A basic income guarantee is a neo-liberal strategy for serfdom without the work

A reader pointed out the other day that a good idea remains a good idea even if bad people advocate it. This was in relation to my blog – Why are CEOs now supporting basic income guarantees?. It reprised an issue that has a long history in culture and the arts. Should we hate Wagner because it was symbolic for the Nazis? What about the work of Budd Schulberg who produced the screenplay for ‘On the Waterfront’ but was simultaneously dobbing people into the House Un-American Activities Committee? There are countless examples of this sort of quandary, or not, depending on your viewpoint. As I wrote in the earlier blog (cited abive), I am always suspicious when the elites advocate something. It is not just a taste for Wagner they are articulating. Generally, they are advocating further pathways that they can shore up their control and power. Which means bad things for the rest of us! The BIG is one of those pathways and it leads to impoverishment and an on-going capitalist domination. A basic income guarantee is not a path to nirvana – I see it as just a neo-liberal strategy for serfdom without the work.

A good article on the art-artist topic was written by Randy Cohen (August 10, 2009) –
Can You Hate the Artist but Love the Art?
.

Cohen asks:

Does rejecting the artist mean rejecting the art?

In our context, is the concept of a Basic Income Guarantee (BIG) undesirable as a progressive strategy because some of the most rapacious and greedy CEOs, who represent the anathema of progressive values, advocate its introduction?

My blog said yes! The reader said that was ridiculous.

Just as the argument goes that “The work stands alone” – whatever the author, artist etc has done, or does, “not a word of ‘Middlemarch’ would be altered” (as an example) – the BIG should stand separate from those advocating it.

For all my blogs on the Job Guarantee.

Okay, lets explore that a little further. Whatever the balance is in the art-artist debate, and I admit, I have mixed views on the issue, the CEO-BIG nexus is more than evil advocacy.

There is deterministic causality involved that cannot be disregarded.

Neo-liberal economists have long endorsed a BIG as a way of avoiding starvation in a world where they want charitable services to be privately supplied.

These economists hate collective solutions to social problems. Just read Milton Friedman’s 1994 Introduction to F.A. Hayek’s 50 Anniversary edition of The Road to Serfdom where he expressed disdain for the “growing intellectual support of collectivism” and suggests that the main game is to defeat any semblance of collective action (which he considers tantamount to socialism).

In his own 1962 book – Capitalism and Freedom – he rehearsed the same theme. In his discussion on “The Alleviation of Poverty”, he wrote (pp 190-91):

One recourse, an in many ways the most desirable, is private charity. It is noteworthy that the heyday of lassez-faire, the middle and late nineteenth century in Britain and the United States, saw an extraordinary proliferation of private eleemosynary organsizations and institutions. One of the major costs of the extension of government welfare activities has been the corresponding decline in private charitable activities.

When I was a student, I must have considered that an important statement because I underlined the section in the book. I dug it out just now to check the quote and found the pages (see photo).

I soon after abandoned the underline approach in favour of typing out the quotes (I was always uncomfortable ‘defacing’ books), which I have subsequently scanned into databases – the march of technology.

This preference for private charity was followed by his discussion of the negative income tax (or BIG). He saw the Negative Income Tax as a way the government could provide a bare existence to the recipients and the would be “far less costly in money, let alone in the degree of government intervention involved, that our present collection of welfare measures”.

I was reminded of that quote after reading this article from Dymtri Kleiner (August 8, 2016) – Universal Basic Income Is a Neoliberal Plot To Make You Poorer.

He argues that the introduction of a BIG would:

… aggravate inequality and reduce social programs that benefit the majority of people … a closer look at how UBI is expected to work reveals that it is intended to provide political cover for the elimination of social programs and the privatization of social services.

In his exposition of the negative income tax, Friedman argued:

More important, if enacted as a substitute for the present rag bag of measures directed at the same end, the total administrative burden would surely be reduced.

This “rag bag” included (as Dymtri Kleiner also notes):

… direct welfare payments and programs of all kinds, old age assistance, social security, aid to dependent children, public housing, veterans’ benefits, minimum-wage laws, and public health programs, hospitals and mental institutions.

On April 10, 2014, Friedman acolyte, Charles Murray was interviewed by the US PBS Newshour program – Libertarian Charles Murray: The welfare state has denuded our civic culture.

He constructs welfare cheques as inducing a dependence and irresponsibility, whereas:

under a guaranteed basic income, he can no longer portray himself as a victim who’s helpless to do anything about it … The first rule is that the basic guaranteed income has to replace everything else — it’s not an add-on. So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations. I think that’s great.

Progressives be warned!

I know that BIG-toting progressives will respond and say their intent is different to Friedman’s. Sure enough. But structures are structures.

The BIG is very susceptible to neo-liberal manipulation. Once you abandon the narrative that it is the government’s responsibility to ensure full employment and agree that all the government is required to do is guarantee a bare existence then the slippery slope has been erected.

A moment’s reflection tells us that the CEOs and their lobbying organisations typically oppose any form of social assistance being provided by governments, in the same way, they tend to oppose wage rises.

