As Akerlof and Shiller say, millions of people are phished for phools. There's a sucker born every minute. Hundreds of thousands of people like her were conned when Osborne lied:
Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits?
The take-away for the left:When we say we're all in this together, we speak for that worker.
Some laboratory experiments (pdf) by Philip J. Grossman and Mana Komai have shown how strong such within-class envy can be. They show that some of the poor are willing to attack other poor people even at their own expense. They conclude:Many cognitive biases are in the genes. This doesn't mean that they cannot be overcome. Only that the tendency lies with the can artists who exploits them. PR and marketing and advertising types have realized this at least since the publication of Propaganda and Crystallizing Public Opinion by Edward L. Bernays. Tidbit: Bernays was by two branches of his family tree the nephew of psychoanalysis pioneer Sigmund Freud. His mother was Sigmund's sister Anna and his father was Ely Bernays, brother of Freud's wife Martha Bernays. (Wikipedia)We find strong evidence of within class envy: the rich targeting the rich and the poor targeting the poor...Within the poor community, the target of envy is usually a poorer subject whose wealth is close to the attacker; the attacker may possibly be trying to preserve his/her relative ranking.I say all this for a reason. It's tempting for lefties to believe that people vote Tory because of "neoliberal" ideology and the right-wing media. But there might be more to it than this. Even without such propaganda, there are cognitive biases at work which undermine class solidarity. I fear some on the left underestimate this fact because of the same cognitive bias which contributed to that woman voting Tory - wishful thinking.
Of course, psyops started long before Bernays and even Machiavelli.
Stumbling and Mumbling
Conning the working-class
Chris Dillow | Investors Chronicle
26 comments:
Well, the neighbour is still on benefits, with continued mass unemployment and no sign of a job guarantee. This must be a really long con...
"getting the working class to vote against its interests."
Ummm ..... most of the time the working class' interests are not on the ballot in the first place.
Otherwise agree with Dillow's main point.
Right. Without participatory democracy and direct voting on issues, the voters are left with campaign promises that may or may not be kept.
Actually, the result of not keeping them has resulted in the rise of the Tea Party, and also the unexpected (by the Establishment) populist campaigns of Sanders and Trump.
Maybe voters are wising up to the con in the US.
Upon further reflection I would add to Dillow's article, that most people believe what they are told to believe, so if authority figures and the media are telling them to hate the poor, then we should not be surprised if the working class hates the poor.
If you can control the media, chances are good that you can control public opinion.
There are other factors, like culture. Other than the post WWII social contract, neither the US nor the UK have ever had a culture of equality and community. I'm not sure that it's something intrinsic to human nature so much as something that we are culturally adapted to. The fact that equal, socially conscious societies have existed in the past, and still exist in some places, proves that our competitive, Ayn Rand-ish culture in not an inevitable part of human nature.
Agree.
So-called human nature is malleable. Even the wiring (brain pathways) can be altered through different inputs.
It is very difficult to distinguish nature from nurture since they are deeply entangled, being in the process of gestation. Not only the parent's physiology influences development during gestation also the psychology. Psychological conditioning begins in earnest during the imprinting stage in the first three years of life. After than all kinds of cultural and institutional forces are brought to bear, many of them designed to shape outcomes.
Hopefully Chris will now see why a Basic Income is a non-starter - because of these in class envies. People need to see other people in their peer group contributing as they believe they are. The 'sleeping off a life on benefits' jibe hits home.
I doubt it though. Bias works in mysterious ways.
So why is a job guarantee a non-starter? Do the working class believe unemployment to be a figment of someone else's imagination?
A large segment of the public doesn't like the idea of "make-work" anymore than "hand-outs."
A JG needs to be presented skillfully to overcome such biases, which aren't necessarily stupid ones either. Governments have screwed but up in the past. The problem is generalizing from such instances, with a lot of help from the opposition.
Progressive programs are not easy to sell in a neoliberal environment.
The majority of the poor -- children, elderly, disabled, stay-at-home parents -- are not in the workforce and would not benefit from a JG.
Then there are the working poor who have a job but it doesn't pay enough to pull them out of poverty. What they need is a minimum wage that is above the poverty level, plus free health care, free education, free public transportation, affordable housing, etc..
Government job programs have their place, but they're not a substitute for a safety net, for public services, or for government regulation of the marketplace.
One could just as well ask "why is any sort of serious full employment & anti-poverty program a non-starter?" Kalecki answered that question.
