “job,” any “paying” job, has taken on an undeserved, almost mystical, personally transformative quality. “Leaning forward” into that bedpan or burger grill is not going to provide access to the american brass ring, however noble, economically expedient and convenient those endeavors are when someone else does them.
If you’re willing to live in a country that accepts the suffering and victimization of their fellow citizens as a beneficial and necessary economic reality, then just admit it.
And “MIT’s Living Wage Calculator?????” I’ll be sure and take a look at that.
Hey, cool your jets.
You have a pattern of behaving aggressively and then accusing responders of acting in the same manner.
All I’m trying to say is that having a “job,” any “paying” job, has taken on an undeserved, almost mystical, personally transformative quality.
Wasn’t a question you asked.
“Leaning forward” into that bedpan or burger grill is not going to provide access to the american brass ring, however noble, economically expedient and convenient those endeavors are when someone else does them.
Who says it is? What statement/argument/position are you responding to?
If you’re willing to live in a country that accepts the suffering and victimization of their fellow citizens as a beneficial and necessary economic reality, then just admit it.
This is the equivalent of asking someone if they’ve stopped beating their children. Have you stopped that yet?
And “MIT’s Living Wage Calculator?????” I’ll be sure and take a look at that.
Why ask a question if you didn’t want an answer? If you don’t like that algorithm, explain why and we can look at others.
You win.
Katniss: I am not sure I understand your thinking. I agree that everyone at all times should cool their jets.
the whole discussion is a bit incoherent until the REASONS people work,
Simple. They want money. Money to buy stuff they want with.
or, maybe more to the point, why “we” want/need them to work, are established.
MMTers don’t want/need people to work. MMT / JG is about a right to be lazy – which cannot exist unless a right to work exists. I want people to have a choice to work for money – or not. At a decent wage, reflecting society’s wealth and aims. Which can and will easily prevent the kind of decline we have seen everywhere of wages/productivity – and increase both. I do not see how anyone can ethically oppose this. MMTers don’t oppose a BIG. But BIGgers often/ usually oppose the JG. Why? Why not give people the choice they want, and which thinkers for ages have said is manifestly their natural right?
That is what poor people, the ones dealing with burgers & bedpans want. They understand that in essence, the JG is real freedom – right now, right here. BIGs on the other hand are well-meaning pie-in-the-sky do-gooderism, the kind that paves roads to hell. It is not Calvinism, but simple, valid logic that the poor and the rich understand very well. But so many do-gooders don’t.
I agree there is a bit of elitism to this argument. The most glaring comment is the ‘eliminate 2/3rds of poverty and leave the rest to charity’ bit. BIG eliminates poverty, and that idea seems to really strike some as unfair, which is odd. It’s a bit like ‘let the cook French fries!’ Rather than let them eat cake.
I think what exists today is unfair, because every person born has a right to live. We aren’t given anywhere to go that isn’t already owned by someone rich, we start off in debt, and maybe get lucky enough to escape that into tenuous ownership levels that get yanked out from under us, as they were for millions in the mortgage crisis.
Give people enough to survive on; necessities, food, shelter, and medicine. That alone will force employers to up their offerings because people won’t be trapped in their crappified positions, right? People would be free to start up all kinds of businesses, and maybe even *gasp* volunteer to help others free of charge as their life’s work.
No, you appear to have refused to read the post.
Providing enough money for necessities leads employers to lower wages. You’ve subsidized them.
There seems like such a gulf between what constitutes “work” today and 1795. I’m curious if the stipend encouraged workers to be less productive, what kind of work was required of them?
backbreaking physical labour.
Basic Income is being tried currently in many places and is experiencing more and more successes built on the knowledge gained from some failures. To dismiss the concept at this juncture naming some ancient alleged failures is premature and myopic. There are reasons some of these experiments have not gotten off the ground that were rooted in undeveloped implementation rather than being structurally unsound in themselves. Some were underfunded, and there have been active forces trying to thwart them. There have been numerous basic income successes, and to cherry-pick alleged failures to say otherwise is either dishonest or ill-informed. Worse, you are commodifying individuals in society by implying their work has no value unless attached to someone else’s monetary profit.
There are simply not going to be enough decent jobs for decent pay, and our current economic system is preventing meaningful work from being released into our communities. And it would be better quality work because it will emanate from the authentic interests and motivations of members in their communities. People are not going to just sit around. There is a deep rooted need in everyone to provide meaningful activity and value in society. What is this obsession with needing jobs and employers to make our lives and work meaningful? It is Calvinist to the bone.
Providing services for each other and even their own needs creates value in society. Taking care of the young and old of your own family and of friends creates value. Organizing active resource sharing and implementing post-carbon transformation programs creates value and more important, survivable viability when our current economic system finally fails. There should be more to life than producing profits for others and then having to beg for a decent lifestyle after already having done the work that earned it. We don’t always need employers. More than ever, we need each other.
“More than ever, we need each other.” Amen.
@chris
I have to agree that Yves is good on many things, but this is not her best moment. Cherry-picking 200 year old “failures” of minimum income is unpersuasive. There are other experiments, but truthfully, the area has not been well-explored. SNAP, SSI/SSDI, Section 8 and EITC are forms of minimum income and have been extremely beneficial. I also don’t buy the idea that minimum income will necessarily depress wages.
We cannot continue to rely on the outdated and perverse notion of employment at the whim of profit-seeking companies, devaluing the work of social and family care, especially in a fast approaching future of pervasive automation, outsourcing of everything, even legal, medical and financial workers, and to put it mildly, decreased employment.
We’re going to have to do a lot better than that.
BTW, prisons are a depository of excess labor, no matter what “offenses” are used to corral millions in a carceral system. The military also. Millions may not be suitable for full-time employment, parents, caretakers, youth, elders, the medically and psychologically impaired: all of whom can make valuable contributions to society, or just to their families.
Are we going to try to force them into the employment mold?
We’re going to need a combination of job guarantees, education, housing, basic income and social value metrics. Reducing the power of profit-seeking, democracy-destroying corporations is a necessary, if not sufficient, condition.
One comment reads “There are simply not going to be enough decent jobs for decent pay,”
How do we know until we try to provide decent jobs? There are currently 90 million fewer workers in the job market than in 2007. Who knows what kind of society we could build if those 90 million were put to work?
I think the comments running in support of income guarantee for able bodied workers show a basic misunderstanding of the phenomena involved. As Yves pointed out ” who [employers] used the income support to further lower wages.” From Polanyi :
[Under Guaranteed income] “Hence no laborer had any financial interest in satisfying his employer….Within a few years, the productivity of labor declined to pauper level, thus providing an added reason for employers not to raise wages above the scale. For once the intensity of labor, the care and efficiency with which it was performed, dropped below a definite level, it became indistinguishable from “boondogling”…”
There are certainly many jobs that need to be done in this society and many require much in the way of a support system from the federal and state governments or they will not be performed at a very high level of competency. Medical care for the elderly, and disabled is but one worthy example. My experience with home care was not good; several of the workers reported 60-80 hour work weeks in order to put together a decent pay check. Exploitation by the care agency was another obvious factor. The Job guarantee together with a true implementation of MMT could turn the world we live in to a better place.
Further discussion is available at
http://neweconomicperspectives.org/2014/01/16-reasons-matt-yglesias-wrong-job-guarantee-vs-basic-income.html
Or check out the CCC program
https://en.wikipedia.org/wiki/Civilian_Conservation_Corps
“The American public made the CCC the most popular of all the New Deal programs.[3] Principal benefits of an individual’s enrollment in the CCC included improved physical condition, heightened morale, and increased employability.[4] Implicitly, the CCC also led to a greater public awareness and appreciation of the outdoors and the nation’s natural resources; and the continued need for a carefully planned, comprehensive national program for the protection and development of natural resources.[5]”
Fascinating article and comments. I’m struck how much neoliberal framing/rhetoric takes on the aspect of the workhouse – and how our economy is thought of and talked about as if our society is one giant workhouse. This seems especially true in the field of education.
I was actually born in a “workhouse”, or former workhouse as many changed into hospitals – but, the term “workhouse” in the working class community I was raised strike fear in to many, it did when I was a kid, and does to this day – particularly given the incumbent UK governments policy of making the unemployed work for their welfare payout, and thus have benefits removed if they refuse to go on these placements in some of the UK’s leading listed businesses, usually retailers – hence my own horror at this article because its not so much a debate in the UK, its happening, except the “welfare” is not enough to live on period.