Capital-labour conflict remains a central dynamic in our societies and only naivety would lead one to conclude it will go away, or rather, be ‘outside’ this dynamic by giving the unemployed a bare minimum BIG.

Once those who were formerly workers – in direct opposition to capital – become meagre consumption units, then the balance of power is tilted further towards capital.

As Kleiner writes:

The conflict between the worker and the capitalist, or between the rich and the poor, can not be sidestepped simply by giving people money, if capitalists are allowed to continue to monopolize the supply of goods. Such a notion ignores the political struggle between the workers to maintain (or extend) the “basic income” and the capitalists to lower or eliminate it in order to strengthen their social position over the worker and to protect the power of “the sack.”

Business leaders fight tooth and nail against any increase of social benefits for workers. Under their dominion, only one kind of UBI is possible: the one supported by Friedman and Murray … The UBI will be under constant attack, and unlike established social programs with planned outcomes that are socially entrenched and difficult to eliminate, UBI is just a number, one that can be reduced, eliminated, or simply allowed to fall behind inflation.

That is why it is important to understand why CEOs support the BIG proposal.

They want to avoid attacks on their power as they kill off jobs in swathes. But they also will continue to work out ways to maintain control over workers and what better way than dishing out a little consumption bundle and keeping them out of the workplace.

The BIG segments the working class – into those who remain in the workplace and those who are prohibited by the lack of jobs – the problem in the first place- from confronting capitalists directly in the struggle for national income shares.

The voiceless BIG consumers then are easily sidelined.

As Dymtry Kleiner recognises:

Many people … imagine that another kind of basic income is possible. They call for a basic income that disregards the “deal” that Charles Murray advocates, but want UBI in addition to other social program, including means-tested benefits, protections for housing, guarantees of education and child care, and so on.This view ignores the political dimension of the question. Proposing UBI in addition to existing program mistakes, a general consensus for replacing social programs with a guaranteed income for a broad base of support for increasing social programs. But, no such broad base exists.

Under a Job Guarantee approach, the capitalist has to contend with the fact that government jobs may become attractive and be used to pursue community development and green-type ventures and still provide unions with the capacity to develop their memberships.

The capitalist also has to face the fact that their propensity to create underemployment (to increase profits at a time of deficient total spending) will be severely restricted by the introduction of a Job Guarantee where workers would be able to work full-time (if desired).

Who would work for a poverty wage in a forced casual job when they can work full-time in a secure job (under the Job Guarantee)? Not to many I would think.

This is why CEOs and those who favour capitalism and markets want to divert the discussion away from guaranteed employment to BIGs. It is clear as day.

Which means the agenda is causal and goes to the heart of power relations in the society.

Which brings me to the question of what should be part of a social guarantee that citizens receive from their agents – the government.

Remember, the government is us and we should use its agency and capacity to advance our well-being not undermine it.

A Financial Times article (April 4, 2017) by Diane Coyle – Universal basic services are more important than income – was spot on.

Coyle argues that “Simply paying people will not help if the fabric of a thriving economy is lacking”.

She points out that all the forces that lead progressives to advocate for a BIG – “deindustrialisation (thanks to automation) of large areas, and the loss of millions of jobs” – are hollowing out regions and “it is hard to see why … [a BIG] … would do better at addressing the economic and social costs of large-scale redundancy than the previous policy of making payments to those who lost their jobs. The problem is a hole torn in the fabric of a local or regional economy and society; giving people money is a temporary patch.”

This is a significant issue – in regions that are hit by industrial change. Not only do the jobs disappear but a raft of services go as income levels decline.

A bare minimum BIG will not arrest that broader malaise.

Diane Coyle says that in this context:

Part of the answer must be the simpler one of giving people jobs. If the state is going to have to spend money, it ought to do so through a jobs guarantee, so the people affected have an alternative to the dole. Even if this only pays slightly more, it sustains the benefits of continuing attachment to the job market.

Exactly.

And then:

Another part of the policy mix is tackling the wider impact of this kind of economic shock on local areas. The decline of the “left behind” regions of developed economies has snowballed as shops close, people who can move away leave, the quality of schools and public services deteriorates, and infrastructure investment gets low priority because the economic returns to projects look underwhelming.

Once you accept a government’s austerity drive is acceptable – which is implied in the surrender to the neo-liberal narrative that the government is not responsible for maintaining full employment – then the next cab off the rank is the array of services that high quality public infrastructure delivers.

If the government isn’t responsible for job creation any longer, why isn’t the market also responsible for service delivery? If the bare existence provided for by the BIG isn’t enough then the ‘market’ will step in to create a charity sector.

As sense of the collective disappears and we become Margaret Thatcher’s collection of individuals – and the game is over for fairness, equality and progressiveness.

Diane Coyle sees this too:

So more important that UBI — whose focus is the individual — is a commitment to universal basic service, with a focus on the community or the natural economic region. If teachers or nurses do not want to move to Detroit and West Virginia, or Burnley and Grimsby, then there should be a pay premium large enough to overcome their reluctance. And the quality of service in local transport networks should be as good in declining as in wealthy areas.

So, in addition to a Job Guarantee we also demand a Services Guarantee.

