All this makes us think that in an advanced society such as ours it is no longer an illusion to defend the veracity of this statement: the only way to achieve permanent full employment is to prohibit involuntary unemployment, and therefore it is necessary to implement a program that guarantees that everyone who wants and can work has access to a decent job....
Such measures would not be impossible within the European Union and the euro if the European Union were to change its treaties. Above all, it would be necessary for the 3% public deficit limit set by the Stability and Growth Pact to be removed. If this were to happen and the European Union were to recognise that the correct level of public deficit is that which guarantees full employment without inflation thanks to job guarantees based on employment buffer stocks, the problem of mass unemployment in Spain could be solved within the European Union. However, there is no indication that the European Union will reform its treaties in this direction. Consequently, within the European Union and the single currency zone there will be no end to mass unemployment.Brave New Europe
Carlos García, José Luis de la Fuente – Is it Time for a Job Guarantee Programme in Spain?
Carlos García Hernández, managing director of the publishing house Lola Books, and José Luis de la Fuente O’Connor, Professor at the Polytechnical University of Madrid
17 comments:
I left a comment there as follows.
“….unemployment in Spain is a political problem. This problem stems from the lack of monetary sovereignty”. That rather conflicts with the fact that when Spain DID HAVE monetary sovereignty, i.e. before it joined the EZ, unemployment was about the highest in Europe.
Second, the article makes the common claim that JG would give us “price stability”. I fail to see how. In particular, given excess demand for particular types of labour and products in the economy in general, why does JG prevent the price of those types of labour and products being bid upwards? Obviously JG might improve the employability of those involved, perhaps via incorporating training. But any such training is bound to be low quality compared to say a proper university degree or 2 or 3 year apprenticeship.
Third, the above article, like the vast majority of articles on this subject, fails to address the following point. JG schemes inevitably involve a high “unskilled to skilled labour ratio”. Indeed the above article makes NO ALLOWANCE AT ALL for the costs of skilled labour needed to run JG schemes. And as the economics text books explain, the more the latter ratio diverges from the normal ratio found with regular employers, the lower will output per head be. That helps explain why the JG scheme implemented in the US in the 1930s, the WPA, was often referred to as “We Piddle Around”.
The latter poor skilled/unskilled ratio can be remedied by subsidising JG people into work with EXISTING employers (public and private): something which has actually been implemented in Switzerland, though I don’t know if that Swiss system is still up and running. I go into the latter “existing employer” option here:
http://www.kspjournals.org/index.php/JEPE/article/view/1237
... by subsidising JG people into work with EXISTING employers (public and private): Ralph Musgrave
This is just subsidized wage-slavery and no better than a Job Guarantee, ethically speaking.
Besides, a Citizen's Dividend and anti-rentier measures such as land reform would allow workers to accept (or not) lower wages from the private sector.
That, and negative yields on the inherently risk-free debt of monetary sovereigns would eliminate welfare for foreigners and improve the trade balance and domestic employment opportunities.
Ethics, not mere pragmatism, is our way out and thus with God's help, not His resistance to godless schemes.
“We Piddle Around” Ralph
Classic!
“Thou shall not piddle.”
"why does JG prevent the price of those types of labour and products being bid upwards?"
It allows the bust to resolve naturally via the automatic stabilisers. More turn = more taxation and less Job Guarantee payments downstream as the economy reaches its limit. That friction then causes firms to fail - which you no longer need to prop up by bailouts, redundancy notices, or anything else. You just let the firm fail fast and fail early. The drop in income from those involved in the failure contracts the economy further and helps terminates the bubble on the demand side.
JG dampens on the way up and on the way down. But most importantly it allows a country to turn the competition up to 11 and let market forces do their thing.
"Indeed the above article makes NO ALLOWANCE AT ALL for the costs of skilled labour needed to run JG schemes. "
None required. The JG scheme can be simply requiring people to sit on their hands for 37 hours a week - if that is what those creating the output JG participants need to live wish. All that needs to happen is that people on the JG don't have free access to use their time for their own purposes. That would be a silly waste of manpower, but it's a base case.
Or you can create a less efficient competitor to private market participants - as the model shows: https://new-wayland.com/blog/look-ma-no-tax-from-zero-to-full-employment/
Putting people into existing employers simply destroys productivity improvements. You don't need to invest in a cauliflower picking machine if you have state subsidised cauliflower pickers.
The task of the private sector is to put us all out of work by investing capital in machines. If we want a higher standard of living then we must avoid putting anything in the way of that process.
