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Friday, October 9, 2020

Bill Mitchell: job guarantee will suppress working class power — David Sligar


A critique of the MMT JG from the left.

This is interesting in that the author seems to be arguing with leaving the system in place because doing so is more favorable for labor market power. It is interesting because his real desire is to transform the existing system away from "capitalism," at least the neoliberal variety that is presently in place. I am left assuming that he thinks either that workers are better able to transform "capitalism" from within without a JG, or something else that he doesn't reveal in this post. Anyway, it's an argument that we are likely to see more of as MMT takes hold.

Western Sydney Wonk—Social policy, economics and politics from a social democratic perspective
Bill Mitchell: job guarantee will suppress working class power
David Sligar, social democrat, influenced by market socialism, with hope to promote a strong and protective welfare state.
h/t Naked Capitalism

37 comments:

  1. Does the desirability of an ethical finance system ever cross your mind, Tom?

    Or is it part and parcel of being blinded by the "god of this world" that it doesn't?

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  2. What is interesting are his arguments. Address them.

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  3. (Separate to the above he also regularly advocates abolishing unemployment benefits, which on at least one occasion he has suggested are a deterrent to work. Eliminating a non-work income alternative would strengthen employers’ hand further.)

    How often must I repeat that being a wage-slave and working are not synonyms?

    That most people MUST be wage slaves or starve is because their means of existence have been largely stolen in large part because of government privileges for usury cartels.

    And btw, the MMT School would INCREASE those privileges in a short-sighted attempt to make an unjust system more STABLE.

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  4. "wage-slave" = figurative language...

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  5. "so its effect on labour markets is not fundamentally more pro-worker than an unemployment benefit."

    Can you move onto unemployment benefit by choice? Never seen that anywhere.

    The Job Guarantee disciplines both worker and firm. Workers can't ask for more money without more product - and therefore cannot recreate a 1960s/1970s style inflation spiral - and firms can't under pay labour or raise prices - instead they have to invest in productivity improvements.

    That anchoring effect of the monetary to the real it what drives matters forward.

    The unskilled get their pay rise when the job guarantee wage is lifted - which forcibly shares productivity with the workforce.

    The question some on the left have to answer is why they believe that they need to keep a lot of people unemployed just so the favoured few can maintain higher wage rates?

    Why isn't a flat wage for all the ultimate expression of solidarity in an "equality of outcome" world?

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  6. The question some on the left have to answer is why they believe that they need to keep a lot of people unemployed NeilW

    Not on the Left myself, but the question for the MMT School is why should the only alternatives be to be rich (largely due to a government-privileged usury cartel for the benefit of the so-called "credit worthy") or to be a wage slave?

    But that's where the MMT School would take us.

    I suggest the MMT School read the Bible and learn that God's will is neither unjust wealth nor unjust wage-slavery but instead roughly equal asset (or at least land) ownership.

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  7. The author calls himself a social democrat. That places him nominally on the left. Irony is that Bill has used the socialist label.

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  8. What to shoot for on welfare and unemployment?
    https://westernsydneywonk.wordpress.com/2020/10/01/what-to-shoot-for-on-welfare-and-unemployment/

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  9. What is interesting are his arguments. Address them.

    I am rather sure that Bill will do that in due course.

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  10. AA,

    Some figurative language here.... maybe help you understand...

    Think of someone seated at the drawing board trying to figure some thing out... pad and mechanical pencil in hand ... scribbling... punching some numbers into calculator ... back to scribbling.... comes up with wrong output... it doesn’t work... he sees it...

    Tears off sheet... crumples it up into a ball... looks over at wastebasket on floor... there are dozens of crumpled up pieces of paper both in the basket and on the floor around the basket ... does a LeBron imitation and launches current crumpled up sheet towards basket maybe it goes in maybe it hits the rim and falls on the floor doesn’t matter...

    Looks down at new blank clean sheet and digs back in to make a corrective adjustment and try again...

    See those papers in the basket and all around on the floor around it?

    Do you see them?

    Well.... that is the Old Testament....


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  11. “ I am rather sure that Bill will do that in due course.”

    Platonist zombies gotta do the Platonist zombie...

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  12. Answering Neil's rhetorical questions.

    The question some on the left have to answer is why they believe that they need to keep a lot of people unemployed just so the favoured few can maintain higher wage rates?

