By Scott Ferguson, Assistant Professor, University of South Florida. He is also a Research Scholar at the Binzagr Institute for Sustainable Prosperity. His current research and pedagogy focus on Modern Monetary Theory and critiques of neoliberalism, aesthetic theory; the history of digital animation and visual effects; and essayistic writing across media platforms. Originally published at Arcade
James Livingston has responded to my critique of his Aeon essay, “Fuck Work.” His response was published in the Spanish magazine Contexto y Accion. One can find an English translation here. What follows is my reply:
Livingston and I share many political aims. We each wish to reverse wealth polarization, to alleviate systemic poverty, and to enable diverse forms of human flourishing. The professor and I disagree, however, on the nature of contemporary economic reality. As a consequence, we propose very different political programs for realizing the sort of just and prosperous society we both desire.
In his rejoinder to my critique, Livingston proudly affirms his commitment to Liberalism and makes a Liberal understanding of political economy the basis of his proposed alternative to the neoliberal catastrophe. Deeming government an intrinsically authoritarian institution, he situates civil society as a realm of self-actualization and self-sufficiency. The problem, as he formulates it, is that while capitalist innovation has made it possible to increasingly automate production, the capitalist class has robbed us of our purchasing power and preserved a punishing wage relation. This prevents us from enjoying the fruits of automated labor. Livingston’s solution is to reject an outmoded Protestant work ethic; tax the unproductive corporate profits that fuel financial markets; and redistribute this money in the form of a Universal Basic Income (UBI). The result: each member of civil society will be liberated to associate, labor, or play as they please.
Like Livingston, the left has long flirted with Liberal dreams that autonomous and self-regulating associations might one day replace the difficulties of political governance. After the Great Recession, these dreams have returned. They imagine algorithms and robots to be politically neutral. They seek a life of shared luxury through automatically dispensed welfare payments. This sounds nice at first blush. However, such reveries are at best naive and, at worst, politically defeatist and self-destructive. Abandoned and abused by neoliberal governance, today’s pro-UBI left doubles down on neoliberalism’s do-it-yourself caretaking. It envisions delimited forms of monetary redistribution as the only means to repair the social order. Above all, it allows anti-authoritarianism to overshadow the charge of social provisioning.
Livingston’s articulation of this dream is especially fierce. As such, it crystallizes UBI’s central contradiction: Demanding a no-strings-attached welfare system, the left seeks to cut government out of social provisioning while at the same time relying on government for regular financial support. This position, which fails to rethink the structure of social participation as a whole, leaves disquieting political questions unanswered: How will we provide adequate human and material resources for our growing elderly populations? How can we meaningfully restructure social production to address climate change? How do we preserve a place for the arts outside of competitive MFA programs and speculative art markets?
Such questions are unforgivingly realistic, not pie-in-the-sky musings. And no amount of volunteerism, goodwill, or generous welfare payments can adequately meet these demands. Indeed, only government can afford to mobilize the persons and materials needed to answer such demands. And while algorithms and robots are powerful social instruments, we cannot rely on automation to overcome extant logics of discrimination and exclusion. To do so is to forget that social injustice is politically conditioned and that government alone holds the monetary capacity to transform economic life in its entirety.
This brings me to Modern Monetary Theory (MMT). Far from an “obscure intellectual trend,” MMT is a prominent heterodox school of political economy that emerged from post-Keynesian economicsand has lately influenced the economic platforms of Bernie Sanders, Jeremy Corbyn, and Spain’s United Left. For MMT, money is not a private token that states amass and hemorrhage. Rather, it is a boundless government instrument that can easily serve the needs of the entire community. International monetary agreements such the Eurozone’s Maastricht Treaty may impose artificial limits on fiscal spending, but these are, MMT argues, political constraints. They are not economically inevitable and can immediately be dissolved. In truth, every sovereign polity can afford to take care of its people; most governments simply choose not to provide for everyone and feign that their hands are tied.
To be sure, Liberalism has debated the “designation and distribution of rival goods,” as Livingston explains. In doing so, however, it has overlooked how macroeconomic governance conditions the production of these goods in the first place. MMT, by contrast, stresses money’s creative role in enabling productive activity and places government’s limitless spending powers at the heart of this process.
In lieu of Liberal “redistribution” via taxation, MMT calls for a politics of “predistribution.” Redistributive politics mitigate wealth disparity by purportedly transferring money from rich to poor. This is a false and deeply metaphysical gesture, however, since it mistakes the monetary relation for a finite resource instead of embracing government’s actual spending capacities. MMT’s predistributive politics, meanwhile, insist that government can never run out of money and that meaningful transformation requires intervening directly in the institutions and laws that structure economic activity. MMT does not imply a crude determinism in which government immediately commands production and distribution. Rather, it politicizes fiscal spending and the banking system, which together underwrite the supposedly autonomous civil society that Livingston celebrates.
MMT maintains, moreover, that because UBI is not sufficiently productive, it is a passive and ultimately inflationary means to remedy our social and environmental problems. It thus recommends a proactive and politicized commitment to public employment through a voluntary Job Guarantee. Federally funded yet operated by local governments and nonprofits, such a system would fund communal and ecological projects that the private sector refuses to pursue. It would stabilize prices by maintaining aggregate purchasing power and productive activity during market downturns. What is more, by eliminating forced unemployment, it would eradicate systemic poverty, increase labor’s bargaining power, and improve everyone’s working conditions. In this way, a Job Guarantee would function as a form of targeted universalism: In improving the lives of particular groups, such a program would transform the whole of economic life from the bottom up.
Unlike the Job Guarantee, UBI carries no obligation to create or maintain public infrastructures. It relinquishes capital-intensive projects to the private sector. It banks on the hope that meager increases in purchasing power will solve the systemic crisesassociated with un- and underemployment.
Let us, then, abandon UBI’s “end of work” hysteria and confront the problem of social provisioning head on. There is no escape from our broken reality. We do better to seize present power structures and transform collective participation, rather than to reduce politics to cartoonish oppositions between liberty and tyranny, leisure and toil. Technology is marvelous. It is no substitute, however, for governance. And while civil society may be a site of creativity and struggle, it has limited spending abilities and will always require external support.
It is essential, therefore, to construct an adequate welfare system. On this matter, Livingston and I agree. But Livingston’s retreat from governance strikes me as both juvenile and self-sabotaging. Such thinking distracts the left from advancing an effective political program and building the robust public sector we need.
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I really need to be kicked out of the house, to go someplace and do something I don’t really want to do for 8 hours a day.
I’ve already got too much time to fritter away. I’m fairly certain, giving me more time and money to make my own choices would not make the world a better place.
Hmm. No “sarc” tag… Really?? More free time and money wouldn’t be a benefit to you and your surroundings? That’s hard to believe. To each their own I guess.
I can see it both ways. Most people see that as sarcasm but I have more than a few friends whose jobs are probably the only thing keeping them out of jail. Idle hands being the devil’s plaything and all. For instance, the last thing you want to give a recovering addict is a lot of free time and money.
As a recovering addict, I must vehemently disagree with ur statement.
I would love to have as much money and free time on my hands to work on the fun hobbies that keep me sober like Political Activism, Blogging, Film, etc.
Many MANY folks take drugs and alcohol specially BECAUSE of their jobs
At no point in the “Job Guarantee” discussion did anyone advocate forcing you to go to work. However, if you decide to get ambitious and want a paid activity to do that helps make society a better place to live, wouldn’t it be nice to know that there’d be work available for you to do?
Right now, that’s not so easy to do without lots of effort searching for available jobs and going through a cumbersome and dispiriting application process that’s designed to make you prove how much you REALLY, REALLY want the job.
For me, the real silver bullet is the moral/political argument of a Job Guarantee vs. Basic Income. Job Guarantee gives people a sense of pride and accomplishment and those employed and their loved ones will vigorously defend it against those who would attack them as ‘moochers’. Also, defenders can point to the completed projects as added ammunition.
Basic income recipients have no such moral/political defense.
The guaranteed jobs could be for a 20 or 30 hour week. I fear they won’t be as most job guarantee advocates seem to be Calvinists who believe only work gets you into heaven though.
Totally flippant and backhanded comment jrs, might help to substantiate your perspective with more than emotive slurs.
disheveled…. Gezz Calvinists – ????? – how about thousands of years of Anthro or Psychology vs insinuations about AET or Neoclassical…
What happens when the employer of last resort becomes the employer of first resort because it is a guarantee that if you walk into this particular office, you’ll walk away with a check? This has a dramatic impact on the rest of the economy and everything that goes along with it. I need to see someone game this one out for reals and not just engage in idle utopian fantasy.