There was a UK ITV documentary on about this last year, here are details:http://docuwiki.net/index.php?title=Secrets_from_the_Workhouse
“I’m at a loss to understand reader objection to the idea of a job guarantee.”
I’m right there with you, Yves.
It seems we have become little else but units of consumption and a BIG would only re-enforce that. A JG requires that we think about and envision the society we want and create opportunities to use the productivity we are flushing down the toilet everyday towards that end while benefiting both individuals and society. Perhaps we really have become nothing but lazy, unimaginative and coddled consumption units and are fine with it. Maybe TPTB have already won.
It may be the a JG would force us to do the thinking we ought to be doing regardless… But wouldn’t simply insisting on government spending to do the infrastructure and environmental work, often referred to by JG proponents, do the same thing? What is the advantage of having the government provide the jobs rather than simply fund the work? Isn’t the result the same?
Not if the purpose is to get money into the hands of workers — business can only be relied upon to do as little as possible of that.
Yves Smith wrote:
While I prefer guaranteed jobs to a guaranteed income, I’m not sure it’s quite as simple as eliminating low-paying jobs or returning to them to the domain of young people starting out. There needs to be critical mass of higher paying jobs available, otherwise, as we’ve seen in recent years, more educated and experienced workers will take “Mcjobs” out of desperation. Subsequently, younger, less experienced and educated workers, get crowded out and have a more difficult time getting started.
And so MMTers will determine what “should” be a high-paying job, right?
????? Not even in the ball park of what MMTers are talking about.
I’m not really clear about the US system but in the UK, during the 70’s elected local authorities (the ‘Local Council’) employed people who were generally unavailable for open employment; they were generally in social housing and received social security to support their families. The work they did was socially valuable -we had clean streets, good rubbish disposal,public parks and civic amenities, social housing was kept in good repair (this sounds like your guaranteed jobs scheme). This ‘direct labour’ has been replaced by a drive for people to look for work, with their wages topped up by tax credits and ‘working benefits’ and housing benefits (in essence a reworking of Speenhamland). Under old system, if there was a labour shortage, companies had to pay wages in excess of council benefits (and such wages were overseen by trades councils and trade union representation).
That has all gone. The tax credit system has resulted in zero hour contracts, below minimum wages that ZHC allows, because workers are paid minimum wages for the hours they work and other scams (cf Amazon business practices) -the tax breaks are a ‘Speenhamland effect’ in reducing wage bills and are a direct subsidy to employers. Similarly, housing benefit has resulted in spiralling rent on housing -the benefit system pays landlords. The UK is suffering problems with the deficit, mainly caused by a reduction in tax receipts. The voodoo economics of neo-liberal regulated markets (regulated in favour of the superrich) creates the problems (through huge demand reduction) it is trying to solve (deficit reduction).
I remain skeptical that enough meaningful work can be found on an ongoing basis to provide genuinely productive work for all who want it. Three centuries ago Western civilization set about replacing human labor with machines powered from inanimate energy sources. Roughly at the midpoint of the 20th century it began replacing the “diligence” of the labor, the machine tenders, still required with computers. Yves provides an example of a category of labor not likely to soon be automated out of existence and no doubt there are others that could be listed. But as far as ‘real’ physical wealth – as opposed to services – automation and mechanization are presumably the wave of the future (as well as the past).
Machines and computers powered from inanimate energy sources no doubt produce more ‘real’ wealth faster, better and cheaper than the required equivalent amount of human labor. And if the world could be filled with self-directed people this might be a good thing. Until there is some evidence of that happening however, I am not sure how much further we want to carry this process. It has not only robbed people of access to the ‘means of production’; it has robbed them of the basic skills to support themselves as the knowledge of how to produce the means of subsistence more and more becomes the province of a shrinking group of people with access to the required money and scientific knowledge.
For me, these two sentences really bite:
Let’s be real: the overwhelming majority of people who think they might like to write a book don’t have the self-displine to do so in the absence of external pressure. And that’s before you get to the question of whether it will turn out to be good enough for anyone but the author to want to read it.
I am the beneficiary of a successful ‘jobs’ program Yves fails to mention – the military Keynsianism to which the United States (and the world) have become addicted. The leisure I enjoy to peruse Naked Capitalism is pretty much wholly the reward for the moral compromises in the immediate aftermath of the US directed coup in Chile required for a career with the U.S. military industrial complex. A liberal arts graduate in a world still willing to train people for productive (?) employment, I found I was fairly adept at the logic and symbol manipulation required to make machines think, if not the higher mathematics required for a career in economics.
The point here is ‘be careful what you wish for’. Our civilization seems to be ruled by two classes of people: those who exercise power directly and those who rule from the shadows. Politicians who unleash wars for the hell of it (or threaten death from the heavens for those who don’t bend to their will) are an example of the former; financiers and the wealthy willing to abuse and corrupt basic institutions upon which society depends like money, government, the press, education, etc. of the latter. People who have more money than they could spend in several lifetimes say they continue to play the game just to ‘keep score’. But the game they play ultimately destroys the nation or civilization which gave them their power and prestige.
Anyhow, back to the work of life and specifically ‘the book’… Understanding life and finding meaning in it is probably the hardest job there is. Harder still is understanding the times in which one lives. History is full of brilliant minds that have tried. If even they ultimately fail to keep civilization from coming “off the rails” (because readers are not willing to expend the energy required to follow their train of thought? because they are smothered by political or commercial censorship?), perhaps those of us who settle for merely trying to understand can be forgiven for not producing the ‘great American novel’ or a definitive book on political economy.
While I suspect most people would not write a book, but I think it’s kind of hard to generalize from the present. Today people live in terror, economic terror of losing their means of subsistence and that drives them to “work” regardless of whether it’s performed well or poorly or does good or evil in the world. It’s hard to even say whether a terrified person could write that novel or not, since a person living in that fear constantly (although like fear of death it’s repressed/ignored) is probably very different than one not doing so.
“I’m at a loss to understand reader objection to the idea of a job guarantee.”
I object to both. However, the BIG at least has the advantage of harnessing the government to do one of the few things it does both well and efficiently….redistribute income. The specter of a JG bureaucracy gives me the vapors.
BIG does not redistribute and will not alter the trend of growing inequality because it does not change national income share captured by capital. The JG does both.
Appeal to Pathos. The Jobs Guarantee is decentralized and, last time I checked, government is far more administratively efficient than large for-profit entities.
False Dichotomy: Assuming arguendo that the government is more administratively efficient than large for-profit entities, it does not automatically follow that a JG bureacracy will be administratively efficient. Which it won’t.
False Dichotomy: Assuming arguendo that the government is more administratively efficient than large for-profit entities, it does not automatically follow that a JG bureacracy will be administratively efficient. Which it won’t.
“You might possibly have accused me of appeal to authority (of expertise) ”
Yes indeed, you do a lot of that too, sometimes twice in one sentence:
“The Jobs Guarantee is decentralized…” and “…last time I checked, government is far more administratively efficient than large for-profit entities.”
The military is highly efficient administratively. And I’ll take any New York State department over my health insurer or my bank, which screws up regularly.
The Jobs Guarantee provides for most and potentially all of the jobs to be devised and supervised at the state and local level, with them free to choose priorities subject to federal supervision regarding graft and conflicts of interest. It would revive the revenue sharing program created by that famous socialist Richard Nixon, which was successful in devising check to deter abuses. So your snark about it being decentralized is incorrect.
As I told Ben, assuming arguendo that the government is more efficient than large not for profit entities, it does not automatically follow that a JG bureaucracy will be efficient. As he fantasized in an earlier comment:
“Everyone entering the Jobs Guarantee will earn an equivalent wage.”
“The job will be designed to suit the worker.”
“The JG is decentralized to the local level with tens or hundreds of thousands of non-profit organizations submitting proposals.”
“Someone” will have to determine what equivalent wages are all for all sorts of jobs in communities all across the country, no? And also “design jobs to suit the worker”, whatever that means. And read and evaluate all of those proposals, and then insure that they are implemented.
And anyway, “decentralized”, does not automatically mean the absence of bureaucracy.
No one assumed this.
That is the proposal. We’re talking about the Jobs Guarantee proposal.
What’s your point?
No one said it did. As you’re the only one expressing “fear” of “bureaucracy”, you appear as though arguing with yourself.
Hmm. You’re arguing that a simple claim is an appeal to authority? If so, “Use every man after his desert, and who should ‘scape whipping?”
Unsubstantiated simple claims, asserted frequently, aggressively and authoritatively… in my view he was appealing to his own authority. Sort of a self referential appeal to authority.
Alrighty then…
An enlightening post. Many thanks.
