Basic income guarantee progressives cosy up with the worst CEOs in the world

A short blog post today (Wednesday and all). I am working on the revisions to our Modern Monetary Theory (MMT) textbook that will be published by Macmillan-Palgrave in November 2018. We have all the editorial and external reviews available now and are working through the editorial process to complete the final version. Mostly clarifications and style issues. There will be a slight rearrangement of chapter order and emphasis but nothing major. In the meantime, some thoughts on UBI and some music for today. A more detailed blog post will come along tomorrow.

CEO and Basic Income Guarantees

I read an excellent article by Chris Hedges (April 1, 2018) – The Oligarchs’ ‘Guaranteed Basic Income’ Scam – which was published by Truthdig.

His argument is that:

A number of the reigning oligarchs … are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.

That is such a strong opening paragraph.

Among the many relevant articles I have written about this topic, here are two from 2017:

1. A basic income guarantee is a neo-liberal strategy for serfdom without the work (April 5, 2017).

2. Why are CEOs now supporting basic income guarantees? (March 28. 2017).

See other entries under the – Job Guarantee – category of my blog.

We were writing about this topic in the 1990s when the Basic Income Guarantee (BIG) movement was gathering steam within academic circles.

In our first National Unemployment Conference (hosted by my research centre – the Centre of Full Employment and Equity (CofFEE) in 1998) – there were ‘progressive’ voices calling for the introduction of a BIG and opposing our espousal of a Job Guarantee.

They were interesting debates but I was never convinced that BIG was anything more than a scam to absolve the government from its responsibility to create full employment.

I also considered BIG to lack any semblance of a progressive macroeconomic stability capacity, which is a feature of the Job Guarantee and makes it intrinsic to Modern Monetary Theory (MMT) rather than an add-on – take-it or leave-it according to your preference.

As the decades have gone by more progressives have jumped on the BIG wagon, not understanding the macroeconomic implications, and thinking it will unleash an outpouring of creativity and freedom.

All it will unleash are impoverished consumption units, denied access to jobs, with an increased sense of social alienation.

More recently, these CEO dudes have started talking about it, which motivated me to write the two cited articles above around this time last year.

The case presented in Chris Hedges article is similar to that made in my blog post (No 2. above).

He notes that:

The oligarchs do not propose structural change. They do not want businesses and the marketplace regulated. They do not support labor unions. They will not pay a living wage to their bonded labor in the developing world or the American workers in their warehouses and shipping centers or driving their delivery vehicles. They have no intention of establishing free college education, universal government health or adequate pensions. They seek, rather, a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will. The hellish factories and sweatshops in China and the developing world where workers earn less than a dollar an hour will continue to churn out the oligarchs’ products and swell their obscene wealth. America will continue to be transformed into a deindustrialized wasteland. The architects of our neofeudalism call on the government to pay a guaranteed basic income so they can continue to feed upon us like swarms of longnose lancetfish, which devour others in their own species.

A poetic and stark appraisal of what is going on.

The CEOs are engaging in the time-immemorial strategy of working angles “to reconfigure the habits of a society to absorb the surpluses”.

They don’t want to create sufficient, well-paid jobs.

They don’t want governments to use there fiscal capacity to ensure there are enough jobs.

They just want to maintain people who are being left behind as ‘consumption units’ to make sure they can keep buying their stuff.

But even then that doesn’t work because the sort of BIG stipends they propose are too low for mass consumption to continue without further credit expansion.

That lock-in, vicious cycle – suppress real wages and employment, push credit onto workers instead to maintain consumption, bankruptcy, house loss, crisis, public bailout, continue – is the exemplar of the neoliberal period.

Privatise the massive speculative gains while they are there but when the whole show collapses turn to government for the bailout, just to start again.

So with realisation crises becoming more frequent, the neoliberals turned their attention to new ways to create surplus value and profit.

As Chris Hedges notes:

Profit in the “empire of consumption” is extracted not by producing products but by privatizing and pushing up the costs of the basic services we need to survive and allowing banks and hedge funds to impose punishing debt peonage on the public and gamble on tech, student debt and housing bubbles.

Chris Hedges calls the ‘Gig economy” – “a new form of serfdom” – a topic I covered in the blog post 1. cited above.

The CEOs calling for a BIG is part of that narrative.

They hide behind a faux concern for morality and welfare but their practices reveal nothing of the sort.

The BIG is just a transition for them – to push some cash into the hands of those who haven’t any because they have been rendered unemployed by the flawed economic policies that the CEOs have lobbied hard in support of.

It isn’t a progressive story at all.

And their short-termism, just coming up with anything that will keep their profit machine rumbling along, reminds me of Jim Morrison’s monologue at the end of the live version of Roadhouse Blues:

..Alright! Alright! Alright!
Hey, listen! Listen! Listen, man! listen, man!
I don’t know how many you people believe in astrology…

Yeah, that’s right … that’s right, baby, I … I am a Sagittarius
The most philosophical of all the signs
But anyway, I don’t believe in it
I think it’s a bunch of bullshit, myself
But I tell you this, man, I tell you this
I don’t know what’s gonna happen, man, but I wanna have
My kicks before the whole shithouse goes up in flames
Alright!

Here he is live:

Reclaiming the State – book review

There is a new review of our current book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017), published by the Irish Village Magazine (March 30, 2018) and written by Anthony Coughlan, from Trinity College Dublin.

It is a very nice consideration of our work.

I will be speaking at two events in Ireland in October. The first will be in Dublin (tentatively Wednesday, October 3, 2018) and the second in Galway (Thursday, October 4, 2018). When more details emerge of these events I will clarify.

There will also be possible speaking engagements in Portugal, Norway and the UK in early October 2018. Again, more details when I know them.

Also, see below for discounts currently being offered by Pluto Books.

Music – Chapter One: Latin America

This is what I have been listening to while working this morning.

This track is from the late Argentinean tenor player – Gato Baribieri – and is taken from his 1973 album – Chapter One: Latin America – released by Impulse! Records.

After a decade of playing free jazz, Gato Barbieri – started his series of albums devoted to Latin American fusion.

I had purchased his earlier free jazz albums in the early 1970s (bugging the import shop guy to get them in from the US).

But this one was my favourite (apart from the album that immediately preceded it – Bolivia) – of his Latin jazz era.

This track – To be continued – was recorded at Odeon Studios im Rio de Janeiro.

The album has been called “one of the all but forgotten masterpieces in 1970s jazz”. I play this record regularly.

What a collection of great players this is!

Here is a Rolling Stone obituary (April 3, 2016) – Gato Barbieri, Latin Jazz Great and ‘Last Tango in Paris’ Composer, Dead at 83.

Reclaiming the State – Big Discount

Pluto Books has gone mad this Easter.

All their stock is being offered at a 50 per cent discount, which is better than the author’s discount I can get normally.

That means you can purchase our new book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World – online, for half price (and the Paperback version comes with a free e-Book).

The offer ends on April 9, 2018.

That is enough for today!

(c) Copyright 2018 William Mitchell. All Rights Reserved.

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    84 Responses to Basic income guarantee progressives cosy up with the worst CEOs in the world

    1. Andrew C says:

      The exhausting arguments I’ve had with two UBI ALP-supporters on this has been tiring.
      One defaults to ‘You’re a Calvinist trying to oppress the people’, and the other defaults to ‘But with a UBI people would be freed to pursue something else, UBI does everything you say a JG does!’.

      Oh and apparently your own self qualifies as ‘some guy with a blog’. So that’s always enlightening.

    2. Patricia says:

      I am, was, a big supporter of a UBI or BIG as you call it, but now after what you said above I have my doubts. My support was based on New Zealand’s universal superannuation which has worked wonderfully for nearly 70 years. But perhaps it is not suitable for young and old after all. A neoliberal world, which is what we live in, is not going to start caring for its people but only cares for its bottom line. So giving a UBI to all might just make a bad situation even worse. Thanks Bill.

    3. slorter says:

      Read Chris’s article as well as many others. He certainly is aware of the neoliberal disaster we currently endure! Thanks for the article good for reference! Cheers!

    4. Jerry Brown says:

      Well the analogy between Jim Morrison and corporate CEO’s is pretty ridiculous. And perhaps Morrison had an inkling he wasn’t long for this world but it is still somewhat cold hearted to refer to short-termism like that.

    5. Allan says:

      The Greens leader has been spruiking the UBI at the National Press Club today.

    6. bill says:

      Dear Allan (at 2018/04/04 at 3:32 pm)

      That is why you would never want to vote for them.