What happens at my local grocery store for example? Afraid to answer that one I bet.
I will note that you don’t really have this problem with ordinary government employment, of the stimulant variety or otherwise.
Don’t forget commute another 2 hours because you can’t afford anything close by!
OMG, where to begin:
“MMT, by contrast, stresses money’s creative role in enabling productive activity and places government’s limitless spending powers at the heart of this process.”
” [money] is a boundless government instrument …”
Limitless spending power is identical to infinite spending powers. If this is a central tenet of MMT, the whole conceptual construct can easily be disproved by reductio ad absurdum.
“And while civil society may be a site of creativity and struggle, it has limited spending abilities and will always require external support.”
Sure, the support of Nature, but I guess the author is referring to Big Brother, the all-knowing and benevolent government, source and creator of all money, indispensable provider of jobs, jobs, jobs.
Before there was nothing, then came the Government and the Government said: let there be money.
Hard to take it seriously.
I would like to see you do that via “reductio ad absurdum” because I find you absolutely clueless regarding MMT’s propositions. Maybe you just like to spout off?
It’s a common ‘argument’ by people defending status quo. They claim something is ridiculous and easily disproven and then leave it at that. They avoid making argument that are specific enought to be countered, because thay know they don’t actually have a leg to stand on.
Furzy
January 23, 2017 at 4:19 am
http://www.pragcap.com/modern-monetary-theory-mmt-critique/
I had to leave your reference behind at this point:
So I am trying to think of an analogy and could only find this: someone talking about the heat produced by the chemistry of a wood burning fire and then telling us that is like the heat of a nuclear reaction. But glad you tried to illuminate the subject anyway.
So where are your – laws – from Ruben…. ??????
Limitless may not have been the best word. Of course the government can print money till the cows come home; but MMT recommends stopping when you approach the real resource constraint.
Taxes to mop up…. but that’s theft in some ideological camps….
disheveled… must have printing presses down in the basement….
Sloppy language does not help so thank you. So the next question is how do constraints (natural or other) affect spending power under MMT, is it asymptotic, is there an optimum, discontinuities?
The other major issue is that although spending power is controlled by legislatures it must be recognized that wealth creation starts with the work of people and physical capital, not by the good graces of gov’t. MMT makes it sound as if money exists just because gov’t wills it to exist, which is true in the sense of printing pieces of paper but not in the sense of actual economic production and wealth creation. Taxes are not the manner in which gov’t removes money but it really is the cost of gov’t sitting on top of the economic production by people together with physical capital.
Help me understand your last sentence. So, if I’m a farmer, the time I spend digging the field is economic production, but the time I spend sitting at my desk planing what to plant and deciding which stump to remove next and how best to do it, and the time I spend making deals with the bank etc, these are all unproductive hours that make no contribution to my economic production?
Yes, Jamie. And as you point out, Ferguson is giving us a better definition of “productive”. He is not saying productivity produces profits – he is saying productive work fixes things and makes them better. But some people never get past that road bump called “productivity.”
The answer to your question is No, they are productive hours of work as well. However, gov’t is not the sitting planner for the digging farmer, the farmer does all the work.
“MMT makes it sound as if money exists just because gov’t wills it to exist…”
No, this is inaccurate, MMT says that the government must SPEND money into existence, not just issue a legal fiat. Collecting taxes in the currency creates a need for the currency. This is historically accurate and can be traced from British colonial history. They imposed taxes on the colonies in pound sterling, that compelled the colonies to find something to export to Britain in order to generate the foreign exchange to pay the taxes.
The debate is over how to get the currency in people’s hands. Should the govt just cut checks and let citizens spend as they see fit? Or should the government directly employ resources to improve society where the private sector isn’t interested?
Regarding user Jamie’s point, I hope I can add to it by saying that someone is going to do the planning, whether it’s the public sector or the private sector, planning must be done. When government does the planning, then it’s decided democratically (at least in theory). If the government doesn’t do the planning, then the private sector is left to do it on its own. This gets chaotic if the private sector doesn’t coordinate, or can get parasitic if the private sector colludes against public interest.
As you mention, wealth creation starts with work but money creation does come from the government (or from banks if you want to argue that way) – it certainly does not grow on trees.
I think the key is that the amount of money in circulation (and it must continue to circulate for any economic system to work properly for everyone) must have some correlation to the amount of goods and services being produced in the society. Then society takes a measurement to make sure things aren’t too far out of whack.
We do similar things now under the current neoliberal system , no reason we couldn’t under a different one that I can see.
A new system would work best with a combination of a job guarantee and UBI along with a progressive tax system to keep the few from hoovering up all the money in circulation. That last part is happening now which is why the current system is failing.
I don’t think there’s anything wrong with calling money a “boundless government instrument”. The problem here comes from confounding a potentially infinite resource (money) with the inherently limited application of that resource. Sovereign money really is limitless, what one can do with it is not. The distinction needs to be clarified and emphasized, not glossed over.
one thing is that sovereign money can always be used to make life better – always. whereas it can rarely be used to create a profit for private parties without the problems of usury… and etc.
Thank you and I agree. To go to my analogy with a nuclear reaction, nuclear chemistry allows us to tap into an infinite power but what we do with it is indeed the crux of the matter.
But MMT dos’t argue money as a resorce. Its just a tool tht effect how real resorces are consumed and distributed.
I am using the word ‘resource’ in the sense of ‘thing needed to advance project’… “Let’s see, we need some wood, some screws, some glue, some people to do the assembly…, oh, yeah, and we need some money to buy all these things with”.
“money is … a boundless government instrument”
Restated: “Trees grow to the sky … and beyond.”
During expansions, the economy is always operating at the real resource constraint. Attempts to goose it with MMT can only destabilize it.
You’ll have to dig into that bit about ‘during expansions’ because I am in a fog after reading your statement and want to try to put some coherence on incoherence but I’ll let you do that.
ABCT – ??????
disheveled…. do I get a booby prize –
Moneys ≠ trees. Trees are material objects. Moneys are conceptual objects. You can compare physical things and ideas, of course, but you can’t assume they behave the same way… that because physical objects cannot grow forever, mental objects cannot either. Even the neoliberals treat ideas as inexhaustible. They like to pretend, for instance, that innovation from “human capital” will allow markets to solve all the problems of unsustainability and global warming. They treat human inventiveness as an infinite resource. There is an analogous problem. You may have infinite inventiveness, but that won’t get you around real physical limits. “Infinite” does not equal “unconstrained”. Most infinities are constrained. For example, the infinite series of all odd numbers is constrained to the set of odd numbers. Having infinite odd numbers will not get you an even number no matter how far out you count.
There was a proposal circulating not too long ago to solve the debt limit by coining a platinum coin and designating its value at some arbitrary number of $trillions. $One trillion is not the “real” value of a coin sized bit of platinum (nor is $.05 the “real” value of a nickle sized bit of copper nickel alloy). Currency value is designated arbitrarily. Some proposals were for one trillion, some were for three trillion… I could not discern any reason for the various valuations proposed and there is only one reason not to simply designate a platinum coin value as infinite. That one single reason is that people would not understand the proposal and therefore would not accept it. The whole reason to propose such a coin was to get around the arbitrary debt limit without needing people to understand how money actually works first. There is no need for such a coin for the government to spend. It’s a sop to the mystified in order to break an impasse and get something done.
I’m not entirely sure, but I think that money is one of those “real resource constraints” you mention. That is, I understand you are trying to make a point about the difference between real wealth and money. And that is a valid point to make. But projects cannot be undertaken in “the real world” without sufficient capital. So, where money is the limiting resource, even in periods of expansion (especially in periods of expansion), a restricted money supply will constrain the expansion below levels of natural capital and labor actually available. (This could be a good thing in the absence of sustainability regulations. Ideally it would be such regulations that constrain the economy, not the limits of natural capital, labor or funding.)
“Limitless” is a pretty good word for some arguments. Look what you get with “limited”: every year congress up and says, “Hey dudes, dudettes, we know you expected some governing from us, but we’ve decided not to do that, because we’ve decided that the money we’ve spent has taken us past the Debt Limit. So we’re gonna stop now.” They’re jerking you around. The rules of fiat money that they’re using don’t work that way. In fact, Richard Nixon took the U.S. into a full fiat money system so he could keep governing without having to worry about running out of money to do it with.
So no, not limitless. Rather, the limitations are political ones, not economic. As long as the sovereignty of the currency is not in threat, the money supply can be increased.
The author is making some assumptions, and then goes and takes them apart. It’s possilble (I didn’t read the article he refers to), that the assumptions he responds to directly are made by the article, but that doesn’t make them universal assumptions about UBI.