The JG is for those willing and able to work. The MMT JG is based on "a living wage" that includes income and benefits. That sets the bar as the "minimum wage." Firms have to make a more attractive offer to hire out of the buffer stock.
The JG is not meant to intended transfer payments for welfare in the cases you mention above and more, e.g., Social Security disability.
One could just as well ask "why is any sort of serious full employment & anti-poverty program a non-starter?" Kalecki answered that question.
Right. Economic liberalism as current conceived is not compatible with social and political liberalism as ideals.
The problem is that in the current environment economic liberalism is realist policy and social and political liberalism are idealist policy.
Realist policy is the actual policy in place. The idealist policy is high-sounding words expressing lofty sentiments that are more aspiration than reality, and TPTB don't believe they can actually ever be achieved. Like "government of the people, by the people, for the people.
TPTB believe that those who own the country should govern the country because their success has won them the right to, and that this is the most efficient and effective way to run a government. "A rising tide lifts all boats." AKA "trickle down."
Without ending economic liberalism as currently conceived, the ideals of social and political liberalism of the Enlightenment won't happen. This is a major paradox of liberalism that threatens its continued existence.
Just as the people that hijacked socialism in communist countries betrayed the ideals, so too are TPTB promoting economic liberalism as presently conceived under capitalism betraying the ideals of liberalism.
Neil Wilson: Hopefully Chris will now see why a Basic Income is a non-starter - because of these in class envies.
To repeat yet again, that is not the essential reason why Basic Income is a non-starter, that is not what MMT thinkers focus on. It is a non-starter because it is either a new name for something old, "welfare", whoop-de-doo! Or it is something "new" UBI - and spectacularly inflationary and unworkable. While these "within-class envies" are manipulated to divide and conquer, the idea that other people should be given "benefits" for a reason, like disability or age - or because they worked for their "benefit" (and are thus actually the benefactor, not the recipient of benefits) is entirely rational. It could not be otherwise. A social animal that did not repulse free riders in some way would quickly die out.
That "within class envy" is the real obstacle is reminiscent of psychologistic explanations of logic, and subject to the same criticisms.
Dan Lynch: The majority of the poor -- children, elderly, disabled, stay-at-home parents -- are not in the workforce and would not benefit from a JG. Nonsense. Unemployment has always and everywhere been the primary cause of poverty. Children come from somewhere. If their parents are unemployed, they are poor. If not, generally not. An enormous number of people in the US would prefer to work but are not counted in the statistics.
Explicit MMT simulations going back to Minsky demonstrate that even at current inadequate minimum wage levels, a JG would immediately eliminate about 2/3 of poverty. This sort of thing is obvious to anybody in touch with the real world - like basically all poor people. Poverty = lack of money. No job = no way to get money.
Kalecki pointed something out. But Keynes, Lerner & Minsky (& their predecessors) saw deeper. (Some versions of that paper include Keynes's notes on it.) Government job programs - as if there could be any other kind in a modern monetary economy - have a spectacular, worldwide record of success in all respects, especially in eliminating poverty. If one looks at things right, this is much like saying "not stabbing people" has a spectacular record of success at "not having people bleeding all over the place."
@Calgacus, your comment is, as usual, a recitation of MMT talking points. No matter how many times someone repeats a talking point, that doesn't make it true.
If the child's parents are disabled, then the child may be poor. If the child's parent is a stay-at-home parent, then the child may be poor -- and choosing to be a full time parent is not being unemployed! If the child's parents attend college, then the child may be poor. If the child's parents work at Walmart or Amazon, then the child may be poor. If the child's parent is paying 60% of his income to the state for child support, then the child may be poor and the parent is probably poor, too. If the child's parent is in prison, then the child may be poor. And so forth.
The disabled and the elderly are not in the workforce nor should they be.
@Tom, as for the JG setting a standard for minimum wage, health benefits, etc., that is one way to do it but not the only way, nor is it politically realistic since the business class will resist a JG that competes with them. The simplest way to create more living wage jobs is to raise the minimum wage.
Linking health care standards to a JG or to any other employment is a uniquely American experiment that has not worked well. If government offered free public health care then no employer would need to offer health care, and no individual would need to worry about losing his health care regardless of his employment status.
I am all for government job programs but there are many ways to do that. The Minsky fixation with "work not welfare" was always driven by Minsky's conservative values, the rest was just spin.
