J.D. Alt: GROAF & CONTRAKSHUN

J.D. Alt took issue with some Naked Capitalism reader reactions to various economic policies, both MMT and otherwise, that seek to promote growth. He is of the view, as he explains below, that those readers must therefore be pro-contraction, which we here call “austerian”.

Although I’ll let those members of the commentariat speak up, but my take is that Alt, intentionally or not, has straw manned many of the issues. The first is that a significant portion of readers are concerned about resource constraints, climate change, species loss, damage to the oceans, and other forms of environmental degradation. They don’t see anyone in a position of influence even beginning to make the sort of changes needed to put advanced economies on a more sustainable trajectory. And in my view, Alt’s answer in his post isn’t even remotely attainable, and certainly not in the time frames he suggests.

The second issue, as anyone who has been following the data knows, that the growth in income post the crisis has gone entirely to the top 1%, and the rest of the population in aggregate is worse off. In keeping, the new jobs created have been almost entirely poorly paid service jobs, and even more heavily skewed towards part-time work than ever before.

So my take on the emerging “groaf” and “jawbs” meme at Naked Capitalism is that they reflect well-warranted reader cynicism about proposals to fix the economy. More of the same will merely produce “groaf” which is more income inequality and more environmentally destructive programs like fracking, and “jawbs” which are better than no work but low dignity and badly paid, for entities that treat workers like toilet paper and too often engage in intrusive oversight and impose unrealistic output targets. Obama is the chief salesman for “jawbs”, shilling for badly-paid, sweatshop-condition work in Amazon warehouses as “middle class jobs.”

And as much as I respect the work of MMT scholars and advocates for their persistent and effective efforts in educating economists and the media about monetary operations, credit creation, and the role of reserves, I must confess I get annoyed with some of their other policy recommendations for their Olympian disconnect with the realties on the ground. Yes, a job guarantee is an elegant concept for setting a floor under the price of labor. I have no doubt it would be very effective if it were ever implemented. If we lived in a world of selfless, intelligent technocrats, it would have a decent shot at getting a hearing. But that is not where we are now. As a policy recommendation, it is simply not going to get any traction.

And with all due respect to Alt’s post below, talking about writing sonnets and growing orchids is the wrong place on the Maslow hierarchy of needs for the overwhelming majority of the population. Frankly, this sort of talk is insensitive and demeaning to people who are struggling to pay their mortgages or medical bills or are new college grads who are fighting depression because they can’t get a job. It makes them seem even more inadequate for having to fight so hard simply to survive and try to carve out some time and psychic space for friends and family.

As a result, those who are frustrated with the current political framework are left with no practical steps they can take to try to make things better, not even ones they can call their Senator about or advocate via a letter to the editor in their local paper.

I can see why many readers are looking to community-level action and organizing as the only possible hopeful avenue. It seems to be the only venue left where individuals or small groups can make a difference, given the corruption of pretty much all of the channels for state or regional action. And that focus is also a good defensive posture against the odds that our highly complex and very fragile economic system starts fragmenting sooner than the authorities dream possible.

By J. D. Alt, author of The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally posted at New Economic Perspectives.

Recently I came across a passage from John Steinbeck’s Grapes of Wrath: One of the Joad-clan migrant farmer characters, upon learning that “there’s a newspaper fella near the coast, got a million acres,” replies—“If he needs a million acres to make him feel rich, seems to me he needs it ‘cause he feels awful poor inside hisself.”

I don’t think I’ve ever heard or read a more succinct description of the underlying reality of the income-inequity issue that has moved to the front page of our national dialog. As part of that dialog, I keep trying to frame a case for radical change that the status quo will actively embrace—for the simple reason that if that were to happen, the radical change itself would be more likely to occur—but also, I realize now, because the status quo “feels so awful poor inside hisself”, it will never embrace radical change unless it believes the change will make it feel richer—and, finally, because from my perspective MMT uniquely makes this paradoxical set of relationships possible.

My most recent attempt at this type of framing was picked up from NEP and reposted by Yves Smith on Naked Capitalism. The commentary there was fascinating and eye-opening for me. People said elegant and remarkable things, such as: “It’s a fallacy of composition to imagine that what we can’t afford individually is affordable collectively.” (From my perspective, that sentence is nearly as precise in pinpointing a fundamental “truth-confusion” as the comment by Steinbeck’s migrant farmer.) But the biggest surprise, really, was how sick everyone was of something called “GROAF”. It shows you what a neophyte I am, personally, in this whole conversation because it took me the longest time to understand what “GROAF” is—and I probably never would have gotten it had Lambert Strether not come along in the commentary and said, “Well, groaf means jawbz.” Even then it took me a second.