      Neoliberals on bikes.

      best wishes
      bill

    7. Neil Wilson says:

      I’ve had run ins with the UBI crowd. They start calling you names when you point out the logical contradictions in their belief systems.

      One of the features of the Free Software movement was that there was a upswing in interest in Social Anarchism as a concept – which resulted in the construction of the Anarchist FAQ. It’s a great document that asks all the right questions and gives all the wrong answers.

      At root though there is a basic contradiction in anarchism as there is in libertarianism. Libertarianism falls on the belief in the ‘non aggression pact’ – the idea that individuals won’t form gangs and attack others to gain power in the brave new future, contrary to all rational evidence.

      Similarly Anarchism falls on the ‘share the kill’ belief – the idea that those specialists and division of labour we require to produce a surplus (for example farmers) will continue to work 40 hours a week to provide for those not doing anything (which seems to be categorised in human societies as consuming your own time). One of the fringe writers on Anarchism (and I forget which) wrote on the issue of why an individual would or should use up their own finite lifetime for others when they get nothing of value in return and ended up hand-waving about ‘concern’ or some such get out. Modern writers try and use the ‘share the kill’ argument – based upon a rosy-eyed view of tribal life. They always forget to look at that system over time and count the bodies in the forest.

      Of course the UBI crowd, being the useful idiots of corporatism, have come up with the perfect reason why those in work will continue to put in 40 hours a week, for a much lower additional wage and have that production surplus allocated to others: Because there are always fewer jobs that people that want them, those with work have ‘job privilege’.

      That wonderful individual freedom relies upon laying the guilt card on other members of society.

    8. J Christensen says:

      In Canada this idea seems to be catching among supporters of the originally social democratic but recently sounding suspiciously like neoliberals , federal New Democratic Party. Debating with the true believers on this is like trying to put a hole in a brick wall with your head, they simply are unwilling to accept the reality; it’s very sad to hear, but this is what neoliberalism has reduced the working class to.
      The provincial Liberal party in Ontario, has been running, yet another “experiment” with the concept. The project has been limited to the low income groups that place frequent demand on the provincial health system. The hope being there will be health cost reduction in the long run. It doesn’t sound like there are plans to make this available to all.

    9. Ralph Musgrave says:

      Bill says “I also considered BIG to lack any semblance of a progressive macroeconomic stability capacity…”. Why on Earth can’t BIG act in a “macroeconomic stability capacity”?

      If there’s a recession, Keynes and MMT says: “have government run a deficit”. If government chooses, it can perfectly well have a more generous BIG as part of that deficit.

    10. Patricia says:

      I can though, see a UBI working in a small poor town together with the introduction of a new, say Government, industry there. I have thought of Kataia which is a small down in Northland and would be ideal for such an experiment for say 50 years. Currently our new Government aims at spending money in the provinces and while that, in my view, is a good thing it will only work if an industry is set up too. The addition of a UBI together with the wages from the industry would enhance the development of the town. While I can appreciate that this does not actually fit Bill’s theory surely in the meantime it is better than nothing?

    11. Allan says:

      “If there’s a recession, Keynes and MMT says: ‘have government run a deficit’.”

      MMT says run a Job Guarantee. Then you can avoid the recession in the first place.

    12. Patricia says:

      But surely a country can have a depression/recession in certain areas and not in others.

    13. Ralph Musgrave says:

      Allan,

      A deficit is better than JG (in as far as a recession can be cured by deficits) because deficits create normal or “regular” jobs: always preferable to JG jobs, given the choice.

      Patricia,

      You’re right, but I don’t see the relevance of your point.

    14. Patricia says:

      Ralph.
      I was thinking, more in the meantime and before MMT is completely accepted – bring on the day- that to deal with those areas that do have a recession while the rest of the country doesn’t, a government could introduce a Government industry plus a UBI which would dramatically help to improve a small poor area. I am thinking of Kataia.
      And surely a job, whatever it is and whether regular or not is better than no job at all.

    15. Mike Hall says:

      Hi Bill, great blog as always. :)

      The link for Anthony Coughlan’s review just takes us to the Pluto books page. This is the link to his review in the Village: (I’m delighted to finally see some MMT interest in Irish academe.)

      https://villagemagazine.ie/index.php/2018/03/reclaiming-the-state-a-progressive-vision-of-sovereignty-for-a-post-neoliberal-world/

      Also, I think the key flaw with the UBI crowd is the fact that (as Wray says) the ‘mainstream doesn’t do macro economics’.
      They simply don’t have any conceptual understanding of ‘fallacy of composition’, so all we ever see is micro economics arguments for UBI.

      I think MMTers should always emphasise this flaw in UBIer’s thinking, not least because I believe it’s the root problem of most flawed economic policy thinking – ie the macro is ignored.

    16. Mike Ellwood says:

      Patricia says:
      Wednesday, April 4, 2018 at 21:33
      Ralph.
       
      I was thinking, more in the meantime and before MMT is completely accepted – bring on the day- that to deal with those areas that do have a recession while the rest of the country doesn’t, a government could introduce a Government industry plus a UBI which would dramatically help to improve a small poor area. I am thinking of Kataia.
      And surely a job, whatever it is and whether regular or not is better than no job at all.

       
      I tend to see the JG in slightly different terms than its American proponents, such as Randy Wray or Warren Mosler. They see people (eventually) going from JG jobs (back) to the private sector (“where they belong” – not quite stated, but apparently assumed. Ralph also seems to have this attitude).
       
      Growing up in the post-war UK with its Welfare State, National Health Service and many other areas fairly and squarely in the public sector, I don’t have the view that “the private sector is always better than the public sector”. (To be fair, I don’t think all Americans think that, either).
       
      Surprisingly perhaps, given all the years of Thatcherism and the sub-Thatcherism that followed it, even now, even people who vote Tory by and large don’t want to see the NHS privatised, and many are not particularly happy with the privatised railways, for example.
       
      Anyway, I kind of see the JG as part of public sector employment, and there being (in due course) a kind of spectrum of JG “minimum/living wage” ranging to full-time public-sector “proper jobs”/permanent jobs, without a strict dividing line in between.
       
      That may not be pure MMT though.
       
      Re: Patricia’s point about having a depression/recession in certain areas and not in others: of course standard MMT says that you take the employment to where the unemployed people are (and not the other way around). How practical / realistic that would turn out remains to be seen, and as Patricia says, perhaps in the meantime, a kind of compromise might work in particular cases.

    17. Some Guy says:

      A JG job is a “normal or regular job” in ordinary English. “Regular job” as Ralph uses it means ones where public money is first given to an entrepreneur (who takes the lion’s share) and then doles it out to the lesser people, the workers. Only specious, circular logic, that assumes what it pretends to prove, can conclude that such “regular jobs” are superior to direct JG jobs. Ralph is wrong about everything he says here.

      For public purposes, for the purposes of getting money to those who need and deserve it, for the purposes of doing the actual work and for macroeconomic stabilization a direct JG is clearly superior to such corrupt or begging-for-corruption “regular jobs”. This sort of “regular job” program is a JG job program with a lower than necessary wage plus a pointless, actually destructive, gift to somebody rich already. This ideological obsession with “regular or normal jobs”, the crazy idea that the more the “private sector” (meaning rich people) is involved, the better thing go, is the way the Bush administration administered the Hurricane Katrina relief efforts, which was roundly and correctly criticized as a farce that did a lousy job of aiding the victims and just made the rich richer. But that was the purpose then – making rich people richer, and that is the only logical reason to prefer the “regular or normal job” to direct government employment.

      A UBI, even one restricted to a small area, is similarly a lousy way to employ people, or for almost any purpose. A) it spends far more money than a JG to employ people. B) It won’t and can employ everyone, while a JG does instantly. Employing the last ten or five percent of the people in the area requires gobs and gobs more money, most of which will go to people moving in to grab it, not the local residents. It is a very inefficient and needlessly indirect way of doing something.

      The only time “a UBI” can make sense is when it is not universal, but targeted and temporary as to victims of a hurricane, and then only as an addition to a JG, which should always be there. It is a well-known virtue of the JG, going back to Keynes, that a JG can treat local problems “a depression/recession in certain areas and not in others”. While “helping” by privatization/regular job/untargeted “hydraulic” deficit spending is very inefficient and even counterproductive.

