Recall that Marx wrote in his 1844 work A Contribution to the Critique of Hegel’s Philosophy of Right. that “Die Religion ist der Seufzer der bedrängten Kreatur, das Gemüth einer herzlosen Welt, wie sie der Geist geistloser Zustände ist. Sie ist das Opium des Volks” (Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people).
Religion was a major vehicle for social control used by capital to divert attention away from what they were up to – suppressing wages and worker autonomy and advancing their own interests.
Think about the role the Roman Catholic church played in Latin America as stark examples of the more subtle processes that operate in more advanced nations.
As the hold of religion lessened over time, capital found mass consumption as the next effective way to sustain a docile, compliant working class.
Please read my blog – The mass consumption era and the rise of neo-liberalism – for more discussion on this point.
But that meant allowing the standard of living of workers to increase through real wages growth in line with productivity growth and a more equitable distribution of national income.
As neo-liberalism has become more refined (not in quality but in its ability to attack the living standards of workers), the mass consumption strategy has become more involved.
Capital worked out that it could suppress real wages through labour market deregulation, take the gap generated by productivity growth for itself (redistribute national income in favour of profits), and then maintain mass consumption by pushing massive debt onto households, via the relaxing of credit standards and the corruption of banking, allowed for by the simultaneous deregulation of the financial markets.
Neat.
Major lobbying was expended to make this seemingly perfect solution operational.
Except greed got in the way and the GFC came along because the debt that was being pushed onto households was no longer subject to satisfactory prudential standards and the NINJAs finally couldn’t pay.
At that point, a new form of social control was needed to cope with the mass unemployment that has been created around the world.
Enter the next ‘you-beaut-plan’ – the CEO-advocated BIG.
And the progressives who are pushing for the BIG don’t know what day it is!
So our conception of humanity is of a bare minimum consumption unit – where society only has a responsibility to provide a small capacity to ensure this consumption is enabled.
End of story. We keep people in their boxes with just enough food and other things to keep them alive – just so they don’t rebel and challenge the capacity of the top-end-of-town to go on their merry way pillaging national resources and generated income.
Social control – BIG time.
If they want a better material existence then they can do a bit of work! But haven’t the robots taken all the jobs?...Bill Mitchell – billy blog
Why are CEOs now supporting basic income guarantees?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
A minimum basic income (low, of course) would not eliminate the need to work, so there would be no shortage of labor. It would allow corporations to reduce labor costs accordingly, increasing profitability. The end result is the direct subsidy of corporate labor costs.
ReplyDeleteWalMart is a good example of how this is implemented now. Minimum wage employees work part time without benefits and survive on public funds in the form of food stamps, Medicaid and housing assistance. Every WalMart store has a counselor whose sole job is to assist "employees" in attaining these services.
A minimum basic income (low, of course) would not eliminate the need to work, NW
ReplyDeleteThen it's not a basic income. A UBI or BIG and other measures such as land reform should be such that all need to work for another is eliminated.
And no. Wages would probably have to go up to attract workers fully able to employ themselves.
Btw, when are JG proponents (with the honorable exception of Bill Mitchell) going to tackle welfare for the rich such as the government-privileged usury/counterfeiting cartel? Until they do, they are part of the problem, not the solution.
The CEO BIG, formerly known as welfare.
ReplyDeleteSocial Security is a BIG and it does not suck. The Scandinavian welfare system is a defacto BIG and it does not suck. Scandinavia has higher workforce participation than the U.S. so all that welfare does not seem to impair their work ethic.
ReplyDeleteThe real reason MMT hates BIGs is because they see it as an idea that competes against their beloved JG, never mind that a BIG could coexist with a JG if designed carefully.
I see a BIG as a safety net to catch people who fall through the cracks. MMT has yet to propose a true safety net.
MMT economists don't rule out something like an income guarantee along with a JG.
ReplyDeleteWhat they oppose is a BIG that ends other welfare provision by the state, which is why the right is for it.
My view, which I don't think is incompatible with MMT principles, is an expansion of welfare provision through universal free education and access to health care, an expansion of Social Security as a pension plan that provides for retirement at a decent level, a JG that sets a floor for compensation at a "living wage" above the poverty line, and provision of subsidies, including direct transfers, for those unable to work. A basic income without subtracting from other benefits could be added . This would be a mix of government spending and transfers.
However, I would think of this chiefly in real terms rather than financial terms. It's not so much the amount of funding as the real resources made available. For the problems to be resolved the nation's real resources need to be distributed in accordance with social priorities.
Social security was intended to keep seniors out of poverty. I know a woman whose SS is $200/mo. less $100 deducted for Medicare.