UBI is not a single exact prescription – and in the same way, JG is not a single exact prescription. The devil, in both cases, is in details. In fact, there is not reason why JG and UBI should be mutually exclusive as a number of people are trying to tell us.
and if we talk about governance – well, the super-strong governance that JG requires to function properly is my reason why I’d prefer a strong UBI to most JG.
Now and then we get a failed UBI example study – I’m not going to look at that. But the socialist regimes of late 20th century are a prime example of failed JG. Unlike most visitor or writers here, I had the “privilege” to experience them first hand, and thanks but no thanks. Under the socialist regimes you had to have a job (IIRC, the consitutions stated you had “duty” to work). But that become an instrument of control. What job you could have was pretty tightly controlled. Or, even worse, you could be refused any job, which pretty much automatically sent you to prison as “not working parasite”.
I don’t expect that most people who support JG have anything even remotely similar in mind, but the governance problems still stay. That is, who decides what jobs should be created? Who decides who should get what job, especially if not all jobs are equal (and I don’t mean just equal pay)? Can you be firedt from your JG job if you go there just to collect your salary? (The joke in the socialist block was “the government pretends to pay us, we pretend to work”). Etc. etc.
All of the above would have to be decided by people, and if we should know something, then we should know that any system run by people will be, sooner or later, corrupted. The more complex it is, the easier it is to corrupt it.
Which is why I support (meaningfull, meaning you can actually live on it, not just barely survive) Basic Income over JG. The question for me is more whether we can actually afford a meaningful one, because getting a “bare survival one” does more damage than good.
That’s why any JG would have to be filtered through local governments or, more ideally, non-profit community organizations, and not a centralized government. New York City’s Summer Youth Employment Program offers a good model for this. Block grants of money are delivered to a wide range of community organizations, thus ensuring no one group has a monopoly, and then individual businesses, other community groups, schools, non-profits, etc., apply to the community organizations for an “employee” who works for them, but the payment actually comes from the block grant. The government serves as the deliverer of funds, and provides regulatory oversight to make sure no abuses are taking place, but does not pick and choose the jobs/employers themselves.
I’m with you on ubi. The jg is the typical liberal bureaucratic response (liberals do not support ubi).
[We each wish to reverse wealth polarization, to alleviate systemic poverty, and to enable diverse forms of human flourishing.] I am unfamiliar with the term ‘wealth polarization’ and it is reversed to what? “alleviate” systemic poverty… that’s a new term. Usually it’s using a credentialed hierarchical bureaucracy to pat the ‘extreme poor’ on the head. When I hear that someone wants to do something about systemic poverty, it’s usually the Clintonite plan to squeeze transfer payments (kick people off ‘welfare’).
There can be no ubi because of ‘reality’? What bs.
There is no (I won’t use profanity, but this bs pisses me off) reality. Society can be organized in a multitude of systems but we must adhere to a system where the benefit of vast swathes of humanity must accrue to the few. Every human is entitled to a base level of the resources that the resources and society have to provide… base level of housing, a base level of food, a base level of water, a base level of income.
This section is bs….
[Demanding a no-strings-attached welfare system, the left seeks to cut government out of social provisioning while at the same time relying on government for regular financial support. This position, which fails to rethink the structure of social participation as a whole, leaves disquieting political questions unanswered: How will we provide adequate human and material resources for our growing elderly populations? How can we meaningfully restructure social production to address climate change? How do we preserve a place for the arts outside of competitive MFA programs and speculative art markets?]
Ah yes, here we go again, the masses are stupid and lazy and need their meritocratic betters to design a system to keep them in their proper place.
If your goal is that the elderly must be monetized and a product of the capitalist system to profit off of, ubi isn’t your solution. People are impoverished NOW taking care of the elderly. A ubi solves the ‘taking care of the elderly’ for all of those people. Climate change is carbon burning, consumerism, over consumption, over population…. Switching to a ubi allows those that want to shift to community service and leisure activities. If you desire to have the privilege to select and crush artists, you will want a private patronage system, but the ubi is specifically useful for the arts. People will have time not just to participate in the communities at schools, libraries, caring for pets, children, the elderly but the ubi is the patronage for many genres of artists….. painting, music, theater.
This bs that people are lazy and stupid still persists amongst the credentialed class. Get out of your own neighborhoods…. I can merely go for a walk and see those lazy stupid people acting in there communities for free…. The person that scrapes weeds not just in front of their own space but continues down the sidewalk, volunteers at the thrift store, volunteers at the school. There are people sitting home alone with no mechanism to contribute.
The real issue is that it is apparent that a dozen individuals could pool a meager ubi and do shameful things like grow produce on a tiny plot and start a grocery store together (reducing corporate power to extract tax reductions) or a library (reducing Amazon’s ability to extract tax deductions). Public schools would have assistants in the classroom, and horror of horrors… there would be those that would step up and run art, computer, shop, crafts, gardening etc and the public resources would be the basis of a community instead of corporate rule and the bureaucratic hierarchies controlled by the meritocrats.
Waldenpond
January 23, 2017 at 1:05 pm
to support your idea of UBI, we are already part way there – its called social security. Some people on ss work some more, some do just hobbies, some watch TV….and I hear some fritter away their time arguing on the innertubes…..
“How will we provide adequate human and material resources for our growing elderly populations?”
Now, I don’t care to supplement my income by emptying bedpans at the old folks home where I will eventually end up…..AT THE CURRENT WAGE OFFERED. Probably would only want a part time job – no matter what I was doing. Won’t do it at double wages, but for triple I’d say give me all your shit…..The fact remains that people in nursing homes are NOT taken care of very well NOW – because it is a POLITICAL decision as to how well we treat them, NOT economic.
Whether we have UBI or MMT does not address the question that many things in society that are truly worthwhile are not done because we set up the system so that someone like Bill Gates who basically ran a monopoly and restrained trade was able to use the system to get rich – not because he came up with a brilliant invention (it was somebody’s else’s software for pete’s sake). Education, more schools for doctors, medical care provided as to be affordable for all, are not provided because there is a dearth of people to do it, it is because some people have convinced most people that they are so smart, and they won’t do their smartness unless they can make a fortune. What a scam – where are all the cancer cures, flying cars, etcetera? All they are smart at is skimming money off the top.
If people had been able to buy 2 or 3 operating systems when personnel computers started coming out, we would have vastly more secure and less buggy networks. This society did not enforce anti trust laws initially with software, and we are the worse for it.
We didn’t have the trillions to fight the Iraq war. And we didn’t raise taxes…we did the opposite, we cut taxes. And somehow it happened….
I’LL BE CONVINCED WE DON’T HAVE MONEY FOR UBI WHEN I SEE A WAR NOT FOUGHT BECAUSE WE DON’T HAVE THE MONEY.
The day the us cuts its military is the day the ROW decides the us does not have the reserve currency… then we can say bye bye MMT.
What Liberals are your referring to here?
I’m writing a longer response to this below, please tune in to see that liberals do support G.I. that would be in place under certain circumstances. So I and others take the universal out and just say, “yes, in certain circumstances, GI, for some people, makes sense. “
I don’t see it as either/or. Provide a UBI and a job guarantee. The job would pay over and above the UBI bit, if for some reason, you don’t want to work or cannot, you still have your Universal BASIC Income as the floor through which you cannot fall.
Private employers will have to offer better conditions and pay to convince people getting UBI to work for them. They wouldn’t be able to mistreat workers because they could simply bolt because they will not fall into poverty if they quit. The dirtbags needing workers won’t be able to overpay themselves at the expense of workers because they feel completely free to leave if you are a self worshipping douche.
It seems that over time the “floor through which you cannot fall” becomes just that, the floor, as the effect of a UBI becomes the universal value, well… floor.
Was going to be my response as well, why such absolute yes or no thinking? The benefit of the UBI is that is recognizes that we have been increasing productivity for oh the last couple millenia for a REASON! To have more leisure time! Giving everyone the opportunity to work more and slave away isn’t much of a consolation. We basically have a jobs guarantee/floor right now, its called McDonalds, and no one wants it.
Labor needs a TON of leverage, to get us back to a reasonable Scandinavian/Aussie standard of living. Much more time off, much better benefits, higher wages in general. UBI provides this, it says screw you employers unless you are willing to offer reasonable conditions we are going to stay home.
Why the Job Guarantee versus Universal Basic Income is not about work, BUT ABOUT GOVERNANCE!
Yep, agree 100%.
We live in a capitalist society which is dependent on a (wage) slave population.
UBI? Are you mad?
I for one am mad, give me UBI!
