You’ve probably seen references to the work of my colleague (and former student), Pavlina Tcherneva in recent days. If not, take a gander at this…Economonitor — Great Leap Forward
Rising Tides Don’t Lift All Boats: Why the 1% Grabs all the Gains From Growth
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City
5 comments:
Wray and Kelton seem to be the closest to my personal beliefs. Pilkington, Tcherneva, and PCooper (heteconomist) are up there too.
How about you?
Dan how do you square that with what Wray says here:
Some progressives want to continue the failed policies of the past. They want to use the tried-and-failed twin strategy of economic growth plus welfare dressed in its modern garb, the basic income guarantee. As Minsky argued, we certainly need welfare. Our generosity is a measure of our humanity. However, throwing more money at the poor will never solve our unemployment and poverty problems."
With Peter's advocacy for an Income Guaranty?
Seems to me that Pavlina is under Wray is under Minsky (this seems to be the way the academe works...) and they are for a JG vs the UI or BIG type policy...
And Wray here characterizes the UI as 'welfare':
"As Minsky argued, we certainly need welfare. Our generosity is a measure of our humanity."
So he looks at it as "generosity" while I dont think it is fair to say that the proponents of a BIG look at it as "generosity" or perhaps charity as everyone would receive it from the govt higher authority (its like a 'ration')... so this is closer to "slaving or warring" than working for wages...
So Wray is most likely firmly in the "wages and debt" cohort.... he often says "money is debt, etc.." so the focus is often on 'debt' yada yada...
I think if you try to cram down a policy tailored for a "wages and debt" cohort onto a "rations" cohort you will end up with the same type of unrest within the 'rations' cohort as the 'coercion' is still there in the relationship... imo they dont want to be seen as being 'coerced' in their human relationships.... so you have to address this for them imo....
rsp,
And it looks like Pavlina is using the Saez/Picketty data which doesnt include income from certain xfer payments such as the EITC or Social Security or Unemployment which is the same source as would be used to fund a UI so they just seem to discount certain (direct?) govt xfers to households as legitimate "income"... they just dont see it this way...
If the govt xfers $ (directly?) to people they dont see that as legitimate "income"... they rather see "wages" as legitimate "income"...
So they are in the "wages and debt" cohort... not saying there is anything wrong with that, but it perhaps ignores the other 'rations' cohort and what is important to that cohort...
rsp,
"If the govt xfers $ (directly?) to people they dont see that as legitimate "income"... they rather see "wages" as legitimate "income"...
So they are in the "wages and debt" cohort... not saying there is anything wrong with that, but it perhaps ignores the other 'rations' cohort and what is important to that cohort..."
I think this mentality is a big problem to make progress policy wise in the future (and I don't mean UI vs. JG problem only,b ut any sort of 'government relief/ money recycling' system they try to implement), because ultimately it can be reduced to the axiom that any sort of income than comes from government is not 'legitimate' and is 'welfare', that only the income generated ENDOGENOUSLY by the private sector (aka "credit" DEBT to sustain WAGES) can be accounted ultimately, this is like saying the government is powerless. Basically they are falling into the framework of the current ruling class (which is definitively in the debt and wage cohort, at least the majority of them, obviously as they are the issuers of private debt). Those who frame the debate, who get to choose the meaning of words, have already won the debate.
Matt-- You highlight an interesting point of divergence within the MMT community. The job guarantee and the basic income guarantee both have good arguments. That might be a point against Wray/Kelton, or it might be a point of strength. Peter Cooper and Steve Randy Waldman have both made powerful pro-BIG cases. This is an area where I'd like to see further policy discussion, but the fact is it that we agree more than we disagree with regard to these issues. In other words, the larger case of what is affordable dwarfs these policy differences.
I also should include Scott Fullwiler in my pantheon of top economists...
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