Getting back to the OT of resentment, if everyone had the same public health care that would reduce resentment. If every retired person had the same pension, that would reduce resentment. If everyone had the same educational opportunities, that would reduce resentment. If every parent received the same child credit, that would reduce resentment. If everyone rode the same public transportation, that would reduce resentment.
Let's boil this down to basics.
1. America is entrenched in the cultural myth of "rugged individualism" and "the frontier spirit." That never really existed in the way the myth claims, but the cultural myth persists. It also seems to be growing based on psyops, since it favors the status quo.
2. America has a large underclass that it created historically and now is largely in denial of, except as a political tool to frighten those immediately above into IDing with the interests of the plutocrats.
3. Plutonomy. TPTB have a lock on power through class structure and wealth and the privilege it generates. This is masked by the Horatio Alger myth (updated) and the relative invisibility of those at the top to others and the bubble effect at the top that isolates them from reality.
4. The paradoxes of liberalism arising from realism versus idealism, with realism solidly in control and idealism a pie in the sky aspiration.
These are social and political issues that are not going to be addressed sufficiently by economic policy alone or even chiefly. Some of these issues are pretty intractable, and money alone is not going to solve them.
That doesn't mean that changing economic policy for the better won't have desirable effects though — unless one is the view that things have to get bad enough before the people rise up and throw the bums out.
@Calgacus, your comment is, as usual, a recitation of MMT talking points. No matter how many times someone repeats a talking point, that doesn't make it true.
Right. But I think that at "An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism." there should be at least one person who presents the MMT = common sense, logical viewpoint. No matter how many times I repeat 2 + 2 = 4, my saying it is not what makes it true or false. No matter how many times DL repeats 2 + 2 = 3, his saying it isn't what makes it true or false. Note that I criticized Neil for continuing to make such an error above - about why a BI doesn't work. What makes MMT true is that its definitions are careful, so its arguments are logical and apply to the real world, and its proponents are actually interested in truth.
The Minsky fixation with "work not welfare" was always driven by Minsky's conservative values, the rest was just spin.
The general, evidence-based opinion, which I share, is that Minsky's values were liberal/socialist. He just tried to avoid the magical thinking proponents of "welfare not work" schemes indulge in. I think grownups should try to follow this example.
The topic here, from Chris Dillow etc focuses on the question of why people have this "work not welfare" fixation. Why do they have it? The answer is simple: they would be crazy not to. Not having it = magical thinking, wishful thinking.
"Welfare, not work", UBI over a JG is a society deciding to make things happen only by wishing them into existence. In this universe, this doesn't work. Marx said "One basis for life and another for science is a priori a lie." But that is what those fixated on "welfare not work" indulge in. Nobody thinks this could work in their own life. Do people who decide to quit their job and sit around wishing for stuff instantly find genies to do their bidding? But unfortunately some contend that wishful thinking can magically work if a whole society just wishes it to. The real question is why people insist on foisting an unwanted "welfare not work" on working people and the poor and consider their - and Minsky's - entirely rational beliefs to be in need of explanation, but never the magical thinking of "welfare not work", that can only change things a little at best. Sure, subjective wishes are part of the solution, part of reality, necessary parts. But not all of it. There really is a real world out there that interacts with anyone's and everyone's subjective wishes.
The simplest way to create more living wage jobs is to raise the minimum wage.
In some conditions, not all, this will raise employment, so it is a win-win. In some conditions, emphasized by neoclassicals, this will decrease employment. So according to the Earth meaning of "simple", this is a very roundabout way at best, far from simple or effective. The simplest way to create more living wage jobs is to create them, not pointlessly making the possibility of their existence dependent on the wealthy and imponderables that nobody can predict or assess accurately.
Instead of baselessly comparing Minsky to Reagan or spinning fantasies about "conservative values" why not read him?" Like The Breakdown of the 1960s Policy Synthesis
Compare "Thus a post-Reagan reform of the American economy that aims not at perfection, but to do better than the performance between 1966-1981 could begin by reorganizing the basic urban and rail transportation networks... Any post-Reagan reform must look to the substitution of by-right children's allowances for today's means-tested tax rebates and welfare schemes..." to your own list or recommendations.
Tom: These are social and political issues that are not going to be addressed sufficiently by economic policy alone or even chiefly. Some of these issues are pretty intractable, and money alone is not going to solve them.