Time to end the insanity of U.S. capitalism…
+100
I’m curious to know if either of these systems work if there is no guarantee of “free” access to healthcare through single-payer or a national insurance? I’m only marginally informed about UBI or MMT, and haven’t found adequate information regarding either as to how healthcare is addressed. It seems clear that neither could work in the US, specifically for the reason that any UBI would have to be high enough to pay insane insurance premiums, and cover catastrophic illnesses without pushing someone into bankruptcy.
Can anyone clarify, or point me in the direction of useful information on this?
I think they’re basically separate issues although MMT provides a way of thinking that federal single payer is possible.
MMT is basically anti-austerity and in favor of ‘smart’ deficits ie not deficits for no reason but deficits that can improve the economy and the overall social structure such as single payer, affordable education, job guarantee program.
Stephanie Kelton has commented that MMT has no real problem with a UBI if it is done in conjunction with a good job guarantee program. She is well aware of the dangers of a UBI if it eliminates most other social programs.
I think that a job guarantee at a living wage would provide a much better standard for private employment than a UBI which could just work as a supplement allowing private industry to pay lower wages. As a supplement to a job guarantee a UBI could help address issues such as payment for reproductive type work.
There are different flavors of UBI, most don’t mention healthcare at all. Milton Friedman’s UBI flavor prefers that it replace all government spending on social welfare to reduce the government’s overall burden. MMT says there is no sense in not having single payer.
My thought on the last thread of this nature is that if UBI were ever enacted in the U.S., healthcare access would become restricted to those with jobs (and the self-employeed with enough spare income to pay for it). You don’t have to be healthy to collect a subsistence payment from to the government.
Here in Canada we have universal healthcare, as well as a basic income guarantee for low income families with children and seniors. There is a movement to extend that as well, details of one plan here.
In theory, I think it could be possible for the JG to build and staff hospitals and clinics on a non-profit basis or at least price-controlled basis, if so directed (*huge* question, of course — by what agency? govt? local councils?). Ditto housing, schools, infrastructure, all kinds of socially useful and pleasant stuff. However, the way the US tends to do things, I would expect instead that a BIG or a JG would, as others have pointed out, simply enable employers to pay less, and furthermore, subsidize the consumption of overpriced goods and services. IOW, a repeat of the ACA, just a pump to get more $$ to the top.
The problem is not the money, but that the Americans govern themselves so poorly. No idea what the cure could be for that.
Fixing worker pay is actually VERY easy. It’s purely a political issue. You tie corporate taxes to worker compensation. More specifically, you set the maximum compensation for CEOs at NO MORE than (say) 50x average worker pay in their corporation (INCLUDING temps AND off-shored workers IN US DOLLARS…no passing the buck to Temp Agencies or claiming that $10/day in hellhole country x is equivalent to $50k in the US. NO, it is $10/day or $3650/yr, period). At 50x, corporate taxation is at the minimum (say something like 17%). The corporation is free to pay their top exec more than 50x but doing so will increase the corporate tax to 25%. You could make it step-wise: 51-60x average worker pay = 25% corporate tax, 61-80x = 33% corporate tax, etc.
It is time to recognize that CEO pay is NOT natural or earned at stratospheric levels. THE best economic times in the US were between the 50s to early 70s when top tax rates were much higher AND the average CEO took home maybe 30x their average worker pay. We CAN go back to something like that with policy. Also, REQUIRE that labor have reps on the Board of Directors, change the rules of incorporation so it is NOT mainly focused on “maximizing profit or shareholder value”. It must include returning a social good to the local communities within which corporations reside. Profits and maximizing shareholder value must be last (after also minimizing social/environmental harm). Violate the rules and you lose your corporate charter.
There is no right to be a corporation. Incorporation is a privilege that is extended by government. The Founders barred any corporate interference in politics, and if a corporation broke the law, it lost its charter and the corporate officers were directly held responsible for THEIR actions. Corporations don’t do anything, people in charge of corporations make the decisions and carry out the actions so…NO MORE LLCs. If you kill people due to lax environmental protections or worker safety, etc, then the corporate officers are DIRECTLY and personally responsible for it. THEY made it happen, not some ethereal “corporation”.
“The Founders barred any corporate interference in politics”
Was looking to find more info on this comment of yours, and came across this awesome Thomas Jefferson quote:
“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”
Yikes.. he sure saw that one coming.
Publicly traded companies where management has no real skin in the game could have salary caps.
It’s not whether or not MMT works or not, it’s a matter of understanding it. Much like the theory of gravity, which was in operation long time ago before Isaac Newton formulated his basic tenets describing it, MMT describes how money has been working since the first money systems were in operation -in ancient Sumeria say. The question is whether or not we’re going to acknowledge its workings and use it to build a better society or whether we’re going to stay, financially and politically speaking, in a pre-Newtonian world.
Here’s the best description of MMT for newbies– dive in anywhere in a google search and read until you get lost. It’s really the only way to gain an understanding of the topic.
Durned hippys… imagine an IRON boot stamping on a once human face – forever. OK, now everybody back to the BIG house. Massa wanna reed yew sum Bible verses. We’re going to be slaves to the machines, ya big silly!
I’m sceptical whether a guaranteed job policy would actually work in reality. There are plenty of historical precedents – for example, during the Irish potato famine because of an ideological resistence to providing direct aid, there were many ‘make work’ schemes. You can still see the results all along the west coast of Ireland – little harbours that nobody has ever used, massive drainage schemes for tiny amounts of land, roads to nowhere. It certainly helped many families survive, but it also meant that those incapacitated by starvation died as they couldn’t work. It was no panacea.
There are numerous practical issues with make work schemes. Do you create a sort of 2-layer public service – with one level permanent jobs, the other a variety of ‘temporary’ jobs according to need? And if so, how do you deal with issues like:
1. The person on a make work scheme who doesn’t bother turning up till 11 am and goes home at 2.
2. Regional imbalances where propering region 1 is desperately short of workers while neighbouring region 2 has thousands of surplus people sweeping streets and planting trees.
3. What effect will this have on business and artistic innovation? Countries with strong welfare systems such as Sweden also tend to have a very high number of start ups because people can quit their jobs and devote themselves to a couple of years to develop that business idea they always had, or to start a band, or try to make a name as a painter.
4. How do you manage the transition from ‘make-work’ to permanent jobs when the economy is on the up, but people decide they prefer working in their local area sweeping the street?
I can see just as many practical problems with a job guarantee as with universal income. Neither solution is perfect – in reality, some sort of mix would be the only way I think it could be done effectively.
Yes. Not either/or but both/and.
To provide some context for passers-by, this seemingly too-heated debate is occurring in the context of the upcoming Podemos policy meeting in Spain, Feb 10-12.. Podemos seems to have been unaware of MMT, and has subscribed to sovereign-economy-as-household policies. Ferguson, along with elements of the modern left, has been trying to win Podemos over to MMT-based policies like a Jobs Guarantee rather than the Basic Income scheme they have heretofore adopted rather uncritically.
(Of course Spain is far from “sovereign”, but that’s another matter … :-(
1) Fire them
2) Prospering region 1 isn’t “short on workers” they just all have private jobs.
3) What a good argument to also have single payer healthcare and some sort of BIG as well as the JG
4) private companies must offer a better compensation package. One of the benefits of the JG is that it essentially sets the minimum wage.
Yeah, those are pretty good answers right off the bat. (Obviously I guess for #1 they can reapply in six months or something.)
Plutonium- I feel like true progress is trading shitty problems for less shitty ones. I can’t see any of the major proponents like Kelton, Wray or Mitchell ever suggesting that the JG won’t come with it’s own new sets of challenges. On the overly optimistic side though: you could look at that as just necessitating more meaningful JG jobs addressing those issues.
I was writing that on my phone this morning. Didn’t have time to go into great detail. Still, I wanted to point out that just because there will be additional complexities with a JG, doesn’t mean there aren’t reasonable answers.
1. If you fire them its not a jobs guarantee. Many people have psychological/social issues which make them unsuitable for regular hours jobs. If you don’t have a universal basic income, and you don’t have an absolute jobs guarantee, then you condemn them and their families to poverty.
2. The area is ‘short on workers’ if it is relying on a surplus public employee base for doing things like keeping the streets clean and helping out in old folks homes. It is implicit in the use of government as a source of jobs of last resort that if there is no spare labour, then you will have nobody to do all the non-basic works and you will have no justification for additional infrastructure spend.
3. You miss the point. A basic income allows people time and freedom to be creative if they choose. When the Conservatives in the early 1990’s in the UK restricted social welfare to under 25’s, Noel Gallagher of Oasis predicted that it would destroy working class rock n roll, and leave the future only to music made by rich kids. He was proven right, which is why we have to listen to Coldplay every time we switch on the radio.