ReplyDelete@AA, what part of minimum didn't you understand? There's a trial BI somewhere at around $600/mo.
"A minimum basic income (low, of course) would not eliminate the need to work"
ReplyDeleteAny income guarantee that is less than the living wage is just a combination of working tax credits and frictional unemployment benefit with a withdrawal mechanism that activates loss aversion responses across the majority of the population rather than just the low end.
Whereas a Job Guarantee is a spend side autostabiliser that eliminates the need for tax side auto stabilisers - and the associated loss aversion response.
And it forces competition onto the private sector driving automation and job elimination (aka productivity increases) rather than taking us back to the medieval period with cheap labour using hand tools.
In the unlikely event that a BIG is rolled out, it would make sense to end some, but not all existing welfare programs. For example, a means-tested BIG could replace unemployment insurance. Why not? As it is, only a small fraction of the unemployed receive UI, anyway, so for the most part the unemployed would be better off with a means-tested BIG.
ReplyDeleteA BIG could also replace SS disability. As it is, most people who apply for disability are denied. The application process takes over a year and often involves hiring a lawyer -- what are you supposed to live on in the meantime? The average disability benefit is subsistence level, about the same as any real-world BIG would be. On the whole most of the disabled would be better off with a BIG than with the existing disability system.
A BIG could replace SS retirement, and it would be little difference for the working class whether they received a subsistence level pension or a subsistence level BIG. The BIG option would give people more control over when they choose to retire, allowing middle aged workers who have health problems to retire early. Though you can make the case, as FDR did, that SS as a universal actuarial insurance program is more politically viable.
On the other hand, a BIG should not replace Medicaid and other health care programs, which is what the right seems to have in mind. Health care is the big ticket "welfare" program in the U.S.. A subsistence level BIG would be a poor substitute for health care.
" MMT has yet to propose a true safety net."
ReplyDeleteBIG proponents have yet to propose a safety net that will work in the real world with real people in it.
Essentially in human society you don't get something for nothing. If you can give up hours for the service of others than you are required by others to exchange those hours for your sustenance.
Service to others is the rent you pay for your room here on earth.
In other words you have to work, unless exempted by others due to age or infirmity.
Society is you in the context of others. You don't get to do anything other than by constant negotiation with everybody else around you.
Those that don't like that must live outside society, or 'outlaws' to give them the Anglo-Saxon name.
If a BIG would be inflationary as the MMT economists claim, then it would be eroded by inflation unless it was indexed to inflation, which would just increase its inflationary impact.
ReplyDeleteBetter to think in real terms rather than financial terms in approaching distribution. People should be entitled to real benefits that are funded federally.
If a BIG would be inflationary as the MMT economists claim ....
ReplyDeleteWhere is the inflation in Scandinavia caused by welfare?
Granted, a UBI would be inflationary unless accompanied by a large tax increase. It's important to distinguish between a UBI and a means-tested BIG. Completely different economics. A UBI would be helicopter money, and lots of it.
Neil,
ReplyDeleteWhat fantasy world are you living in?
There are millions of people living on welfare, charity, and who are supported by society. Millions are unemployed and underemployed. Useless takers, as Mitt Romney might say.
Service to others is the rent you pay for your room here on earth.
The real world fails to live up to this ideal. The welfare state is an imperfect way of addressing it.
Dan, MMT economists are against a UBI and not a basic income transfer like the earned income tax credit or "welfare" transfers. They just say that the income subsidy and the JG are targeted at different economic issues. The primary purpose of a JG is to provide a buffer stock of employed to replace the present buffer stock of unemployed. Welfare transfers would still be needed with a JG, which is not meant as a substitute for them.
ReplyDeleteNeil:Essentially in human society you don't get something for nothing. If you can give up hours for the service of others than you are required by others to exchange those hours for your sustenance.
ReplyDeleteService to others is the rent you pay for your room here on earth.
Right except again - I quibble - for the focus on human society and "loss aversion responses" above, for focusing on psychology rather than reality and logic. You don't get something for nothing because you can't get something for nothing. Real basic income, something new that isn't just another name for a particularly crappy way of providing welfare, welfare that every society ever has provided ... Real basic income won't work because it can't work, not because of resentment, which actually helps basic income work a bit better. It is logically impossible, not merely emotionally distasteful. It's either pointless playacting, or it explodes the economy.
Bob: The real world fails to live up to this ideal.
It's not an ideal, but a brutal reality. If you are one Neil's "outlaws", if you don't work to feed yourself, you starve. Thinking it can work otherwise, that it doesn't scale up, for any society, any group of people, of outlaws - that good things will magically happen just by wishing for them = income guarantee trash, is sheer lunacy, a luxury, a disease of civilization.