The wealthy and powerful are never in doubt as to how their problem of not being wealthy, powerful and tyrannical enough is easily solved by throwing public money at them. Money is all-powerful - except when the poor might get a way to get some. These issues aren't intractable, but very easy to solve.
No country in the world has ever found them intractable. The difficult thing to eradicate is the irrational, evidence-free belief that these easy problems are intractable. Here is where the demand, the wish, the desire that I criticize Dan for relying on to the point of absurdity is necessary, useful and effective.
No country in the world has ever found them intractable.
What country might that be?
In my reading of history no country has been able to turn out the power elite for long, even through revolution.
This has proven to be intractable politically as far as I can see, and I see no chiefly economic resolution to it, since it involves social and political issues more than economic ones.
What I am saying is that full employment--> prosperity --> equality & these lead to "a crisis of democracy" - which is to say too much of it. I wouldn't divide up the social and political issues the way you do. I am arguing against the existence of such intractable social and political issues that a "permanent semi-boom" would not fix, not allow people to fix for themselves much quicker than without it. #2 & #3 are pretty clearly economic. The separation of an "underclass" from the rest of society is easy enough to reverse. Welfare states throughout the world had no trouble with it during the postwar era. And a plutonomy cannot rule the way it does today if everyone has the option of saying "take this job and shove it" to it, and not become homeless and destitute.
Basically, the way to look at it is the plutonomists are serial killers who like to stab people & like convincing people to stab themselves even more. They do this by exercising monopsony power over the sale of labor or subverting the state. The underclass are their stabbing victims. MMT & a JG erases this bizarre and unnatural situation. There will be a lot fewer people bleeding all over the place if laws against stabbing are passed and enforced. The postwar era was when there was the beginning of anti-stabbing laws and enforcement. The subsequent era was when the suckers were convinced that it is much better to be stabbed or threatened to be stabbed than not. Together, they're a pretty good historical experiment, and they show that these or whatever social and political problems are not intractable or separable from economics, but mainly economic and easy to fix.
I don't disagree with the view that a benign capitalism is better than monopolistic "capitalism," which is a perversion of capitalism. But I view it as utopian. Capitalism is set up to favor capItal, where capital equals ownership of means of production (essentially technology) and land is folded into capital. All that is possible in this system is increasing labor share rather than putting people first.
I think that there is justification in a degree of economic inequality based on knowledge and skill, but that is part of labor and not "human capital." Those capabilities are both individual (talent and application) and social (education, status, networking). So even in the case of difference of ability, there is reason to distribution gains socially as well as individually.
One could say that is is more utopian than benign capitalism, and in a sense, I would agree. Generally development occurs gradually and incrementally rather than in suddenly and radically.
So I encourage development that accentuates the better aspects of capitalism and attenuates the worse. But the end in view needs to be transcending capitalism and that requires thinking out of the box and testing potential solutions.
Presently there is no alternative path that is well worked out theoretically although some experiments have been encouraging. What they tend to show is that it is difficult for alternatives to work in a world that is dominated by economic liberalism. This is the intention of neoliberal globalization. The goal is to create an environment where success is only compatible with conformity and achievable by "following the rules" as laid down by TBTP, that is, the ownership class.
Just as MMT is needed to confront the neoliberal economic paradigm; so too, socialism as putting people first is needed to confront the putting property ownership first paradigm. At a minimum this means making the right to property subordinate to human rights and civil liberties. I don't see any alternative to this in making social and political liberalism compatible with economic liberalism. Economic liberalism is not necessarily "capitalism" in the sense of putting property ownership first and making people and the environment subordinate.
Presently there is no alternative path that is well worked out theoretically although some experiments have been encouraging. MMT is well worked out theoretically.
What they tend to show is that it is difficult for alternatives to work in a world that is dominated by economic liberalism.
No, this is the opposite of what clear thinking = MMT shows. The only thing to fear is such fearful thinking. Marx said it was difficult? - if so, he was wrong.
socialism as putting people first is needed to confront the putting property ownership first paradigm
And that's what the JG does directly, immediately and decisively - although again I would not frame the questions the way you have. I have a lot more to say about this, and will continue the relevant discussion about Marx etc you, Bob & me were having a week or so ago in a new post at my blog that I will put up in a few days.
But the end in view needs to be transcending capitalism...