4. This ignores the reality that jobs are never spread evenly across regions. One of the biggest problems in the US labour market is that the unemployed often just can’t afford to move to where the jobs are available. A guaranteed job scheme organised on local govenment basis doesn’t address this, if anything it can exacerbate the problem. And the simplest and easiest way to have a minimum wage is to have a minimum wage.
1) Kelton always talks about a JG being for people “willing and able to work.” If you are not willing I don’t really have much sympathy for you. If you are not able due to psychological factors or disability, then we can talk about how you get on welfare or the BIG/UBI. The JG can’t work in a vacuum. It can’t be the only social program.
2) Seems unrealistic. You are just searching to find something wrong. If there is zero public employment, that means private employment is meeting all labor demands.
3) I have no idea what you are going on about. I’m in a band. I also have a full-time job. I go see local music acts all the time. There are a few that play music and don’t work because they have rich parents, but that’s the minority. Most artists I know manage to make art despite working full time. I give zero shits what corporate rock is these days. If you don’t like what’s on the radio turn it off. There are thousands of bands you’ve never heard of. Go find them.
4) Again, you are just searching for What-If reasons to crap on the JG. You try to keep the jobs local. Or you figure out free transportation. There are these large vehicles called busses which can transport many people at once.
Yes these are all valid logistical problems to solve, but you present them like there are no possible solutions. I can come up with several in less than 5 minutes.
I support the JG, and I agree with you that logistical problems can all be solved if we are willing to solve them, so don’t take this the wrong way.
“Willingness” is a psychological factor. So what “psychological factors” specifically do you have in mind? (That’s a rhetorical question.)
Whether a person can do productive work is not determined by their psychological and physical state alone. It is determined in large part by the tools and environment they are asked to work with and in, and the outcome they are expected to produce given those tools and that environment. Obviously in a competitive profit based system, employers will make the least effort possible to accommodate a variety of psychological and physical states among workers. They will demand uniformity as nearly as possible to a single standard of psychological and physical condition.
If, on the other hand, the government undertook to provide jobs, not to turn a profit, but to produce useful social outcomes, there would be very little reason to exclude people from participation based on “psychological factors” and/or physical abilities. Oh, so I don’t have the aptitude to be a steam pipe fitter or an airline pilot or x, y or z… does that mean I can’t get a job from the government because I am “unwilling or unable” to work? What Ms. Kelton ought to say (in my opinion) is that the government will give a job to anyone who asks for one. (I wouldn’t assume that because a person asks for a job that means they are “willing to work”. I encounter people everyday who are unwilling to work. They are willing to show up and collect a paycheck. There’s a difference.) If you open the can of worms of means testing for JG, you will have endless difficulties down the road. And “anyone willing and able to work” is a means test. You may know what it means (to you) but I assure you not everyone will think alike about this.
Who decides if a person is “willing and able to work” or not? This is not a logistical problem. I don’t mean to imply that it has no answer or solution. But it is a policy question that needs to be answered before a JG could be put into place.
Something else the JGers never discuss when they say jobs for “anyone willing and able to work” is age. Will the government employ my eight year old son if he asks for a job? How about simply, if you’re capable of asking for a job we will give you one. Do we just define all young people as “mentally incapable” of seeking a job in their own best interest? Or do we exclude all young people from meaningful work because some greedy (or desperate) parents exploit their children when permitted?
#4 isn’t exactly about compensation packages though, it’s that the non-material benefits of actually having jobs that do something worthwhile would be so far beyond anything capitalism has on offer that … well you won’t be able to keep them down on that farm.
I look at the time sink of our bureaucratic systems and tried to imagine how it would work and gave myself the thought experiment of “Sex work will/won’t fall under the jobs guarantee regime”
What jobs are included/excluded? Let’s impanel a committee of the credentialed class to determine which jobs are useful (to whom?). It shouldn’t take more than 15 to 20 years to come to agreement regarding the selection of 6 jobs. Oops, seems like they are in support of corporation A.
Where will the jobs be located? Let’s impanel a committee of the credentialed class to determine where jobs are useful (to whom?) Oops, seems like they are located where they serve a support to corporation B.
Take any one job, try to decide whether it should be included/excluded and watch what happens. I can guarantee that it will be split into separate functions (what is sex work), forced into a hierarchy (what age will be allowed to participate), the majority of the benefits from labor will go to the elite (uberize the job) and will require a large bureaucracy to manage (medical certificates, training certificates, hours tracked) and an increase in fines, penalties, police and prison beds to enforce (taking tips, inflating hours).
For a more practical first step—-how about getting rid of/slashing regressive and non-federal income tax deductible sales taxes? shifting that tax burden to where income growth has been.
Democratic Party-run states/cities are the biggest offenders when it comes to high sales taxes.
universal basic income in the West + de facto open borders won’t work. just making a reasonable hypothesis.
Make-work will set you free?
There might be a psychological benefit to a jobs guarantee vs. UBI. There are a lot of people that would much rather “earn” their income rather than directly receiving it.
some but then this is this is be-lied by the number of stay at home parents who DO NOT earn their income from paid labor but do free labor raising kids. I guess those aren’t the people who would rather earn their income clearly. But some people would.
And a lot of others who would rather directly receive their income than “earn” it.
MS DLI Sharing-Economy contractor’s app:
Which of these tools do you posess:
( ) Machete, pick-axe, big old hemp bag
( ) Scattergun, hound, mirrored shades
( ) Short-shorts, bandeau top, knee pads
( ) RealTree camo ACUs, FLIR scope
( ) ephedrine, pseudoephedrine, fast car
A JG would begin to rebuild the trust and cooperation needed to have a society based on justice instead of might makes right. Human life is based on obligations- we are all responsible to one another for the social system to work. The problem is always about how to deal with cheaters and shirkers. This problem is best solved by peer pressure and shaming- along with a properly functioning legal system.
I get a kick out of the “make work” argument against a JG. With planned obsolescence as the foundation of our economic system, it’s just a more sophisticated way of digging holes and filling them in again. Bring on robotic automation, and the capitalist utopia is reached. Soul crushing, pointless labor can be sidelined and replaced with an unthinking and unfeeling machine in order to generate profits. The one problem is people have no money to buy the cheep products. To solve that dilemma, use the sovereign governments power to provide spending credits in the form of a UBI. Capitalism is saved from is own contradictions- the can is kicked farther down the road.
The obligations we have to one another must be defined before any system organization can take place. Right now, the elite are trying to have their cake and eat it too.
Well said!
I agree with those who see a need for both programs. I think the critique of UBI here is a good one, that raises many valid points. But I have trouble with a portion of it. For instance:
treats ‘poverty’ as an absolute when it is a relative. No matter what programs are in place, there will always be a bottom tier in our hierarchical society and those who constitute it will always be ‘impoverished’ compared to those in higher tiers. This is the nature of the beast. Which is why I prefer to talk about subsistence level income and degrees above subsistence. The cost of living may not be absolutely fixed over time, but it seems to me to be more meaningful and stable than the term ‘poverty’. On the other hand, in a rent seeking economy, giving people an income will not lift them out of poverty because rents will simply be adjusted to meet the rise in resources. So UBI without rent control is meaningless.
Another point is that swapping forced unemployment for forced employment seems to me to avoid some core issues surrounding how society provides for all its members. Proponents of the JG are always careful to stress that no one is forced to work under the JG. They say things like, “jobs for everyone who wants one”. But this fails to address the element of coercion that underlies the system. If one has no means to provide for oneself (i.e. we are no longer a frontier with boundless land that anyone can have for cheap upon which they may strike out and choose the amount of labor they contribute to procure the quality of life they prefer—if ever was such the case), then jobs for “everyone who wants one” is simply disingenuous. There is a critical “needs” versus “wants” discussion that doesn’t generally come up when discussing JG. It’s in there, of course, but it is postponed until the idea is accepted to the point where setting an actual wage becomes an issue. But even then, the wage set will bear on the needs versus wants of the employed, but leaves out those foolish enough to not “want” a job. Whereas, in discussing UBI, that discussion is front and center (since even before accepting the proposal people will ask, how much?, and proper reasons must be given to support a particular amount—which again brings us to discussing subsistence and degrees above it—the discussion of subsistence or better is “baked in” to the discussion about UBI in a way that it is not when discussing the JG).
“UBI without rent control is meaningless”
Yep.
That may be, but why is it that much different than wage increases without rent control? Because those could also be diverted to paying rent, couldn’t they?
It depends on where the wage increase comes from. If the wage increase is an increased share of productivity gains, that’s different than the increase coming from the government. Increased wages as a greater share of productivity implies an equal reduction of income to the owning classes and an overall more equal society. But this only applies where productivity gains are actually being realized… and the number one means of increasing productivity in the current environment is to reduce labor costs… so there’s a contradiction built in there. Increasing wages should increase demand which should lead to increased use of productive capacity. But increasing productive capacity, increasing the use of existing productive capacity, and increasing productivity gains are not all the same.