Thanks for the primer. I’m convinced. BIG won’t work without some kind of wage floor substantially above the subsidy. Theory and real outcomes seem to jibe.
JG is a deal with the devil in the details. It will fail to the degree that it mis-allocates labor. It will succeed to the degree that it’s well designed – Meis’ “god in the details.”
Failure means a bloated, over-funded administrative class that trips over its own feet trying to tell everyone what to do. Anyone who’s been in France before the Euro started dismantling the state will realize that condition is not so bad. Suck it up guys. Assuming the worst, bureaucratic incompetence beats the hell out of unchecked kleptocracy any day.
A big way to solve that some national programs or minimum standards (say for things like day care and elder care) and revenue sharing with state and local governments. States and local governments are the place to choose among and oversee things like infrastructure programs. Basically you set some national priorities in some key categories, let state and localities use other funds for their own priorities, and for BOTH (as in the national priorities as well as state and local), drive as much of the administration of the work as possible (presumably all or close to all) to the state and local level.
Nixon implemented revenue sharing and had provisions in place so the Federal government would oversee to prevent fraud and waste. Those provisions could be revived.
And that’s the way Argentina did Jefes–federal money, local control
JG is a deal with the devil in the details. The devil is NOT in the details.
As you rightly say with “Assuming the worst, bureaucratic incompetence beats the hell out of unchecked kleptocracy any day.” This point bears repeating.
The devil is in the decision. No country that has ever tried to have full employment has failed. The devil is in not listening to insane plutocrat propaganda that says letting people work when they want to work and get duly rewarded transgresses the world’s vital general equilibrium quantum hermeneutics and so will Blow! Up! The! World! No. More good stuff will be done if more people do more good stuff when they feel like it and don’t do stuff when they don’t.
A slow 10 year old child could design and administer a JG that would leave the current intentional economic misrule in the dust. The problem is that usually, too many details are given for proposals, not too few. The details – which is not where the devil is, remember – obscure the logic, which is usually so simple it repels the mind.
The Speenhamland system was a “topping off” system, not a BIG.
The equivalent today would be topping off all annual incomes to say, $50,000. Then why would any employer pay more than minimum wage, since the government would top off the wages to $50,000? For that matter, why would anyone work at a low wage job if they could make $50,000 sitting on their couch?. So yes, such a system would drive down wages and workforce participation — but a well designed BIG would not.
For example, a weekly means-tested BIG of $250/week for any adult citizen, in conjunction with a $10 minimum wage and/or $10 JG and a 30 hour work week. No full time worker would get a penny of BIG. A minimum wage job would pay more than the BIG ($300 vs. $250) so there would still be a financial incentive to choose work.
Yves said I’m at a loss to understand reader objection to the idea of a job guarantee. It would either price many McJobs out of existence or convert them back to their old form
The Argentine Jefe did not price McJobs out of existence, since the Jefe wage was only half of poverty level. Regardless of what MMT proposes, there is zero chance that any real world JG would pay more than McJobs. If the goal is to increase wages and improve treatment of workers, that could be done simply by raising the minimum wage and passing more worker’s rights laws, no JG required.
Yves said And there is no dearth of meaningful work that needs to done: providing universal day care, better elder and hospice care; replanting forests; building wildlife tunnels; maintaining and improving parks; repairing and upgrading infrastructure with an eye to energy efficiency.
By MMT’s own rules, the JG cannot compete with existing private enterprise. A JG day care would compete with private day care. There are ALREADY government programs for elder and hospice care. Replanting forests is normally done by private contractors, so the JG would not be allowed to do that. Building wildlife tunnels would require heavy equipment, concrete, asphalt, engineering, and semi-skilled workers that make it incompatible with the JG. Ditto for any infrastructure project. That leaves only “maintaining and improving parks”, in other words a CCC.
I fully support a CCC, but a CCC was never a universal JG.
As an older person (57) with health issues and with 2 college degrees, I don’t have the slightest interest in doing CCC work. If you want me to support a JG then you need to go back to the drawing board and make it a CAREER GUARANTEE, not a job guarantee. The worker should be guaranteed a CAREER in his area of training and experience, paying the prevailing wage for that occupation.
MMT has never had a realistic plan to create suitable jobs that do not compete with the private sector and that fit into MMT’s narrow funding guidelines (typically 80% or more of the budget must be labor). The JG, as it stands, is ivory tower nonsense.
Yves said People need a sense of purpose and social engagement. Employment provides that.
Michael Perelman would disagree. Independent farmers had a sense of purpose long before the wage economy came along. Native Americans had a sense of purpose before their culture was destroyed by capitalism. And so forth. The truth is that the wage economy has destroyed our sense of purpose, not enhanced it.
Randy Wray said A job at a decent wage, set by public policy, will eliminate at least 2/3 of poverty.
Questionable since the majority of the poor are not labor force participants — children, stay-at-home-parents, the elderly, and the disabled. The Argentine Jefe did not make a dent in poverty. And as I said before, there is zero chance that a real life JG would pay a “decent wage.”
To sum things up, all you have to do to avoid the Speenhamland effect is make the BIG pay less than the minimum wage, then no full time worker would get a penny of BIG. I further recommend making the BIG a weekly affair based on each week’s income rather than based on annual income, that way there would be no financial disencentive for the BIG’ers to accept temporary jobs.
It was an income guarantee, means tested and set at what then was considered to be a living wage.
You are arguing over nomenclature. You don’t have the right to have personal definitions of well accepted terms.
Why don’t you explain just how and on what turf they’re competing? Is Ruth’s Chris competing against McDo?!
You know full well how underfunded and short-handed they are, or you wouldn’t have used them as an argument.
“MMT has never had a realistic plan to create suitable jobs that do not compete with the private sector and that fit into MMT’s narrow funding guidelines (typically 80% or more of the budget must be labor). The JG, as it stands, is ivory tower nonsense.”
I guess the 2 million jobs created by Jefes all competed with the private sector then, right Dan? Oh, wait, MMT economists went to Argentina and did case studies that showed all kinds of jobs created not competing with the private sector–but as everyone knows real-world site visits are “ivory tower nonsense”
I see you’ve still got that “free markets for the left” thing going, Dan. How bold.
“as long as his wages amounted to less than the family income granted to him by the scale”
There’s your problem.
http://basicincome.org.uk/2013/08/health-forget-mincome-poverty/
I recently read in Huff Post a story about this Canadian experiment during the 1970s. A more recent Canadian grad student said she had heard about it from older profs and decided to research it. The above link is an interview about the Canadian Mincome program. Finance has its complexities that needs to join with the rest of the social sciences so that we are not just throwing money at a problem and hoping consistent with the rubrik that it is money that makes the world go round, all manner of problems will be solved. The need for socialization once the cash hits the impoverished is obvious to many political leaders as well as academics. People who only experience and live one way can not be expected to behave with just more money the same way people who spent a lifetime being being inculcated with a disciplined way of life, by sticking to schedules to get up and go to school on time, go to bed on time, wake and cooperate with adults who have to get out the door and get to work on time.
The coordinated operation of successful middle class families, and the money they receive in return is built on generations of time bound disciplines and expectations on roles from childhood to adulthood. The so called poor, unemployed, outside of the system of regimentation, simply given some money, will not react to the expectations of the program executive director without an extensive support system to extract the benefits of the income. Maybe the Canadian research will yield some better, more fleshed out elements to making such programs more successful.
The fly in the ointment here is neoliberalism / dollar hegemony. JG does not make sense for countries exporting jobs faster than they could possibly be created. BIG does not make sense for the countries creating the wealth for the recipients in (once) wealthy countries to purchase with their BIG money. WHEN China and other developing countries stop accepting US dollars and derivative currencies like the euro (which in the last analysis relies upon US “debt collectors” to insure its continued acceptance), the US and the rest of the West is going to have to get real about the difference between real wealth and (money as) debt creation.
That’s the global dimension for any analysis of the global reserve currency.
1) China will never cease accepting dollars.
2) the Jobs Guarantee makes most sense in countries running trade deficits. Creating a job is far easier than exporting one.
Your point #1 is mere assertion, no more valid (or invalid for that matter) than someone asserting, in 1928, “China will never have a communist revolution!”
China is not going to cease accepting dollars because the United States is and will continue to be their largest export market. What are they going to do, sell instead to Antarctic penguins?
Predatory Pricing & Semiconductors
Unions are a funny thing. You pay for current retirements, knowing that your pension will be inflated away, so long as your income is four times your rent, and you average twenty-five hours a week. Mostly, unions replace each other, in a race to the bottom, like most everyone else, because increasing protection replaces skill. Not all union members, and not all non-union workers, are morons. Resonance is a funny thing.