It is no good having a bare minimum income if the dentists and doctors and shops in your town are closed and the public transport system is deficient.

And in this regard, the UNICEF Press Release last week (March 29, 2017) – 27 million people lack safe water in countries facing or at risk of famine – also bears on this topic.

It discusses the failure of basic infrastructure in northern Africa. These types of developments are perfect for Job Guarantee schemes in poorer countries.

The Job Guarantee workers become the infrastructure development workforce. Handing out a BIG in this context, where basic sanitation is missing, would be a venal irresponsibility.

The linked evils – poverty, poor housing and sanitation, poor water supply, and unemployment – are all attenuated through targetted employment programs. I have first hand professional experience of that fact.

Conclusion

As I wrote in the earlier blog (cited in the introduction), I am always suspicious when the elites advocate something.

It is not just a taste for Wagner they are articulating. Generally, they are advocating further pathways that they can shore up their control and power.

Which means bad things for the rest of us! The BIG is one of those pathways and it leads to impoverishment and an on-going capitalist domination.

That is enough for today!

(c) Copyright 2017 William Mitchell. All Rights Reserved.

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    42 Responses to A basic income guarantee is a neo-liberal strategy for serfdom without the work

    1. Bill says, “Once you abandon the narrative that it is the government’s responsibility to ensure full employment..” BIG does not imply any such “abandonment” does it? I.e. advocating the right of people to do no work and live (at a very modest standard of living) at the taxpayers’ expense does not mean one abandons the objective of providing work for those who want it (and a somewhat higher standard of living presumably).

    2. Neil Wilson says:

      In addition to all this is the problem of geographic dispersion.

      Capitalists want us all living in MegaCity One. It’s easier to control people that way. So you have to move where the work is. We are all destined to become Navvies – moving from one casualised top up job to the next on a global basis. We are all destined to be forced to live in cramped accommodation.

      Capitalists will keep on recreating 1840s Manchester until some entity stops them.

      That is another role of the Job Guarantee – to fully fund life outside MegaCity one including social provision of production and services in that area where necessary.

      All this is in Beveridge from the 1940s. Why are we having to point out the obvious all the time. Ordinary working people want to live their lives in their communities.

    3. Neil Wilson says:

      “does not mean one abandons the objective of providing work for those who want it ”

      It does – because you are still stealing output from those that work and giving it to those that don’t in exchange for nothing of value. The money is essentially worthless because it is not backed by production. It is a redistribution from the active to the idle – which funnily enough is largely why we resent the rich – and causes inflation for everybody else.

      How is that working out in our current social security system? Welfare cuts and benefit caps galore.

      So handing out more money and then increasing taxes to get it back just doubles down on the damage. You impart even more loss aversion on the population by giving something with one hand and taking it back with the other.

      The Job Guarantee takes our output gap and transfers the increased output to the poor. The BIG takes the output gap and transfers it to the middle class who want to live like the rich.

    4. Kevin Harding says:

      And you are reduced to the absurd notion of imagining serfdom or slavery without labour.
      As I said before I do not claim that MMT JG is any sense a modern serfdom or slavery
      but it is historical ‘fake news’ to see the historical relationship of master and slave,
      lord and serf as a form of UIG more than a coercive form of JG.
      I reiterate my belief in a government following a path that leads to full voluntary employment
      and would support guarentees to that end.There is no inherent conflict between the guarentees.
      Confirmation bias is a process which takes an analysis of the world and constructs
      a lense through which the world is seen.
      You cannot see the UIG for the JG.

    5. Kevin Harding says:

      Neil ‘You are stealing output from those who work and giving it to those that don’t in exchange
      for nothing in value”
      Commonly known as the neo liberal welfare narrative applicable to all welfare payments.
      Child benefits ,disability benefits , old age pensions.THe biggest theifs of all being the baby in the
      incubator.
      This is an example of Bills desire to value the social over the individual?

    6. Alan Longbon says:

      My understanding of the support for BIG by the top end of town was that it is ok if it is paid for out of the taxes from those left working. Then it is ok.

      For the top end of town, it is not ok if the BIG is paid for by the currency sovereign, as a social dividend harvested each year out of the commons created by the community, by way of currency creation. (this being the good ideal solution)

      For the top end of town, it is BIG with an evil neo-liberal twist to it, a sting in the tail. Wagnerian BIG. Evil BIG. A BIG that inflicts the most amount of pain and suffering.

      The top end of town does not seem to realize that once all workers and BIG clients have been reduced to a basic consumption unit with no disposable income, there is no demand for their products.

    7. Brendanm says:

      The comparison seems very simple, JG increases total real wealth production and BIG does not and may even decrease it. The JG strengthens the public sector and BIG is at best neutral.

    8. Neil Wilson says:

      “Commonly known as the neo liberal welfare narrative applicable to all welfare payments.”

      Not at all.

      You must earn a living unless excused by age or infirmity. The young, the old and the disabled are excluded due to age or nfirmity and everybody agrees to support them – because they cannot reasonably be excepted to contribute.

      They don’t agree to support you for nothing in return.

      There isn’t a single society on earth where you are supported permanently and you contribute if you feel like it with no threat of sanction.