So, I suddenly realized, here I am framing an argument that if we use MMT principles to provide FREE universal education to every American—beginning with Pre-K early learning, and continuing all the way through college or technical/trade school—the status quo will reap huge benefits because there will be so many more successful EARNERS able to buy its products and services—in other words, suggesting that we “grow” the consumer base—only to discover that, for a lot of smart progressive people, “growth” is anathema: “GROAF, GROAF, GROAF, JAWBZ, JAWBZ, JAWBZ”—they’re sick of it!

If they didn’t want “GROAF”, I decided, what they must really want is “CONTRAKSHUN”. But I couldn’t figure out exactly what that would accomplish—educating fewer people so they’d be less capable of earning money to buy goods and services—except it would put the status quo in its place: So there! status quo, we’re going to starve your poor, selfish need to feel rich by making ourselves less educated and poorer! That makes a lot of sense.

After mulling it over, I suddenly had this thought: What all this was really about might be that there’s an important distinction between genuine “growth” and “GROAF”—and between meaningful work and “JAWBS”—and that must be what the folks at Naked Capitalism were riled up about. They interpreted what I was proposing as being insensitive to this crucial distinction. In fact, however, what I was proposing was headed in precisely that direction; I just hadn’t gotten there yet.

To illustrate where I think I was going, here is an excerpt from the novel The Architect Who Couldn’t Sing. As background, the story is about a man who was an idealistic, prize-winning architecture student, then an early volunteer to Vietnam who, upon returning from a horrific and disillusioning war experience, spends the remainder of his life hiding, and writing, in a riverbank encampment deep in the Olympic National Forest. He is tracked down and discovered by a son he was unaware he had even fathered, and the son—telling the story—slowly unravels the mystery of his father’s vision, ultimately realizing it has become his own as well . At one point, the son shares an excerpt of his father’s writing which, as the story unfolds, becomes a central theme of the vision:

THE WORLD CITY PROJECT

It is too late, now, to save Wild Nature. What we can do, if we’re lucky, is make enough room for it to save us.

By the year 2030—the year our grandchildren will be graduating from college and beginning their young families and careers—the world population is expected to have nearly doubled to 10 billion souls. It is difficult to imagine this mass of humanity without also imagining a dense, high-rise, urban lifestyle of towering apartment blocks and skyscrapers—nature all but paved over, people living in the sky, traveling back and forth from glass-walled residential towers to brightly illuminated vertical markets and offices without ever touching the ground. The concept of vertical farming has even been seriously introduced! It is a vision in which man’s alienation from nature is virtually complete—the natural ecosystems diminished to a few verdant remnants remaining in national parks and preserves which must then be gated against an onslaught of tourists.

A simple calculation, however, puts the necessity for this imagined vertical density in perspective: If the projected population of 10 billion people were theoretically organized into families of three, and if each family were given a five thousand square foot “homestead” on which to subside—more than enough acreage and solar exposure to grow a subsistence diet of food—the entire human diaspora could be accommodated (with land left over for transit corridors, schools, markets and recreation fields) within the boundaries of the U.S. central plateau—the great plain, that is, between the Rocky Mountains and the Mississippi River.

But the most remarkable thing to imagine, were such a “World City” to be built, is that the rest of the earth could then revert to the wild ecosystems of God’s original nature: Except for strategic pockets of mining and agriculture, the West and East coasts of the United States, all of Canada, all of South and Central America, the entire continents of Africa, Europe, Asia, Australia, and the archipelagos of Indonesia—all could exist in a state of natural wilderness, without the presence of Man.

The political discipline to create such a “World City”, of course, is impossible. Even if it were accomplished, bands of “explorers” would likely escape to colonize and exploit the new wilderness, and one could imagine world history, in an almost comical parody, simply repeating itself. (Except, that is, for one small detail which we’ll get to in a moment.) But the notion that there is more than ample room for urban growth to occur at a very low-rise densities, and (if properly conceived and organized) that such a horizontal order could make room for a vast and contiguous replenishment of our wild ecosystems—that notion is suddenly placed there on the table as a viable option for consideration.

But why should we even consider it?

The first reason is social fairness. Vertical architecture was invented by the socialists and communists to efficiently create housing for the masses. It was quickly adopted by the free-market capitalists because of its efficiency in generating profits. In each case, however, the results were unfortunately the same: the greed and corruption of concentrated wealth and, for the common man, the sorry struggle of being existentially homeless.