    They may be pigs who have learnt that some animals are more equal than the others, whose needs should be met by sending them to the knackers. They may be accelerationists trying to make things worse to make them better. But probably, they are just airheads who cannot reason.

    Why isn't a flat wage for all the ultimate expression of solidarity in an "equality of outcome" world?

    Of course it is. The above people are to that extent insane. Example below:

    A number of times self-styled Real Lefties - have explained to me how higher wages- for the Real Lefties like themselves, not the lesser people - are necessary and socialist against the unfairness of a "capitalistic"?! flat, equal JG wage. Uh-huh. Yeah, right.

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  13. Here's my comment on that blog:

    Have to disagree. This is just another example of facile ultra-leftism carrying water for the right and the rich. The JG is exactly the sort of thing Kalecki wanted. Have to write more about how some of the details of that piece are grossly misinterpreted - by Mitchell here or even Wray. Contemporaries, like Balogh, who I just was reading commenting on that piece, got it right. Mitchell recently has said some very strange things about the JG, btw. The other MMTers in the USA are imho more on the mark.

    As I've been saying for years, and as capitalists have known and said for centuries, the JG damn well is a panacea. Of course what they say is that it is their worst nightmare. Why, O Why, O Lord, don't people listen to the capitalists? Unlike most "socialists", they understand what they're talking about.

    participants have no right to collectively bargain in the manner of conventional employees
    A- The USA's near-JG, the New Deal work programs - had a collectively bargaining union, the Worker's Alliance of America. Historical fact refutes abstract theory. No reason not to have one for a JG. I think only Warren Mosler has argued against such unions, not the other MMTers.

    B - the JG is a big thing where "the people" as JG employees and voters are confronting themselves as employers and voters. If anything, deflation is the likely outcome of a JG - so the real wage will increase without anybody doing anything. In any case the diminution of inflation will make it less of a Red Queen's Race. If you're a sole proprietor, you have the right to collectively bargain with yourself. Doesn't help much. The JG wage could be set to $100/hr. Fine . It would help workers a lot temporarily, but cause substantial but temporary dislocations and inflation. Then things would settle down in a society which was more equal, but not all that different. But no mass collective bargaining can achieve a general wage of more than one hour of work in return for one hour of work. That's the way God, advised by his kids Jesus and Karl, made the world. Tight full employment is not a good thing. It equates with inflation or shortages - and a sober realist like Kalecki [sidelined by the Polish government, because of his insufficiently optimistic realism] would be the last to pull for that if there were a good alternative. One cannot safely run businesses without buffer stocks of inventory; neither can one run an economy without some looseness, buffer stocks.

    But to imagine that a real JG - and it alone - not the other public expenditure elsewhere - doesn't put far more power, decisive power, into the workers' hands is to be completely detached from the real world. Astounding historical and political and economic naivete and ignorance. I can hear Marx rolling around in his grave over this one.

    For instance, which did more to get the USA out of the Great Depression, put more power into workers' hands - the New Deal, centered on its work programs or the Second World War, with even more public expenditure. The correct answer, based on history and statistics is the first. Which is why there is universally accepted revisionist history from the Right, Center and the Left based on and propagating lies that it was the second.

    As Engels once said, capitalists present workers with a choice - if they don't like the capitalist frying pan, they are perfectly free to jump into the fire of unemployment. They don't have that power with a JG. Basically, capitalists have NO OTHER POWER. They know that. When "the left" remembers that - we'll have social democracy/socialism. Not before.

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  14. Matt:"wage-slave" = figurative language...
    Gotta agree with you here, the way that AA uses it. Not listening to anybody ever, for years, he has the cheek to complain about not being listened to!

    On pigs, Animal Farm, of course.

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  15. Roger Waters had a rough upbringing...

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  16. The scripture (Paul) says: “to the worker the wage is considered not a gratuity but a debt”

    No figurative language here...

    When AA introduces the figurative “wage slave” (oxymoron) he is covering the knowledge and truth of the scripture here from Paul...

    The reason we have wages for work in the first place is so that scripture can be understood...

    The paying of wages and work are figurative activity... figurative actions...

