If you’ve come here looking for a list, I’m afraid you’re going to be disappointed. The Job Guarantee isn’t a list of things to do, because, unsurprisingly, the people who designed it weren’t fans of central planning.
Instead we’ll go through the Job Guarantee in detail and explain that it is a process, not a destination. We’ll explain what it does and why it is there — using a slightly different viewpoint from normal....
The Job Guarantee is a mechanism for creating jobs of social value. It is a dynamic system that enables and supports the creation of jobs that provide public service to others and that others consider to be of public service.
Nobody has any idea what jobs the Job Guarantee will create or not create because that is left to the Social Entrepreneurs to decide based upon the forces they respond to.
In this view of a JG, the currency issuing government doesn't create the jobs directly by employing people, but rather indirectly by providing the supporting institutional structure and funding for job creation by social value entrepreneurs operating on the basis of creating social value through innovation instead of market value like the private sector.
64 comments:
So what does a job guarantee fund? And who gets the money, and who gets employed, and doing what? I think this is a lot of hand waving by Neil. If this is the best he has to offer, then a BIG is a much better way to go.
Seems to be an open invitation to corruption. Much better way would be to fund concrete goals that improve society, Large multiple ambitious projects, of the same magnitude as Kennedy's "we will put a man on the moon by ..."
Private pothole fillers will want a piece of the publicly funded pothole filling business. If they have to call themselves social entrepreneurs, they will. They'll also make a plea to the public that they're trying to make a living, and that the public works component is unfair competition.
They already do this. As soon as government funds an activity that was previously unprofitable, the funding makes it potentially profitable. And the dominant narrative today is to privatize.
As soon as government funds an activity that was previously unprofitable, the funding makes it potentially profitable. And the dominant narrative today is to privatize.
Nothing wrong with this. In fact it is a feature rather than a bug. f the private sector is willing and able to do something that is not naturally a public good, no worries. The government just opened up a new sector that hadn't been available before.
There are plenty of opportunities for social entrepreneuring regarding social value where there is not yet enough market value to attract venture capital or to obtain lending for investment. A big problem now is with funding. Startups are risky. If some end up privatized, no problem.
I don't think it's a problem either. Will Neil and Ralph concur?
More privatizing social services for profit. Haven't we had enough of that yet?
The public would have to weigh in, say that they've had enough and demand that it be so.
Mission creep?
The culture of various countries and regions is different. The US is highly individualistic and the different regions of the US are cultural diverse, too. For example, California tends to be socially and ecologically oriented while Texas individualistic and profit-oriented. But this is different within these states too. The job guarantee could be approached differently depending on these differences.
"I think this is a lot of hand waving by Neil."
If you want a list, you want Central Planning. And I think that makes you a Communist.
" They'll also make a plea to the public that they're trying to make a living, and that the public works component is unfair competition."
I didn't mention that bit because the article was getting too long and I didn't want to get bogged down in detail.
The Social Value part of the Job Guarantee avoids competition with the private sector. There has to be a mechanism where a market value firm can request the Job Guarantee backs out of an area.
I'd see that as working along the lines of a manifesto. If a local government has been elected saying they want pot hole filling to be a social activity, then the Job Guarantee can enter that area and eliminate any market value firm. Which it will do since the labour is subsidised on the Job Guarantee, but not in the private sector.
It's all down to what the society believes is the best way to get things done. Social value does everything in Cuba and next to nothing in the United States.
"They'll also make a plea to the public that they're trying to make a living"
Social entrepreneurs are paid. They are paid a wage, usually in a non-profit organisation. We have a form of incorporation in the UK called a 'Community Interest Company' - which exists to benefit the community rather than enrich private shareholders.
Bob,
Your example – pothole filling – is a good one. It’s the sort of simple task that might seem suitable for JG people.
There’s 100 yards of hardcore or “dirt track” road leading to the group of houses where I live, so potholes regularly need filling. There’s a right way of doing this job and several wrong ways. I wouldn’t let a bunch of JG people or anyone else near the road: they’d make a mess of the job. Me and my neighbours do the job ourselves.
Re private “pothole” contractors objecting to competition from JG hole fillers, that problem arose with the WPA in the 1930s. One way round it is to subsidise JG people into work with EXISTING employers. I.e. a private pothole filling contractor ought to be able to make use of one or two inexperienced JG people.
“Social entrepreneurs” would in effect be bosses of small firms: they’d need administration skills, marketing skills and so on. The idea that those sort of people are thick on the ground among the ranks of the unemployed – particularly when unemployment is low – is plain unrealistic.
And those sort of people cannot be nicked from the “regular jobs” economy because that would reduce output in that sector of the economy. I.e. if JG to any significant extent destroys regular jobs, then JG is a farce.
“Social Entrepreneurs will sell the benefits of what they are doing to retain the public opinion they need to continue.”
OK, Neill, following this principle, now you should get real and try to sell the benefits of your proposal to win public support.
Stop ducking the issues. Give us something substantial to think about. Your woolly statements are almost meaningless, e.g. “The Job Guarantee isn’t a list of things to do … it is a process, not a destination.”