    18. PhilipO says:

      I`m about to toss my hands up, get off my MMT soap box and “call it a day”(almost)

      We in Barbados (tiny island)have had, since the nineteen sixties, something similar to the JG. We jokingly but affectionately referred to it as, the government`s “army of occupation”. We also ran continuous overall fiscal deficits. In 1995/6 we added what we called a “reverse tax credit”. I suppose we could refer to that as UBI support for anyone working but under a certain income level (24,000 PA). Said income was also not subject to income tax.
      Since 2008 every policy has done a 180 shift. Reduce the labour cost to government through privatisation and layoffs. Run balanced budgets. Remove the reverse tax credit….etc,etc.

      Reclaiming the State has hit the nail on the head. This once progressive government, bought into the neo-liberal agenda and now abvance policies, claiming! to be progressive and practical in a globalised environment……..Absolute rubbish.
      I should stop.

    19. Paulo Marques says:

      A UBI would quickly create an incentive to de-fund public services in order to create “more efficient” solutions by private rentiers. We’ve seen enough of that when charter schools replace public schools that start selecting students and teaching religion, despite being illegal.
      UBI would quickly split society into the elite, the blue collar class and the untouchables, or, if you prefer, the Inner Party, Outer Party and proles.

    20. Neil Wilson says:

      “Why on Earth can’t BIG act in a “macroeconomic stability capacity”?”

      Because it doesn’t back off during recovery. It cripples the spend side auto-stabilisation system. Spending via a Job Guarantee responds far faster to changes in circumstances than taxation ever can.

    21. larry says:

      Paolo, and your evidence for this?

    22. Kathy Heyne says:

      Yep. The tree tories- sorry, pro-capitalist centrists ( aka the Greens or neoliberals on bikes- whichever you prefer) released it as policy today – that and a sorta kinda partial nationalised banking/mortgage scheme thingy. Crikey newspaper dumped them both in a box marked “stupid” in big block letters.

      https://www.crikey.com.au/2018/04/04/greens-ubi-reserve-bank-economic-plan-is-bonkers/

      and the UBI idea IS stupid, but re-nationalising banking in some way isn’t stupid, so it was a shame it was dismissed out of hand. (Having two institutions creating money but only holding one to account worries me.)

    23. Kathy Heyne says:

      @Neil Wilson
      Wednesday, April 4, 2018 at 17:07
      Thank you for the descriptions of libertarianism and anarchism. I’d never thought of them as the flip sides of the same coin before- minted by liberalism, I’d guess.

    24. Keith Newman says:

      When I have discussed UBI with its progressive proponents they seem to believe there just isn’t enough work for everyone and UBI would fill the gap. According to this view it would allow people to receive income rather than starve and also find fulfilling non-work alternatives.
      I find the premise of a lack of work puzzling, bordering on the bizarre. I did a back of the envelope calculation a few months ago of the number of jobs we need in Canada to improve health services, education, social services for the disabled and frail elderly, public transit (inter and intracity), day care, environmental services, infrastructure, etc. My conclusion was we needed approximately 1.5 million additional workers to accomplish this. The Department of Finance estimates the multiplier for government spending at 1.5 so the additional buying power of those additional workers would increase economic activity and the number of jobs still further. Unemployment in Canada would practically disappear. The Job Guarantee could then assist workers in deprived regions and people at the lowest end of the labour market.
      Conclusion: there is tons of work to do and plenty of idle hands to do it. Why in the world would you want to pay people NOT to do all the things we so badly need?
      If in the remote future we do actually live in a Star Trek or Jetsons world let’s deal with the situation then. In fact I suspect there will still be plenty of jobs in health care, social services, education, personal services, etc, etc. If a lack of jobs is a problem then the work week and work year could be shortened.

    25. Ralph Musgrave says:

      Patricia,

      Re high unemployment geographical areas, there have been measures in place in the UK to try to tackle that problem in the UK since the 1930s and certainly up to around the 1980s: e.g. investment subsidies for high unemployment areas, and restrictions on building factories / office blocks in and around London. I’m not sure whether those measures are still in place – I’m not up to date on that.

      Some Guy,

      My reason for saying regular jobs (public and private sector) are more productive than JG jobs is that employers (public and private) always try to create the most productive jobs first, and only create relatively unproductive ones given employment subsidies or special measures like JG. Likewise a country uses its most productive agricultural land first, and only uses less productive land if it has to, or “if the price is right” so to speak.

      Neil,

      I don’t think the fact that a form of stimulus is not “auto” (i.e. does not work automatically come a recession) is a particularly damning criticism of it. Interest rate adjustments are not “auto” and nor is QE or the VAT cut that Alistair Darling implemented during the crisis.

    26. Neil Wilson says:

      “I don’t think the fact that a form of stimulus is not “auto” (i.e. does not work automatically come a recession) is a particularly damning criticism of it”

      You should do, if you understand about harmonic feedback in control systems.

      Interest rate adjustments don’t work as advertised and take about 18 months to work through the system, and the VAT cut was just tinkering at the edges that did very little quickly – because it takes so long to work through. VAT payments don’t clear the cash cycle for four months.

      The result was lots of unnecessary unemployment. Nowhere near full employment. And permanent loss of output and productivity.

    27. Neil Wilson says:

      “always try to create the most productive jobs first”

      Not if there is a labour surplus. Then you get a labour substitution for capital making all the jobs less productive. JG is partially about making labour scarce and expensive for private businesses so they will decide to deploy capital rather than labour.

    28. Sam says:

      I’ve never heard “Bolivia” referred to as a free jazz album….

      I’d call it Latin jazz.

    29. Paulo Marques says:

      @larry

      there is none, the situation doesn’t exist. Just like others, I’m extrapolating from what I’ve seen. After seeing capitalists put employed against unemployed, new against old, private employees against public, precariat against contracted workers for 10 years, I wouldn’t expect the propaganda to change. I think it would be even easier to blame and abandon the poor for “their own failures” while threatening workers who want a personal life.

    30. Deborah says:

      Mike Elwood says, “Anyway, I kind of see the JG as part of public sector employment, and there being (in due course) a kind of spectrum of JG “minimum/living wage” ranging to full-time public-sector “proper jobs”/permanent jobs, without a strict dividing line in between.”

      I suspect Mike and I might be of a similar age and experience. When I left school in the early 70’s it was to a world of full employment. I first worked in the civil service then went to uni. After that I chose the not very stable world of the arts to work in for a few years. In between the jobs I wanted I did jobs that filled the gaps – mostly civil service type. I got all of them through the Job Centre who, in those days (at least in the bit of London I live in) cheerfully helped you. There was even a temp section where a lovely lady called Betty would ring me up at home and say ‘are you resting, dear? Need a bit of extra cash? I think I’ve got just the thing for you…’ Then they merged the Job Centres with the benefits offices and, despite retaining the name ( with a ‘Plus’ that was actually a minus), the agency work was contracted out to the private sector and all the help to find a job disappeared slowly but surely. All central and local government offices had been obliged to advertise through the job centres for no matter what level of job, permanent, temp, full and part-time. Other businesses used them too. It was as near dammit a job guarantee as you could get. Whether that was a universal experience in those days I don’t know (I have a feeling Betty may have been unique), but I did see a blog a few years ago from a retired employee of that service in which he detailed how it had changed over time. He felt it was a great loss as a service and a terrible change as an employee to go from being a helping hand to being a barrier to access.

    31. PhilipO says:

      So if Bill allows. I want to put in a pump for the new MMT book…..come on you bloggers, put in early support for the book. I`ve ordered mine at Amazon since Jan.

    32. Ralph Musgrave says:

      Neil,

      I don’t know how many people hereabouts are impressed by the technical sounding phrases you have a habit of trotting out, e.g. “harmonic control feedback systems”. Certainly I’m not impressed.

      Re your point that interest rate adjustments take time to work, that’s irrelevant. I’m well aware of the weaknesses in interest rate adjustments (and QE for that matter). My point was simply that the fact that a form of stimulus is not automatic is not in itself a serious defect. “Automaticness” is a nice feature, but it’s not the be all and end all.

      Re the fact that VAT money collected by traders takes a few months to end up on government coffers, that’s near irrelevant. I.e. when a finance minister announces a cut in VAT, that change can take place almost immediately, thus traders and shopkeepers cut their prices (if they’re going to cut them) almost instantaneously. Ergo the consumer is encouraged to spend more very quickly. As for the tax collected by traders, that just sits in bank accounts for a few months till it’s handed over to government. So that money has little effect.

      And finally you claim that employers do not create the most productive jobs first because given a surplus of labour, employers would create relatively unproductive, labour intensive jobs.

      Yes, and if nuclear war broke out, people might be reduced to relatively unproductive subsistence farming. Anyone can think up circumstances in which jobs created are relatively unproductive. The jobs created as a result of Trump’s import tariffs will be relatively unproductive.