On the other hand, increasing income by government handout, by itself, is just a cash cow for the rentiers. It’s rather like trying to fill a bathtub while the drain is open. Productivity gains sharing sort of automatically creates a more balanced distribution of wealth (at least among those participating). Handouts only create a more balanced distribution of wealth if additional steps are taken to constrain rent seeking (put the plug in the drain).
The failure to share productivity gains is itself a form of rent seeking. The workers are, in effect, paying rent for their income by producing more than they are being compensated for. So “constraining rent seeking” whatever that means, should include equitable sharing of productivity gains (which means higher wages for employed people).
You’re right, in both cases rent seekers will seek rent… it’s what they do.
While UBI interests me as a possible route to a non-“means of production”-based economy, the problem I see with it is that it could easily reduce the populace to living to consume. Given enough funds to provide for the basics of living, but not enough to make any gains within society, or affect change. It’s growth for growth’s sake, not as to serve society. Something is needed to make sure people aren’t just provided for, but have the ability to shape the direction of their society and communities.
Where I work @3/4 of the staff already receives social security and yet it is not enough… seems to me human satisfaction is boundless and providing a relative minimum paper floor for everyone is just. Yet the way our market is set up, this paper floor would be gobbled back up by the rentier class anyway. So unless there is a miraculous change in our economic rent capture policies, we are screwed…
So yes, just describe to people precisely what it is – a ‘paper’ floor … not something that has firm footing yet acknowledges inequities inherent in our current currency distribution methods. And of course couple this with a jobs guarantee. I have met way too many people in my life that ‘fall through the cracks’….
why is no one bemoaning the rabid over-consumption of the complainers who suck up much more than they will ever need, hoarding and complaining about people who do not have enough? the real problem is rampant out of control parasites
Must be a capital gains ‘earner’…. and a professional projectionist
both ends see the other as a parasite
But Ferguson should also adknowledge that Livingston has some points.
Why on earth we politically put limits to, for instance, public earning-spending while do not put any limit to the net amount that one person can earn, spend and own?
Upward redistribution is what occurs in the neoliberal framework. UBI is distribution. Bear in mind that even in the best employment conditions, not everybody can earn a salary. 100% employment is unrealistic.
The people marketing UBI and MMT have hundreds of years of attempted social engineereing to overcome. I referring to the ” why people want what they want and why do they believe what they believe.” Why?
The only suggestion I have is that, since everybody has a different relationship to the concept of work, the populations involved need to be smaller. Not necessarily fewer people, but more regions or nation states that are actually allowed to try their ideas without being attacked by any existing “empire” or “wanna be empire” via sanctions or militarily.
It is going to take many differerent regions, operating a variety of economic systems (not the globalized private banking extraction method pushed down every one’s throat whether they like it or not) that people can gravitate in and out of freely.
People would have the choice to settle in the region that has rules and regulations that work most for their lives and belief systems (which can change over time).
Looking at it from the perspective that there can be only one system that 300 million plus people (like the USA) or the world must be under is the MAIN problem of social engineering. There needs to be space carved out for these many experiments.
First, congratulations to everyone who managed to read this all the way through. IMO both this (and the guy he’s responding to), seem like someone making fun of academic writing. Perhaps with the aid of a program that spits out random long words.
FWIW, when I lived in Japan, they had a HUGE, construction-based make-work program there, and it was the worst of both worlds: hard physical labor which even the laborers knew served no purpose, PLUS constant street obstruction/noise for the people in the neighborhoods of these make-work projects. Not to mention entire beautiful mountains literally concreted over in the name of ‘jawbs’.
Different thought: I’m not sold on UBI either, but wouldn’t it mess up the prostitution/sex trafficking game, almost as a side effect? Has anyone heard UBI fans promote it on that basis?
I bet it would since many women do go into sex work because they have no other options but then so might other options. Now there are also those who enjoy sex work and so be it, who is anyone to stop them? But it can’t erase the reality that many women doing sex work were sexually abused as kids, and then start prostituting themselves really young out of desperation.
The sound and fury of disagreement is drowning out what both authors agree on: guaranteed material standards of living and reduced working time. If that’s the true goal, we should say so explicitly and hammer out the details of the best way to attain it.
Interesting read… society has become so corrupt at every level from personal up through municipal, regional and federal governments that it cant even identify the problem, let alone a solution
all forms of government and their corresponding programs will fail until that government is free from the monetary influences of individuals / corporations and military establishments, whether it be from donations to a political establishment or kick backs to politicians and legislators or government spending directed to buddies and cohorts
I don’t pretend to understand the arguments at the level to which they are written, but at the basic level of true governance it must but open and honest, this would allow the economy to function and be evaluated, and then at that point we could offer up some ideas on how to enhance areas as needed or scale back areas that were out of control or not adding value to society as a whole
We stand at a place that has hundreds of years of built in corruption into the model, capable so far of funneling money to the top regardless of the program implemented by the left or the right sides of society
first step is to remove all corruption and influence from governance at every level… until then all the toils toward improvement are pointless as no person has witnessed a “free market ” in a couple hundred years, all economic policy has been slanted by influence and corruption
we can not fix it until we actually observe it working, and it will never work until it is free of bias / influence
no idea how we get there…. our justice system is the first step in repairing any society
Alarms go off. This is both untrue and undesirable if true. Read Minsky. Why? Because the MMT crowd revers Minsky’s name, if not his actual theoretical contribution. I’m sure Minsky would say, “crap!” His financial instability hypothesis offers no “boundless government instruments.”
On the contrary, Minsky argued that capitalist finance was inherently unstable and that government stabilization was inherently inflationary.
I would particularly call attention to Minsky’s 1978 congressional testimony before the Joint Economic Committee in which he stated:
This statement was bold and perplexing enough to evoke a question from the committee chair, Representative Bolling:
Few words and a lot said, indeed.
Consistent with his financial instability hypothesis, Minsky pointed out that government stimulus to increase investment produces inflation. But the interesting question is why? Because a “higher proportion of the wage bill” goes to pay people who are not involved in the production of consumer goods. What Minsky doesn’t say in his testimony is that making full employment, instead of growth, the proximate objective of policy is a panacea. He doesn’t promise a “boundless government instrument.” He only proposes the shift in policy objective as a way to decrease the emphasis on debt.
The MMT panacea would not “decrease the emphasis on debt,” it would greatly expand a type of debt while calling it “not really debt.” This is directly contrary to Minsky’s hypothesis in which he emphasizes the proliferation of innovative debt instruments. Debt appearing in a new guise is still debt.
Reading Minsky, it is clear that he was circumspect about the extent to which policy could solve the inherent financial instability of the capitalist economy. I suspect that if was alive today, he would insist that he was not an MMTer.
It is true. Money is simply numbers in a ledger, and the government controls the ledger. Numbers, the mathematicians tell us, are boundless.
Minsky (as I understand him, not read him directly) is talking about private debt. Government money is a nominal debt (i.e. accountants put it on the liability side of the ledger) but not a real debt. It never has to be repaid with real wealth.
Whether any government spending causes inflation depends on what is happening in the other sectors of the economy. It is not a given.
Randall Wray, one of the main MMTers, was a student of Minsky.
Yes, I know that Wray was a student of Minsky. And the people that Minsky, in agreement with Joan Robinson, called “bastard Keynesians” considered themselves Keynesians. Marx went so far as to say “I am not a ‘Marxist'” to disassociate himself from his self-proclaimed followers.
There really is no substitute for reading directly. In this case, you “understand” him to mean the opposite of what he wrote. Yes, he talks about private debt but in the context of government stabilization policies meant to stave off the consequences of financial instability. If you would actually read Minsky instead of relying on the “alternative facts” of your imaginary understanding, you would discover that he was talking specifically about a period in which government fiscal and monetary policies can abort financial crises:
In short, stabilization success leads to accelerating inflation. Minsky could not have been arguing that government debt is not “real debt” because he was writing that government debt feeds into and stabilizes private debt thus enabling the resumption of the “boom”:
.
There is no firewall between supposedly ‘nominal’ government debt and private debt, therefore government debt cannot considered “not a real debt” especially since the purpose of expanding the government debt is to enable the private debt to resume its expansion.
Quotes, by the way, are from “The Financial Instability Hypothesis: An Interpretation of Keynes and an Alternative to ‘Standard’ Theory”
None of your quotes, it seems to me, are incompatible with MMT in any way, except that Minsky almost says that deficit spending inevitably results in inflation. MMT says it imparts in inflationary bias, but not necessarily inflation. Sometimes this is desired. Also, moderate inflation is preferable to mass unemployment.