      The only people who do live like that are the wealthy – and they are rightly resented for it.

      If you want something from others you have to give something of value in return. Money is insufficient.

    9. Simon Cohen says:

      ‘If you want something from others you have to give something of value in return. Money is insufficient.’

      But Neil, this is no longer an explicit function as it might have been in the days of Smith and the Butcher, Baker etc. It is extremely opaque in a globalist setting as we don’t often know who the producers are we ‘owe’ something to. In addition, there are many jobs that could be seen to destroy ‘social value’ which might well warrant a ‘negative wage’.

      What you say might well be true at some fundamental level but it has been taken up by the neo-liberals, distorted in a hall of mirrors and used as a weapon to beat the unemployed and ill and to direct resentment toward them.

      Defining ‘earning a living’ in a society where profit without production has become dominant is rather tricky. Do I deserve a wage when my speculative activities (even if it involves a lot of head work) contribute to commodity price rises in poor countries?

      Just a few thoughts.

    10. TonyB says:

      Bill,
      probably the most informative and in-depth (through links) article I have read in a long time, and clarified my own thoughts. I have followed arguments for BIG and Jobs Guarantee (JG). The democratic surplus is surely with JG not BIG, however most activists are not there. Popular writers such as George Monbiot, a supporter of BIG, skim over the macroeconomics and confuse their readers, my own tribe (Green) soak up Monbiot’s view. JG by definition will have to involve the needs of the [local] community.

      One point and two questions:
      1) JG is such a positive for the disabled including those suffering mental health problems. In my experience there are so many talented young people today who can’t gainfully enter or sustain a place in the work place because of employers’ and societies’ attitude to mental health disability. I have seen many workers with mental health problems being forced by the UK’s DWP into gig and zero hours work. Jobs they can’t sustain, subsequently dropping out of the competition for work and thus the labour force and not register as unemployed. JG will provide access to a route into “work when well’. Work and social contact improves mental health so much it must be prescribed.
      2) Inflation. I don’t understand how inflation would fare (controlled) with potentially ‘full employment”.
      3) Carers: Where do full time and part time carers fit into JG. Do they get a basic income guarantee through JG? This is where the community can be influential in decision making haggling on local priorities, rather than the horrors of dealing with e.g. the UK’s DWP.

    11. mondo77 says:

      I am entirely in sympathy with the job guarantee, but I wonder if the full implications of what would be required politically to realiseit have been fully thought through? We all know Kalecki’s views in ‘Political Aspects Of Full Employmen’, and this is the nub of the issue. It would take almost a revolutionary overthrow of the current political system as is (I am talking about this from a UK perspective) and at this moment I simply cannot see where a ‘popular front’ is going to emerge from that could push for this.

      The JG would place the power in the hands of the working class and that very threat of the transfer of power would mean that the masters of the universe would put up the most formidable resistance utilising all arms of the state, media etc. I have no wish to be overly pessimistic, but to paraphrase slightly the words of the late Mark Fisher in ‘Capitalist Realism’, it is easier for people to imagine the end of the world than to imagine the end of neo-liberal capitalism. The traditional conduit of parliamentary progressivism, the Labour Party, is finished and I cannot foresee any ‘parliamentary path’ to the job guarantee.

      It is an absolute imperative that the job guarantee and the political and economic revolution that comes with it is fought for but at this stage I have no idea where any forces of resistance against current orthodoxy will come from. The Job Guarantee is a banner, a standard which the battered, tattered and split Left could rally to but it is extremely difficult to envisage at this moment or in the near to mid term future.

    12. bjell says:

      A BIG can range from the progressive to the regressive, agreed. Also, I concur that corporates would try to hijack and divert a progressive BIG, certainly. But let’s be honest, they will just as readily try to do that to a Job Guarantee and make it degenerate into workfare. Both schemes are equally vulnerable on that front.

      On a more general note, I dislike the in-fighting. This post is still civilized, but nonetheless it manages to drop an accusation of ‘surrender’ in passing. Surely that must be the Godwin of the small left. Should it come as a surprise, as progressives keep fighting each other, that they all end up battered and blue?

    13. Hog says:

      @Alan Longbon
      “My understanding of the support for BIG by the top end of town was that it is ok if it is paid for out of the taxes from those left working. Then it is ok.”

      financing BIG through taxes is very paradoxical, since the purpose of taxes is to get people to look for work in the first place.

    14. larry says:

      Ralph, Alan, you guys don’t seem to understand a fundamental principle of MMT. Taxation is not involved. The taxpayers aren’t paying for anything. To read something before the advent of MMT on the non-relationship between taxation and revenue, have a look at Beardsley Ruml, “Taxes for Revenue are Obsolete”, American Affairs, 1946.

    15. John Doyle says:

      I’d say let it happen! There is a good chance the UBI will escape from Neo-liberal strictures. Sure it will cover for lack of jobs and unemployment. But that’s a good! It has to be a living wage, same right across the nation, another good.
      Frankly everyone, even including the Koch Bros, gets the stipend. To compensate all the basic services like welfare will dry up. Special needs will keep welfare on the books, but available for special cases. But it will and should substitute for a myriad of payments like welfare, education charges etc. I believe the actual cost will be minimal. Spending into the economy produces a rise in spending and thus raise the economy’s value. maybe enough for near parity[?] I couldn’t care less about neo-liberal motives. Lets all get the benefit.