      My point was that ALL ELSE EQUAL, or if you like, “under normal circumstances”, employers create the most productive jobs first.

      What do you think they do in hospitals? Pull out the stops to attend to minor cuts on someone’s finger while ignoring people in the prime of life who have been seriously injured and whose life can be saved if medics stopped wasting time with minor cuts?

    33. Curt Kastens says:

      If the JG were to be put in to practice would there be one wage rate no matter what the job is or would there be a payscale?

    34. bill says:

      Dear Curt Kastens (at 2018/04/05 at 7:05 am)

      There would be one pay scale. That is the price stabiliser – the state would be ‘buying off the bottom’, wherever it chose to set the bottom, which doesn’t imply a poverty wage at all.

      Once you start setting pay structures, you compete with non-government for the labour and lose the macro stability feature that defines the buffer stock.

      best wishes
      bill

    35. bill says:

      Dear Sam (at 2018/04/05 at 4:17 am)

      It was poor wording from me. The earlier albums I purchased were his free jazz era. Bolivia then the album I posted a track from were the beginnings of his Latin Jazz era.

      best wishes
      bill

    36. Neil Wilson says:

      “Certainly I’m not impressed.”

      No you won’t be. Dunning Kruger being a thing.

    37. kevin harding says:

      Again a very disappointing shallow guilt by association BIG analysis.
      Again the neo liberal memes that unemployment is voluntary.
      The lazy poor happy to be poor and idle .
      Again the preposterous notion of serfdom without work .
      BIG is certainly no magic bullet because magic does not exist.
      It would not be my first choice of stimulus.That would be targeted at reduction
      of real resource poverty in housing,healthcare,education,mass transportation and
      looking to the future sustainable energy supply.
      With our current resource poverty in the uk no minimum wage or income
      is sufficient for a decent life.
      I do give you credit in pointing out the dangers of BIG that reactionaries would use
      it as an excuse to cut targeted spending.Of course reactionaries would like to use
      job programs to exploit workers, yes i know that is not what an MMT style JG is about.
      But obviously I am going to point out again that the fiscal context of a BIG is vital.
      If it increases stimulus and aggregate demand it will cut unemployment.If it is
      implemented alongside raised taxation on the wealthy it will be progressive.
      Having no faith in equilibrium models .I for one welcome any measures which
      encourage fiscal stimulus and fiscal transfers.BIG as a negative income tax on the
      low paid’ could’ work that way.

    38. Patricia says:

      Oh Bill I don’t like the idea of one pay rate for all JGs. No No No. That would be seen as the old working for the dole at just a different pay rate. I can see that a same pay rate as paid in the private sector implies competition with the private sector but there must be a better way than the stigma of working for the dole.

    39. Leftwinghillbillyprospector says:

      @Kieth Newman:
      “Conclusion: there is tons of work to do and plenty of idle hands to do it. Why in the world would you want to pay people NOT to do all the things we so badly need?
      If in the remote future we do actually live in a Star Trek or Jetsons world let’s deal with the situation then. In fact I suspect there will still be plenty of jobs in health care, social services, education, personal services, etc, etc. If a lack of jobs is a problem then the work week and work year could be shortened.”

      The BIG advocates I have conversed with argue that a Jetsons-style future will be here very soon (as little as 10 years say the most extreme advocates) and that no amount of idle hands will ever be needed again thanks to automation replacing initially 50% of the labour force and ultimately a higher percentage. In their view, there will simply be no place for human beings to perform anything that can be done better by machines, which is ultimately nearly everything.

      In their view, a BIG will allow people to keep consuming (some advocate it at the level of a living wage at least) while unleashing a great wave of creative outpouring as humans are freed of the need to do mundane tasks.

      While it sounds pretty cruisy in theory, I can’t see how removing the need for humans to problem-solve on a daily basis (which employment does) will enhance human welfare but rather, will dumb us down collectively as mental atrophy through disuse overtakes our species. A human being that has grown up without ever having to solve a problem more complex than “should I do landscape painting or basket-weaving today” would surely be one of the most utterly helpless life forms in existence. Nothing wrong with either of those pursuits by the way.

      I say that human creativity grows from having to engage in problem solving and thinking – not by being free of any need for problem solving and thinking!

      There is a good reason we came to be the dominant species on Earth – our ability to think creatively and problem solve in the face of all the challenges the world throws at us. Freeing the human race of all such challenges seems like a recipe for regressive de-evolution.

      From the Frank Herbert novel “Dune”: ““Once men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.”

    40. Jerry Brown says:

      Curt Kastens, here is a very detailed proposal for a Job Guarantee for the US, from Pavlina Tcherneva.
      https://www.pavlina-tcherneva.net/job-guarantee-faq

    41. Henry Rech says:

      Mike Ellwood,

      “This sort of “regular job” program is a JG job program with a lower than necessary wage plus a pointless, actually destructive, gift to somebody rich already.”

      So you tax rich appropriately.

      Pay the worker a negative income tax.

    42. Henry Rech says:

      Neil,

      “Spending via a Job Guarantee responds far faster to changes in circumstances than taxation ever can.”

      So you put people out of work hoping they will be re-employed in the booming private sector?

    43. Jerry Brown says:

      Patricia, I think the idea of a basic Job Guarantee is already pretty ambitious and difficult politically to implement. Usually (I think), the intention is for the jobs not to be a permanent career option for someone. The wage is set at what is the minimum to allow for a person to engage with society with some dignity. And there probably will always be some stigma involved with these jobs from some people. Even now in the US, without any kind of job guarantee, some people begrudge plenty of full time workers who happen to work for the government.

    44. Henry Rech says:

      Some Guy,

      “A JG job is a “normal or regular job” in ordinary English.”

      How can you say this?

      In design and conception it is anything but.

    45. Patricia, says:

      Jerry, here in New Zealand we do have an unemployment benefit but it is certainly not at a “living wage’ which is what is being championed here in New Zealand for all workers. There is a stigma, even here, for being on the dole. So, as I see, it just increasing the JG to giving them a ‘living wage’ is not going to achieve much. I think Bill, who is the clever one here, needs to do more work on the concept of a JG.

    46. Matt B says:

      Henry,

      A person wakes up, goes to work, gets paid at the end of the pay period. It’s a normal job in the public sector.

    47. bill says:

      Dear Patricia (at 2018/04/05 at 9:35 am)

      You suggested:

      I think Bill … needs to do more work on the concept of a JG.

      I started writing about the JG (buffer stocks) in 1978. I have written millions of words since and published lots of articles, books, and major consulting reports etc on the topic.

      Have you read even a skerrick of that material?

      I guess not.

      All of your concerns are addressed including the myth that the Job Guarantee is just an elaborate form of dole payment or workfare.

      best wishes
      bill

    48. Patricia, says:

      Oh Bill. I do apologise for offending you. I do regularly listen to your YouTube Lectures and I do try and educate myself through them. I will try and find more on your job guarantee.

    49. PhilipO says:

      Patricia,
      You might want to look at “The Job Guarantee And Modern Money Theory” It is a collection edited by Michael J. Murray and Mathew Forstater. Bill has a chapter in there.

    50. Jerry Brown says:

      Patricia, the Job Guarantee envisioned by MMT would provide a living wage unlike what is the current Federal minimum wage in the US. I am sorry you got scolded (I hate when Bill scolds me), but the Job Guarantee is not some ‘back of the envelope’ idea- its something that they (Bill and other MMT economists) have put a lot of work and thought and analysis into. But that doesn’t mean you can’t have an opinion about it, it just means you should read up a bit on it. I put a link up earlier (at 8:59) from Pavlena Tcherniva who is an MMT economist that details one proposal for the US. If you look at it you will realize some of the work and thought involved. Obviously, getting anything like this passed into law to become a program is going to require a lot of work and even if we can get something like it that they call a Jobs Guarantee, it might not be all that similar.

    51. Paulo Marques says:

      Leftwinghillbillyprospector:
      “The BIG advocates I have conversed with argue that a Jetsons-style future will be here very soon (as little as 10 years say the most extreme advocates) ”
      This is just pure Kurzweilian nonsense. AI is great at doing tricks, but is easily fooled by changing 1 pixel in a image. In the right context, it’s already amazing and incredibly useful, but we’re far away from general usage. Electrical production and storage is not there either. Ecological damage mitigation will be a nightmare.
      That’s before getting to Bill’s area: there aren’t many who can afford to buy it, so the effects of scale don’t exist.

