In Welfare for Markets, Anton Jäger and Daniel Zamora show that cash transfers emerged as an alternative to the welfare state favored by a left that had abandoned hope in socialism and a right hostile to democratic management of the economy.
What exactly do David Graeber, Milton Friedman, Charles Murray, Yannis Varoufakis, and Mark Zuckerberg have in common?” It sounds like the setup to a bad joke. The punch line may not be funny exactly, but it is revealing. Although they share practically nothing when it comes to their political commitments, they have all supported the establishment of a Universal Basic Income (UBI) — cash transfers, or a state-provided wage regardless of employment status. In other words, free money.
In Welfare for Markets: A Global History of Basic Income, Anton Jäger and Daniel Zamora seek to explain how such an ideologically diverse crew could come to share this particular vision of the welfare state. Providing an intellectual history of the origins and ascendence of the idea of a universal basic income — which in recent years has become a major plank in progressive reform platforms — they show that its broad appeal is evidence of a tectonic shift in the ways thinkers both left and right have come to understand both the welfare state and the market.…
MMT argues for the MMT JG instead of UBI.
15 comments:
If it's universal and not means-tested, then how can it still be perceived as welfare?
"MMT argues for the MMT JG instead of UBI."
It's rather more than that.
The JG is a stabilisation policy in the market for labour that replaces any interest driven stabilisation policy in the market for money as the way the business cycle is handled, based upon the core MMT theory of Price Anchorism.
You can't do that by promising people a state pension at 18, or 'child benefit' for adults.
“ JG is a stabilisation policy”
But they advocate for a stable JG wage… then we know from Minsky that “stability creates instability“ so this is going to cause major instability while the Federal Reserve Act mandates “stable prices”….
Doesn’t sound like it would work… ie all that stability would just create massive instability…
🤔
The questions I never hear asked about JG is, "What jobs specifically would be 'guaranteed'? And where? And by whom?" [The latter I assume means Da Gubmint.] Endless Public Works Projects?
What jobs? Exactly. Robots and AI will be doing all the work. UBI is needed.
I don't understand why people are so against government funded jobs....
Millions of people already work for the government. So why is it that if your pay cheque comes from the government then what you do is automatically 'make work'? But if you are a coder for an app that makes fart noises, that's not 'make work' because a company is making a profit and that's ok because it's private sector...
It is in our culture to be against government funded jobs.
"The questions I never hear asked about JG is, "What jobs specifically would be 'guaranteed'? And where? And by whom?" "
That's because you're asking the wrong question.
What is guaranteed is that your labour hours will be sold for a fixed amount, and that you won't be able to consume them yourself.
Which is what those doing the actual work require so they will produce a surplus for you. Otherwise they'll just take Friday off and leave you to starve.
"What jobs? Exactly. Robots and AI will be doing all the work. UBI is needed."
They said that in the 1950s. From the article
"Observers mistakenly attributed rising unemployment in the late 1950s to an “automation revolution,” opening up the possibility that the economy would soon shed a substantial portion of the workforce. "
The problem is that somebody still needs to do the work and operate the machines. Why should they bother using up their hours to produce a surplus for you if you're not using up your hours for them?
Far better that the productivity accrues to them, and they take Thursday and Friday off.
And that's why we need to have guaranteed jobs. So that those in work will be happy to work the full week operating the machines.
It's a solidarity issue - which we see already with the refusal to sanction unemployment benefit.
Moreover it is core to the MMT anchor system. It's how we set the price of all goods and services.
"But they advocate for a stable JG wage… then we know from Minsky that “stability creates instability“"
Minsky has nothing to do with Modern Monetary Theory.
Neil W: "It's rather more than that."
Yes. Lots more. I didn't have time to get into it when I posted this.
Bill Mitchell constantly reminds us that there is either a buffer stock of labor or not. This was Bill's major contribution to the development of MMT along with Warren Mosler and Randy Wray in the 90s.
MMT is the only proposal on the table that includes provision for a buffer stock of labor, without which involuntary unemployment is guaranteed in a capitalist economy. This involves idling resources, which results in waste (economic inefficiency).
The challenge is to achieve full employment along with price stability. The MMT JG includes a price anchor along with the buffer stock of employed to address this. This results in more efficient use of resources for achieving optimal growth along with full employment and price stability. This is the holy grail of economics that other macroeconomists regard as unreachable, holding that only two factors of this trifecta can be achieved simultaneously.
The definitive work on the MMT is The Case for a Job Guarantee by Pavlina R. Tcherneva. See also her Job Guarantee FAQ.
It is also important to note that the MMT JG is not primarily a welfare transfer program like a basic income, but rather, it is a purely economic one that increases efficiency of productive resources. It is also an automatic stabilizer cushioning the effect of rising unemployment during contractions in economic activity, capitalist economies being affected by business and financial cycles.
If UBI can be portrayed as a welfare program, so can a JG. Nice way to frame a debate.
Why are these two approaches being pitted against each other?
There is a fantasy future where a Citizen's Dividend and buffer stock employment exist in harmony.
sths: "I don't understand why people are so against government-funded jobs...."
"Capitalism" (economic liberalism) and propaganda for capitalism (see Powell memo for instance). As Michael Hudson points out, classical economic liberalism (18th c. capitalism) was about "free markets," that is, markets free of government.
Post-WWII, classical liberalism morphed into neoliberalism (finance capitalism and monopoly capital), which added an assumption to those of classical liberalism about the economic role of government, namely, that to the degree government is an institutional factor, its economic function is to promote private sector capital accumulation, and its social function is to provide security for persons and property as fundamental to the good order necessary for commerce and investment.
There is a lot more to it but this is basic to understanding the opposition to market intervention by government and the narrative about it that has permeated the culture.
The MMT JG is a huge government intervention in the labor market in that the labor market under "capitalism" is used to discipline labor demand for increased wages. The economic reasoning given is that full employment empowers labor to seek a higher real wage competitively and this is the primary driver of "inflation." The assumption here is that competition in the labor market is bad when labor actually has power. The same argument is used to oppose trade unions, which also increase labor power "artificially." See Michal Kelecki, "Political Aspects of Full Employment."
Peter Pan: "There is a fantasy future where a Citizen's Dividend and buffer stock employment exist in harmony."
I don't think that this is out of the question if the Ciitizen's Dividend would include some form of price stabilization. This affects all automatic stabilization since there is a widespread belief that "free money" (income without economic contribution) is inflationary.
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