    AA is a victim of the “Judeo Christian” Platonist dialectic synthesis (which many are he is not unique in this) ... he’s pretty harmless the ones I worry about are these ones we have currently reifying and trying to foment WW3 in present day nation called Israel so (they think) Jesus is going to all of a sudden appear and save them... that’s not going to end well for anybody... if it is false... which I hypothesize it is... it may have to be tested...

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  17. Here itsRomans 4:4

    “ 4 Now to the worker, the wage is not reckoned as a favor, but as a debt.”

    We work for wages so that we can understand the difference between that and unmerited favor (grace)...

    They are two different things... perhaps opposites..

    We understand these things thru contrast... discrimination.. not synthesis... the “narrow gate”... it divides...

    They are profound abstract concepts we have to learn while we are here... “unmerited favor” vs “debt”...

    Something like “wage slavery” is a synthesized product of Platonist reasonings (in figurative terms the “Satanic” personification of the OT ) and covers the knowledge and truth... not good...

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  18. Calg,

    You have a UBI (grace, unmerited favor) and you have a JG (wages, debt) we can today (in flesh) implement either or both or whatever as material systems policy it doesn’t matter... the key thing is we obtain (while we’re here) the knowledge of the two different opposing concepts...

    Look you can argue for JG all day long AA can argue for UBI or somebody else can argue for a synthesized hybrid or whatever is seen to work the best... just test the policies out...

    From my (Science trained) POV we have a surplus society we throw away half our food etc... the material systems part is not that hard ... we can make it hard and often do with unqualified morons in control etc... but again those problems there are purely material.. and without the morons they go away tomorrow... so let’s not make a mountain out of a molehill.. if not for morons it’s molehill...

    They key thing is to recognize the difference between the two concepts.. which I think we do..

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  19. We have surplus food, surplus land, surplus materials to build shelter, surplus energy from the sun if we just work to harvest it (the solar energy hitting earth every hour is more energy than the entire planet uses in a year!) surplus time ( most people actually work less than 4 hours out of their 8 at work) surplus hospital beds ( lack of trained people to man them in many cases) and surplus developed space(abandoned commercial space across the country). What we dont have a surplus of is empathy. We care way too much for people in our circle and have antipathy for those outside it.

    I think it’s private ownership that needs to be addressed. The owners are holding these material systems hostage. In many cases the owners had nothing to do with development of these systems. They are just someone who bought someone out for a secure income stream.

    So the material system is the hardest. Not the creating of the surplus but the just distribution of it.

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  20. Distribution is is simply a (important) part of material systems management and administration....

    Trump: “ it’s called logistics”

    You can get a Science Degree in Business Logistics... it’s called “BLog”

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  21. https://catalog.utk.edu/preview_program.php?catoid=11&poid=3867&returnto=985

    Logistics Major, BS in Business Administration – Collateral Option
    Return to {$returnto_text} Return to: College of Business Administration

    Logistics has responsibility for the movement of raw materials and component parts into and within a business firm and to the distribution of finished products and services to customers.

    Because having products and/or services in the right place at the right time is critical for success in any business, logistics plays a critical role in a firm’s comprehensive supply chain. A career in logistics offers students the opportunity to make a significant contribution to corporate effectiveness in this area.

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  22. Hey Greg wtf here they go again:

    https://twitter.com/thelastrefuge2/status/1314774866931965952?s=21

    https://youtu.be/YZAz5eZrb3w

    “President Trump says he will donate his own plasma,”

    They just put in cloned antibodies from Regeneron why would they take trumps blood ? Trump just has the Regeneron antibodies THEY JUST PUT IN....

    Why do they think they have to take Trumps blood just give the other person the Regeneron...

    ???????

    #quackery

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  23. We have the know how to get things where they are needed/wanted. We have the trucks, trains, roads, rails, airports etc. The people who control these things want more control, they are not interested in public good. Training in logistics is for working within the present system completely driven by a very few people’s power motive.......sorry, not even close to the answer.

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  24. First off, just because Trump says he will donate his plasma doesn’t mean anything. Performance art with him and the quack physicians He’s still actively infected more than likely.

    He certainly has some of his own antibodies more than likely, unless he’s immune suppressed but no one takes your plasma at this point. Down the road maybe. Anyone who has completed their infection is a candidate, I can’t imagine receiving RGN is a DQ. Maybe it is

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  25. “The people who control these things want more control, “

    Conspiracy Theory....you should go on with the Alex Jones show....