    16. Alan Longbon says:

      @John Doyle.

      Hallo,

      I know that taxes do not pay for anything and are a destruction of financial assets. Please do not lump me in with Ralph. I wrote down how the top end of town see things in their neo-liberal Dickensian world where they DO think taxes pay for things and are necessary. This method of paying for BIG is why the top end town has a form of twisted support for BIG; Bill explains their support and exposes it for what it is.

      My second paragraph about how a currency sovereign can pay the BIG or the JG is how it should be done.

    17. Mel says:

      “JG increases total real wealth production”

      I’ve said before, implementation is crucial.
      We used to make jokes about negative value-added enterprises back when we were making fun of the Soviets. These were factories whose products were worth less than the labor and resources that went into making them. Inflation is a market phenomenon where too much money chases too few goods, and prices are bid up. If a badly implemented JG paid money to produce goods that the market refused to chase, then there would be inflation despite our fond desires.
      Some huge proportion (what, 90%?) of new enterprises fail, so there are lots of entrepreneurs who know that coming out with a product that the market will chase is not something that happens just because we want it to.
      In another forum, somebody suggested guaranteed jobs in non-credentialed education. To game that, you could teach me Sanskrit, I could teach you table-loom weaving, and we’d both get paid. Somebody would have to think twice about letting us get away with that.

    18. SpicyTuna64 says:

      “Serfdom without the work”

      What’s that? Sounds like a recipe for reform or revolution.

      And indeed, the long game of our society is a formal returning of the commons, and a large part of their wealth to the people at large, with access to such managed by a or multiple currencies, via unconditional incomes.

      So might as well establish the groundwork for a future economy now.

    19. Neil Wilson says:

      “Do I deserve a wage when my speculative activities (even if it involves a lot of head work) contribute to commodity price rises in poor countries?”

      As I’ve pointed out a few times now, whether you are worth a wage or not is a matter of negotiation with your peers in your society. That is the key bit missing from the BIG literature – the idea that as an individual you exist in a constant negotiation with everybody else in society. They don’t seem to realise that individual freedom has social limits. You have an obligation to respect other people’s rights – as embodied in the “how would you like it if” example we teach to children.

      This is why we queue. This is why we back off and say ‘after you’. The mutual respect for each other in a crowded space is what prevents conflict.

      The BIG is individualistic without regard for anybody else. It is libertarianism that stamps firmly on everybody else’s feet and tells them to get out of the way. It is the language of the mill owners, not the mill workers.

      You have to serve others in a way that demonstrates clearly to others your worth. Then you will get something in return. Service to others is the rent we pay for our room here on earth.

      The Job Guarantee helps you make that rent by providing work of real social value.

      The BIG hands out money and hopes there is somebody stupid enough to take it.

    20. Neil Wilson says:

      “Where do full time and part time carers fit into JG. ”

      Much the same as mothers looking after their own children. It depends on the society constructing the Job Guarantee.

      If (as expected) society at large doesn’t believe that individuals should be paid to care or look after their own children, then it has to provide the social care structures that frees up the individual to do other work.

      When a child is born, or an individual becomes disabled, there is a job of work created to look after them. That job has to be done by somebody. We either construct shared care (day care, nurseries, schools etc), or we accept individual care.

      What we can’t do is pretend the job doesn’t exist.

    21. Neil Wilson makes the totally bizarre claim in answer to my comment above (1st comment after Bill’s article) that the fact of “stealing” money from taxpayers so as to fund BIG means one abandons the aim of achieving full employment.

      So by the same token does “stealing money” from taxpayers to fund those on state pensions, hinder existing efforts to find work for the unemployed? Come to that, does supporting pensioners also mess up other areas of government spending like the Army, Navy and Air Force as well? I suspect the admirals, generals etc are not too worried about taxes being collected to support pensioners. In fact I suspect they’s split their sides at the barmy logic hefre.

    22. Larry,

      Thanks for informing me that taxes do not necessarily need to be collected in order to fund public spending. I’ve been aware of that for decades. However, a fairly large proportion of public spending does actually need to be balanced by tax, else inflation goes thru the roof. As MMTers often put it: tax is needed to prevent excess inflation.

    23. sam w says:

      @Ralph
      “However, a fairly large proportion of public spending does actually need to be balanced by tax, else inflation goes thru the roof. ”

      Not applicable in a modern economy with few supply constraints. We’ve (Australians) seen full employment from 1945-1974 where government has aggressively spent out of downturns pushing that inflation envelope and it did not ‘go through the roof’.
      Every example of aggressive inflation occurs concurrently with some supply shock on a commodity, political instability, corruption or degree of war.
      The ‘demand pull inflation’ is small with modern factory line manufacturing it scales faster than cashed up consumers can hit the shelves and demand more than is available. Eg: look at the most expensive commodities like computer parts, very easy to double factory output of such things.