Apes having monkeys compete to build business practice, with better as enemy of best results, requires no brain cells, just activity, lots and lots of activity, drawing down natural resources in favor of hoarders, original sin, supplying margin leverage to the monkeys, always in a state of artificial scarcity. Immersed in public education, you would swear that capital and management came before work, and theories preceded inventions before insight.
They all knew better, but they all had excuses to chase oil up and chase oil down, as we watched the economic activity liquidate purchasing power, of temporary grant income, with permanent monetary rent inflation, in an administrative environment built to produce crime, with arbitrary, capricious and malicious bipolar system intent, growing income inequality with more of the same.
Government cannot replace parents, with negative rates and government grants, debt before surplus, or revolving immigration, but that never prevents the majority from participating, and trying to enforce equality on everyone else, with MAD insurance.
Whether America or ISIS is responsible for current fad of fascism is a matter of perspective. From the perspective of labor, all governments are ran by incompetent, feudal, money-laundering fascists, which have their uses, ignorance serving stupid, teaching ignorance. It’s not the size of government, but rather its market share that matters. There’s Carney again, always applying force on the wrong side of the curve, with the same conclusion.
Empire rocket scientists, trained to prove that something-for-nothing is an economy, is a problemsolution. Don’t go in there without sufficient momentum to advance forward EMF spark. A wire and a switch does have inductance, capacitance and resistance, depending upon your position and frame of reference, your meter and the surrounding gas.
The speed of light is a function of resonance, from the perspective of the observer, not a limit across the universe. Do you really think Faraday began with equations and constants, standing on the shoulders of Maxwell?
Life is not a question of the chicken or the egg, fusion and fission, or the Big Bang. The chicken and the egg exist on a fulcrum. Which comes first depends upon your position and frame of reference. If there is life beyond this solar system, do your really think it would communicate with the majority, or its leaders, always in a State of adolescence?
So Putin is yet another money launderer extending the rest, and Obamacare is yet another capital control, extending the rest, and funny, the critters in the middle wanted the black boxes, from both Boeing and Airbus, surprise.
Sounds like a certain austrian’ s prescription to solve the plight of the many unemployed according to ‘the rise and fall of the thirdbreich’ . A national socialism minus the genocide is what we need.
Not everyone liked it. Employers complained when they were stuck with gold Bricker and sometimes employees had to relocate, but he ameliorate the problem. I’m not being snide. It’s just ironic how this demon did some things right.
National Socialism in our time with the Greenback as its chariot.
Yves, I have been working through my backlog of books toward Polyani for some time, and you are going to spoil it for me the same way you did Private Equity at Work with all of these citations!!!
Editorial Dysfunction Alert!
Serious ED — “Extreme Delusion” — infects the sentence below.
“I am mindful of the fact that being in a Master of the Universe role is vastly more gratifying than trying to patch together part-time work to make a living. However, CEOS,top financiers and top professionals typically work well over 55 hours a week.”
That’s going to meetings and playing golf!
That’s not work.
Work is plucking chickens.
Work is driving busses
Work is painting nails
Work is cleaning streets
Work is nursing patients
Work is delivering mail
Work is selling shoes.
Work happens in a cubicle or behind a cash register.
Work is doing something you wouldn’t do if you weren’t being paid to do it.
What they do for 55 hours a week isn’t work. It might be socially useful! Or it might not be. But it isn’t work.
Maybe rather than an income guarantee, make it an income guarantee for all existing jobs. If you do any of the above, or any job that society supports through its patronage, for less than say $40,000 per year, you get a government credit every 3 months to bring you up to a floor income level. Maybe that would work. If people think about it, they’ll see it’s very multi-dimensional, very nuanced, and perhaps a very useful idea.
Very well said! Having worked, by choice, at some blue collar jobs myself, I can only chuckle softly when I hear people high up on the corporate (or non-profit, or academic) food chain bemoan about how stressed they are about how much “work” they’re doing.
Recently a family friend (Provost of an institution of “higher learning”) was bemoaning his tough week of staying in excellent hotels in Europe, hanging around with other over-paid administrators, supposedly “working” on ways to “improve the experience” for their cash-cows aka “students.” Only generations of high bourgeois, conformist tradition prevented me from throwing my lobster bisque in his face! Patrick Kennedy was merely being truthful when he blurted out that he had never worked a f#@-ing day in his life! And please spare me the self-made bootstrap-pulling legends!
I have known personally quite a few millionaires who claim to be “self-made.” In all but one case they had families of sufficient means to pay hefty tuitions, provide capital to start new or expand existing businesses, etc. The one exception is a guy who literally did go from rags-to-riches, selling rags on the street to accumulate a little capital, and many decades later, expanding from one little shop/gas-station to a huge, multi-state chain of convenience stores/gas-stations.
Yves writes, “I’m at a loss to understand reader objection to the idea of a job guarantee.” So I’ll explain why I’m a skeptic. Not an opponent — I think a job/career guarantee + BGI would be fabulous. And besides, I’m a socialist, so I like the idea of government employment. Personally, I worked half my life in the private sphere, and half in government, and government employment with its civil service protections is better. But here goes.
First, I have reservations about the pay structure. If the minimum is set at say, $20/hour plus benefits, what, about half of current workers would come for the job guarantee? And then, does it go up? Would everybody make the same, from janitors to postgraduate biochemists? There is a real need in this country to provide a career path for high skilled professions, because intermittent employment really wrecks their skills. Would that be part of the jobs guarantee, or would the research scientist do child care? Every discussion by the pro-JG crowd that I’ve seen implies that everyone would be guaranteed a job that would use their skills, and I don’t see how that would work.
I don’t know that I agree with the perception that jobs in the job guarantee program would be supported by legislators and the general population. Currently, public employees are under attack, even such popular ones as teachers. Of course, the battle for good policy is never ending, but I don’t agree that a GBI would be unpopular while a JG would get support.
A related issue — what are the models of job guarantee programs? The WPA and CCC are the ones that keep coming up, but neither was a universal program and both employed primarily unskilled labor. What do you do about jobs that require training? I get cold chills when I read about how many people can be put to work tending the frail elderly and children; inadequately trained people with power over the helpless? No thanks. I’ve seen quite enough of that in the past 15 years as social services have been privatized, and contractors have been spared government defined credentialing regulations. But unless you have a pretty large HR function, you’ll get people deciding that child care is needed, and anybody can do it. The big HR function is fine if you’re talking about long-term organizations. That’s not my understanding of what the JG envisions.
Related is the question of how and who defines work, especially in terms of non-traditional jobs. Do full-time caregivers and homemakers count, at what pay and under what supervision? I remember the 1990s when “welfare reform” depended on child care and access to health care; both failed legislatively, but gosh darn it, the work requirement was imposed anyway. These days access to very desirable jobs and jobs that eventually lead to power within the society starts with unpaid internships, effectively restricting them to the children of the elite. Would those internships be jobs in the JG?
What is the record on universal job guarantees? The only two I can think of are the military, which puts every serviceperson to work, training them as necessary; and state socialist societies. which had their own set of problems. Neither seem totally voluntary. Are there examples of voluntary universal JGs?
As commenters have noted about the Speenhamland policies, how people react depends on the society in which their consciousness was formed. Right now, we live in a consumer society, but that society was actively created and can be changed. The moralistic “Let’s not provide the masses with money and time because they’ll just use them in ways we don’t like” is an approach I find troublesome. There are more respectful ways to build a better society.
The wage is, ideally, set to rhe living wage level in the community in which you reside.
What is the econometric basis for this assertion? How did you arrive at “about half?”
Or down, or remains static depending on how the wage level meets desirable social goals.
Everyone entering the Jobs Guarantee will earn an equivalent wage.
The job will be designed to suit the worker.
You’re thinking in terms of a centralized bureaucracy. The JG is decentralized to the local level with tens or hundreds of thousands of non-profit organizations submitting proposals. Someone in Washington or the state capitol might not be able to figure out a use for a chemist, but in my community I can think of a dozen uses to enhance public services and quality of life.
nihil obstet: First, I have reservations about the pay structure. If the minimum is set at say, $20/hour plus benefits, what, about half of current workers would come for the job guarantee?