    See any bigfoots lately too? Sasquatch?

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  26. “ The people who control these things want more control, ”

    You have NO EVIDENCE of that.... NONE....

    Get me a Wikileaks or a panama papers thing that shows me Neo the neoliberal A telling neoliberal B “hey! we gotta screw these other people so we can have our surplus! Yeah good idea let’s do that and not tell anybody!”

    Get me a copy of the email....

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  27. @ Calgacus

    Agree.

    And the existing problem with talking about a JG other than very generally lies in the details. Wake me when somebody write a bill to effect the policy institutionally. Until that happens, it's hard to pin it down.

    MMT clearly boosts the bargaining power of workers at the bottom, and as others have pointed out, it could also weaken bargaining power of workers at the upper end of the scale who benefit from a very tight labor market in their field to negotiate higher wages when there is wage pressure should the JG loosen the labor market and be a disinflationary factor. From what I can gather from MMT economists, they don't see this happening and even foresee some increase in inflation that can be absorbed by increased productivity by employing idled (wasted) resources.

    Moreover, on this reasoning, the greater one's labor power, hence compensation and bargaining power, the less one is benefited personally by a JG. So these people may not support such a policy if that is the way they come to see it.

    In addition, as others have observed, the JG compensation makes a difference systemically and has knock on effects that have to be considered. Some have asserted that going to "a living wage" (including benefits)immediately would rock the boat too much. So, a more incremental approach should be considered.

    The debate needs to get much more specific with respect to different jurisdictions, and until there are competing bills, the issues won't be entirely clear. And the program may need adjusting based on feedback once adopted and results are measured.

    For example, the US MMT economists could write up a bill for AOC and squad to submit.

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  28. "but again those problems there are purely material.. and without the morons they go away tomorrow... so let’s not make a mountain out of a molehill.. if not for morons it’s molehill..."

    See Belling the Cat

    That all material problems are material problems that should be solved by experts in materials is pretty much a tautology. But it doesn't apply to the real world where power is determinate, material systems are embedded in human systems, and bhumans are subject to the human condition — bounded rationality, irrationality, radical uncertainty (inestimable risk), perverse incentives, principal-agent problem in representative democracy, free riding, economic rents, etc.

    There are also pertinent questions about material systems based on scarcity of resources, ownership of resources, allocation of resources, ecology, etc.

    Also, material systems issues are dependent on human expertise and creativity, which are not material, but in Bucky Fuller's terminology, not physical but metaphysical, that is, knowledge and skill dependent. So the question is not only physical resource but also metaphysical resources. Metaphysical resources are not only knowledge and skill related but also are dependent on world views, values, character, will, interests, incentives, etc.

    Virtually all significant issues are systemic and must therefore be approached systemically. No one discipline or few disciplines are fitted to handle this and one a global scale, it is far from known whether humans in their present state are capable of dealing with the scale. So far, results are not encouraging given that emergence involves both greater opportunities and greater challenges.

    Shooting from the hip or using a shotgun is not going to cut it.

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  29. "Basically, capitalists have NO OTHER POWER. They know that. When "the left" remembers that - we'll have social democracy/socialism."

    This may be, but as I have said previously, I am not so sure. So-called capitalism is now embedded in society to the degree that the ownership class is the ruling class, and the ruling class holds the reins of power. The conflicts are not between the ruling class and the rest but rather between factions of the ruling class that struggle for power among each other.

    So it is not just an economic issue but a social and political one. A JG would be a step in the right direction toward social democracy, but it is only an initial step and opposition from the power elite is to be expected. They are still trying to completely erase the vestiges of the New Deal and have been making progress since the Seventies. For example, a conservative judiciary could block implementation of forthcoming legislation as unconstitutional — which is one of the goals of conservatives.

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  30. Are you telling me that the owners of land and developed property and owners of energy companies and owners of transportation and owners of grocery and food production are NOT looking for more control of the resource they currently own? You are either saying they are completely happy with what they currently have or are willing to settle for less control. Those are the only three options; wanting more control, content with where they are or okay with sacrificing some control to someone else. They are capitalists and the resources they control give them the power they seek. They don’t want workers organizing to reduce their power to hire and fire, they don’t want goats liberalizing and pushing for public options in everything from housing to health care. It’s not a fucking conspiracy theory it’s watching their own actions and reactions to daily events

    Your fucking request for an email is fucking ridiculous. Watch them every day, listen to their concerns (too much govt in the way, labor costs too high, no good people hire). People organizing and coordinating around a set of ideas can be called a conspiracy or the modern American conservative political movement

    Why do you think they want those things? Are you telling me that ownership isn’t about control? Are you retarded?