There is no advantage to having JG people supervised privately rather than publicly. There's no competitive gain there and certainly no productivity gain. If the private firm wants to use the people they need only bid more than the JG and they will get the labour. Labour needs to be expensive for private firms so they will replace it with capital.
Neil, I agree that JG scheme could in theory consist of people "sitting on their hands for 37 hours a week". But what's the reaction going to be? First, politicians would de-fund the scheme because it was obviously near pointless. Second, potential JG people would not even turn up because they'd become a laughing stock among their friends and neighbours.
And if JG did consist of "hand sitting", that would make a nonsense of those claims that JG enhances skills, and improves employability.
The task of the private sector is to put us all out of work by investing capital in machines. NeilW
And then what? All but the rich shall be paid to waste their time?
If we want a higher standard of living then we must avoid putting anything in the way of that process. NeilW
I don't call wage-slavery (or any other form of slavery) a higher standard of living.
What will maximize the standard of living is justice and I suggest the MMT School learn what that is (Hint: read the Bible).
"But what's the reaction going to be?"
Nothing.
That's what we have now in the UK with the Universal Credit system work requirement - which is 35 hours a week looking for jobs that can't possibly exist in aggregate.
If your Claimant Commitment includes looking for work, you will be expected to do everything you reasonably can to prepare for and find work. In most cases, you will need to complete up to 35 hours of work search activity per week in order to receive Universal Credit.
If you don't do it, you don't get paid. Which is what would happen with anybody who "didn't show up".
Remember, what people are required to do on a Job Guarantee is just what is required for people to accept it. All that is technically required is that people can't use their hours for their own benefit - to avoid the "double payment" problem you get with normal benefit arrangements.
The skills that are maintained in a job guarantee is the ability to turn up on time and do what is required by the job, while interacting with other people. Those who show they can manage 9-5 Mon-Fri are a far better hire for firms than those who can't get out of bed until 2 in the afternoon.
As Bil mentioned this morning on stream, the Job Guarantee is designed to be a small thing in the economy that provides the auto-stabilisation. It's not supposed to be some massive public sector training scheme or road building mechanism. It's a Transition Job to either a proper public sector job (which has to be funded by taxes), or a private sector job (which is ultimately funded by some sort of borrowing).
As Bil mentioned this morning on stream, the Job Guarantee is designed to be a small thing in the economy NeilW
But YOU said "The task of the private sector is to put us all out of work by investing capital in machines."
So what is a JG to be? A "small thing" or to ultimately include everyone but the rich machine owners?
The MMT School has no end game, it seems, by your own admission.
At present, a JG is an "imaginary thing" until some politician slaps the JG label on a workfare scheme. Then it becomes a "marginal thing" used by the unemployed, who have long been a marginalized group. This is status quo sleight of hand.
JG as a macro stabilizer (i.e. a "structural thing") will have to be fought for.
JG as a macro stabilizer (i.e. a "structural thing") will have to be fought for. Peter Pan
The virus has already proven that fiat ALONE works as a macro stabilizer in this debt addled world.
Moreover, an equal Citizen's Dividend to replace all fiat creation for private interests is an ethical requirement.
So both experience and ethics as well as common sense say screw some bogus make-work requirement.
AA: equal Citizen's Dividend to replace all fiat creation for private interests is an ethical requirement.
No, its closer to being an ethical requirement to not have a Citizen's Dividend. I suggest trying to put your ideas into a larger frame and making them coherent with themselves and facts that everyone agrees on. Then you would see the pointless stupidity of the treadmill called BIG, UBI, citizen's dividend. A citizen's dividend is like trying to solve the problem of slavery by making everyone be a slave. Or a master. Same difference.
The ethical requirement that any non-hypocritical Christian, as well as anybody else sane, sees is the Job Guarantee. A demand which we see in all human civilizations and societies. But you have to be willing to entertain logical arguments and chains of reasoning, rather than thinking that you can grasp the truth through your infallible immediate intuition - and then complain when the poor lesser people slaves, the victims of such hare-brained schemes - don't make your magical ideas work. It's always their fault, not the addled Masters like Andrew Anderson who can't see that a Citizen's Dividend is predicated on forcing people to work like slaves, not a Job Guarantee.
AA: Ethics, not mere pragmatism, is our way out and thus with God's help, not His resistance to godless schemes.
Physician, heal thyself.
Ralph:I fail to see how. In particular, given excess demand for particular types of labour and products in the economy in general, why does JG prevent the price of those types of labour and products being bid upwards
It doesn't. But that bidding up will travel "down" to shrink the Job Guarantee pool and thus government spending and demand, and that will be disinflationary, in the standard manner of an automatic stabilizer.