You really have to tell us what JG people will do. Of course the details will vary over time and place. But we need a clear principles, outlines and examples. How else can we judge whether a JG scheme is might be operational, let alone whether it could deliver social value?
There are dozens of vital questions which you don’t address.
Who the hell are these wonderful “Social Entrepreneurs”? How many JG workers would there be per supervisor? What are the overhead costs of this bureaucracy? Would it have the capability to mobilise rapidly and oversee projects effectively? Surely it would be better to create employment and supply social needs by contracting private firms, which have learned to survive by employing workers effectively?
How will JG workers be motivated and disciplined if they don’t like the work? How will absenteeism, malingering, slow/poor performance and obstructive attitudes be handled.
Will easy/popular JG jobs get lower pay than tough/unpleasant jobs? Will hard workers be rewarded? How will workers be allocated between soft and hard jobs?
Will the “living wage” be adequate for families with children? If not, how would a JG scheme differ from reduced benefits + workfare paid conditional upon some lousy job?
Will workers have anywhere to appeal if treated unfairly?
Will transport and/or rehousing expenses be provided if the locations of workers' homes are distant from the locations of social needs? How can you justify work with low or zero social value near JG workers homes if there are much greater social needs elsewhere?
"“Social entrepreneurs” would in effect be bosses of small firms"
They already exist. They are called 'Community Interest Companies" - that are required to distribute their profit to the community rather than for private gain.
Would you like them closed down?
It's all down to what the society believes is the best way to get things done. Social value does everything in Cuba and next to nothing in the United States.
That might explain why Cuba is closer to offering its workers a job guarantee. In the United States, the ideology insists that if something is not profitable, it doesn't get done. The exception are those activities that are deemed essential, or defined as a public service.
In Canada...
If Ralph's dirt road is a private road, he and his neighbours are responsible for maintaining it. If it is a public road, the municipality is responsible. It used to be the case that public services would only be provided by public employees. Nowadays, such work can be contracted out to the private sector. Apparently there is no issue with public money being used to subsidize a private contractor, so long as the service being provided is public. Given where we are, a JG in Canada would be restricted to public services and utilize Ralph's approach of subsidizing existing private sector employers.
A hard delineation between public/private, enforced by NOT funding market value firms is not part of any debate I'm aware of. What is the downside of contracting out full employment (an essential service) to the private sector?
"You really have to tell us what JG people will do."
Just as soon as you tell me what the new businesses next year are going to do - precisely, not with 'wooly' examples. You first.
And then move onto charities and answer all your questions for them as well.
Then you'll have your answers. You just do what is current being done already. Just do more of it.
If you want to know what Social Entrepreneurship is, why didn't you just Google it?
Social entrepreneurs run Community Interest Companies (and other corporate forms in the same vein). Those sort of companies can file a zero-wage timesheet with the national payroll tax collection system, which will then pay the individual the living wage instead of the Company for the hours worked.
CICs then, effectively, get the subsidised labour from the state that is available to work on community projects. This is no different from applying for public grants. You just get paid in people rather than money.
Similarly there is no reason why the CIC can't be a subsidiary of a local council or other traditional public sector entity. Or even just a department of the council. The key is the social innovator interested in solving community problems.
Social entrapreneurs then lobby to have less market value provision and more social value provision. They would want the private sector shrunk to free up resources for their use. That counters the lobbying from the market value sector in the opposite direction. The competitive tension between the two then delivers even more social value and we'll find out dynamically which approach delivers better outcomes in a world that is 90% or more service sector.
Example: An unemployed graduate in surveying could be placed in a market value firm doing surveying work for the government. A public subsidy for the graduate's wages, as part of work being done to benefit the public. If this were expanded to include the private sector, there would be more opportunities to hire a graduate within their field of study.
Neil,
No large organization works without planning. This includes all governments,public and semi public organizations, and any business with more than one employee. If you think any organization can run without concrete achievable aims, goals and methods as well as well specified things to do, you are really hand waving.
Pavlina already proposed using the nonprofit sector for this. The nonprofit sector in the US is huge. I have been involved in it all my life in various ways. I agree this is the way to go. There are loads of people in it that could be making a whole lot more in the private sector but choose not to for various reasons.
The nonprofit entrepreneurs and management are highly committed and skilled. For example, a group of "hippies" started a food coop here in the 70's. It is still going strong and has expanded. There are now three stores and the stores are stocked in part by local gardens and farms, some cooperatively owned and run.
There are no major food chains here other than Walmart. The regional supermarket is Hy-Vee, which is employee-owned. There is a local family owned market with two stores. A branch of Lucky's, which is a regional health food market, recently opened and a Natural Grocers opens this week. Costco opened a store not long ago, and Trader Joe's is now under construction and opens in the fall.
The coop has lots of competition, but it is doing fine. Moreover, none of the privately owned places are at all concerned about competition from the coop since the clientele is relatively small in comparison to them, judging from store size.
Everybody is happy, and the nonprofit sector is growing.
Another nonprofit example is Goodwill, a national chain thrift store whose mission is hiring low-income and handicapped people. People donate their no longer needed stuff and Goodwill sells it cheaply, aimed at those in need.