Minsky, Keynes et al may be revered by MMTers but they do not believe they could never be wrong or not entirely right.
This may be true in a neoliberal world, where the debt is provided primarily to the financial sector, but it would not be in an MMT one. Since government debt increases the financial assets in the real economy it reduces the need for private debt expansion.
Well, I am not going to argue with someone who hasn’t read the author they thinks they understands.
No. Private debt is owed by productive firms (etc.) to banks, and must be repaid in real wealth (or tokens thereof).
Government debt is owed by the government to productive firms and is redeemed with receipts for tax paid, which cost nothing.
It is in the interest of the banks to conflate these two things. It is in our interest not to.
It is fine to distinguish between the properties of government debt and the properties of private debt, just as it can be useful to distinguish between the properties of precipitation and the characteristics of rivers. But when referring to a hydrological cycle in which rain and melting snow flows into rivers it would be rather silly to ignore the effects that precipitation has on stream flow. It would be even sillier to say that snow “isn’t really water” because in the winter it stays where it falls.
Evaporation is also part of the hydrological cycle but it has the opposite effect from rain.
“Predistribution” is an important idea. It creates the direction of the society we envision. and maintains it.
If I’ve learned anything on this site over the years I’ve spent here, reading, thinking, writing, getting yelled at repeatedly, I’ve learned this much. Economic productivity, the real economy, is primary and independent from finance, which is secondary and dependent upon a pre-existing social organization which produces goods and services in the first place. The more complex civilizations use money to facilitate and enable the social and economic order. Our world today has money and finance enmeshed within the social order, and is an absolutely critical element in maintaining our social order. MMT goes back to basic social science’s #1 question: What Makes the Social Order Possible? And so it describes what is in fact going on, in fact, as it is observable and measurable. It then can lend itself to theoretic policy prescriptions.
This discussion about work is the #2 big social science question: How Is Social Change Possible? A gradual evolution or a dramatic quick and radical change? It depends! The plans of mice and men frequently do NOT work as intended. Better to hasten slowly, as Roman emperors were famously quoted. But what insight is there into moving from one form of social organization to another at a rate less than ASAP? People have to change who they are, not in their humanity, but in their cultural socialization. Think of moving from capitalism, even in its financialized neo-liberal iteration to a more humane mixed economy, one with markets, but with the markets under strong regulatory supervision by a democratically controlled republic.
During the 1970s, it seemed we were building that hybrid mixed economy with the familiar markets and whatever progress could be attributed to them, aligned with public policy, deliberated upon by the government, based upon the methods of valid scientific knowledge of what was practical and workable. Hence, the air and water necessary for human and other life needed protection from corporate pollution and the EPA was instituted. The world did not end, but the reactionary right wing conservative’s patience certainly ended. Never again became the battle cry against any power sharing with unions, minorities, un-cooperative liberal capitalists and anyone else in the world who did not do exactly what we told them to do.
But there is a difference between industrialization and capitalism. Capitalism is the ruling set of institutions that governs civil society within the borders of nations and among nations globally. It is not the only source of power, but the liberal social order is the dominant force over civil society, determining most social relations and drawing the limiting boundaries of organized human activity. The most simple definition of industrialization is human labor replaced and augmented by mechanical means. Industrialization was further fueled by fossil fuel driven power plants which exerted more force measured in BTUs than all of humanity put together 24 hours a day could exert in a lifetime. One man driving a John Deere tractor could do the work of a hundred before lunch. Productivity of foodstuffs could not be matched by people working with their hands, a horse and plow against modern farm equipment. Modern factories could produce more and more with fewer manhours, which of course meant the need for fewer men, jobs lost!
Capitalism and industrialization are decoupling due to advanced technological capacity. One of the leading indicators of this is the auto industry and manufacturing decoupling from fossil fuels. Just as wood was displaced by coal, and coal by oil and natgas, solar and wind power are emerging the primary source of power for the political economies of the planet. The other is automation, which can be seen in driverless cars and commercial trucking.
Today, the crisis of capitalism, many to be sure, from climate change, falling profits, political challenges globally to resist absorption, to the further reduction in jobs due to modernized, mechanized and robot assisted production, distribution and it would seem, even the design of new, innovative goods and services, is creating another challenge to the dominance of capitalists. The automation of production, distribution and design is creating a larger problem than a stockpile of surplus labor meant to keep workers in their place. It seems we could create a world where there are just too many people, with no place for them anywhere at all. Or we could create a world where the input of human labor is diminished proportionately with the advances in productivity. After all, just passing money out does not plant and harvest crops. Just passing money out, does not build and maintain a roof over our heads. Just passing out money does not make you a doctor or a nurse, the effort to become a critical member of the political economy will still require the effort to transform yourself into a needed skilled person.
So how will we face the fact that productivity is so great that we no longer need the 40 hour 5 day work week? We will still have to work outside of the home or community to produce the goods and services we need to live and thrive. A mixed basket could be offered with a combination of a shorter work week and shorter work day with the same pay and benefits to maintain a middle class lifestyle, if not a wasteful consumerist fantasy of buying stuff all of the time and and then throwing it away after we run out of room to store all of the mostly useless stuff many of us accumulate.
And earlier retirement from the formal economy. After graduating from Community College or a 4 year school, 30 years of service toiling to produce whatever for the economy at large is enough of your lifetime to serve as duty to maintaining the formal productive capacity of civilization. In others words, 30 years of going to work at a job for a paycheck or stock options, as the case may be, is enough for anyone given the productivity gains of automation. The informal economy where we work for no pay, you know, shopping, cooking, cleaning, laundering, nursing flu ravaged family members, walking the dog, stuff we need to do, not do gooder voluntarism, for no paycheck, but to maintain our humanity, our marriages, our families, our communities, is work that has been done and is being done by people all over the USA and the world. Mainly women historically.
Duty to civilization in the form of a 3 day work week, and a 30 years tour of duty for a paycheck will entitle you to retire from the formal economy, make way for the younger, more energetic and not be some bizarre only seen in a sci fi novel possible world. There are no worlds possible other than the lived world, with lives lived, not books and words that never happened and never will happen. Humanity in the world, the one firm under our feet, boundless over our heads not some world that only exists in an unreachable ideal. We have gradually lowered the burden of time spent as useless tribute to those more powerful than us, just because they say so, and we had no map to a different not too far away place. We have gone from slavery, serfdom, peonage to a 6 day work week with 12 hour days, to 5 day work weeks, with 8 hour days. It is now time to take the evolutionary step to a 3 day work week and a 6 hour day, with a minimum requirement of 30 years of duty in the formal economy. We can already see it forming with all of the under utilized labor, all of the disabled on SSI, etc. All of the part time jobs. We still eat, we still throw 1/4 of our food away, all with 2% of the population feeding us. It used to take 90% of us just to not starve to death.
MMT shows a way of issuing money into the vast machine called the modern economy, a built system of homes that last for generations, of bridges and roads that last for generations. We do not have to go out each and every year and build up a new civilization. We inherited much of one when we were born and will pass on a bigger one, one with 10s of millions of homes, offices, public facilities, factories, farms waiting to be worked by a new generation that just has to operate them, maybe expand and replace a portion of it all. That is the capital accumulation that counts. If we could build a home as easily as we could print a dollar or issue an electronic deposit, there would be no work, no jobs. But it is real work to construct, to fabricate, to plant and harvest in the real economy. It is real work to issue a paycheck as well, to keep the books, to issue a Social Security Payment into direct deposit. I am sure the people who build the computers that will do all of that work will be happy to do so, and retire at age 50 or 55 to do something they are NOT forced to do simply to eat, or not be homeless.
We will need to be acclimated and socialized into this different world. Expanding the formal development period from Pre-K all the way through primary, secondary and post secondary education, the community colleges especially, will promote the culturalization and socialization to enter a world where the majority of the days of the week are yours to structure, manage, and strategically plan for into your old age. Civilization needs an expanded framework for civil society to make a transition, and we have right now, the vast platform of public education as well as private and parochial schools to develop people who can thrive. It is not a radical break from the past, but an inflection point, one that we have experienced in the past and now, with an even better equipped society, one that can be achieved. Our parents and grandparents have gone through much worse social upheavals, this challenge is doable and not some far fetched when did that ever happen before event. The political struggle will be monumental, but the alternative for most of us is just not an option.
We have gradually lowered the burden of time spent as useless tribute to those more powerful than us, just because they say so, and we had no map to a different not too far away place. We have gone from slavery, serfdom, peonage to a 6 day work week with 12 hour days, to 5 day work weeks, with 8 hour days.