      Henry Rech:
      “So you put people out of work hoping they will be re-employed in the booming private sector?”

      I’m new to this, but I believe the idea is that most of the people in a JG would go elsewhere for better pay and a more fulfilling work, cutting wages if necessary. Presumably, real freedom of work choice would improve work conditions, otherwise other laws could come into play.

    52. Neil Wilson says:

      “So you put people out of work hoping they will be re-employed in the booming private sector?”

      The other way around. When people are hired off the Job Guarantee by a booming private sector, the spending on the Job Guarantee stops.

      If you like you can consider the Job Guarantee to be the ‘default’ employer of everybody, and the private sector bids people away from that if they can make a profit doing so. That keeps labour relatively expensive while sustaining demand and prevents capital to labour substitution. That then drives productivity via market share effects.

    53. Neil Wilson says:

      “I don’t like the idea of one pay rate for all JGs.”

      What justification is there for different rates. How do you decide them?

      Once a JG is in place you have full employment, which means then for one person to have a higher rate there has to be a tax transfer from somebody else.

      At that point you have created a traditional public sector job where the differential to the Job Guarantee rate has to be justified in democratic terms.

      And that’s how you justify different rates. If you want to pay certain people more, put the tax proposal to the population and see if they accept it.

      The Job Guarantee doesn’t just discipline private sector wage rates, it requires public sector wages above the job guarantee rate to be justified politically as well.

    54. Patricia, says:

      Thank you Jerry and PhilipO for your suggestions. I will certainly read them. I don’t think I will reply to these blogs anymore. MMT answers all my questions about how money works and I read and listen to it as much as I can, but quite frankly at 79 I am too old to be roared at. It is not good for my health!!

    55. Jerry Brown says:

      Oh Patricia, in the comments section on the internet most everyone is about the same age- usually about 14 or so it seems :). Its actually generally nicer at Bill Mitchell’s blog than other econ blogs. Don’t let it stop you from expressing your opinion.

    56. Raoul says:

      “If you like you can consider the Job Guarantee to be the ‘default’ employer of everybody, and the private sector bids people away from that if they can make a profit doing so. ”

      As I see it, this might run against the reality of private economy employment seeming increasingly not viable for anyone but already market winning ventures ( http://www.nber.org/papers/w23687 https://slate.com/business/2018/01/after-all-the-talk-about-a-u-s-skills-shortage-the-real-problem-may-be-an-employer-shortage.html ).

      Looking back at prior industrial revolutions, we passed general education (and work week time reduction), in a sense permanent stimulus, as a response to structural change: An economy where physical labor is not harshly limiting output anymore, so people might as well not just do whatever their parents used to back when about anyone had good enough capacity to build muscle to get whatever work done.

      Now that we increasingly solve mental labor shortages in production and delivery of additional copies, it might be useful to consider a basic income as a progression of general education. In the sense that a basic income ensures that people can be more entrepreneurial, now that we’re increasingly moving away from work in production and delivery of additional copies (unless we go down with wages and up with workloads indefinitely.)

      As for different rates in a potential JG model: To some extent, individual hardship can justify individual distinction in compensation. As much as one might easily end up compensating those who least enjoy their roles the most. Already a problem in the first labor market, if you look at the pay rates that open source development manages, or that women dominated fields manage. As much as it’s not a bad thing, people working without feeling special hardship, but instead more positive notions. Enabling people to work for free if they want to do that (while maybe collecting donations or premium services, if they care to do that), that is an agreeable direction to take, in my view. Also makes sense from an Adam Smith-esque direction. Consider his focus on ‘ensuring cheapness of provision’ then ‘all people benefit’ in his view.

      Of course there’s always going to be some ‘presentation’ of one’s efforts or projects, though taking ‘variable pay’ out of the picture doesn’t change the fact that on some layer, ‘presentation’ is essential to actually chose what is supportworthy. ‘Variable pay’ actually allows for a decentralized, democratic mechanism, if money that can be used to pay others is readily available to all.

      There’s also a semi-related problem to observe with ‘modern’ care work: Commodification nowadays increasingly strips it of the personal qualities that make it preferable to care work done by robots. In my view, the long game of care work really is ‘friendship’, assisted by technology, because that’s what people really want when resisting against the prospect of having a robot care for the children or elderly. People enjoy relations characterized by mutual giving and giving back (but necessarily not proportionate giving and giving back.)

      Just some food for thought I hope!

    57. Curt Kastens says:

      Dear Bill, Neal and Jerry,
      I agree with Raoul’s comments above as to why different pay rates COULD be justified. I was about to write something similar. Maybe the counterarguements outwiegh his points. Maybe in Austrialia or Northern Ireland were people love each other and do not have guns anymore people can accept others making the same wage as them even though they do much eaiser work. I think that in the USA though when Joe who is helping to clean sewers in Phoenix becuase there is a flu epedemic and lots of people called in sick from the city work force finds out that his cousin in Maryland is tworking in an office transfering hisorical documents to a dogitail format for the same pay he is likely to go postal.
      I will watch or read the link that Jerry provided later today. I will say that this post did a good job of poking holes in the BIG. None the less one of the things about the JG that troubles me at this point is the idea that the government (society) will give EVERYONE a job who wants one. EVERYONE includes people who have become socially disfunctional or who have physical or mental handicaps.
      Such people certianly must be cared for. But especially for SOME OF those who have become socially disfuncional it seems to me we will be doing them a favor and a society a favor just to give a BIG and let them stay home and do what ever they can with the SMALL amount of income that they recieve.
      SMALL amount of income might seem cruel but the higher the payment is the more people there will be that will want to take advantage of it even if they have to do one and a half Corpral Clingers do get it.

      Bill, you are an economist, who have written and spoken millions of words over a life time giving great thought and defending your thoughts concerning MMT. Well millions of other economists have spent a life time defending their pets too. Yet 99% of them have wasted our time.
      So you say that people such as Patricia and that pehaps includes me too should do more research before making criticisms. But the thing is I am sure that if I read your complete works of millions of words I would discover that you have repeated yourself over and over and over again. I know I have and i have only written tens of thousands of words about my pet. Most people do not have the time to become economic historians. You get the opportunity to mold people like Patricia and myself by repeating your well rehearsed songs to their comments and questions. It might be years or even decades before the results become apparent. When Patricia says that you need to do more work on
      the job guarrantee what she means is that you need to do more work explaining how a worker doing work under the JG program will not be seen as a parasite by those not in the program. When such views are wide spread it will as Jerry says make the program politcally unachievable.
      You do not need to convince me of that though because I do not believe in democracy anyways. I believe in rule by a central committee of dictators who are capable of acting like Mahatma Gandhi, or Thomas Paine, or Toussaint Louverture and or Ghengis Khan depending on the situation.

    58. bill says:

      Dear Curt Kastens (at 2018/04/05 at 7:43 pm)

      To work as a macroeconomic stability policy, the Job Guarantee can only have one wage. Sorry. It is not a job creation program but a stability framework. It simply loses its basic qualities once a wage structure is added. Then it becomes regular public sector employment and you lose the anchor.

      As your comments re Patricia from NZ, I was not annoyed. I was pointing out that if you want to seriously engage in public debate about ideas that have a long history and literature, then it would seem appropriate that you, first of all, familiarise yourself with the literature.

      The claim that the Job Guarantee, as envisaged is simply workfare, which was Patricia’s assertion, revealed that very little of the literature has been accessed before that assertion was made. I do not find that an acceptable position for progressives to take. Education is freedom.

      As for your ‘parasite’ reference, that is another one of those basic errors that come up when the Job Guarantee is discussed. We have covered that misconception many times and we cannot cover every angle every time we mention the Job Guarantee.

      best wishes
      bill

    59. Chris says:

      “Protectionism” it’s all the rage!

      Jamie Dimon, the head of JP Morgan, has warned American politicians not to drive the world economy into a new protectionist era.

    60. Raoul says:

      “The claim that the Job Guarantee, as envisaged is simply workfare, which was Patricia’s assertion, revealed that very little of the literature has been accessed before that assertion was made.”

      I find myself to agree yet disagree here in a sense. It’s certainly not ‘simply’ workfare, however if it tries to press useful work into a less effective format, while treating similar things unequally, namely societally valuable work that is hard to integrate with the JG concept, then there’s a quality of workfare at play to the extent that people are made to participate less effectively than they could otherwise participate in the greater society, given a more flexible support system.