      “However, a fairly large proportion of public spending does actually need to be balanced by tax”

      Tax needs to be responsive to such things not balanced. Balanced is what got us in this current mess.

    24. Kevin Harding says:

      Neil so we are agreed that excepting something that is freely given is not theft?

    25. Kevin Harding says:

      I find myself defending a UIG on this blog mainly because the irrational attacks upon it.
      Serfdom without exploitation of labour.Welfare causing idleness.
      Welfare spending having an inflationary bias over non welfare spending.
      Welfare as theft.Some reactionaries support UIG so UIG is reactionary.
      As I said earlier I think it is a case of not seeing the UIG for the JG .
      Personally I do not think either should be the priority of economic governance.
      For me that should be the direction of resources for utalitarian purpose.
      Here in the uk that should be towards our crisis in healthcare, social care and
      housing and looking to the future education,scientific research and the production
      of sustainable energy.Millions of well paid jobs directly state employed or not.
      The fiscal context is vital both stimulus and transfers.I think the Japanease experience
      and the relative success of the post war settlement shows us that stimulus and full
      employment will not promote social justice in the “free “market without fiscal transfers
      this is where I see a role of UIG supporting the minimum wage alongside higher
      rates of taxes for the wealthy ,land value tax and rent controls may mean we do
      not need the very high rates of income tax so successful in the post war settlement.
      UIG can also undermine the neo liberal narrative on welfare , scroungers , shirkers etc
      and mitigate against the high marginal tax and insecurity involved for current welfare
      recipients entering job markets.
      The reality is that my desires for direction of real reserves to where there are most needed,
      UIG’s ,JG’s are all a distant dream in the modern neo liberal political consensus .I would
      support any of the above in the context of fiscal stimulus and fiscal transfers.

    26. Hog says:

      “Tax needs to be responsive to such things not balanced. Balanced is what got us in this current mess.”

      right, taxes keep inflation at bay primarily by inhibition, since most of the money supply is created endogenously anyways. i’d argue its not really the most important component for that job, since a lack of proper regulation can render it ineffective, no matter how high taxes are set.
      hence the amount of “revenue” generated from taxes is not a good indicator for its effectiveness in regards to inflation, with the exception of the tax policy that aims to maximize revenue (a Laffer), that one is almost certainly most ineffective.

    27. Anthony Zappia says:

      Bill, a stupid question if I may. How can CEOs expect their profits to increase over time if more and more people are reduced to the bare bones of existence, on a BIG? A bit like biting your nose to spite your face isn’t it? The robots may reduce their wages bill, but I can’t see a population reduced to surviving on a basic income coming to the rescue. Seems economically unsustainable to me. Or is this simply a case of short-term thinking – “I don’t care what the next CEO inherits down the track, as long as I get my million dollar pay packet, shares, options, etc.”

    28. MarkG says:

      I am on the fence about a BIG. I think most of the arguments against it are very valid but I have some thoughts to support a BIG. If the BIG allows some people to leave the workforce will this give greater bargaining power to those left in the workforce? What will happen to the “family fabric” if a BIG allows one spouse to stay home? Less divorce (and all the ills associated with divorce), better outcome for children, etc. How do we put a social value on that? The BIG may allow some people to do research and discover something to greatly benefit mankind. So I understand Neil’s comment “stealing output from those that work and giving it to those that don’t in exchange for nothing of value”, I am not sure if we are getting “nothing of value”. I am sure there will be those who choose to hang out on the street corner and drink all day, but I am guessing they are there anyway. Like I said, I am on the fence but just some food for thought.

    29. sam w says:

      For the pretty graphs causality between money supply growth and inflation is not related:
      http://evonomics.com/moneysupply/

      In the upcoming French national elections Benoit Hamon advocates UBI and Yannick Jadot, Phillipe Van Parijs (Bill has already blogged about Phillipe) are probably the intellectual fashion behind the popularity on the left.

      In one way if we look at their progressive intentions for BIG it will simply provide the bottom up fiscal stimulus that SHOULD have been done about 10 years ago by now. Its only one of the tools in the shed. We prefer JG but we don’t have billions of dollars a network of CEO’s running the so called ‘progressive’ component of the media to market it.

      Its noticeable to me that over the last 20 years society has done pretty well at indoctrinating people into confirmation bias and cognitive dissonance patterns and trying to dislodge one progressive idea with another superior progressive idea is quite hard. ;-)

    30. Neil Wilson says:

      “How do we put a social value on that? ”

      We used to have a student grant in the UK. Now we don’t. That was a basic income for students. The got paid ahead of schedule and there was an implicit expectation they would do something for it.

      Now it doesn’t exist. Just like unemployment benefit and like all guaranteed income schemes. Why? Because a few people take, the majority resent that, they elect somebody who will do something about it and the scheme is then ended for all.

      So it is a non-starter. Organisational psychology shows the majority expect something for something, with the rest split roughly evenly between those who will take whatever they can get, and those who hand out regardless.

      Ultimately there is all activities of social value that can be organised as a job. And that is how you have to organise it if you want majority support for it. Because that is how society works. The evidence of history is very clear.

      The BIG is the usual problem of a small 20% of intellectuals desperately wanting the world to be something other than what it is. There’s even a psychological term for it – the false consensus effect.