Some time ago it was not well-managed and its stores were pretty much in low-cost strip malls. Then they hired an experience manager from the private sector at comparable pay. There was an uproar over "wasting money," but he turn the place around in short order, built new stores that would attract people and managed them accordingly. Huge improvement and they were able to hire and provide training for more people.
Goodwill in an interesting case, since it operates somewhat as a JG would. There are many people that take a job there temporarily, get trained and move up to a better position in the private sector.
One way to launch a social entrepreneuring program of which the JG would be a part is to establish nonprofit incubators as nonprofits themselves.
Incubators are now common and some are run by universities.
Search on entrepreneuring incubator, business incubator, and startup incubator.
There are also consulting services that do this.
Search also on social entrepreneurship.
There is even a Wikipedia article on it.
Social Entrepreneurship.
Scott Fullwiler was a director of the social entrepreneurship program at Wartburg College until he moved to UMKC recently. He has been active in the social value, social entrepreneuring and social finance fields.
I don't get all the skepticism about this.
It's also necessary to distinguish different private v public of goods.
Public Goods
There are already a lot of nonprofits in the US.
The Nonprofit Sector in the United States: Size and Scope
Many get government grants and others are eligible but don't apply for various reasons but could qualify.
No reason that government could not supply personnel as par of a JG as part of a grant program, as Neil suggests.
Time to resurrect Kenneth Boulding's grants economics.
Neil,
Simply giving something a different name does not amount to saying anything (you refer to social entrepreneurs as "social interest companies"). Nice catchy name. But it doesn't answer my point, namely that the sort of people who would be able to run those outfits are not thick on the ground among the ranks of the unemployed.
There is actually an organization that has an office 200 yards from where I live that helps "social enterprises" (to use their terminology). I've been to meetings there. The sort of people who run social enterprises / social interest companies are EXTREMELY intelligent, well motivated, skilled, etc. In fact I feel humbled in their presence.
Dean Baker claims (link below) giving all the unemployed JG jobs (an extreme case of course) would mean taking on five times as many people as the US government employs. The idea that there are enough of the latter skilled people among the unemployed to supervise that very large number of people is unrealistic. Certainly as Dean suggests, if JG is given the go ahead, it needs to start in a small experimental sort of way to iron out the bugs.
http://cepr.net/publications/op-eds-columns/a-job-guarantee-and-the-federal-reserve-board
Tom,
Re your enthusiasm for non-profits, the empirical evidence (from studies in Switzerland) is that the subsequent employment record of those who have done temporary PRIVATE sector subsdised jobs is better than those who have done temporary public sector / charity type
temporary jobs.
The idea that there are enough of the latter skilled people among the unemployed to supervise that very large number of people is unrealistic.
Ralph, what gives you the idea that the unemployed would plan and manage the programs themselves?
The JG package would either provide for funding the planning and admin through contracting, or else set up a bureaucracy to do it.
The social entrepreneurship model is an alternative to setting up another government bureaucracy, but that too is an option.
Re your enthusiasm for non-profits, the empirical evidence (from studies in Switzerland) is that the subsequent employment record of those who have done temporary PRIVATE sector subsdised jobs is better than those who have done temporary public sector / charity type
temporary jobs.
There is a huge issue in the US about the government subsidizing the private sector. A JG that did that would be considered workfare and the Democrats would kill it.
Another government bureaucracy to administer a JG would be killed by the GOP.
A social entrepreneurship model that is government funded could pass tho, at least, I think so, since it contains elements that both parties support and some compromise could be worked out.
Ralph, Neil
The problem with small experiments is that even if they are successful, they can often not be scaled up.
The reason WPA of the depression era worked, is because there were definite infrastructure needs that needed to be filled. That formed the backbone of the program - this includes the CCC, which was a direct result of the earlier efforts in conservation by Teddie Roosevelt (FDR's cousin) - other programs which employed writers and journalist was to document the vast knowledge that existed in the various government agencies. Many agricultural pamphlets were written that way.
THe JG people would be much better served, if they started thinking along the lines of trying to figure out what needs to be done, and then start working from there, instead of palming off those necessary actions to other very nebulous entities. When you do this, it is an open invitation to corruption. Government works best when it goes after concrete objectives to be attained. You want to employ the unemployed? Then the obvious question is "To do what?" If that cannot be answered, and it is not being answered, then a BIG is a much better way to go. Even an employer subsidy is not enough to bring up employment in down times, because the question "Employed to do what?" remains unanswered.
There is a huge issue in the US about the government subsidizing the private sector. A JG that did that would be considered workfare and the Democrats would kill it.
If that is so, why are private contractors being hired to perform public services?
It is seen as more efficient, even when that isn't the case.
Favoring non-profits over existing employers would appear to limit the variety of job opportunities under the program.
Coop Profile: Syllable
Favoring non-profits over existing employers would appear to limit the variety of job opportunities under the program.
Only one is thinking inside the box. Entrepreneuring, including social entrepreneuring, involves thinking outside the box. It's about innovating.
That is Richard Wolff's plan for reforming capitalism. It's to be encouraged but is not a viable option for a majority of the workforce. In the meantime, existing businesses operating under the conventional model is where the jobs are.