    And the guy talking about Dems and nursing homes and China creating this virus to unleash on the world and a public health official making decisions simply to appease vaccine companies is chastising the guy suggesting that owners of industries seek control and power for being a conspiracy theorist.

    Where are the emails Matt from Fauci to the vaccine companies, where’s the evidence that democrats are telling nursing homes to let the virus run wild to make Trump look bad? Where’s the evidence?
    Wow...... fucking WOW!!

    You are turning into a cartoon Matt, the picture in the dictionary of the off the deep end right winger..... sad.... you used to occasionally add something to discussions. You are just a joke to be ignored.

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  31. With a fraction of the working age population able to provide food, shelter and other necessities of life for everyone, a UBI is the next logical step politically.

    If you can't convince a self-labeled social democrat that a JG is workable, let alone desirable, what chance do you have across the rest of the political spectrum?

    You have no support, other than from marginalized unemployed folks like me. And I only support it out of self-interest.

    For example, the US MMT economists could write up a bill for AOC and squad to submit.

    Too late. Mama Pelosi has signed them up to sell the American public another bill of goods.

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  32. A couple of points on control.

    1. Conservatives (the Right) deny the existence of public goods, let along oppose them.

    2. A market state, which conservatives desire vs a welfare state, is driven by private ownership and the incentive to increase it. They assume that the most efficient and effective what to do this is through market allocation by price rationing. What markets don't do in this regard, e.g, by policy intervention in market forces, is superfluous and wasteful.

    3. In the real world wealth translated into power, as it plutonomy. (Citbank published a report on it, since taken down.) Those who hold power control institutional arrangements, corporate and political, with corporate and political joined at the hip through campaign finance, lobbying and the revolving door between business and government.

    4. Power enables extraction of economic rents. All economists agree with this in principle, e.g., monopoly power. The result is distributional, leading to social consequences and eventually social, political and economic dysfunction. (The US and UK are destabilizing.)

    5. Mainstream economics, which is largely performative, minimizes power and economic rent, and provides a rational for why all factor receive their just deserts based on productive contribution.

    This has been analyzed in detail by heterodox economists, economic sociologists, and economic anthropologists.

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  33. I can’t disagree with anything you said Tom

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  34. Peter Pan:You have no support, other than from marginalized unemployed folks like me. And I only support it out of self-interest.

    Umm, no. The Job Guarantee is very popular. There have been polls posted here showing that it has majority support, and was the most popular of a bunch of alternatives including the UBI.

    If you can't convince a self-labeled social democrat that a JG is workable, let alone desirable, what chance do you have across the rest of the political spectrum?

    David Sligar, in this post, is a social democrat in the grand tradition of Alex Tsipras, François Mitterrand, James Callahan, the Germans who voted for the war credits in 1914 etc. People who had power, but then used it to perpetrate the most blindingly obvious, unforced and consequential betrayals. But probably, for most, from nothing but sheer stupidity and ignorance of things which are very obvious to the ordinary person, but not to those who led their sheltered lives.

    The UBI is of course not the next step, because it is a worthless, incredibly stupid idea, that has never worked anywhere because it cannot work. Which is why it has less support than the JG, especially among the working class, which unlike those with more income, is macroeconomically literate. UBI leaves things safely in the hands of the rich and does nothing at all good in the long run, which is why the rich support it. The idea that a UBI is workable and a JG is not is laughable.

    In the USA, we had a simultaneous experience of quasi JG vs. quasi UBI. The New Deal work programs and the Bonus which Roosevelt rightly vetoed, but was overridden on. The work programs had according to Alain Parguez, in a very important unpublished paper, "Revising the Revisionists ..." - the highest supermultiplier effect anywhere ever, probably over 10. [That means not just the usual "multiplier", but also take into account the additional private, investment spending caused by the work program spending, by business seeing all these people now having a steady job.]
    What did the Bonus do? Temporary quick fix for some of course - otherwise, nothing good. Coming at the same time as the CIO strike wave, it actually caused some inflation / stagflation in the midst of the Great Depression! And once this inflationary high wore off, its absence was perfectly timed to be one of several causes for the short but sharp Roosevelt Recession.