A problem in my view is automatic rejection and characterization as "gradual", "benign", "incremental", "reform" what would clearly - at least clearly to me - "transcend capitalism" in short order, and is the only practical path I know of. We really, really disagree here. I cannot grant such essential points, which I think you are terribly mistaken about. What you see as merely "incremental" - Isn't!
MMT is well worked out theoretically.
Within the capitalist system leaving ownership dominate. In an ownership system owners balance marginal productivity of capital and marginal productivity of labor. As labor becomes more costly, then technology is substituted for it. That is actually what is happening in the push toward automation and robotics. Rising unemployment and underemployment becomes a negative externality to be picked up by society like environmental degradation.
No, this is the opposite of what clear thinking = MMT shows. The only thing to fear is such fearful thinking. Marx said it was difficult? - if so, he was wrong.
Marx said it would require either a revolution or waiting for the world to be under capitalism as a whole, at which point capitalism would implode on itself because it needs to expand to be sustainable. I am not saying that Marx was right and I think the point is moot in that the world has moved on after a century and if Marx were alive now he would adjust his thinking to conditions.
What I am saying is that there is no well worked out theoretical basis for a socialistic economy to entirely replace capitalism if there were a revolution tomorrow. That's something that the left in general doesn't acknowledge deeply enough in my view. There are interesting ideas on the table and there needs to be more debate about this. The most interesting developments on the left of late have been in China.
And that's what the JG does directly, immediately and decisively - although again I would not frame the questions the way you have. I have a lot more to say about this, and will continue the relevant discussion about Marx etc you,
Ownership and rights are legal institutions. A JG doesn't alter that. Owners can easily thwart better treatment of labor through capital substitution and it is already happening. In fact, the rate is increasing to the degree that economists are now noticing it and becoming concerned about the economic effects of much less demand for labor in the near future.
A problem in my view is automatic rejection and characterization as "gradual", "benign", "incremental", "reform" what would clearly - at least clearly to me - "transcend capitalism" in short order, and is the only practical path I know of. We really, really disagree here. I cannot grant such essential points, which I think you are terribly mistaken about. What you see as merely "incremental" - Isn't!
We apparently have very different views of the objectives.
Calgacus, pardon my ignorance (and sorry for interrupting the interesting discussion) but which is your blog? If I'd known about it, I would be following it. Or perhaps it is under a different name and I am following it without realizing?
peterc: Haven't put up a post for a long time 3+ years - though I have written some and not posted. Said that above & here to give myself a kick in the pants! Click on my name above, or here Solitudinem Faciunt, Pacem Appellant. Thanks for the interest! And thanks for posting the Forstater interview - only had time for the first 10 mins so far, but is exactly my cup of tea. MMT needs more historical grundlichkeit & exposition thereof!
Tom: We apparently have very different views of the objectives.
What I have been trying to say is that we have the same objectives. I would be happy to have you, not me, as a judge of the success of the "well-worked out plan". If you grant this identity of objectives, then our differences must be about the logic, the events that would occur if the MMT plan were put into effect - and it is: I strongly disagree with almost every sentence and interpretation above, from the first to the last. And which often, imho, prove the opposite conclusion to the one you are drawing - mine & MMT's. The solution is to not go so fast, not assume I agree with you about what is obvious, because I really, completely disagree at every turn about what is obvious or true. E.g. "Owners can easily thwart better treatment of labor through capital substitution" - this isn't thwarting better treatment of labor- but practicing better treatment of labor!
What I am saying is that there is no well worked out theoretical basis for a socialistic economy to entirely replace capitalism if there were a revolution tomorrow. That's something that the left in general doesn't acknowledge deeply enough in my view.
My view is the opposite, and if the left doesn't acknowledge the false belief that there is no good plan, that's excellent news!
As a left libertarian, my chief objective is to see a permanent (constitutional) end to propertarianism and "ownership" basis of society, along the lines of Murray Bookchin's communalism and the lifestyle of indigenous peoples. This is a lot simpler to do in smaller groups. Getting there in the institutional setting of a modern nation would involve a step function, such as Evo Morales is implementing in Bolivia.
It doesn't seem to me that even a full implementing of MMT based policy as it has presently been stated would be sufficient to get there.
Calgacus. Thanks for the link! Cheers.
I'll be sure to have a look see :)
I kind of like the Bishnois. Seeing the divine in all forms, they take care of everything: - in their desert region, the documentary I was watching said there were ten times the wildlife, compared to similar regions where people had more the western idea of conquering everything.
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