Thinking outside the box is fine, and even preferred. But when government mandates the purchase of basic necessary social services from private for-profit corporations the system is beyond repair.
BOcare is a court-tested model for the privatization of social security and whatever else hasn't been fully privatized yet. Hillary's plan was called "managed retirement".
It is difficult to understand Neil Wilson’s reluctance to give any details about his proposals.
Other proponents of JG have done serious research far beyond mere philosophical abstractions. For example, in 2008 Bill Mitchell and colleagues produced estimates for the whole of Australia of (a) unmet need for infrastructure and services, and (b) the type and quantity of socially meaningful work that could be performed by low skilled workers employed under a JG scheme.
They estimated that “The socially meaningful work that respondents considered could be created nationally accounted for around 40 per cent of all unemployed people. The highest numbers of jobs identified was for builder’s labourers 34%, personal carers and garden labourers/handypersons 10%, and teacher’s aides and child care assistance 8%. Other needs included environmental remediation workers, community and fitness workers, food preparation assistants and rail workers.
http://e1.newcastle.edu.au/coffee/pubs/reports/2008/CofFEE_JA/CofFEE_JA_final_report_November_2008.pdf
Why can’t Neil Wilson today produce any estimates for the current year for even his home city/town? Unemployment in that city is currently NN,000, with characteristics a,b,c. Social and infrastructure needs and priorities have already been identified in numerous studies and reports by the democratically elected council for the city.
As for all this fanciful talk by Neil and Tom about social entrepreneurs and Community Interest Companies managing a JG scheme, frankly this belongs in cloud-cuckoo land.
Some people apparently have difficulty thinking out of the box.
There are two major issues involved in the JG.
1. Who is going to design and run it? That is, it is going to be a government bureaucracy within the Dept of Labor, or is it going to be contracted out?
2. Who is going to be served and how? This doesn’t translate directly into job types that can be listed and people can be fitted into.
The are some existing models that are applicable. New ones will also likely be developed.
I don't see theses being that big a challenge in comparison with most other challenges.
The JG program is aimed at "unskilled workers." There are very few jobs now for "unskilled workers" like manning a shovel and digging ditches. Most jobs require at least minimal training. One obvious way to employ people is to pay them for training. Companies would love this for hiring out of the buffer stock of unemployed.
This would improve workers and increase productivity instead of workers being idled and existing skills deteriorating with a buffer stock of unemployed.
Doing just about anything is more productive than doing nothing and it costs no more than paying people to do nothing with transfer payments.
I would envision the JG program as several fold.
1. Temporary employment. Build an inventory of socially valuable jobs that need doing that can be assigned to just about anyone that shows up. Local nonprofits could submit lists and the JG center would send out people as they showed up.
2. Training- programs to train workers in new skills.
3. Startup incubation -for example, launching worker coops that would employ people.
4. Special employment - gig and the like.
5. Permanent employment
On item 1 of Tom Hickey's "program" is JG.
Tom Hickey notes that “The nonprofit sector in the US is huge”. He seems to think that this indicates that non-profit organisations/social entrepreneurs/Community Interest Companies would be more efficient or otherwise superior for the provision of JG.
But he fails to mention that US non-profit firms are largely a product of the US tax and legal system. These factors are completely unrelated to their underlying economic or social efficiency.
Advantages of non-profit incorporation in the US include:
1. Exemptions from state and federal corporation taxes.
2. Reduced local state and county taxes.
3. Eligibility for grants and donations from private and public bodies.
4. Private donors can claim tax exemptions.
These strength of these factors is magnified in the US by the high rates of corporation taxes, and the importance of religion and charities for the provision of social needs.
None of the above boosts the efficiency of non-profit firms.
But there are several important factors which tend to cause inefficiencies in non-profit organisations. Their managers are not accountable to owners/shareholders and there is no pay for directors. This tends to result in the employment of worthy do-gooders, self-righteous idealists and satisficers rather than dynamic efficient managers.
Neil Wilson claims that there would be accountability to public opinion, but at best this is likely to be indirect, slower and less effective that the profit motive.
Efficiency is not an objective of nonprofits. Effectiveness is. Same with the military.
Government bureaucracy is notoriously inefficient and not especially effective.
This is NOT a good argument for privatizing everything. If an area is not privatized in an era where everything that can be turned to a profitable business is being turned into one, then what's left is social value, as Neil explained quite clearly in my view.
Many nonprofits are process-oriented rather than results oriented. For example, the local drama troupe aims at producing plays as much for the people involved as the audience, which is probably not large enough to support a local troupe on admission fees, let alone being viable on a profit basis.
So undertakings like this get special treatment from government and they also depend on donors for support. At least part of the support could come from grants including federal grants.
This could be worked into a job guarantee program, too, with a little creativity.
What would efficiency even mean here? The point is for everyone to have a good time while contribution to the culture of the region.
This is particularly important in an era of passive entertainment through devices. Drama is, of course, only one example.
BTW, the job programs during the Great Depression also included the employment of artists to decorate public works, etc. Why couldn't street art fit into a JG? A good many people play music with a cup out. Why not include them in a JG?