      There’s also a concern to consider in that market work is increasingly uncertain, unprofitable, as the article/paper I refered to earlier might indicate, meaning JG offerings could quite easily compete for workers in the real economy, and coming from a country that has some nascent features of a public employment sector (certainly quite neoliberal in execution, though. Lack of democratic feedback in the public work measures being the prime issue, though there’s more general problems present as well.), the solution here has been to require workers to take any private market job, even if it’s temporary and welfare dependence is maintained on the job. So there’s some pratical shortcomings there.

      While at the same time not being particularly supportive of people trying to actually start a business. While that was initially intended, these features were cut fastest, and in the first place, they weren’t supportive of treating similar similarly, they were not supportive of people working work that is societally important but not (intended to be) profitable. While the public jobs were perfectly fine being that way. This is insulting to all the people who want to get going with making the world a better place, isn’t it? So a grassroots democratic feature in the choice of public work (that further empowers people to act where they see need, where they are particularly inclined to help more than others, as a matter of sympathy (the basis for social capital)) seems like something to emphasize.

      I like to compare the UBI to the JG in this particular way: An ‘ideal’ JG might result in enabling people who want to work, to work precisely as a UBI would have em work. This doesn’t say that a UBI would be the same in all other aspects, like it wouldn’t automatically be counter cyclical (that would have to be an aspect of the financing or of additional support systems), though I consider the work aspect to be an interesting benchmark. If you ask people about a public work offering and what they’d want to do differently/instead, there’s good information in there, in my view.

    61. Raoul says:

      “There’s also a concern to consider in that market work is increasingly uncertain, unprofitable, as the article/paper I refered to earlier might indicate”

      Note that I don’t mean ‘unprofitable’ categorically here, just tendencially increasingly further down the ‘high risk – high reward’-road. Today, many of us don’t have the support to commit to multiple 5 year startup cycles with unkown outcome, and the funding seems to have picked up on the growing uncertainty
      https://techcrunch.com/2017/11/30/theres-an-implosion-of-early-stage-vc-funding-and-no-ones-talking-about-it/

      Now countercyclic stimulus could certainly help to make the ‘reward’ very worth it, though I’m not sure that people and credit institutions have all that much of a desire to go fund project after project on credit till it eventually might pay off a whole lot. Instead, it appears to be a feature of existing market winners to increasingly have the capacities to act that way. Now you might say that e.g. Amazon is using other measures as well, like buying up ‘competition’ (though technically they’re not. They just buy market winners in non competing sectors and convert em into elements of the amazon ecosystem), but I don’t see the problem go away so easily that Amazon has buckets of money, and a platform that people know of and use, with a potential market penetration that non-platform companies can only dream of.

      I think the challenges we’re facing here are to be taking with particular seriousness! But maybe that’s just me.

    62. Curt Kastens says:

      So here goes,
      I just read most of the link that was provided by Jerry. Now perhaps my comments are a waste of the readers time as many here will have spent much more time than me having discussed this subject of the JG. My own view is that I am old enough to know what a job is and I am old enough to know what a guarrantee is. In my view that makes me qualified to make some comments on what little I have read up until now.
      First of all, to work as a macroecomoic stability policy a JG can have only one wage. Well if that is the case I do not think that a JG of this sort will be enacted anywhere by anyone reguardless of whether or not it would function as an effective macro economic stability policy. I find it really stunning that a group of well educated people think that they can pay people the same amount of money for doing different jobs. In my expierience that is totally at odds with human nature. Yes there is a really large institution that pays the same wage for doing different jobs, kind of. It is called the US military but only a very few percent of people ever attempt to work for it. Furthermore even that is misleading because there are many bonus paid for the really difficult to fill positions. Not only that there are pay increases based on rank, much like one would find in typical public service employment.
      Second of all ALL JG Employment as envsioned by this macroeconomic stability program takes away jobs from at least the public sector if not the private sector (which I do not care much about anyways). If someone goes in to the JG employment office and is offered a job working as a teachers aid, a school janitors assistant, planting drought resistant trees in Arizona, giving aid and comfort to the old, or giving aid and comfort to wounded Iranian veterans of the American backed Saddam Hussein`s war of aggression against Iran, or giving concerts in the park, that person has been offered a job that should have been offered as a regular government position. Therefore it automatically takes away a potential government position.
      If a job is worth doing it is worth doing by a government employee. If it is not worth doing it should not be done by even a person in a JG program because that person should be doing something else rather than wasting societies time and getting paid for it.
      If there are people who think that government employees sponge off those in private enterprise such people need to be reeducated in understanding that government jobs, with the exceptiion of the military jobs, are provide just as much benifit to the society as private enterprise jobs. People who fail to learn that lesson need to be first of all striped of their citizenship then buryed up to their waste in a layer of lava and up to their neck in a layer of sulpheric acid.

      Now I really like the JG part about bringing jobs to the people not expecting people to go to the job.
      I like this because it is a step towards eliminating the private automobile. The private auto is one of the prime culprits in creating the unsustainable environmental conditions that threaten human existance. I like the idea of the Unemployment Agency becoming the Employment Agency instead.
      That is not really a very radical idea. Germany has been doing it for decades.

      But the article that Jerry linked failed to convince me of one other thing. That is that the armies of unemployed people around the world can be employed by their goverments with out a significant increase in spending for things other than wages to purchase the raw materials and capital equipment to build, improve, and maintain infrastructure. Yes more people can be employed in more labor intensive sustainable agriculture, as aids to the elderly, and other jobs that require little capital investment. But lets have a show of hands and see how many people think that a government can guarrantee everyone a job without capital investment?
      OK now that we have established that we need capital investment to reach full employment how much capital investment does the USA, or the UK, or Austrialia need? What ever the amount is for every pound of iron or aluminum, or pine wood that is used by such countries they have denied the opportunity of The Congo or Bolivia to used those resources. So if every country has a job guarrantee which I admit they should and we greatly increase the amount of miners and foresters to meet the demand, how long can the earth meet the demand? When the earth can not meet the demand for every country to meet its needs and desires with out any kind of international coordination WHO IS GOING TO SACRIFICE their well being once it is obvious that such coordination is neccessary for some people not to sacrifice their LIFE.

      To me that question brings up a closely connected discussion. It was determined on the link that Jerry provided that 15 dollars per hour is the neccessary wage in the US for a worker to make enough live with dignity. I figure that is probably correct since at the current time it is quite difficult for most Americans to live with out an automobile. But I think that in addition to the structural changes that westerners need to make to live sustainably on this planet with billions of other people changes in what many westerners consider the characteristics of a life with dignity need to change.
      My accusation is that millions of westerners have to be reeducated to understand that oats were the breakfast of the Roman army and therefore the breakfast of champions. Millions of westerners need to be reeducated to understand that with a pair of work shoes a pair of snow shoes and a pair of dress shoes Columbus whent from Venice all the way to Peking and back. Once they start to relearn these things they might start reexamining thier consumption habits. Wages in a western country should be low enough to discourage living like we are all in Hollywood and it is 1969.

      The idea that people need work and need to work is a good one. Obviously people should be paid for their work so that they can buy the things that they need. Those things can not just be given away.
      They must have a price on them or there would be no mechinizum to signal to a consumer that resources are a scarce commodity. But seriously I like my job guarantee much better. If you are unemployed you will get a letter in the mail a few days later that will tell you where and when to show up for your next job if you have not found another one by then and what you will be paid.
      You will show up for that job with a smile on your face if you value your life.
      Unemployment will not be possible because everyone will be drafted in to a paramilitary organization on at least a reserve basis. No it is not democratic. Our democracy is an illusion anyways. That democracy should even be a goal in a reasonable society is a sacred cow that should have been slain long ago. Most people that I know will quickly come to the conclusion that such a society would opperate like North Korea. No if the members of the central committee are capable of acting like Gandhi, or Paine, or Louverture, or Gengis Khan it will be much more like MASH, or Gomer Pyle, or McHales Navy. Nothing has ever been seen like it before or since.

    63. bill says:

      Dear Curt Kastens (at 2018/04/06 at 12:30 am)

      Instead of writing your long comments why not read the literature on the Job Guarantee.

      All of your “accusations” have been answered, analysed, ‘done to death’ by MMT authors several (if not many) times over the last 25 or more years.

      The Job Guarantee is a ‘buffer stock’. For most it is not a permanent station in life. It can only operate as a buffer stock with a single price.

      best wishes
      bill

    64. Curt Kastens says:

      OK, I did not make “accusations” I made “observations”. Your observation that essentially I need to shut up and read could be interpreted as a way to shame me in to sllence. I spent my morning reading some of your recent blog posts filed under job guarantee.
      Here is one thing that you wrote
      And the really detailed literature on the Job Guarantee does not exist in the blogosphere. That is the problem of confining one’s knowledge set to the Internet.