    31. Neil Wilson says:

      Raplh,

      “So by the same token does “stealing money” from taxpayers”

      I said stealing output, not money. Try again.

      The output belongs in the first instance to the workers who produce the output. Why should they bother working longer to produce output for you if you are not prepared to offer anything real in return? Moving nominal amounts around doesn’t change that fundamental equation. It’s just a sleight of hand to try and mask it with inflation.

      Pensions are earned due to length of service. People give you output in return for the work you have done previously. That is why the state pension age continues to rise even as jobs get scarcer – there is a social limit to how much output people are prepared to give in acknowledgement of prior contributions and the rise in life expectancy shifts that window.

      Other public services are indeed a confiscation of output to support the people running the public service. There is a definite political question “why are we paying doctors/firemen/teachers/etc more than the living wage?”. Anything more than the living wage has to be taken away from those producing stuff to give to the doctors/firemen/teachers/etc. And that’s why those wages and expenses are usually covered with taxation.

      Differential income in the public sector is always going to be a matter of tax and spend, and is a political decision we all have to make. Which is why social value does not equal market value.

      The bizarre idea is that the workers will work for nothing in return, other than in the short term before they discover they’ve been had. Not in any society with actual humans in it.

    32. J Christensen says:

      MarkG (apr 6, 2017 13:13):

      Lot’s of question marks there. If you’re on the fence, why not take the job guarantee first position, and then look afterwards to see if there is a need for some additional income, as MMT economists have suggested?

      A job guarantee at a reasonable wage setting would eliminate many of the same problems the small scale pilot income guarantee projects around the world have addressed; something is needed on a far larger scale to address the snowballing decline in aggregate demand fostered by the growing private debt crisis, lest immiseration continue as the trend. It’s hard to see how a BIG could mitigate against that.

      “family fabric” : Isn’t being a stay at home parent not really a job anyway? Don’t parents pay other people to do that when they are both able to find higher paid work? Having one parent at home and the other getting up and working each day is a situation many family’s feel is ideal and there is no good reason not to pay the stay at home parent for their work.

      “getting nothing of value”: When people are paid to do a job with a socially valuable output we have some certainty that we are getting something of value. What about the work volunteers do?
      The people on this planet who really do “nothing of value” today are those who make their money drawing economic rent from society.

    33. Dan says:

      A universal income might be favourable if people were to go back to some sort of collective agriculture. Collectively, in your suburb or street or village you take care of the majority of your food requirements. Permaculture is one philosophy for this. Then the basic income, depending on what it is, would be enough to cover fuel, power, water, medicine.

      To achieve Bill’s s with a universal job guarantee people need to be in control of government. I’m doubtful this will ever happen. But if government is willing to give me enough money to cover some of the basics, and let me escape the rat race, then there is plenty of land in far flung places that can be bought cheap and farmed.

    34. Brendanm says:

      @Neil –

      Other public services are indeed a confiscation of output to support the people running the public service. There is a definite political question “why are we paying doctors/firemen/teachers/etc more than the living wage?”. Anything more than the living wage has to be taken away from those producing stuff to give to the doctors/firemen/teachers/etc. And that’s why those wages and expenses are usually covered with taxation.

      Sounds a bit like you now are confusing money and output. Public services intrinsically provide the output needed to justify their existence.

      The resentment of Medicare for example does not, I think, stem from any feelings that doctors are stealing resources or overpaid in anyway. Rather, it stems from a realisation that doctors paid in this way spread their work equitably across the populace and the better off know that, were they not taxed so highly, they could afford to bid doctors away from other patients and gain superior attention for themselves.
      This is of course a critical design feature of public health systems, taxation is used to reduce the spending power of those whose self interest would oppose the provision of a public service. We have to keep this firmly in mind when defending public services, that taxation is used to free up the resources needed to provide the service, rather than to pay for the service. For example, giving people tax breaks for bidding resources away from the public sphere so as to “provide for themselves” is very counter productive and leads to massive inefficiency, as seen in the US health system.

    35. Kevin Harding says:

      Why are we giving doctors etc more than the living wage(which is now Tory speak for a minimum wage)
      ideally because we value their services but in the real world because we wouldn’t have any
      doctors etc if we didn’t.
      This human society with its imaginary peer negotiations is a monumental xxxx up.

    36. bill gorrel says:

      Budd Schulberg did HUAC’s dirty work by producing an anti-union script. Elia Kazan was part of the collaboration as the director of “On the Waterfront.” Kazan went on to make poor people look like evil fascistic grifter monsters who must be put down in “A Face in the Crowd.”

    37. Martin Hensher says:

      I’m very late to the party on this one (busy week last week and all), but I’m delighted you are taking this on. One of the curious things about BIG (or UBI, I’m sure it has a few aliases) is the strange bedfellows it attracts. There seems little doubt that it is attractive in certain progressive circles precisely because appears to offer the prospect of not needing to work, which is – shall we say – almost irresistible to certain people who would rather be freed to pursue loftier pursuits than wage slavery. That it would provide subsistence at modern-day poorhouse levels seems to elude them…Yet it seems immediately obvious that – as per Friedman et al – this would just be the greatest excuse ever to cut loose the poor – “they have been fully provided for, after all, so now they only have themselves to blame”. In my own area (health care) the absurdity of this is instantly clear – forcing paupers on BIG to choose whether to take out private health insurance or go without care is a platinum-grade neoliberal fantasy but would (of course) be vastly less efficient than those nasty old publicly-funded collective health care systems it would replace.