On item 1 of Tom Hickey's "program" is JG.
Thinking in the box.
"BTW, the job programs during the Great Depression also included the employment of artists to decorate public works, etc. Why couldn't street art fit into a JG? A good many people play music with a cup out. Why not include them in a JG?" Acting institution Carl Reiner claims that he and many others got their "ticket" to Hollywood because of federally sponsored art/music/theater programs.
These strength of these factors is magnified in the US by the high rates of corporation taxes
Effective corporate tax rates average around 12% despite a "book rate" of 35%. Many of the largest corporations pay no taxes at all or have a negative tax rate due to subsidies (corporate welfare). There are massive tax credits for "foreign investment" and shelters abroad that eliminate taxation entirely. Apple is in the news because the are bringing back $1B (0.4%) of their 1/4T untaxed overseas cash hoard in a BS PR play.
This is the actual product of the US legal and tax system.
The JG program is aimed at "unskilled workers." There are very few jobs now for "unskilled workers" like manning a shovel and digging ditches. Most jobs require at least minimal training.
Most jobs in an economy are "unskilled" in the sense that they do not require formal education beyond high school. Training is provided on-the-job and/or with a few hours of classroom instruction at most. You learn by doing, which is the kind of experience that employers prefer.
You're not doing a JG proposal any favors by referring to your clientel as "unskilled".
1. Who is going to design and run it? That is, it is going to be a government bureaucracy within the Dept of Labor, or is it going to be contracted out?
In the Canadian context, it would be designed by provincial and municipal governments, run by the municipalities and funded by the provinces or the federal government. It would initially provide work in areas deemed to be public services. If that initiative were a success then it could be expanded elsewhere and with different objectives.
Politically, this baby will be strangled in its crib before it has the chance to crawl, walk or run.
You're not doing a JG proposal any favors by referring to your clientel as "unskilled".
Call it lowest skilled workers then.
The point is that labor cost is labor time multiplied by "labor power" as output.
The lowest skill level has a power output of one, so one unit of labor time multiplied by one unit of labor power is the labor power/time rate of one. This is the base rate of compensation at a "living wage," given costs in an area.
Higher skill workers will have a higher output per hour and so can demand a higher wage.
An MMT JG sets the base wage for a labor power/time ratio of one at a certain rate of compensation, which then anchors the currency to labor rather than say, a fixed amount of gold or silver.
This has the effect of reducing the power of capital to control the wage through influencing the bargaining power of labor, which is the way a buffer stock of unemployed works (against labor).
I want to expand on my point 5 above about one aspect of a JG being the need to provide permanent employment.
The JG establishes a buffer stock of employed to replace the current buffer stock of unemployed, the idea being that firms will hire out of the buffer stock of employed as the economy recovers from a contraction that expanded the buffer stock.
But some people may never be selected for private employment and remain in the pool indefinitely.
So a JG must be designed to provide for this eventuality, too.
The JG provides a minimum living wage for lowest skilled workers and those unfortunate enough to hold a PhD. The private sector is tasked with offering those workers a better deal.
Unemployment and employment are permanent from a macro perspective.
Tom,
IMO, a JG that is in reality a combination JG/BIG could well work. My idea is as follows -
All people who want a JG, register at the local (un)employment office. They are immediately given a BIG stipend (less than the living wage assuming full time work - perhaps 50% or more). Then a marketplace is developed, where employers bid for these JG recipients (with the proviso that the bid plus the BIG hourly rate be greater than the going living wage). The job fits into a set of categories (e.g. farm labor, office work, etc) and various offers are displayed. JG recipients put down their preferences as to the type of work. The employment office then takes up the offers on a first come first served basis (for the JG recipient, keeping preferences in mind) - highest offers going first. The JG recipient has the choice to accept or not at the offered wage, while the employer gets the person for the day/week - with choice of continuing with the person for a longer period of time. Transport vouchers are also given to the JG recipient to allow them to get to work (this can cover public transit or gas money)
All of this has to be done in conjunction with a good public housing program, as well as a back up system for people who are unable/reduced able to work because of disabilities.
This in my opinion would be very workable. This really would serve as a buffer stock of employment.
IMO, a JG that is in reality a combination JG/BIG could well work. My idea is as follows -
Concur.
This fits into my cat 4 in the list above.
It would work for more skilled workers that did not wish to go with the base rate for the lowest skilled by giving them some support while angling for a better deal. Unemployment insurance was supposed to take care of this, but that has not always been the case.
The authors of JG schemes tend to be opposed to a BIG. This is another huge bone of contention.
I'd support a purely BIG initiative as an improvement over the status quo. I'd support a BIG/JG hybrid as well as a JG only approach. Each of these proposals are better than mass unemployment and welfare.
The authors of JG schemes tend to be opposed to a BIG. This is another huge bone of contention.
No they don't.
The contention is that only a JG replaces the buffer stock of unemployed with a buffer stock of employed. Just every child can have a pony if there are enough ponies and every dog can have a bone if there are enough bones; so too, everyone who is willing and able to work can have job if there are enough jobs.
This has noting to do with a BIG.
