Subsidised temporary employment is not a bad way of dealing with unemployment. The advocates of Modern Monetary Theory tend to call this form of employment “Job Guarantee” (JG).
The story in brief is thus. A graduate already doing volunteer work for a museum was told she’d have to work instead in a shop - stacking shelves and sweeping floors. (h/t to MarkWadsworth)
The graduate didn’t like the shelf stacking assignment, so she’s suing the government department that allocated her to it.
What the graduate has going for her (seems to me) is that she was ALREADY doing something useful. So why the need to re-allocate her?
Read the rest at Ralphonomics
UK graduate, Cait Reilly, objects to her new JG job
by Ralph Musgrave
7 comments:
Another excellent post today by Bill Mitchell. He makes the point that among the well-studied and well-documented costs of sustained unemployment are:
1. loss of current output;
2. social exclusion and the loss of freedom;
3. skill loss;
4. psychological harm, including increased suicide rate;
5. ill health and reduced life expectancy;
6. loss of motivation;
7. the undermining of human relations and family life;
8. racial and gender inequality;
and
9. loss of social values and responsibility.
Some of these are related to the loss of income alone. But some are exacerbated by, or specific to, the phenomenon of unemployment.
And at what point do you realize you are completely broke? Have you ever studied the exponential function in math? You cannot grow debt in orders of magnitude higher than GDP for 30+ years without hitting the wall, or have you not read the history of Empires?
Let me quote Cicero:
"On the other hand, we denounce with righteous indignation and dislike men who are so beguiled and demoralized by the charms of pleasure of the moment, so blinded by desire, that they cannot foresee the pain and trouble that are bound to ensue; and equal blame belongs to those who fail in their duty through weakness of will, which is the same as saying through shrinking from toil and pain. These cases are perfectly simple and easy to distinguish. In a free hour, when our power of choice is untrammeled and when nothing prevents our being able to do what we like best, every pleasure is to be welcomed and every pain avoided. But in certain circumstances and owing to the claims of duty or the obligations of business it will frequently occur that pleasures have to be repudiated and annoyances accepted. The wise man therefore always holds in these matters to this principle of selection: he rejects pleasures to secure other greater pleasures, or else he endures pains to avoid worse pains."
It's time to back and ask ourselves what would Hamilton do?
The answer to whether or not we should have a JG or BIG is not found in the immediate situation but of the necessary physical direction the economy must take. It is bad policy to design a permanent program based on the current outlook of job skills, likes or dislikes of participants, or so called crowding out of private sector job, or even a bias toward private or public sector work.
Why? All of these considerations are based on premise that people out of work should be given jobs or income because of need to rise aggregrate demand and later on the program will act simply as achor to stabilize the private sector prices which are "driving the ship" so to speak.
The problem is that such a view is premised on the idea that the development of an economy must be left to the marketplace because the marketplace let's us create gains by the mechanism of comparative advantage.
Unfortunately, this view is false. David Graeber has done us a service by showing that market places are effects of institutional power relations not the other way around and therefore the visions of future inherent to the institution that underlie the market mechanism insure what gains from commerce that come to exist are merely the expressions of intent of public authority.
The fact is that the so called "private sector" that now exists has been organized since Hamilton's time around the use of the public debt of the United States Federal Government. What that means is that the priorities of spending by the central issuer of the currency institutionally directs nature of exchanges in the formal economy toward the activities being funded and thus gains are always measured effects of this institutional quality. All of the so-called private sector is organized by public sector and thus not distinct from it. There never was "a competition" between public and private sector.
The idea there ever was is nothing but imported British Imperial social Darwinism which is based on a Smithian fantasy. It has nothing to the real development of real economies all of which are people trying to harmonize their together actions rather than "competition." Contemptory Biology has long since drop the 19th century notions of "competition" and has moved no on to a concept of networks and information exchanges and it time that economics do so as well.
(Continues... in next post)
Now that we have eliminated the Smithian nonsense from our economics we shall then take up the question of JG or BIG. BIG is based on idea that consumer demand is all that is important because the effect on aggregrate demand is all that is important to an economy. Let's think about what is being said here. Giving people money will give the opportunity to go shopping more often and thus allow increased customers would leads to increased employement...Keysian pump priming yadda yadda yadda....
Wrong! Totally Wrong. BIG assume that the consumption patterns of unemployed people with nothing to do are no different from the patterns of employed people with something to do and that idea is ridiculous. By having a BIG you are creating a cultural effect where you have disconnected the certain kinds of activity are productive and others as far as the government is concerned.