No. This is a misconception that Washunate has too. (Half of) everybody will NOT go on the JG. Sure, if it offered $1 million / hour everybody would get a JG job – for a short while. It would set off mega inflation – which would terminate though. Then the higher productivity, juicier. more-in-control-of economic-rents etc jobs would pay more $2-20 million / hour, whatever. The idea that everyone would go on the JG misses two things – the level of the non-inflationary JG wage is determined not by the current compensation, which could be about zero, if we were a slave society – but by current productivity. $20 / hour would just return the USA wage closer to the pre-1975 trajectory. So we can easily afford without inflation a $20/hour JG, which will not employ half of everybody. Second, and related, it misses the multiplier – the new spending of the JG will have a multiplier effect, because the JG workers will spend. Indeed, it will have this effect even before there is a JG! (Time travel, wooooo) A serious JG debate in Congress will raise employment by itself. This was seen in the New Deal IIRC, where private investment anticipated major PWA/WPA/alphabet soup spending in some places.
And then, does it go up?
Should not go up very often. Only if (a) there is inflation serious enough to seriously diminish the JG workforce or (b) in line with productivity, which doesn’t go up superfast.
Would everybody make the same, from janitors to postgraduate biochemists? There is a real need in this country to provide a career path for high skilled professions, because intermittent employment really wrecks their skills. Would that be part of the jobs guarantee, or would the research scientist do child care?
This is a complete non-problem in a full employment society. Dan Lynch wrongly worries about this too. There would be a lot more sane gov spending usually, outside the JG, plus the JG. Again, this is missing the multiplier – the fact that JG & other government workers would spend their money. “Highly skilled” people would be much less likely to be unemployed – as now. They would get the other gov jobs or other jobs in their specialties. In a recession, they might lose their dream job, and accept one a little bit “lower”. Like Paul Samuelson settling for tenure at MIT instead of Harvard. Boo-hoo. Even with a JG, “You can’t always get what you want.” But a JG means “if you try sometime you find You get what you need.”
The moralistic “Let’s not provide the masses with money and time because they’ll just use them in ways we don’t like” is an approach I find troublesome. There are more respectful ways to build a better society.
The (universal, classic) BIG is not a plan to provide the masses with money & time. It is a plan to give people a piece of doo-doo and call it money, and make them scramble for more jobs to pay their inflating bills in inflated cash. Poor people don’t want a BIG (as a general social plan). They have experience with the delights of welfare. Poor people want a job (offer) – a way to get money at their discretion.
A society without a JG – including one with welfare/BIG is insanely disrespectful and contemptuous to the poor, the unemployed. It lyingly says to them your labor (which we superiors feed off of) is a piece of shit. You are a piece of shit. We superiors give you neither the right to work nor the right to be lazy. The best way, the essential way to respect the ordinary working stiff, the masses is with a decent wage for his or her work, proportional to the wealth of the society.
Calgacus, thanks for responding to Ben Johannson’s question about the $20/hr. I was actually looking at median family income in my area. But I’m not clear on why half the people wouldn’t go on the JG for a job that meets the criteria you two are describing. Say I work at a fast food place for $8/hr. Or I’m an adjunct professor at the local university (where two thirds of the faculty is adjunct) or the community college (85% non-tenure track), teaching 5 courses a semester at $3500/course. As a fast food worker, I’ll probably go for any $20/hour job that I can physically do. That’s 3.7 million people in the U.S. And then the teaching — a tenured professor makes in the 6 figures for teaching two or three courses a year. An adjunct makes about $35,000 for ten courses a year. What’s the “equivalent wage” for someone with college teaching skills, interest, and a current job? Although there’s a need for teaching, would the JG simply set up alternative colleges where professors would be adequately paid? Is it up to the local board? Why wouldn’t I run down for the guaranteed job in either case?
I go on about these details because the arguments for a JG that provides more than a decently paid low-skill job seem to float on political marvels that I have never seen — “there would be a lot more sane government spending.” I hope we get to more sane government spending, but I can’t see these very very vague assertions about how things would work will be the silver bullet that gets us there. I’ve spent a lot of time making grants to local governments and non-profits, including major disaster recovery. Even where there are major obvious needs and lots of unemployed, there isn’t the civic infrastructure to handle what you seem to be describing. I keep hoping you can describe something that has a chance of working. Oh, TV recommendation! — watch Treme. While the New Orleans recovery effort was particularly bad, Treme does portray the difficulties of major government spending with multiple objectives well enough for you to see the scale of the problems.
At base, however, is a disagreement about human nature, personal worth, and respect. I support a JG as a supplement to a guaranteed basic income. If the government is going to enforce “property rights”, it must provide reasonable access to the resources of the society as a prior right. Defining that access as throwing doo-doo at anyone who doesn’t have property is distinctly Romneysque — they’re takers! It’s all about how you get status and respect — the property owner who gets farm subsidies does not regard them as “insanely disrespectful and contemptuous”. But when people who say that respect and worth are available to those without property only if they exchange time and autonomy for what would otherwise be doo-doo, then SNAP becomes a stigma and the intrusive means testing becomes insanely disrespectful and contemptuous. It’s not about getting money. It’s about people in authority treating them with contempt.
Should people inherently have freedom, autonomy, and respect? Or are they better, happier people if made to develop the habits of capitalist industriousness? I’ve read these comment threads, and it seems to me that those questions are the difference between the two approaches.
Nihil Obstet:
But I’m not clear on why half the people wouldn’t go on the JG for a job that meets the criteria you two are describing. Simple. The fast food place etc would start paying $20 / hour. And this would not raise prices, be seriously inflationary. They could afford it with ease. Not understanding this is not understanding accounting, not understanding how the plutocracy is robbing everyone – not so much by directly stealing/redistributing, but by sabotage and strangulation.
I go on about these details because the arguments for a JG that provides more than a decently paid low-skill job seem to float on political marvels that I have never seen
What is wrong with decently paid “low skill” jobs? We don’t have it now – it is the real problem. I trust you that you haven’t seen the political marvels. But why? For the marvels are right there, staring you in the face. The whole world after WWII was this political marvel. The entire history of the (pre) USA back to colonial times and up to about 40 years ago was another. [The (First) New Deal is of course a period to which special attention should be paid.]
The reason so many cannot see what is staring them in the face: As Hegel & Ludwik Fleck said “Nihil est in sensu quod non fuerit in intellectu” there is nothing in the senses/experiences which has not been in thought. For example, Darwin famously commented on his own inability to see glaciation at work, when evidence for it was all around him.
[“This passage wonderfully illustrates the need for a theory to see what is in front of our faces” – From Mexico, to whom h/t]
So as I have said before, MMT academics are wrong to present, to debate details too much. That is not where the problem, the incomprehension is. It comes before the detail stage. The incomprehension is abstract, simple, easy, accounting, theoretical, logical, arithmetical, of philosophical understanding. People are multiplying 10 times 10 and getting the answer “3”. The only answer is: slow down. Think about really dmub things. Festina lente. A lot of people here are doing this. MMT cultists like me are just cheaters who’ve peeked at what smart guys since Epicharmus have said.
While the New Orleans recovery effort was particularly bad, Treme does portray the difficulties of major government spending with multiple objectives well enough for you to see the scale of the problems. What “recovery effort”? There was a successful effort to rob poor, black people, after many had been left to die, to benefit rich white people. That was the sole objective. Read Shock Doctrine or many Nation articles. I have some well-off semiracist family there, there since slavery & they agree.
I support a JG as a supplement to a guaranteed basic income. That’s like saying legs are a good supplement to wheelchairs, the regular kind of lungs good supplements to iron ones.
Defining that access as throwing doo-doo at anyone who doesn’t have property is distinctly Romneysque — they’re takers! That is not what I said. There may be confusion because of corruption of terminology – the classic, universal, big “UBI” BIG is what I referred to and meant. This is an insane idea: give everyone tax-free $30,000 or so. Enough to live on. Not seeing that this is spectacularly inflationary – (thus, throwing doo-doo at people and calling it money) – is spectacularly innumerate, although the many academic & other proponents are that innumerate. Now, insane ideas are worth thinking about, to clarify issues; pondering such is the main source of philosophical progress. Other, small, BIGs, the NIT, a means-tested BIG, etc – they’re just welfare. Whoop-de-doo. We have it already. This is supposed to be the magic bullet? Sure, us MMTers are bleeding heart liberals (Wray) – so we love welfare. But does it really help people so wonderfully well, when people don’t have jobs? No.
But when people who say that respect and worth are available to those without property only if they exchange time and autonomy … Not at all what the JG says. The JG says “money”, not “respect & worth” and “if” not “only if”. Bad economics gets everything backwards (Wray). It is so omnipresent, so inculcated that people read things written straightforwards in the backwards way. Even our heroic MMT & post-Keynesian academics do this a bit. The usual word used for “hyper-intuitive” is “counter-intuitive”.