A JG and BIG can co-exist. In fact some MMT economist favor allowing a choice between receiving a BIG and opting for a JG.
What MMT economists oppose is a universal income guarantee (inflationary) and especially one that removes the safety net (anti-progressive).
MMT economists also favor some type of BIG for those who are unable to work. This should also be at a living wage.
MMT economists oppose providing firms that have a low wage policy (such as Sam Walton stated as Walmart's policy) to receive a subsidy through welfare payments that make up the difference between the compensation paid (wage and benefits) and a living compensation. This would eliminate the class of "working poor" that populates welfare programs and creates a social and economic drag.
Re-read you own post, Tom. MMT economists are all over the place, except that they don't support a pure BIG. It goes without saying that they believe a JG is a superior option to a BIG. Within the MMT community, it is rare to read anything to the contrary.
A JG and BIG can co-exist. In fact some MMT economist favor allowing a choice between receiving a BIG and opting for a JG.
Yet I haven't read anything from Bill Mitchell acknowledging that a JG could co-exist with a BIG. He has written many articles opposing BIG schemes and there's no suggestion the two approaches are compatible or complementary. Likewise for the author of this piece.
Maybe it is possible to implement a hybrid system. Perhaps a JG-only approach is the only acceptable approach for our work obsessed culture. Or maybe it is time to abandon the ideal that everyone can or should be employed at a "job". I'm open to all suggestions, "MMT economists" are not.
Something will have to give as we move forward. Doing nothing is the worst possible option.
What MMT economists oppose is a universal income guarantee (inflationary) and especially one that removes the safety net (anti-progressive).
We should all be suspicious of the political motivations behind the BIG. Part of its support is coming from the laisser faire crowd.
MMT economists oppose providing firms that have a low wage policy (such as Sam Walton stated as Walmart's policy) to receive a subsidy through welfare payments that make up the difference between the compensation paid (wage and benefits) and a living compensation. This would eliminate the class of "working poor" that populates welfare programs and creates a social and economic drag.
A minimum living wage would address this concern. This would make Ralph's preferred approach non-exploitative as the wage subsidy to a private employer would be the equivalent of that offered to a non-profit/public employer.
US MMT economists are OK with a basic income policy (transfer payment) that is means-tested rather than universal.
The US already has this as the earned income creditearned income credit and welfare/Medicaid for those under a certain income limit. Only low-income people qualify for it. MMT economists are fine with this and would expand it where it is insufficient to address needs.
Some factions would either convert the exiting welfare to workfare or a UBI that eliminates other social welfare programs. The US MMT economists are opposed to this. The MMT JG would not impact existing social welfare programs or act against expanding them. It would not be workfare because it is unrelated to social welfare programs, and it would not be a transfer payment because work is involved.
From Wikipedia article:
Millions of American families who are eligible for the EITC do not receive it, essentially leaving billions of dollars unclaimed. Research by the Government Accountability Office (GAO) and Internal Revenue Service indicates that between 15% and 25% of households who are entitled to the EITC do not claim their credit, or between 3.5 million and 7 million households.
Houston, we have a problem.
Not only EITC but also other social welfare programs.
Works both ways.
It is very difficult to get on social security disability "because there are so many scammers."
Bob:The authors of JG schemes tend to be opposed to a BIG. This is another huge bone of contention.
Contra Tom, I think this correct. If as is usually agreed on, BIG means "a substantial program that is more than just a new name for welfare". And I think they're right, but don't say it loudly and stridently enough. Practically everyone criticizes our MMT heroes from the right; I elected myself to criticize them from the left long ago.
And I think it is important to not mischaracterize the MMT heros positions, as both friends and critics of their positions can.
Wray at NEP a few years ago said that the mainstream gets everything (exactly) backwards. I'm christening this Wray's Law.
Thinking that the BIG is a "progressive" idea or the JG is "work-obssessed" is pure mainstream economics. Wray's Law in action.
The BIG is a piece of shit. At best it does nothing. In reality it would make things worse. Which is why so many plutocrats love it so.
The richest nation in the world, Switzerland solidly voted down a BIG a while ago, although it is probably the nation in the world for best suited for a BIG, where it would do the least damage and might even help for a while. But could it just be that they actually did it for logical long-term thoughtful reasons, that the majority understand economics better than BIG-pushers? The people of Switzerland also just brought their own central bank to heel - for the same reason - go Swiss!
Perhaps a JG-only approach is the only acceptable approach for our work obsessed culture.
Backwards thinking. The BIG is "work-obsessed". Other people's work. The JG is just normal slacker cooperation on a groovy commune.
Who is more work obsessed?
Someone who trades their labor for someone else's if and when they need or want it? - I'll fix your plumbing if you'll paint my house.
Or someone who insists on regularly being waited on by others and doing nothing in return?
Or maybe it is time to abandon the ideal that everyone can or should be employed at a "job".
The second "should be" has nothing to do with MMT. The first "can" is a human right. Thinking that ensuring this right is impossible - rather than extremely easy to execute and entirely beneficial - is lunacy.
Doing nothing is the worst possible option. I agree somewhat. Instituting a BIG would convince everyone that it is a piece of shit. Maybe we need to go through that loop one more time.