That helps explain why the JG scheme implemented in the US in the 1930s, the WPA, was often referred to as “We Piddle Around”.
That's just a slander of the Roosevelt-haters of the era. By any objective measure, the WPA and the other work programs did an enormous amount of good and work that was far more needed and "productive" than the private-sector employment of that day, or ours - which is incredibly inefficient at doing genuine work for sane purposes, rather than the insane and disgusting purposes of the billionaires, the sick minds at the top.
So "We piddle around" is a better description of today's capitalist economy like the USA's - symbolized by the insane inefficiency and incompetence of Trumpism. Naomi Klein has a good article comparing the effectiveness of one if those supposedly inefficient work programs staffed by supposedly "unskilled" youth - to today's USA's (or UK's) idiotic response to epidemics.
Hell, maybe putting the "unskilled" in private sector work would be a good idea after all. They would do a better job than the idiots running our modern monopoly capitalism. Anybody would. Ever see "Trading Places"? - Dan Aykroyd, Eddie Murphy, Don Ameche, Jamie Lee Curtis etc. Great movie.
Then you would see the pointless stupidity of the treadmill called BIG, UBI, citizen's dividend. Calgacus
Not pointless at all since if the real growth rate of the economy is, say, 5%, then a 5% growth in the money supply is needed just to prevent price deflation.
Read Neil and learn that sitting on one's hands for 37 hours a week is sufficient to achieve the goals of a JG.
You poor guys. You thought a JG would be a slam duck - especially you with a few Bible verses taken out of context. But the virus has prevented all but the most necessary work and the economy has survived with fiat injections alone. So much then for the make-work the MMT gang (stupidity) insists on.
Not pointless at all since if the real growth rate of the economy is, say, 5%, then a 5% growth in the money supply is needed just to prevent price deflation.
Andrew - you are talking about things you have no understanding of.
I do not subscribe to some of Neil's recent remarks, nor consider them too consistent with core MMT.
You thought a JG would be a slam duck -
Dunk. And I certainly didn't, nor do the MMTers. Who don't seem to know and appreciate the significance of the long history over centuries of thinking about it.
especially you with a few Bible verses taken out of context.
That's an improvement. Previously you've avoided those verses like a vampire seeing a cross. :-)
You still have no answer to them, nor to the basic and simple arguments that a JG is an absolute and logical moral obligation in a monetary economy. Nor that Basic Income is an idiocy that hardly deserves discussion.
Try thinking about it in one or two or three person societies. Say Mosler's parents and kids and chores example. Can a basic income work or really do anything much? Does anyone run a family without a job guarantee principle embedded? Pre-monetary societies have no unemployment, because they have an embedded job guarantee. Whatever degree of explicit understanding "primitive" societies have of it and the working of their econonies, it is superior to the general modern self-understanding of monetary economies - and far superior to yours, which is at or below standard mainstream professional Ph.D. economist level.
Record unemployment, mass misery, grotesque enrichment of the ultrawealthy - that's a success of the moronic US response to coronavirus injecting money directed at the rich? Most people would call it failure. If they compared it to the semi-MMT world of the 60s almost everyone would see the abject failure. A real MMT / JG policy would convince everybody but a few thousand psychopaths who like to see suffering.
I wonder what you would do? If you saw in the real world the abject failure of your ideas and the shining success of MMT ones (which is what historical comparison indicates) - would you change your mind? Or continue to think of yourself as the infallible prophet of your own (highly unethical) religion?
The pandemic response in Canada included a temporary BI, but it wasn't universal. If we want people to stay home, an income scheme is necessary. Make the pandemic permanent, and UBI-like policies may become normalized.
In the meantime, no political movements = no change
We'll have full employment as soon as civilization kicks the bucket.
Temporary BI, Canadian style, about to end:
https://www.cbc.ca/news/business/cerb-ei-switch-anxiety-confusion-1.5738934
Part of Neils point, which I totally agree with, is that if the private sector ever manages to automate everything we currently use people for, that could only be an improvement if we didn’t completely lose our sense that we still have some duty to each other.
To think that if that magic day arrives that robots do everything humans do with no glitches AND we do it in a sustainable way, (not headed for
resource depletion/environmental collapse..... this is magical thinking here) there would still have to be some method of determining who gets how much of what. That method would require some sense of duty to something other than your own wants and desires. In that scenario it might mean for some people , “just sit on your hands”. People would have to learn when it’s their turn to eat steak , because there really is not enough steak for everyone to eat it for every meal. and no one gets to have it whenever they want.
The UBI is going down the road of people doing what they want when they want, which fails the fallacy of composition. A JG says there is some duty for all of us to a larger “we”.
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