At base, however, is a disagreement about human nature, personal worth, and respect. No, that is not the problem at all. From your statements, I conclude that you & I basically agree on such things. I am saying that the poor & the rich & MMTers do arithmetic correctly. Viewing the JG as a supplement to the BIG etc suggests doing arithmetic incorrectly. Poor people prefer a JG to a BIG. MMTers say their preference and the logic they base it on is entirely rational. I am saying that the logical errors of BIG-exalters, JG-belittlers, leads them to make unreasonable statements that they do not realize are highly insulting, contemptuous of the poor, the jobless.
I think we see things very differently. The whole world after WWII was this political marvel. The entire history of the (pre) USA back to colonial times and up to about 40 years ago was another. [The (First) New Deal is of course a period to which special attention should be paid.] In colonial times, there was ongoing theft and genocide against the native inhabitants of the land. Taking this land enabled economic independence for European settlers. That’s why I mention that enforcement of property rights as the government feature that entitles people to access to the society’s resources. It was failure to enforce those rights for the native inhabitants that gave settlers their prosperity. Thomas Jefferson thought that employees could not be good citizens of a republic, but only the small independent landholders who made up the majority of the white population of Virginia. Even then, the prosperity was based largely on slavery. Slaves, investment in slave operations, and slave-produced goods were the single largest accumulation of capital in early 19th c. America. What am I supposed to see in that situation that reveals a JG?
And then there’s the post WWII miracle. It was great if you were a white male with GI benefits (you know, cash given by the government). Even better if you were the son of the elite and could get out of the two years draft that did wonders for the job market (I guess that’s an argument for the JG, but I have problems with it). Less great if you were a minority pretty much sentenced to doing society’s crap work cheap. In fact, the marvels weren’t really right there before your eyes. I do not find it accidental that movement towards enforcement of the Civil Rights Act of 1964 eliminating the legality of the cheap labor ghetto ended the political marvel. It was replaced with what we have now — high un- and under-employment, inadequate pay, the incarceration of mass numbers of working age persons and their guards as economic development. This political marvel of well-paid full employment for some at the center of the empire depended on the exclusion of many others.
I’m obviously not an economist, so bear with my feeble understanding of money. I see it as an accounting mechanism for granting people access to real resources (and that includes its function as store of value). So I believe as you say that giving everybody $30,000 tax-free would be spectacularly inflationary if that’s all you do. But I thought the whole point of MMT was to explain and balance the creation/destruction of the chits that we call money so that people’s access to real resources is what we want. Why does this concept suddenly disappear when we talk about providing benefits? It’s like how we can’t afford Social Security and Medicare — supporting people who don’t work for thirty years! Cut the benefit! Raise the eligibility age! Now me, I want to extend the concepts of Social Security and Medicare to the entire population, not cut them because we won’t do appropriate monetary management.
Oh, on the Treme — the point was that organizing and controlling government spending through organizations set up to distribute the money is likely to be highjacked. It’s like charter schools, which argue for local control to educate children free of stupid regulations and selfish unionized teachers. They claim they’ll be democratically run, apparently unlike your local elected school board. Great rhetoric, but the reality is it’s about grift. Things always start with vague but glowing descriptions based on the logic that how we think it should work is how it will work. And that’s why I keep saying, tell me how specific cases will work.
I do want to express my whole-hearted agreement with your implication that nothing is wrong with decently paid low skill jobs. I believe that one thing wrong with American culture is that we’ve always had someone else to do our crap work. First there were slaves. Then blacks under Jim Crow and new immigrants. It’s always puzzled me when people say, “My parents came to America and worked 80 hours a week digging ditches and scrubbing floors to give me a good life,” as though this were a good thing. But there’s a strong current of belief that people who do crap work can’t be paid much because first, they don’t deserve it; second, you want them to be miserable so they’ll work their way to something better; and third, it would be so inflationary. Suggest making picking tomatoes a decently paid job with adequate rest and benefits, you’ll get a response of “Do you know how much a tomato would cost?!” Sort of like your response to the GBI.
And finally, we just know different poor people in different circumstances. I’d suggest that you volunteer with a nonprofit that works with the low-income. In six months, tell me if you have the same ideas about how well non-profits work and about what poor people want.
What else is going to be done? Never mind the simple fact that, as you acknowledge, BIG will require significant additional legislation to deal with the negative outcomes it will produce (making it politically even more difficult) what BIG proposal has anyone submitted that adresses these problems? If it’s out there then why do BIG supporters here never reference it?
It disappears for BIG supporters who never bother to integrate it into their thinking. You effectively argue that BIG is good and so MMTers should figure out how to make it work for you, rather than doing it yourselves; you don’t appear to have considered that MMTers just might have considered BIG in the past and, based on their viewpoint, decided it was less workable than a Jobs Guarantee.
How do you know he hasn’t and yet arrived at a different conclusion?
I think we see things very differently. Nope, the way I think you mean. Me bleeding heart liberal like you too & agree about all that moralistic stuff. But your thinking, your point of view is informed, derailed by omnipresent bad economics, bad accounting – mine was infected by it too for a long time. That obscures the glacier in front of you.
In colonial times, there was ongoing theft and genocide against the native inhabitants of the land. Taking this land enabled economic independence for European settlers. That’s why I mention that enforcement of property rights as the government feature that entitles people to access to the society’s resources. It was failure to enforce those rights for the native inhabitants that gave settlers their prosperity. What am I supposed to see in that situation that reveals a JG? Compared to Europe the US had a tradition of pragmatic economic thinking (American System) high growing wages, high employment economy, no pauperism, more equality as Tocqueville & many others have commented. Very roughly, a more JG-ish society. It wasn’t just the stealing, the slavery etc that gave the settlers & their descendants their prosperity. Yes, make all those qualifications. But there is something absolutely essential left out, the size of a glacier. Because of these economic differences from Europe say, basically every generation lived a little bit better than its parents for hundreds of years in the USA/ British North America. That stopped ca. 1980.
And then there’s the post WWII miracle. It was great if you were a white male with GI benefits (you know, cash given by the government). Wasn’t only white males who got GI benefits. Basically, it was bloody great for about everyone, everywhere. In comparison to what had gone before of course, for each particular group.
Less great if you were a minority pretty much sentenced to doing society’s crap work cheap. In fact, the marvels weren’t really right there before your eyes.
Yes, they were. Minorities were overall greatly benefitted by WWII, because of full employment. Sure, economically less great to be black than white then. But it was getting better for both, and the gap was narrowing. Basically, things were getting clearly better for minorities until ca 1980. And there was a period when the old Jim Crow was dying/dead & before the New Jim Crow arose, which pop culture tries to obliterate by post-dating civil right progress. But as social norms, civil rights – in some narrowly defined ways – became solider, economic rights, the right to a decent job instead of a trip to prison, became more and more illusory.
I do not find it accidental that movement towards enforcement of the Civil Rights Act of 1964 eliminating the legality of the cheap labor ghetto ended the political marvel. Explicit decisions to end the political/economic marvel is what ended the postwar era. Nothing else. See my reply to MyLessThanPrimeBeef above. Result 2. Victor Quirk is the go-to-guy on this. Not sure what you are saying here, but if anything what you cited should and did improve general economic conditions.
This political marvel of well-paid full employment for some at the center of the empire depended on the exclusion of many others. This is the heart of your confusion. Utterly wrong. The political marvel of “well-paid full employment” depended – as always – on one thing and one thing only. A social decision for “well-paid full employment.” That was the cause of the postwar economic miracle that happened everywhere in the world, not just the USA. In fact it tended to be more marvelous at the periphery than the center of the empire, and was for all, not some. So this idea – while common enough – is wildly false, empirically. Bill Mitchell & Joan Muysken have a book about it: Full Employment Abandoned. But that kind of idea, that well-paid full employment is a luxury for some that only empires can afford by oppression is not merely empirically invalid, but logically absurd. It is stark, raving mad.
Any society can afford to pay its people as much as they produce – the “well-paid” part. Full employment means more people working, means more production, means better-paid. Yes, if one class runs things it can temporarily pay itself more. In the long run, equality means a speedier scientific, technological & economic advancement, and more wealth even for the upper class. But that is not what the upper class wants. Frederick Douglas famously described his expectation that the North, the Northern whites would be poorer than the South, seeing that there was no slave class to rob. But he saw instead that it was richer. Quite contradictorily to that utterly wrong thinking above.
