The Workers’ Think Tank: With an eye on the United States and Greece, scholars at the Levy Economics Institute are developing plans to ensure full employment, by Sasha Abramsky, February 2, 2015, The Nation.
http://www.thenation.com/article/196721/workers-think-tank
As Sasha notes, the Levy Institute has a novel approach to fighting unemployment: JOBS! Hardly anyone ever thinks about that–that the cause of unemployment is lack of jobs.
For some reason, virtually all policy-makers and economists (including progressives) think that jobs will magically appear. True, some suggest that US unemployment is created because China (et.al.) “steals” jobs that are rightfully due to America. Hence, the solution is to steal them back.
But why not just create more? Is it really that hard to come up with a list of things that people could usefully do, right here in America?Economonitor — Great Leap Forward
Jobs for Greeks and for Americans, Too
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City
5 comments:
Yes. More of this.
Randy: Is it really that hard to come up with a list of things that people could usefully do?
I totally agree! So why doesn't MMT advocate Henry Wallace's "list of useful things to do" approach to full employment rather than the make-work JG?
Henry Wallace's full employment proposal was to maintain a "to do" list of desirable projects, and to gradually release funding for those projects as needed to fulfill a full employment budget mandate.
Some of those projects might involve increased funding to existing Federal agencies. Others might involve grants to state and local governments, or revenue sharing. Others might involve outsourcing projects to private contractors. A small percentage of the projects might employ a CCC type program.
I totally agree! So why doesn't MMT advocate Henry Wallace's "list of useful things to do" approach to full employment rather than the make-work JG?
Great point, Dan. Although to be fair, some versions of the JG are based on identifying important kinds of work to be done.
Unfortunately, there are other kinds that focus on not "interfering" with the private sector. The JG wage is just a "prove you can show up on time somewhere" wage that does little more than re-label the unemployed as employed, and re-label their unemployment checks as paychecks. Apart from its (useful) role in household income stabilization and setting a floor wage, it does nothing to address the systemic inadequacy of the private sector to drive economic progress.
I am not at all opposed to nationalizing certain sectors of the economy, but that needs to be debated and voted on, and private companies impacted by nationalization should be compensated in some way.
If we limit the JG to things that:
-- do not compete with the private sector
-- do not duplicate existing government programs
-- do not require more than 20% of the budget for materials, equipment, and overhead
-- do not need to be done on an ongoing basis (because the JG will shrink during booms).
That's extremely limiting. It's one thing to come up with a "list of useful things to do" and another thing to come up with a list that complies with those limitations.
Good to see you commenting again, @Dan Kervick.
Dan L - as I have said many times before, you mis-state the JG approach, and offer as replacements things that are part of the JG & MMT proposals already or add things to it that are not in MMT/JG. That calling the JG "make work" makes no sense follows from an adequate understanding of money and its nature. Either all government work, even all remunerated employment is make-work - or none of it is. There is nothing "artificial" about a JG - what is artificial & weird is a money-using society without a JG.
"List of useful things to do" is part of the MMT & the JG, and is not due to Wallace. It is in Keynes General Theory, and was incorporated into the practices and the economic textbooks during the postwar era.
Dan K:The JG wage is just a "prove you can show up on time somewhere" wage that does little more than re-label the unemployed as employed, and re-label their unemployment checks as paychecks. Apart from its (useful) role in household income stabilization and setting a floor wage, it does nothing to address the systemic inadequacy of the private sector to drive economic progress.
Completely wrong, baseless, but traditional right-wing criticism of the JG. Could have been copied from 1930s business press "criticisms" of the New Deal. Earlier plutocrats were less guarded and clearer. As and when Marx did, but in less muddled fashion - no, Marx was not perfect - plutocrats once said openly and accurately that a JG is socialism, is communism. And of course the JG obviously does an enormous amount, is the essential, decisive thing to "address the systemic inadequacy of the private sector to drive economic progress".
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