Since this amoralism is the real intent of the policy the market place will response by increasing effects that mimic this assumption by awarding the capricious.
So the intent of policy be to produce capricious consumers? So to believe in a BIG is to state that public policy can act with no higher organizing principle toward human behavior because we are lacking both the know-how and imagination of what a higher state of human relations above capricious consumer would be. That condition is truly slavery for within it no wealth can be created outside impetus of the immediate thus everything is devalued relative to any future state including future production from which all wealth arises.
(Still more...continued on next post)
Now that we have eliminated the Smithian nonsense from our economics we shall then take up the question of JG or BIG. BIG is based on idea that consumer demand is all that is important because the effect on aggregrate demand is all that is important to an economy. Let's think about what is being said here. Giving people money will give the opportunity to go shopping more often and thus allow increased customers would leads to increased employment...Keynesian pump priming yadda yadda yadda....
Wrong! Totally Wrong. BIG assume that the consumption patterns of unemployed people with nothing to do are no different from the patterns of employed people with something to do and that idea is ridiculous. By having a BIG you are creating a cultural effect where you have disconnected the certain kinds of activity are productive and others as far as the government is concerned.
Since this amoralism is the real intent of the policy the market place will response by increasing effects that mimic this assumption by awarding the capricious.
So the intent of policy be to produce capricious consumers? So to believe in a BIG is to state that public policy can act with no higher organizing principle toward human behavior because we are lacking both the know-how and imagination of what a higher state of human relations above capricious consumer would be. That condition is truly slavery for within it no wealth can be created outside impetus of the immediate thus everything is devalued relative to any future state including future production from which all wealth arises.
(still more..continued in next post)
So what about the JG. What is separates a good program from a bad one?
Hamilton explains very clearly in his "Report on the Subject of Manufactures" that the aim public finance is "to cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted."
Why? Because of what Hamilton's view of what Capital formulation is. Capital formulation under Smith's British System, the classes in society which have happened to amass capital—by inheritance, thievery, or otherwise—are given virtually free reign to use it for their profit.
Hamilton rejected this elitist view of "libertarian freedom" and says that Government policy should promote conditions to encourage, and create, capital, for the higher purposes of the happiness of the people not the only elites.
Hence we are back to the principle found in the Declaration of Independence of the equal right of all men toward the pursuit of happiness.
So what is the "pursuit of happiness" in this context.? It is completely subjective. No. The pursuit of happiness is not something of attainment but one of expectation.
Consumption by definition is equal to the attainment of something therefore the pursuit of happiness is for something not found in the life of the individual for his consumption. The object of the pursuit in found the higher purpose of creating a better future for our "posterity" and by do such each generation a more perfect union is constantly attained.
This is purpose of the Union toward which all public policy must be aimed.
So what does means for the JG program? It must be aimed at producing a kind citizen who is committed toward a improving of the future and thus will direct their patterns of consumption toward that future and thus the market will follow people toward that vision. Markets adjust to what the people desire and the intent of the employment activity i.e. production produces the character which dictates the desires served by the market not the other way around.
The CCCs are example of this principle. Prior to the CCCs there was no industry for outdoor leisure and touring because there was no real national park system that people could access to enjoy and appreciate the beauty of nature. The market didn't create it or compete with it. The private sector simply acted in harmony with the moral intent of the CCC projects.
So the purpose of the JG should be figure out what physical projects are needed toward steer American away from some decadence that has developed and toward some future improvement.
We must ask ourselves what in 20 years time do we want this program to build so our children can have it? Perhaps such as better water system such as desalination plants to irrigate the dry parts of country and restore the nation's top soil, and perhaps something on the cultural front like literary excellence away from the demoralizing rap produced by ghetto-prision culture. Imagine taking unemployed or underemploy musicians (not hard to find) and have then them perform an opera in the inner where folks haven't even seen how beautiful and uplifting music an can be. Something that challenges the depravity of the familiar and directs the mind toward the moral and hopeful.
They are hundred of things from which we have make a jobs or subsidize existing kinds of jobs but our intent is not to "make work" but moral citizens who's work directs the future of market production.
The only thing required is the courage to act with the conviction that a more moral future is possible and we do indeed have the power to create that moral character in our citizens by creating jobs that express those values.
And moments ago, in prior blogs, Bill makes clear if you don't like your JG job, you can change it for another JG job (pending on design of course)
So are we talking about a JG type job here or is it a strawman?
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