Long hard labor was true for slaves and domestic workers. Otherwise, most people worked far fewer hours prior to industrialization, which enclosed the commons and reduced most people to employee status with virtually no economic rights. Most middle-class white women did not work for wages outside the home until recently. Anecdotally, it seems true that time worked has increased substantially in the last part of the twentieth century and first part of the twenty-first.
It’s not simply a question of work evolving, but a whole series of political, social, and economic choices.
Most middle-class white women did not work for wages outside the home until recently
In the 19th century at the height of the industrial revolution- 1840’s, 75% of the textile mills workforce were women freeing themselves from controlling fathers and husbands (see Lowell Mill Girls). The first women workers union- the Lowell Female Labor Reform Association was formed. The LFLRA petitioned for shorter working days (10 hours) and improved conditions and better pay. They eventually created a political framework used to appeal to the public and eventually brought change to the notions of labor, wages and work environment.
By the close of WWI, 20% of the workforce in U.S. manufacturing were women. By 1929 they constituted 22% of all employees in manufacturing industries. (Source: “Employment of Women in War Production” SSA.gov/policy)
At the height of World War II, there were 19,170,000 U.S women in the labor force. The percentage of married women working outside the home increased from 13.9 to 22.5. Between 1943 and 1945, polls indicated that 61 to 85 percent of women workers wanted to keep their jobs after the war. (Source: Susan M. Hartmann, The Home Front and Beyond: American Women in the 1940s) Women were forced to do their patriotic duty of leaving a well-paying job for the returning men. Perhaps the term “pink slips” came about after the war due to women’s employment termination.
Women- middle class and working class, have always been part of the workforce. They’ve been authors- Fanny Fern, Lydia Maria Child, Catherine Maria Sedgewick, Louisa May Alcott… Editors- Elizabeth Oakes Smith, Pauline Davis, Margaret Fuller. University principals and presidents- Mary Lyon- Mount Holyoke 1837- all female presidents until 1937, M. Carey Thomas 1865- Bryn Mawr. All earning a living and making positive changes not only in the work environment but for society at large writing and authoring societal reform from education to sanitation and childcare. The middle-class phenomena as we know it today (hyper-industrialization and over-consumption) kicked into high-gear after WWII with the fictional fabrication of women not working outside the home.
Once again, we are on the cusp of change. The beginning of the 21st century and revising our conceptualization of labor, workdays, wages and leisure time.
I think historically during a lot of this time women have nearly been worked to their deaths. Not just the wage labor, women have pretty much ALWAYS done the vast majority of the housework, the cooking, cleaning such as it was, childcare, old folks care. So they worked 2 full time jobs pretty much, housework was much less automated in those days remember. But even your statistics don’t show most married women working. 20-22% of the workfoce by the close of WWII and probably much smaller for married women, single women have always been more likely to work. But there was a pretty big class divide, better off women had maids to help them even though they still worked hard at housework and sometimes didn’t have to work for pay, condition for working class women who worked was particularly bad not only were their paid labor conditions probably worse but their housework conditions worse as well. They sometimes hired help with housework as well but not full time. So yes they worked, and worked, and worked and worked, some of it paid, much of it unpaid and barely counted.
This is mostly based on the book: “More Work for Mother”.
My counter-argument addressed nihil obstet’s comment, Most middle-class white women did not work for wages outside the home until recently. “Middle-class white women” does not indicate whether they are single or married. Rather, I presented historical information indicative of middle-class women in the workforce earning wages ‘outside the home’ prior to the ‘recently’ claim. The comment is not about middle-class women and unpaid housework. Lastly, the elephant in the room is how “middle-class” is defined within the United States timeline. I’d say the middle-class is the transitory value dependent on who’s defining it and those that claim they are part of this class structure.
Most white women were never middle class. The informal economy of women who worked without pay at home did not include dish washers, clothes dryers, garbage disposals, all kinds of electric kitchen food preparation gadgets etc etc. In many places, it did not including central water supplies, plumbing. See Caro’s 4th LBJ bio on life for women in the desolate expanse of the Texas pan handle. The strong, healthy women ground down into stooped back bent over painful posture from hauling water from the river in 2 buckets with a stick draped over their shoulders. White women of the not so middle class. Nice work, no pay, all the family’s water needs hauled by women on their backs on a daily basis. I am sure things were just as swell with that whole commons thingy you refer to. And then there was the whole child birth without maternity wards. Try to not romanticize the freedom of the commons, it was not a great life for everyone.
The home economics was a lot of drudgery. The much fewer hours worked prior to industrialization was due to the merciful setting of the sun, because we could not work in the pitch dark and the kind of lives lived is nothing I would consider swell, in comparison to what we have today with longer lifespans and lifespans that include nice things like cataract surgery eliminating near blindness, among other useful medical procedures.
The subject as I understand it is the amount of time necessary to spend in wage paying jobs. That is not inevitably tied to some sort of progress, but is a result of political and economic choices. If the subject you want to discuss is the improvement in medical technology, I’ll agree that it has improved.
“We wish to control big business so as to secure among other things good wages for the wage-workers and reasonable prices for the consumers. Wherever in any business the prosperity of the businessman is obtained by lowering the wages of his workmen and charging an excessive price to the consumers we wish to interfere and stop such practices. We will not submit to that kind of prosperity any more than we will submit to prosperity obtained by swindling investors or getting unfair advantages over business rivals.”
-Teddy Roosevelt
I would like to add a clarification here about MMT. MMT is a description of how a sovereign currency monetary system works. MMT in and of itself does not recommend policy and is not prescriptive of any particular politics.
Now, with that said. I will concede that many of those who understand MMT and the associated policy space that comes with it, tend to have similar policy views but not always.
Put more concisely, MMT is not an ISM, but rather just IS.
People when seeking to make sure that Eden is recreated on earth with any benefit of G-d forget that money…any trade token of any kind…is an expression of natural energy. Originally, we grew things, using sunlight, or used things growing naturally. Eventually, we used concentrated energy products to create other products, and improved our life quality.
But there is a limit to the energy we have access to currently, and until a new source of creating further energy is developed, we have to share out amongst ourselves what we can currently produce, in a way that is helpful to all, while stimulating personal and societal growth.
Robotics is helpful to eliminate work that is mere drudgery, if there is sufficient energy to produce the robotics without robbing people of simple things like food, or clothing, or basic housing and education, because robotics is a high end finished product that has a high energy cost.
We must be careful not to rob people of the reason to live…and part of our raison d’etre is expending personal energy to obtain our desires once basic needs have been met.
So tired of the bot eating my comments, I swear, each time this happens I’ll never come back. And this time I vow I never will
so long
Sad to say bye. I enjoyed your comments. Skynet is an equal opportunity comment eater and everyone around here has been bitten. When it happens, I don’t take it personally.
happens to all of us. keep your comments short and not too many links, and the skygod may ignore you. or may not, not for the likes of us to question its inscrutable ways.
I feel like I lived a version of UBI/JG. Graduated college 1968, got drafted, got discharged and then spent almost 4 years on dole and G I bill…getting another degree in what I wanted culminating in an 8 month independent study in Kyoto studying gardens. A great time in my life. It just sucked having to be wasted in the military to get it. National service would’ve been better…like my dad, who taught english for a few years in the CCC.
The problem not mentioned: the Job Guarantee would disempower the plutocrats. Now, you’d better accept whatever crappy job is on offer or suffer the indignities of poverty, debt peonage, homelessness, incarceration or even starvation. The lack of jobs is a whip in the plutocrats’ hand. That there aren’t enough jobs that produce a profit doesn’t mean a thing, it’s just an excuse to say the unemployed are necessary. JG accumulates a stock of labor just as the agricultural programs accumulate stocks of commodity crops.
Anyway, this is a thorny thicket indeed. The problem isn’t that there’s not enough work. Cleaning the parks and raising our children come to mind as underpaid, under-appreciated contributions to the public realm that simply don’t have enough people.
The ultimate public realm, incidentally, is the environment. The ultimate enemy of environmentalists is the segment of the population that wants to privatize and profit-ize everything not nailed down. Again: plutocrats.
The problem with JG is that it requires a fundamental change in the idea of work, and who is in charge.
The author makes a rather bold claim but then doesn’t explore its implications. No strings attached welfare isn’t some pie in the sky utopian principle. It’s the basic foundation of the Social Security Act and related legislation.
The programs most closely resembling a universal system – old age insurance and Medicare – are two of the most politically popular and administratively efficient programs in the entire government.
Either the author opposes these kinds of programs, or the argument being made is not intellectually rigorous. I am curious which it is.