      (Tweets, blogs, etc are shorthand communications. In my case, the shorthand might be longer than others, but it is not a substitute for my academic work.

      Rather it is a teaser – to encourage people, where possible to engage with that deeper work where possible. If that is not possible, then at least the blogs provide a vehicle for telling readers that such work does exist and the ideas presented in the blog – in streamlined form, are evidence based.

      In my case, I try to run a half-way house as well. That is why my blogs are longer than the offerings of other bloggers. The material I cover is so contested that I feel it necessary to provide deeper explanations and more intense evidence so as not to be dismissed as yet another soapboxer. Whether than works is another matter but that is my intention.)

      I like many others do not get paid to do academic research. Yet it could be interpreted as an insult that such people can not judge basic ideas that do not require a degree in advanced mathematics.
      Furthermore you said that you wanted to make the your ideas available to a wider audiance. Is a wide audiance not people like me who do not have time to academic research? That this topic has been done to death in the past is really an irrelevent comment.

      There is a lot that I would like to add but in an effort to keep it short I will just ask one itsy bitsy question. Why do you think that a MMT job guarantee needs to be countercyclical?

    65. Curt Kastens says:

      OOPs I got my parentheses in the wrong spot to highlight what you had written.

    66. PhilipO says:

      Curt,

      ” Why do you think that a MMT job guarantee needs to be countercyclical?”

      Come on now Curt,,,,, Really?????

    67. Curt Kastens says:

      Philip,
      No, seriously, let me move backwards a bit.
      If I were an economists and would have replied to my own comments own comments from O dark 30 I imagine that I would have said something like the job guarantee is a bufferstock it can only work with a single WAGE (Price). For most it is not a permanent station in life. If the jobs are permanent rather than mostly temporary then these workers will not be available to private businesses to employ when they are needed by private business. There will be a labor shortage which will drive wage rates which will make national businesses less competitive in an international market place and which will give workers more money in their pockets and therefore more claims to the corn on the cob and the calamares which the business owners want to have all to themselves.
      Therefore I ask the question why try to create a system that meets unreasonable objections of economists on the conservative side of the isle rather than a system that meets the reasonable objections workers on the left side of the Isle. Maybe there actually is a good reason to meet their objections rather than mine. But I would like to hear them rather than be told to go and find them myself because that is asking people to pay a deposit to enter the game which many can not afford.
      And if the response is these are the good reasons that the system is designed to be a buffer stock,
      such as number one it is anti inflationary I can use a very basic knowledge of MMT to point out that there are other ways of controling inflation.

    68. Mike Ellwood says:

      Curt Kastens says:
      Friday, April 6, 2018 at 20:25
      OOPs I got my parentheses in the wrong spot to highlight what you had written.

       
      @Curt, please take this as a friendly tip:
       
      If you want to quote someone else (either another commenter, or part of one of Bill’s articles), you could use the HTML blockquote tag, i.e.
       
      <blockquote> ahead of the quoted text. and </blockquote> after the quoted text.
       
      In your comment at Friday, April 6, 2018 at 20:23, it’s really not clear to see what is your personal text, and what it is that you are quoting.
       
      I hope this helps.

    69. Curt Kastens says:

      Mike Elwood,
      Thank you, I am trying to figure this out for next time.

    70. PhilipO says:

      Curt,

      No, you don`t Curt, and I certainly don`t mean to be rude. I am not an economist, therefore I won`t feed you fodder with which to extend argument unrelated to the direct question. The question was:

      ” Why do you think that a MMT job guarantee needs to be countercyclical?”

      Now, were I an economist, I would simply repeat Bill`s response…..”To work as a macroeconomic stability policy, the Job Guarantee can only have one wage. Sorry. It is not a job creation program but a stability framework. It simply loses its basic qualities once a wage structure is added. Then it becomes regular public sector employment and you lose the anchor.”

      I would then have to ask, and purely out of concern, if you know of any macroeconomic stabilisation policy which is intended to be pro-cyclical.

    71. PhilipO says:

      Sorry Mike :(

    72. Curt Kastens says:

      I am asking why is a “macro economic stability package” more important than putting people to permanently to work. Also if it is not a job creation program why is it called a job guarantee?

      Now you added the part that maybe I do not understand. You wrote once a wage structure is added then it becomes regular public sector employment and you lose the anchor. What is the anchor?

    73. Jerry Brown says:

      Hello testing this out,

      …..”To work as a macroeconomic stability policy, the Job Guarantee can only have one wage. Sorry. It is not a job creation program but a stability framework. It simply loses its basic qualities once a wage structure is added. Then it becomes regular public sector employment and you lose the anchor.”

      hope it works!

      Hey it does! Thanks Mike! This will be very useful.

      Curt, a program that created productive jobs for all unemployed people would be a good thing as far as I am concerned. And if they were at least as productive (created as much value) as they cost, and at the same time paid a living wage that allowed people to have a decent life, then probably most people would agree with that.

      The problem is that the chances that we can create jobs for all unemployed people that fit that criteria are pretty slim. The Job Guarantee recognizes that at least some of the jobs created under the guarantee will not be as productive as they cost, especially in the opinion of ALL citizens who value different things differently. So the productivity of a Job Guarantee Job is not necessarily equal to the real cost to society of providing a living wage plus benefits to the employee- which would not be the most desirable way to have a permanent career for most people- at least in my opinion.

      Now if it turns out that the particular Job Guarantee ‘job’ happens to provide a surplus over cost then perhaps the government will vote to make that a permanent position and fund it just like they do normal public jobs under their regular budget.

      However, even if at any particular time it turned out that every single Job Guarantee occupation was creating a surplus or equal value to the real costs of the salary, one of the characteristics of capitalistic economies is that they are inherently cyclical in nature. Despite many attempts throughout history to solve the problem, capitalistic economies manage to screw up and have recessions where people get laid off from their jobs and cannot find other satisfactory replacement jobs. And the opposite of recession, the boom periods, where the economy experiences demand in excess of the ability to produce and inflation becomes a problem. This is where the Job Guarantee would excel- by counter acting these cyclical behaviors of the economy so that we can more often be in the zone where the economy is functioning so as to serve the interests of society. That is what ‘counter-cyclical’ or ‘macro economic stabilizer’ means.

    74. Jerry Brown says:

      Curt Kastens, you ask “what is the anchor?”

      At the present time without a Job Guarantee, the economic policy of the United States is to maintain a reserve of unemployed people in the economy to maintain a semblance of control over inflationary pressures. That is the current ‘anchor’ for prices. It is an immoral policy in my opinion and it doesn’t even work well. The Job Guarantee would replace this reserve of unemployed with a reserve of employed people through the Job Guarantee. Bill has shown how this would actually be more effective as an ‘anchor’ for prices. And it certainly would be a far more ethical policy than keeping people out of work just to try to prevent inflation is.

    75. PhilipO says:

      Sorry Curt, I`m out. I could never handle the “wrong`un”