The second reason is that small detail mentioned earlier: in the year 2030, as it turns out, the post-industrial infrastructure and civilization we will have bequeathed to our grandchildren will begin rapidly to run out of fossil fuel. The great vertical cities we are imagining they will be living in will begin, one by one, to go dark. Human civilization will irrevocably have begun—after its tumultuous, two hundred year sprint on the adrenaline of fossil-fuels—an inevitable slide back to the steady-state of Nature herself, the state that derives its energy for work from the only source there ever was: the Sun.

I would argue that developing the micro-energy systems and new, local-based subsistence technologies that would make the World City possible—as well as the social networks and collective institutions that might enable it to peacefully thrive—would constitute a genuine “GROWTH” of the human endeavor which is qualitatively different fromthe mere “GROAF” of the status quo. Further, I’d argue that the work necessary to create the World City (or some part of it)—and to keep it peacefully operating on a sustainable basis—constitutes a daily effort that is qualitatively different from simply creating “JAWBZ”. The fact that this “growth” occurs by actually contracting the human footprint on planet earth represents a true understanding of “progress.”

Although the novel only hints at it, I imagine the real “growth industry” in the World City would be education itself—that having evolved into a society based on high-tech subsistence with a dwindling number of “JAWBZ”, we would “fill” our empty souls (rather than with the rampant, insatiable consumerism of carbon energy) with learning. Learning everything we can even after we thought we’d learned everything we could—learning way beyond college or trade school, learning how to cook French or Thai cuisines, learning how to dance (instead of just wiggling), learning how to write sonnets, deliver speeches, paint landscapes, throw and glaze and fire a pot, learning magic tricks with numbers, enough guitar chords to sing our favorite songs, how to read hieroglyphics, how to propagate orchids, how to build a telescope, brew sake, bake baguettes, build a tea-house with Japanese joinery where we can then learn to sit and be quiet for fifteen minutes each day.

I even think it’s possible, if we began immediately to build a Lifetime Educational System freely available to every citizen, that things would naturally evolve in this direction. The bit about the “successful EARNER” was just bait for the poor, empty soul of the selfish gene. But if we say that out loud, the status quo might get suspicious.

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57 comments

  1. mmckinl

    Entirely agree with your analysis Yves.

    J.D. Alt lives in a two dimensional panacea where earth has limitless resources.

      1. Adam S.

        I like Kuntsler, he definitely has introduced me to perspectives I never would have considered before. Even so, his articles recently seem to be too aggressively pessimistic, his tone seemingly having more to do with him being offended that his warnings and analysis are being ignored than our situation being so dire.

        I don’t disagree with him that the current consumption rate of non-renewable resources is unsustainable, but our current social situation seems less a function of running out of resources than the social and political decisions of how those resources are used and distributed. It seems like a real injustice by Kuntlser to dismiss Piketty’s work, which is focused on the current social situation in a historical context. Without this kind of analysis, it seems to me that change in the sense that Kuntsler’s advocating would be even harder to achieve.

        The culture of spectacular waste that we’ve internalized over the last century as a result of the massive surplus generated by industrialization won’t be combated without organization of regular people and a realigning of political objectives. I find it amazing the positive reception of people when I start, even in passing, suggesting that we might want to reorganize our current living situations to reduce waste and suburban sprawl. People I talk to seem to inherently intuit that what we’re doing is wrong, but find difficulty articulating their positions because those positions haven’t entered the public discourse for a multitude of reasons.

        It is groaf and jawbz which produce waste on an industrial scale, which I picture like a social cancer. If we continue to maintain current consumption levels without intelligently making decisions about how we distribute, use, and most importantly generate resources, I fear we’ll end up in the worst case scenarios that Kuntsler and others hypothesize.

        1. allcoppedout

          We teach helplessness and selfish ethics in economics classrooms. It’s obvious we should be building green power capacity and lifestyle. But we can’t, so learn a few of these maths tricks or you’ll end up with a jawb or a queue for one.

    1. Paper Mac

      Spot on. Anyone who talks growth without explicitly situating it within the context of the hard biophysical constraints imposed by resource depletion, climate change, and environmental degradation is not to be taken seriously.

      1. Foppe

        Yeah, I quite liked how David Harvey put it in the Enigma (2009), restated here:

        There are abundant signs, however, that capital accumulation is at an historical inflexion point where sustaining a compound rate of growth is becoming increasingly problematic. In 1970 this meant finding new profitable global investment opportunities for $0.4 trillion. Resumption of three percent growth right now would mean finding profitable investment opportunities for $1.5 trillion. If that rate of growth were to be sustained by 2030 or so we would be looking at $3 trillion. Put in physical terms, when capitalism in 1750 was about everything going on around Manchester and Birmingham and a few other hot spots in the global economy then three percent compound growth posed no problem. But we are now looking at compounding growth on everything going on in North America, Europe, much of East Asia, Latin America and increasingly South Asia, the Middle East and Africa….The implications socially, politically and environmentally are nothing short of gargantuan.