The best antidotes I know of to the omnipresent mind-poison are the quote from a letter from Keynes to Shaw: Public Service Employment: Full Employment Without Inflation. And at greater length, Ernst Wigforss’s pamphlet “Can We Afford to Work”. But indoctrination in deranged economics & magical thinking is so thorough now that the common sense that Keynes & Wigforss successfully appealed to back then is nearly extirpated in the middle class. Links to Wigforss’s essay – readable in google translation, excerpts from a billyblog are here
Why does this concept suddenly disappear when we talk about providing benefits? … Now me, I want to extend the concepts of Social Security and Medicare to the entire population, not cut them because we won’t do appropriate monetary management. That’s what MMTers want : extend the concepts of SS, Medicare etc to everyone. We’re all big bleeding heart liberals. But the (big) GBI is not this, but obvious lunacy. The small GBI hardly deserves a new name, “welfare” is good enough. MMTers are all for welfare; but it ain’t magic, and will die and is dying without full employment = JG. Societies can provide universal benefits to everyone: public goods, national defense is a classical example. “Socialized medicine” Medicare for All, an NHS in the USA is/would be another. Low rent public housing. What no seriously monetized society can do is automatically provide an amount of state money, enough to live on, to everyone without making that state money worthless. “Appropriate monetary management” of a big BIG doesn’t and can’t exist.
But there’s a strong current of belief that people who do crap work can’t be paid much because first, they don’t deserve it; second, you want them to be miserable so they’ll work their way to something better; and third, it would be so inflationary. Suggest making picking tomatoes a decently paid job with adequate rest and benefits, you’ll get a response of “Do you know how much a tomato would cost?!” Sort of like your response to the GBI. My response to “GBI” is because it cannot work: Big or small, it doesn’t do what well-meaning people think it does. The JG works and does do what the BIG/GBI supporters wrongly think it will. A $30,000 tax free classic, big GBI [what do you mean by GBI – big or small?] – will make tomatoes fabulously expensive, will make the tomato-picker LESS able to afford the tomatoes he picks. Period.
As Ben points out, there really isn’t anything that could be done to prevent the inflation. Taxing it, means-testing it makes it into a small BIG “welfare”, which MMTers both support – & say whoop-de-doo to. Your “third” is the JG – pay tomato pickers decently. For there isn’t any other way to that than a JG. Government provided employment to offset government enforced taxation, because nobody else can have the money it requires. At least, the (impossible) burden is on you to suggest another way. MMTers, not BIGgers say: give poor people, tomato pickers, decent pay and conditions.
And finally, we just know different poor people in different circumstances. I’d suggest that you volunteer with a nonprofit that works with the low-income. In six months, tell me if you have the same ideas about how well non-profits work and about what poor people want. I have said nothing about how well non-profits work. But there are polls supporting my statements on what poor people want, which are (true) truisms, (true) folk wisdoms. I think that the poor people you know do agree with me, and suggest you ask them. I am making strong statements: poor, lower class, working class whatever people everywhere and at all times – the great majority of the human race through history – agree with me. Generally, people on the personal level prefer to truly earn something in reasonable conditions with reasonable compensation, rather than being beneficiaries of a handout and thus saddled with an implicit debt. Of course everyone, poor or not, would like to win the lottery. But a (big) BIG = a lottery that everybody wins = a (sadistic) joke. On the level of universal plans, I think that essentially all poor people have had the understanding of the value of a dollar beaten into them well enough to know that making money grow on trees, rather than something you have to work for as a general rule – would make it as socially valueless as leaves.
We do see things very differently, and I’m not talking about just the wished for result. I do think that you want. as I do, the best for ourselves and our compatriots. I can’t get over the fact that early American prosperity was built on genocide and slavery. Those are not such minor items economically that they can be dismissed. There was good government policy such as allowing settlers to claim land as opposed to South American governments which made large land grants to connected persons. And when access to resources is dependent on participation in the paid labor force, more employment will be better than unemployment. That doesn’t mean it’s the best way for the society.
A hundred years ago, the majority of the population worked in agriculture. But we’re not starving. We can use increased productivity across all sectors of the society to reduce the number of people we need in paid employment. Given how much of the society is in nonproductive jobs ranging from telemarketing to the whole FIRE sector, the whole “defense” industry, prisons, and the like, we’re better off with these workers not working at all. At least I wouldn’t have to spend billions on planes that won’t fly safely or deal with another telemarketer. I don’t agree that paid employment is automatically productive work, and that seems to underlie your whole argument.
No, I don’t ask the poor people I know, “Would you rather have this benefit that you’re entitled to or work it off so you can feel that you’ve earned it?” Nor do I ask, “Do you want to go on welfare?” The context and wording of polls is rather determining. If poor people want a job more than a stipend, just offer them their choice. If they take the stipend, it means that they wanted it more. It says something about assumptions to claim that they want the job, but then to claim it’s silly to think they would choose the job. What they want is a secure future.
Those are not such minor items (genocide etc) economically that they can be dismissed. I am not saying that. I am saying don’t dismiss other things, in particular, the ordinary person and their labor. Scandinavia, Sweden etc is a “cleaner” case. No genocide etc. Basically – Scandinavia had MMT, full employment, (near-)JG. Result: poor countries become rich & egalitarian, fair, make everybody else look bad. ;-). At varying stages these states abandoned the crucial policy of JGish full employment, while keeping the rest of the BIGgish welfare state. Result: decaying, dying welfare states. Burgeoning homelessness. Just the US with a lag.
And when access to resources is dependent on participation in the paid labor force, more employment will be better than unemployment. That doesn’t mean it’s the best way for the society.
Access to resources must be largely, essentially dependent on participation in the paid labor force, because the paid labor force is THE Resource. There is no other way, nothing to do with money even. “Access” here is ambiguous, but there are to many things to say already.
I don’t agree that paid employment is automatically productive work, and that seems to underlie your whole argument. What is productive? Who decides? There is no magical definition outside of human decisions. In a society with unemployment, where the government, the society as a whole sadistically, insanely forces people to be unemployed, the deciders are the people with money = financiers, capitalists. That’s how they control the whole society. In a society with a JG, with full employment, the individual and the society-as-a-whole dialectically decide, and there is no better definition of “productive.”
If poor people want a job more than a stipend, just offer them their choice. That is all that MMT says. But MMT agrees with the poor that the important thing is the job offer, not the stipend. It isn’t a real, paying job, it is not treating people equally if it doesn’t pay more than the stipend. And the government of a monetized economy like ours just can’t pay a stipend to everyone that is enough to live on. It, a big, universal BIG is like saying the government should make 2+ 2 = 5.
I did not suggest to ask poor people whether they would rather be rich / win a lottery / have a stipend. Of course they would. I am suggesting that you or anyone inquire of poor people’s Abstract Theory of How Things Work, which IMHO are intellectually superior in all respects to BIGgism & magical thinking prevalent here. MMT = PPT = Poor Person’s Theory of economics. (Also = Rich Person’s Real Theory).
MMT/PPT/ common sense shows that “welfare” alone, a BIG of the kinds so many so foolishly propose here, alone is just a way to (a.) inflate the currency (b.) divide and conquer the poors & the soon-poors (= middles) (c.) tyrannical, managerial, bureaucratic ordering poor people around, not liberating them (d.) a sadistic trick of the rich. Again, I am saying middles should ask poors to explain the facts of economic life to them – & maybe even pay them for the education. I know educated, well-meaning pro MMT economics PhDs, good guys, rightly famous ones even – but who really need this education-from-poor-people too. To stop thinking so fast and think slowly, philosophically about the meaning of what they are saying. It isn’t easy.
MMT/PPT/ common sense shows that “welfare” alone, a BIG of the kinds so many so foolishly propose here, alone is just a way to [get bad things].
Yes, I think we all agree that it can’t be done alone. I can’t think of anything more to say to convey that I’m not advocating an inadequate, stigmatized welfare check, with no other policies in support, any more than I think you’re advocating inadequately paid, demeaning workfare.
A universal unemployment benefit, which exists in some countries, is not that different from an income guarantee. It does the job of keeping those who are struggling to fit into society (for various reasons) fed, clothed and sheltered, but that’s about all that can be said for it. While most people on the benefit can look at various highly-paid jobs and agree that they would be preferable to their current situation, it’s generally not obvious how to get from here to there, or whether it’s even possible. Jobs that are actually immediately available to them (if any) typically offer little or no marginal benefit in exchange for a large increase in workload. Staying on the benefit starts to look more and more like a sensible decision, but in the long term it can become a trap. Subsistence living on government support with no work can be quite psychologically destructive in the long run. Planning a route back into productive society would be quite mentally challenging even for the best of us, and many of these people have problems or issues of their own which were the reason they ended up in long term unemployment in the first place. Some have mental or physical disabilities or complications from injury or substance abuse (past or present). Some simply didn’t do well at school, made poor life choices, or have otherwise been unable to structure their lives in a way that allows them to contribute to society in a way that employers will value enough to pay for them. I’ve known a few people in that situation and it’s not a fate you would wish on anyone, even if it beats living under bridges.