      Instead of a BIG, how about enforcing 50% public ownership of all artificial intelligence intellectual property rights going forwards? Then we could all benefit even if the robots did take all our jobs, without eliminating private incentives to develop them?

      And by the way, while I have always felt fairly secure in the vocab department, what on earth does “eleemosynary” mean??

    38. bill says:

      Dear Martin (at 2017/04/10 at 5:33 pm)

      eleemosynary = relating to or dependent on charity.

      best wishes
      bill

    39. The Unwilling Feudalist says:

      You’re right. And also wrong.

      If a “basic income” is funded the wrong way, you are correct: It will do literally nothing for the average person. Anyone who benefits in net terms from the policy will, in the long run, see rents and mortgage payments rise to match the benefit they’re receiving. Anybody who suffers, in net terms, from the policy, will see those things fall. The end result of the policy, like the end result of all policies that do not address land tenure, will be nothing more than to shift rent from some landlords to others.

      If it’s funded the correct way — from land rent — that’s a different story. Land, which is unfortunately so often lumped in with structures and referred to as “real estate” or “housing” is fixed in supply and required for all life and production. Its owners, macroeconomically, simply take whatever net income people have beyond a bare minimum and keep it in exchange for nothing but allowing them to exist. Imagine, for example, that you tax all income and distribute it equally to everyone, but only one person — say, Bill Gates — owns all the Earth’s land titles. All you’re doing is shuffling wealth around for a bit before everyone pays most of it (everything beyond the “margin of production”) to Bill Gates as land rent. THAT is why a “basic income,” funded from taxation, is serfdom with some glitter on it; and it’s why a geoist “Residents’ Dividend” from land rent will end poverty.

    40. James says:

      There are an awful lot of clichéd beliefs coming out of the mouths of supposedly compassionate people when it comes to this topic.

      For the vast majority, both JG and BIG are non-starters. JG has a slight edge because it appeals to people’s desire to crack the whip over their fellow humans.

      As for the psychology of groups and expectations of our fellow humans, most people are quite spiteful and want others to suffer just as we suffer. If I’m under the whip, so must you be, therefore I will support JG and put you idle benefit scroungers to work for society, doing punishment-work.

      As for resenting the rich, there’s not much of that about. It’s mostly envy. Most of want to be rich, and free of the burden of having to work too hard, or at something we despise or which is ill-fitting to our natures.

      Humans yearn for freedom, but since we can’t have it, we want burdens for all.

      But once the robots can do all work, then BIG will be popular and JG will be irrelevant.

    41. James says:

      PS The idea that BIG means little or nor contribution to society is wildly wrong, and the passionate, even aggressive pushing of the idea reads quite nastily to me.

    42. Some Guy says:

      A BIG which is more than “welfare” (which every society has always had) – a UBI – an untaxed, substantial monetary universal basic income is simply impossible. Never existed and never will. People who don’t waste much time on the internets see that very quickly.

      JG has a slight edge because it appeals to people’s desire to crack the whip over their fellow humans.

      Backwards. No, BIG / UBI is about cracking whips, compulsion. The JG is about playing well with others, cooperation. But the childishly naive “progressive” BIG supporters are unable to see the whips, who is holding them, who is cracking them – and who feels the lash.

      On the other hand, their puppeteers, the plutocrat BIG supporters see it very well – because that’s what they like – cracking whips. You and the many equally confused have it quite backwards, because “mainstream” economics teaches everybody to think about economics in a completely backwards way.

      The idea that BIG means little or nor contribution to society is wildly wrong,
      No, it is completely accurate, by definition of the BIG= money (= a whip) for nothing. If the things that money can buy – above all labor – are worth so little to the beautiful BIG recipient souls – who surely will spend all their time contributing to society – why do these beautiful souls want this money so much to whip their fellow human beings into working for them?

      But once the robots can do all work, then BIG will be popular and JG will be irrelevant.
      This robot garbage has been around for centuries. It’s a trick of plutocrats and worshippers of wealth to appeal to wishful thinkers, idle daydreaming intellectuals.
      The question is: why should the work of “the robots” have to be paid for in money at all?
      Answer: It shouldn’t, in a reasonable world.
      But in the robot world of the BIG/UBI the plutocrats plan on and WILL own every last damn robot, making every last progressive beautiful soul work hard pandering to their disgusting whims to get an ounce of robot-production. “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
      Non-monetary BIG/UBI has always existed – it’s a good idea, for each society to think about, make collective choices about and enact. If a society is rich enough to have these magic robots – give everyone a robot! Don’t make people pay (inevitably through the nose, with their hard work). But monetary basic income? It’s one of the stupidest, most incoherent, self-contradictory and malignant ideas every concocted.

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