I'm open to all suggestions, "MMT economists" are not.
They are open to suggestions. You don't evolve a bulletproof logical theory without testing it. They reject the BIG because they've thought about it. People who support it haven't. As Wray notes, they usually don't even coherently formulate anything. I'd be happy to help anyone go through the arguments - but it would be nice if they came with a truly open mind (hey, maybe I could be wrong - the BIG could be a piece of shit) and argued in a more usual style than say AA or EKH. I mean, at first I thought the BIG could be an improvement on the JG when I was learning MMT. Then I learnt and thought more and realized how wrong I was.
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Since the last JG-related post, been writing a long response to Dan Lynch, Kong King & Unknown mainly, who are imho (surprise!) completely wrong about everything, (factually, logically and common sensically) , but this slacker as always has far too much work to do. (What a relief a JG would be!) Will post it soon.
The richest nation in the world, Switzerland solidly voted down a BIG a while ago, although it is probably the nation in the world for best suited for a BIG, where it would do the least damage and might even help for a while. But could it just be that they actually did it for logical long-term thoughtful reasons, that the majority understand economics better than BIG-pushers? The people of Switzerland also just brought their own central bank to heel - for the same reason - go Swiss!
Must be because the Swiss have full employment and a JG, thanks to their better understanding of economics.
Backwards thinking. The BIG is "work-obsessed". Other people's work. The JG is just normal slacker cooperation on a groovy commune.
Who is more work obsessed?
Someone who trades their labor for someone else's if and when they need or want it? - I'll fix your plumbing if you'll paint my house.
Or someone who insists on regularly being waited on by others and doing nothing in return?
The Swiss. The "pull yourselves up by your own bootstraps" folks. The "I'm alright, Jack" crowd. The people that go on about "dole bludgers". The voting demographic that Neil Wilson keeps writing about, who will reject a BIG because there's a lack of reciprocity. (They will also reject a JG because those are not "real jobs")
The second "should be" has nothing to do with MMT. The first "can" is a human right. Thinking that ensuring this right is impossible - rather than extremely easy to execute and entirely beneficial - is lunacy.
My "job" is to post comments at Mike Norman Economics. I've been doing this for years, yet I'm still waiting for my first paycheck. Is the delay due to implementation issues, or are my rights being violated?
Instituting a BIG would convince everyone that it is a piece of shit. Maybe we need to go through that loop one more time.
Maybe we need to return to the full employment policies of the past. Then someone (preferably open-minded) can come along, declare those policies to be shit, and history can repeat itself.
Bob: The BIG sounds so nice at first. But it is a return to the womb fantasy.
Maybe we need to return to the full employment policies of the past.
Yup. They are good because they worked. They made sense. The BIG doesn't and won't. I'm sort of agreeing with you. Subject it to the test of experience, the test that BIGs never pass and JG always do. MMT provides logical reasoning for this empirical observation. You really think you're being open-minded? You seem to have no doubt whatsoever that BIGs can work, that they are not shit.
My "job" is to post comments at Mike Norman Economics. I've been doing this for years, yet I'm still waiting for my first paycheck. Is the delay due to implementation issues, or are my rights being violated?
Take it up with Mike - did he promise you $? What I am saying, what others have said long before is that if a government issues money, backs it with taxes, it is lunacy to not offer people a way to get money, to pay the taxes. "Primitive" pre-monetary societies understand this logic fine. That's why they don't have unemployment. Moderns never stop and sit on a log and think, so they become suckers. If your government doesn't offer you a job and insists on its money being a necessity of life, you have a perfect moral right to fight back, even "steal" from it, because a manifestly insane law has no moral force behind it.
That people don't like a BIG or insist on reciprocity is not the MMT reason against BIGs & UBIs. The MMT reasoning is that they are impossible, because reciprocity is logically necessary, not just something people like or don't like.
By the way, I am all for nonmonetary "BIGs". But if something can be safely provided by BIG income - then make it free. If not, a BIG is just a way of enslaving the people who are providing that good.
You seem to have no doubt whatsoever that BIGs can work, that they are not shit.
I have no doubt that the status quo doesn't work and is shit.
The talk amongst the chattering classes is mostly about a BIG. So that presumably is where we're headed. We could also be headed to a world where "useless eaters" are culled.
I'm open-minded about the experiments that will be attempted.
That people don't like a BIG or insist on reciprocity is not the MMT reason against BIGs & UBIs. The MMT reasoning is that they are impossible, because reciprocity is logically necessary, not just something people like or don't like.
Then a communist "gift economy" is impossible.
What is currently possible: a less-than-big BIG, known as welfare.
By the way, I am all for nonmonetary "BIGs". But if something can be safely provided by BIG income - then make it free. If not, a BIG is just a way of enslaving the people who are providing that good.
In Canada we have food banks. Canadians can become homeless and destitute but thanks to our "basic food guarantee" they won't starve. Perhaps the next great leap forward will involve a basic shelter guarantee. No money required.