(Practically) all actual MMTers politically support welfare states, but it is not a part of the theory the way the JG is. And of course welfare, social security, etc is not "basic income". Basically, if you think there is something wrong with slavery, that slavery violates rights, and that this isn't just some arbitrary predilection of modern societies, but something absolutely morally wrong, and that this follows from whatever other moral statements one holds....
And I note that this is the position of practically all 99%+ of humanity today, in spite of many, most imho rather obtuse and poorly educated "intellectuals" or "skeptics" belittling such absolutes....
Then the MMT contention is that support for the JG - and to a lesser degree, opposition to basic income - follows from opposition to slavery or the now universal morality and theories undergirding this opposition. It's not a matter of stringing harmonious sounding buzzwords together to build daydreams, but actual logical argument - a very unfamiliar beast.
The JG is about not preventing people from working, about letting them freely cooperate to help themselves and everyone else. It is pro-freedom, anti-slavery. Basic income is pro-slavery, anti-freedom - it's about enslaving people to work for assholes, who could wipe their own asses, but think they are too good for it, and want to use state power to force others to wipe their asses. What we have now is a lot better than that. Everyone always sees the wondergoodness of having someone wipe your ass by basic income, but never the evil, the force involved in making people do it. For those morlocks, those slaves, those immigrant workers in Kuwait say, aren't really people you know.
Austrians or neoclassicals understand economics a lot better than basic income opium eaters.
If a BIG would be inflationary as the MMT economists claim, Tom Hickey
ReplyDeleteSo:
1) A BIG would supposedly lower labor costs (How? In the face of minimum wage laws?)
AND(!)
2) A BIG is inflationary.
And how is make-work not inflationary? E.g. how does paying a mom to waste her time and energy and morale supposed to lower child care costs? Especially since Neil claims a JG shall not compete with the private sector?
And there's the restitution aspect. How does making victims work for restitution constitute justice?
ReplyDeleteService to others is the rent you pay for your room here on earth.
ReplyDeleteChapter and verse please? Here's what I read:
He has told you, O man, what is good;
And what does the Lord require of you
But to do justice,
to love kindness,
And to walk humbly with your God? Micah 6:8
It's not an ideal, but a brutal reality. If you are one Neil's "outlaws", if you don't work to feed yourself, you starve. Thinking it can work otherwise, that it doesn't scale up, for any society, any group of people, of outlaws - that good things will magically happen just by wishing for them = income guarantee trash, is sheer lunacy, a luxury, a disease of civilization.
ReplyDeletePeople who are supported by society through various welfare programs are not outlaws. So long as they meet the means test, they are entitled to claim those benefits.
In developed countries, people who do not work do not starve. That is the less than brutal reality, whether you accept it or not. In countries that do not have a formal safety net, support is maintained through familial and local networks. Given that unemployment and lack of income are global issues, it is inevitable that systems are in place to cope with it.
There are of course welfare cheats and criminals. The fact that these 'outlaws' persist in spite of your universal morality should tell you something. Then there are the exceptions to the rule: beggars who are able to survive, and wealthy inheritors allowed to go through life without ever having to work. These are practical realities that fly in the face of your moral absolutes.
What you are describing is akin to a little girl's tea party, where everyone follows proper etiquette. Such a world has yet to be built.
Neil Wilson dares talk of "outlaws" when he defends government privileges for a usury cartel? That systematically loots the poorer (the less so-called credit worthy) in favor of the richer (the more so-called credit worthy)?
ReplyDeleteMay the Good Lord spare us the "morality" of such as Neil Wilson.
the BIG is paradoxical in nature. the very conditions that would make a BIG viable are the same ones that make monetary systems obsolete.
ReplyDeleteif automation was really relieving people of work at the rate BIG supporters claim it was then that would manifest itself as a spiral of deflation and tax cuts to compensate.
there would be no shortage of goods, no poverty. if there was, then obviously there is work to be done.
so, what about all the work that people under BIG would be doing voluntarily? the system does not run solely on voluntarism, that's why we have a monetary system in the first place.
if these conditions are not fulfilled BIG will have the following effects: the slightest bit of inflation leading to tax increases leading to unemployment, leading to inflation... (we've all seen the tax proposals supposedly "financing" BIG...)
what about BIG regional field tests that look to be successful? classic fallacy of composition. what works in a limit section of society cannot be applied to the aggregate.
if you really think people should/will be relieved of work, rather than implementing a BIG the sensible thing to do would be to make subsistence goods cheaper, JG can aid in achieving that.