    As for Thomas Balogh, here is a relevant quote The Dollar Crisis_ Causes & Cure, A Report to the Fabian Society- Basil Blackwell (1950) p 105

    "The resistance of the entrepreneurial classes to State measures calculated to maintain full employment is based on their correct intuition that such measures, while they safeguard their short-run profits, would, in fact, undermine their ultimate source of power, the power to decide the level of business activity and thus their relative bargaining power as a class."

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  35. A JG would be a step in the right direction toward social democracy, but it is only an initial step and opposition from the power elite is to be expected.

    Of course they will be opposed to it. But it is far, far more than a step in the right direction - it is a mortal wound to their tyranny. The time it would take to die is not clear - but as long as the JG is there, the outcome is not in doubt. People in the era of Keynes, Kalecki and Balogh understood that - it's the classical socialist position, but almost all socialists have forgotten or never learnt it, so we get fakes like Sligar or Michael Roberts etc preaching anti-socialist "socialism". Even Bill Mitchell has said some remarkably obtuse and amnesiac things recently.

    For example, the US MMT economists could write up a bill for AOC and squad to submit
    AOC, Sanders etc already have done that. The JG is part of their Green New Deals.

    By the way, in the USA, almost all seem to have forgotten that the Congress can overrule the Supreme Court on almost all cases - simply by removing a case from its appellate jurisdiction. That's how the Radical Republican Civil War legislation went through over the meaningless opposition of the Taney court.

    And the existing problem with talking about a JG other than very generally lies in the details. Wake me when somebody write a bill to effect the policy institutionally. Until that happens, it's hard to pin it down.

    Again, the details are NOT important. The main thing is getting people to understand it the way rich people do - that the details are just not important. I wake up when people realize this! Been saying it for years at billy blog, but I think with some success, based on others recent comments there. Bill Mitchell himself can get trapped in the details. When I feel better, I have to write a long criticism of his confused (ing) recent series on right vs duty to work. The details of a JG are not something necessary or very useful or important to pin down. The concept of a JG is something that is used to pin other things down. The idea that any social or general good can come from forcing other people to not work is psychotic. The morality of it is Nazi-like, as Balogh says elsewhere in that book.

    When you paint a house, do you put one healthy arm in a sling? And do you grade each arm and worry about the details of their performance vs each other, how they do what they do, plan the exact motions they each perform? It's something, as is the JG details, that ordinary untutored intelligence can easily do. Capitalists know, that, which is why they fear it. "Socialists" don't, can't see the forest for the detail trees, and so are easily led by the nose.

    The labor aristocrats that would not benefit greatly from a JG - and who do not see its obvious benefits to them and society- are negligible today, after 40 years of neoliberal destruction of unions and prosperity. Sligaresque ideas that it would really suppress higher paid workers bargaining power is fantasy, that only exists in New Labour, Clinton Democrats pseudo left circles, intellectuals, including the ultra-Left infantile-Marxist poseurs. Such effects are Such critique is not from the Left, but the Right - or rather from the ever present Party of Stupidity. It isn't complicated or nuanced or in the details. That's what the elite with great success educates people into doing - not taking their own side in an argument (or class struggle).

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  36. @ Calgacus

    We disagree on this as well as power. And they are related.

    The power elite are still trying to dismantle what's left of the New Deal, chiefly SS and Medicare. They are tenacious in this. The same would happen with a JG as soon as it was passed. The attack would be ferocious and filled with disinformation, fear-mongering, and pitting interest groups against each other.

    This is a reason it is necessary to the JG right the first shot and that means getting the details of the legislation, implementation, and enforcement correct from the get-go. The attacks will be "told ya so." Even if the results are excellent, the disinformation will be intense to "prove" the opposite.

    One big potential problem is that a JG is only directly helpful to those at the bottom of the scale. People with better jobs, especially higher up the scale, are unlikely to care about a JG or defending it when they regard it as ridiculous to think that they would ever take a job paying what amounts to the minimum wage. And things would have to get pretty bad for that to happen, like facing homelessness. At that point the country is is very deep do-do, where massive fiscal injection would be needed to avoid becoming a failed state.

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