With the Tiny House movement and 3D printers capable of building concrete shells for houses in hours a basic shelter guarantee could be right around the corner and absolutely no one could object that we 1) dont have the space or 2) dont have the materials
I know plenty of people who can afford much larger houses thinking about downsizing to much much smaller houses. There are a significant number of people questioning the whole "personal castle" way of living that became popular. A lot of those folks are having trouble selling their mansions.
It could be right around the corner or it could be that society does not want to help the homeless. Is it really just a cost issue? Marginalized people have next to no political power, resulting in a lack of political will to implement traditional solutions like affordable housing.
Food is a special case in that it is perishable and there is an abundance of it. Enormous quantities of edible food end up in the dumpster.
It could be right around the corner or it could be that society does not want to help the homeless. Is it really just a cost issue?
Mean-spirited.
Bob:The talk amongst the chattering classes is mostly about a BIG. So that presumably is where we're headed.
I doubt it. Too many level headed clear eyed "Swiss" - even among bleeding hearts. The chattering classes do little but chatter. That's what they do.
We could also be headed to a world where "useless eaters" are culled. I very much doubt it, I am quite optimistic, I think MMT & the JG will win, starting in the USA probably. That's where it looks like it is headed to me.
Then a communist "gift economy" is impossible.
If that means an economy with no reciprocity, with people just randomly giving stuff to each other in an uncoordinated way, then yes. This is impossible - and desirable why? - in any foreseeable future or past. Gift economies were all about some kind of reciprocity. Such a thing never existed. The problem is that people think about things completely backwardsly. Primitive "gift" societies did it the right way.
Refusing a gift was a major insult, a termination of a relationship. That's what the gov does to the unemployed. They are asking to be taxed-in-real-terms, to give a gift of their labor to the gov, to subsidize the gov and get government brownie points for it. In spite of the fact that this kind of gift-giving is what makes the whole monetary economy go round, the gov insanely refuses. (Because it is corrupted by the dudes who monopolize the brownie point supply - which they receive for the really crappy, often poisonous gifts they give to the gov)
It could be right around the corner or it could be that society does not want to help the homeless.
Most people do want to do something about it. Something of prime importance is brainwashing people into forgetting that there was no homelessness during the postwar full employment era, and a bit afterward, varying by country. The problem is that if you believe in absurdities, you can commit atrocities. Not meanness or cruelty, which is a comparatively trivial problem, but delusion. But every minute that people wake up brings a better future closer.
I went rather too far above - it was late, and I was tired. I shouldn't caution people about mischaracterizing positions and then do it myself. I wrongly over-opposed Tom's assessment. I am trying as usual to sketch the MMT logic more clearly imho than usually done. But the usual MMT position is more like - none of them are for BIGs - (because there really isn't anything good about it that couldn't be done better in another way, and it is very dangerous in many ways) - but they oppose it or not in varying measures, without a strong party line against it.
And I have to apologize to Dan Lynch or the others- not completely wrong about everything - I agree with the criticism of Ralph's "do it thru private employers" somewhere.
But my basic point is that people work hard at making imho ridiculous, far-fetched criticisms of the JG - the normal thing that always works well - while they blithely reject any criticism of the truly far-fetched "income guarantees for nothing and chicks for free." All the JG criticisms I've seen were decisively refuted in theory and practice long ago, and are begging for lampooning.
If that means an economy with no reciprocity, with people just randomly giving stuff to each other in an uncoordinated way, then yes. This is impossible - and desirable why?
A communist economy is envisioned as a gift economy because goods and services would be produced on the basis of use-value. The economy as we know it is based on commodity production. Good or service X is produced with the intention of selling it, for money or its equivalent. In our current system, the use-value of a good or service is realized after the exchange, or after a series of exchanges. The same would be true of gifts, except that gifts do not require money (or barter) to be exchanged. It is a one-way exchange, without the usual quid pro quo.
It is envisioned that the need for money in a communist economy would decline, or take another form. This would occur as people are able to associate their contribution to society to what they receive from it. The more the system is perceived as fair, the easier it is for individuals to accept that their efforts are being recognized and rewarded fairly. It's difficult for us to conceptualize this transition because we are used to treating everything as a commodity, including labour.
In a gift economy, people do not randomly give each other stuff. Production is co-ordinated and people continue to work and consume. The key difference is that the metrics we are familiar with (income, price) have been changed. Labour is accounted for but not treated as a commodity. Prices exist and may fluctuate but are initially based on cost estimates rather than exchange value. Under such conditions it is predicted that people will become less concerned about reciprocity and assume that it exists. Perhaps, to use an analogy, in the same way we assume our bank statement doesn't contain arithmetic errors.
An important factor will be to what extent our scarcity mindset is alleviated.
I can go into greater detail about what might be, as opposed to what is. Suffice to say that the communist vision involves full employment, sharing of labour, reduction of labour, elimination of wages, production based on use-value, and monetary/non-monetary forms of BIG (or B?G). This is a different beast than the use of a JG and BIG to 'reform' capitalism.
I'm not as optimistic as you are regarding our future. Then again, I'm a hermit. I know that individuals can be caring and rational. I believe societies have to struggle to achieve those attributes. Chris Hedges writes that our institutions, which safeguard civil society, are rotten. I believe him.
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