    76. Curt Kastens says:

      Jerry,
      Ok now we are getting somewhere.
      Figuratively speaking this site is the Bill Mitchell and Associates Law Firm. The firm has a very important case pending before the court. It is MMT against all the others in the case of economic stability. The readers here are the jury. It is the job of the law firm to present their case effectively not the job of the members of the jury to go a virtual or real law library and figure out what the law firms case is. Is a member of the jury does not buy in to the firms case it is the fault of the firm not the juror.
      So now let us get to that case. The only thing that I was unaware of was that the army of unemployed people was refered to as the anchor (for inflation). Bills plan is cetianly better than the current situation. I am still troubled by the aspect of the temporary nature of the jobs. First of all from an economic standpoint there are lots of construction firms that lay off workers in the winter time. Society is subsidizing these firms now as those workers can collect umemployment benifits during the winter. Yet with a temporary job program those firms would still be gettng subsidized with the government taking over the costs of employing those people those people in the winter. So I think that the firm lawyers should be able to understand that some jurors would interpret this as just making it even easier for businesses to be able to draw on a pool of temps. Yes they would have to pay these temporary workers 15 or 18 dollars an hour to lure them away from the job guarrantee but that is a bargin for them considering that they are paying much more than that to the private temp. employment agencies when they use them. That is why I was shocked that these jobs are designed to be temporary. Ok now on further reflection I can see that it is at least a win win situation. The low skilled workers get higher wages and the companies get a more dependable workforce.
      But if we should have learned anything from MMT it is the government can afford to give everyone a full time job. Hell in WW2 the government gave 17.5 million people EXTRA a full time job in a population of less than 200 million. This argueent that we need to have a program that counteracts the cyclical nature of capitalism seems to be placed out of proportion to its need. The links that you and other have given have demonstrated the really destrucitive nature of unemployment to society.
      Inflation by compairson is a piece of cake. In fact those who think that 4% annual inflation is a threat to the nation should be stripped of their citizenship. Assets rise in value along with the level of inflation. OK some assets more than inflation and some less but it all averages out. The only asset that really takes a hit are checking account and savings account balances. Many workers do not have much in those accounts anyways. The most important asset most workers have is their skills. Then their house and cars. No problems there. Some are lucky enough to have private pension plans no problems there. So the inflation side of a booming economy really should not count for billy jack. Furthermore tax rates can be used to reduce private demand.
      Then there is a human cost to giving people temporary employment. Changing a job is a quite stressful event. No perhaps not as stressful as unemployment. But why encourage something with negative side effects IF it can be avoided.
      So I think that with these additional considerations in mind the emphasis should be on permanent jobs. Of course I know that in many countries government jobs have been given out based on politcal patronage. But that is another discussion.
      Now getting back to the one wage fits all kinds of work. It is said that this is neccessary or you lose the anchor effect. Well honestly I do not really understand that arguement yet. But that is not vital for the moment. What is vital is that if the job guarantee focuses on permanent jobs would that not make the anchor effect really irrelevent? Then even if it was still relevent that is only one consideration. Another consideration is that one wage reguardless of the type of work being done breaks a taboo. Now I am not a defender of taboos in general. Hell one of my favorite pass times is pointing out how stupid it is to run a government based on the idea of one person one vote, or its main competitor one dollar one vote. But different wages for different kinds of work is a custom that I think is very defensible. Paying one wage for different types of work will breed thoughts of favoritism and even of being exploited. I therefore think that the advantages of a simple wage scale, with perhaps three possible wage rates, outweigh the advantages of one wage, until such time that I hear a better defence of the one wage idea and perhaps a successful attack on the wage scale idea.
      These are the obsticals that the firm has to overcome to gain another vote on the jury.

    77. Jerry Brown says:

      Curt, you and I might think that the government should be willing to employ people full time and create permanent jobs for them when they have no job. But you and I do not amount to a majority of voters in a country such as the US. Which is unfortunate from our perspective, but true never the less.

      So the Jobs Guarantee is a proposal that would have the government employ all people who wanted a job at least at a living wage. And it has a lot of work and theory behind it that shows that it nullifies the objections that so called ‘realists’, conservatives, supply siders, or whatever you prefer to call what is the de-facto establishment that presently runs things. And the Jobs Guarantee would actually do a better job at accomplishing what they claim the present army of the unemployed is necessary for! But a government Jobs Guarantee will NEVER satisfy what are the real objectives of the ‘capitalist’ class or the very rich, who prefer to have workers be desperate for a private sector job that only they can provide when that worker meets their standards of agreeableness first and then profitability.
      So you may legitimately ask why a Jobs Guarantee should be proposed if you are a socialist or communist and believe that society should have a more idealistic goal, more like Marx said, what was it- from everyone what they can, to everyone what they need? (something like that at least). But I would just say that kind of thing is far, far from being an actual proposal that would be supported at the ballot box, while a Jobs Guarantee is something that, while it will require a lot of work to get enacted, is a reasonable possibility in our capitalistic but somewhat democratic society. To put it bluntly, if we can’t get the government to provide a temporary job for people who find themselves unemployed- what are the chances we can have the government provide permanent careers for everyone unemployed?

    78. Some Guy says:

      Curt Kastens:Therefore I ask the question why try to create a system that meets unreasonable objections of economists on the conservative side of the isle rather than a system that meets the reasonable objections workers on the left side of the Isle.

      The problem is that you have your left and right and reasonable and unreasonable generally mixed up and reversed. The job guarantee needs to be countercyclical (a) because of logic, because of truth in advertising, because that’s what the word “guarantee” means. (b) because the demand of countercyclicality and a job guarantee and no unemployment (as in zero persons unemployed) is a perfectly reasonable and “productive” one coming from workers, from the “progressive” “left” (which includes Marxists, like uhhh Marx) not an unreasonable one from the “conservative” “right”.
      And the job guarantee is a program for employing people full-time in permanent, productive jobs, a permanent career for everyone unemployed who wants it. Thinking differently = not understanding the proposal, whose simplicity might repel the mind. Was writing a much longer comment in part critical of some of Bill’s statements here, was interrupted by Real Life, but some recent discussion make his (& PhilipO’s) exasperation rather easier to understand.

    79. Neil Wilson says:

      “I am asking why is a “macro economic stability package” more important than putting people to permanently to work.”

      The Job Guarantee replaces the current unemployment buffer with an employment buffer doing socially acceptable work for the Living Wage. That is the ‘default job’ which we all do – unless the private sector make a better offer.

      Once the JG is in place the private sector will only do that if the efficiency of deploying capital allows it to make better use of labour than the social sector.

      Consider Uber for example. Once the JG is in place you can let Uber do its think and automate taxi-driving out of existence. Because anybody displaced would just take a local Job Guarantee job instead.

      Similarly Uber wouldn’t be able to get anybody to do taxi driving for any less than a living wage, which means that in the meantime they could not unfairly compete with existing taxi firms by playing the ‘we create jobs’ card.

      Overall competition works better, capital is deployed more efficiently and decent firms win when the ‘parasite economy’ is eliminated. Job Guarantee eliminates the parasites by simple competition.

      We will know Job Guarantee is working when crappy businesses start moaning and dying and decent businesses investing capital start smiling about the increased demand they’re getting.

    80. Kathy Heyne says:

      @Patricia Thursday, April 5, 2018 at 8:39
      ” Oh Bill I don’t like the idea of one pay rate for all JGs. No No No. That would be seen as the old working for the dole at just a different pay rate.”
      I understand why that worries you, but the idea is to set the pay rate to the minimum wage, not unemployment benefits, and for that minimum wage to genuinely ensure a decent standard of living. It would force the private sector to compete with the JG sector. If it wanted to attract and keep the cream of the available labour, it would have to offer better than the minimum wage and/or conditions. If it didn’t need the cream, it would just have to offer the minimum wage and conditions, too. What it couldn’t do anymore is what it does now- offer less than the minimum wage to anyone it considers less than cream.

      Oddly enough, your fear of one pay rate for all set at entirely inadequate levels is exactly what I fear with UBIs. The figure I hear bandied about the most is $13000 US, $18000 AUD: that’s the dole. And since the aim is to abolish huge sections of the welfare system and all the jobs that go with its administration, there’d be a hell of a lot more people on the new UBI dole.

    81. Patricia, says:

      Thank you for replying Kathy. Now I understand the JG better and I can see how it would force employers to maintain at at least a living Wage for their employees. And yes, I can see why it is better than a UBI which while I liked the idea of I did wonder whether it could be used by employers to increase their profits by not increasing wages when they should. And if a UBI wasn’t indexed to wages or inflation then it would be just a waste of time to have. The JG is certainly more elegant

    82. Kathy Heyne says:

      @Andrew C says:
      Wednesday, April 4, 2018 at 12:32
      “The exhausting arguments I’ve had with two UBI ALP-supporters on this has been tiring”
      Ditto. The most frustrating one I get is real life UBI trials and proposals are completely irrelevant, because UBI is a HUGE CONCEPT, so I must take it on faith and ignore all the real world evidence, (except when UBI proponents cite the same evidence as proof of UBIs benevolence, of course- then I must prick up my ears and be totally impressed! :-)

      Their argument for UBIs basically translates to the link below, but they just can’t see it:

      https://youtu.be/gls09kO-8DE

    83. Mike Ellwood says:

      I just noticed a recent paper on the Job Guarantee:
       
      http://www.levyinstitute.org/pubs/wp_902.pdf
       
      Working Paper No. 902
      The Job Guarantee:
      Design, Jobs, and Implementation
      Pavlina R. Tcherneva
       
      Levy Economics Institute of Bard College
      April 2018

    84. Curt Kastens says:

      Mike Ellwood,
      That is a more complete link to (than) the link that Jerry provided earlier. Jerry’s link went to the Q and A part of the link that you just provided. As I was reading I knew that I had read all of this before. The advantage of your link is that it gives some concrete examples and history. The advantage of Jerry’s link @ 8:59 on April 5th is that it is not 67 pages.

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