As a society we need to do better at helping these people. A jobs guarantee would be a good start – if we can make it work. There are real and significant problems involved, like matching up the skills of the workers to the work that needs doing, but most can be addressed by various strategies (e.g. training). The biggest problem that I’ve seen historically has been a failure of imagination due to excessive reliance on free-market thinking. As Yves points out, there is no shortage of worthwhile jobs that could be done, but we can’t sit back and wait for the market to provide. If the market was able to provide jobs for these people, it would have done so already. It’s time that we recognized that the free market is poorly equipped to solve some of our problems (‘creative destruction’ may work well when applied to companies, but it’s a moral abomination in labor markets) and started looking for alternatives.
Fred Block and Margaret Somers in their recent extremely ambitious book “The Power of Market Fundamentalism: Karl Polyani’s Critique” state that one of the primary reasons for the success of market fundamentalism has been the ability of this framework to create what they call a “conversion narrative.” Block and Somers define such a narrative as having only one goal: to convert, a person, culture, a people, a nation from one ideological regime to another by telling causal stories that change perceptions of reality. Its task, according to Block and Somers is to neutralize and delegitimate the prevailing narratives by using its own alternative story to reveal the illusion and the reality of the true but hidden causal mechanisms of the social order. They go on to say that by identifying the now maligned ideational regime as something people have been fooled into believing by empirical trickery, it becomes easier to convert people to an alternative understanding of the reasons of the causes and cures for poverty.
i would speculate that what Yves, Lambert and many of the other committed Social Democrats among posters and commetariat on NC are attempting to do, with MMT as a key ingrediant, is to construct their own “conversion narrative” to begin to counter the success of market fundamantalism.
Although Block and Somers argue, contrary to Yves,, that the experience of the Speenhamland period is that poor relief did not hurt the poor, but rather helped to protect them from structural changes in the economy and 2nd that any doubts about a guaranteed income proposal cannot use the Speenhamland events as a historical foundation for such a critique, both authors would be in sympathy with the attempt to create an alternative “conversion narrative” along Social Democratic lines to counter market fundamentalism.
I think the key difference here, is that these schemes were local and not national (hence the workers not being able to leave).
And I really don’t understand why the discussion above has missed this crucial point. Besides which there is nothing inherent in a basic income that stops the government employing directly, it just doesn’t guarantee it. The basic idea is to achieve security for people with less invasive bureaucracy.
Note also that a basic income not only redistributes income from high earners to low, it also redistributes it geographically (i.e. it automatically is a regional support system).
Basic income does not redistribute, it simply injects additional spending on top of what we’ve got now, which means the profit share (the thing responsible for our current and growing inequality) will remain on its upward trajectory.
????
How do you think it is financed?
It’s “financed” via spending Spending doesn’t redistribute, which means to take from one and give to another.
I’m pretty surprised by this post. Income “top-ups” are not a GBI. Means-tested anything are not a GBI. For a GBI to work, it’d have to be:
– national – otherwise you would get strange arbitraging behavior
– unconditional
– available to all adults
The idea is that you get the *minimum* (let’s say 22k a year if we started one now), then you work to get even more money. It’s enough to live on. To not starve. To pay rent. If you want to live well, you try to get a job if you can. It would have to replace nearly all of the current welfare state (except maybe disability – 22k may not be enough for the seriously disabled), and not just be another program.
I’m also confused about your confidence that there’s “so much work to do.” Automation is on the march, and will continue (I’m sure you’re very familiar with Autor / McCaffee / Ford and friends.) Many of the jobs that you might envision (and that still exist) are jobs that no one wants to do in today’s world in any case. They aren’t pinnacles of dignity and pride; they’re soul-crushing, meaningless, repetitive, and body-destroying. The sooner we automate them, the better. No one will miss doing them. A jobs guarantee also puts us right back in the workhouse / make work mindset.
“People need a sense of purpose and social engagement. Employment provides that. History is rife with examples of the rich who fail to find a productive outlet and and whose lives were consumed by addictions or other self-destructive behavior.”
Yes, many people would do drugs and play lots of video games. I think it’s short-sighted to believe we can stop that (and as things like VR improve, we’ll probably get to the point of wireheading.) Many others would spend time with their friends, make art and music, etc. I think pre-emptively assuming that most would just be loafers is falling to the same thinking trap that has sustains ideological wonders like the Protestant work ethic and modern Social Darwninism. There are other ways to encourage “purpose.”
A jobs guarantee is, and will hopefully remain, a non-starter. Machines will free us from work; then we’ll have to find our own purpose.
“Machines will free us from work.” Hmm. If that’s the premise of the BIG, I’m sure that the JG will do just fine.
Well we should at least be able to work less hours right? Why can’t we take any productivity gains in leisure rather than in more stuff or even more services?
Sure, why not?
Exactly correct, Puzzled. This article is completely, utterly off-base because a *means-tested* program like Speenhamland behaves completely differently, economically, from a Basic Income program.
As for “sense of purpose”, Hitler also thought everyone needed a sense of purpose. I disagree. People can find their own purpose and that’s not my problem. Perhaps we will have a tremendous flowering of art. Those who want to do really useful work will get stinking rich. That’s OK… we still need progressive taxation to prevent them from getting so rich they can buy the government, of course.
“Appeal to Hitler”, never takes long when someone (usually a right libertarian) arguing in bad faith runs out of argument.
“You’re wrong because Hitler/Stalin/Mao!!!!”
Yves,
Sorry I missed this one. But me thinks your adherence to MMT and its JG have blinded you. Might I suggest that Speenhamland was a bit more nuanced than Polanyi’s discussion would suggest.
Please reference:
[PDF]In the Shadow of Speenhamland: Social Policy and the Old …sociology.ucdavis.edu/…/PAS252272.pdf University of California, Davis by F BLOCK – 2003 – Cited by 70 – Related articles
You essentially make the same REACTIONARY arguments against “parish relief” and the salutary results of hard work, discipline, etc made by its opponents during the period in question. Your using Speenhamland as an example to promote JG over BIG is really appalling…
It’s a moderately interesting paper but unpersuasive.
The Speenhamland system is a prime example of current poverty traps, as well as one of the systemic problems that lead real communism to failure (but of course there’s more very obvious reasons for that, like decoupling production from what people actually buy. Not very clever.).
Anyway, the Speenhamland system was designed to top up anyone to the exact same level. So why work? It’s beyond obvious any sane person would drop their labor responsibilities if they cannot earn a single piece of currency through it. If you let em drop their jobs. That’s why while we also have poverty traps like the Speenhamland system had, we get people to work through the threat of losing benefits.
Either way, we lack entrepreneurship and knowledge workers, so why not just let people earn money according to how productive they are? And tax em a fair rate somewhere in the cycle of consumption/production, while also giving em a check to cover subsistence costs. That’s a basic income as 99% of supporters propose it.
Employing people for the sake of their labor not losing value is lunatic. Because human labor is not worth the cost that a living incurs, unless it’s a very specific skill, or lucky+smart entrepreneurship. Machines already beat us to the punch, in a significant number of fields. I refuse to recognize anyone’s labor as valuable, if it incurs more cost than if a robot did it (though, including cost of obtaining/maintenance). But hey I do hold in high regards, the potential of ever man or woman who’s trying to earn a little extra on the market, or who’s inspired to become active otherwise. Meaning everyone. So everyone deserves a living for being alive, if you ask me.
Raoul is the third person who nails it. The problem with Speenhamland is that it’s a “top-up” system like food stamps or welfare, which means *extra work doesn’t get you extra pay*.
What we need is an “everyone gets the same check” system like the Alaska Permanent Fund. Where extra work still gets you extra pay. Totally different.
You don’t know what you’re talking about, but I’ve noticed you have come in many days alterward, spamming the same comment over and again to clutter up the thread.
The Speenhamland system was a Basic Income Guarantee, which means it guaranteed a level of income. That is by definition a means tested system which, as you repeat ad nauseam failed, just as a BIG today would fail for the very same reasons. If you remove the means testing it isn’t a BIG anymore, so please don’t come in trying to change the subject with an argument that is completely irrelevant.