    2. MikeNY

      Me, too. Excellent summary of objections, Yves.

      As I’ve said before, trumpeting GROAF! is just a distraction technique, a protection device for plutocrats, so people don’t look at the criminal wealth concentration and corporatocracy in the US.

      I think it was Banger who recently voiced a desire for ‘radical devolution of power’ to the local level. I’m increasingly sympathetic to this POV. Our Federal Government seems just too big and too byzantine to be accountable to the people, too dangerous to us and the ROW. “Democracy doesn’t scale well.” Indeed. What are the chances of running into my senator in the cereal aisle at the Safeway, and telling her what I think?

  2. Moneta

    as he explains below, that those readers must therefore be pro-contraction, which we here call “austerian
    ——–
    The well known argument of either you are with us or against us.

    I want growth but I believe that MMT will just increase the number of resource wasters such as the 1 trillion health care IT project. IMO, it’s the last 2 decades’ method of printing on steroids.

    1. Vatch

      J.D. Alt’s false dichotomy, either growth or contraction, reminds me of something a very mediocre man once said:

      “Either you are with us, or you are with the terrorists.”

    2. jrs

      Or they favor redistribution. Isn’t one of the reasons groaf became so popular anyway is because it was a way to promise improvements in the conditions of the poor etc. without redistribution? Isn’t that (and maybe compound interest) why the whole western world got hooked on groaf as the center of it’s economic theories, because it’s no threat to the rich (or compound interest)?

    3. lyman alpha blob

      Alt seems to mean well but things like this –

      “If they didn’t want “GROAF”, I decided, what they must really want is “CONTRAKSHUN”. But I couldn’t figure out exactly what that would accomplish—educating fewer people so they’d be less capable of earning money to buy goods and services—except it would put the status quo in its place: So there! status quo, we’re going to starve your poor, selfish need to feel rich by making ourselves less educated and poorer! That makes a lot of sense.”

      -suggest he hasn’t thought things through completely.

      Rather than educating fewer people, maybe we could just have fewer people and educate all of them. And maybe those fewer people could make things that are designed to last rather than making disposable crap or products designed to be obsolete in a year or two, wasting precious resources unnecessarily. Sure there would be a contraction of the total GDP, but we’d all have a lot more elbow room and leisure time if we didn’t spend all our time working for low wages just so we can replace the car that gets us to work every few years when it breaks down right after the warranty runs out. Then we wouldn’t need massive vertical cities to warehouse everybody. And most of the jawbs currently available are just busy work anyway – “marketing” comes to mind as a colossal waste.

      When i was younger there used to be a TV repairman in my small town of 600 people. When was the last time anyone had a TV (or anything) repaired rather than just tossing it out? Technology is great but it doesn’t need to be incorporated into everything to the point where no one who isn’t an IT pro knows how to fix anything anymore.

      The human population will not expand forever as the planet simply can’t support it. Having one child per couple would reduce the population by half in a few decades. Or we can continue as we are and nature will reduce the population for us, and maybe by a lot more than half and a lot quicker.

      How to convince enough people to stop reproducing so much is the tough part and I am not particularly sanguine that it’s possible. if we have a collapse before we make some serious changes, any better world I or Alt or anyone else thinks is possible won’t be happening for a long long time.

      1. Moneta

        Sure there would be a contraction of the total GDP, but we’d all have a lot more elbow room and leisure time if we didn’t spend all our time working for low wages just so we can replace the car that gets us to work every few years when it breaks down right after the warranty runs out
        ———-
        Instead of making crap, we could be making less stuff with incredible detail which does not consume all that much more resources… think Chapel Sistine…

        One of the biggest problems with North America is that we do not value social sciences and arts enough. The arts we admire are mass produced where only a few make money… think Madonna.

  3. Moneta

    The political discipline to create such a “World City”, of course, is impossible. Even if it were accomplished, bands of “explorers” would likely escape to colonize and exploit the new wilderness, and one could imagine world history, in an almost comical parody, simply repeating itself.
    ————-
    It’s not socialism or capitalism that are the culprit. It’s physical realities. All land is not created equal. Who gets to live in the California high-rise on the beach vs. the one in Calcutta with a view on the old shanty town? Then who gets the 2nd floor unit vs. the 30th floor unit?

    These economic/political systems were created to try and deal with earth’s unfair distribution of resources but they always seem to emerge from theory when the devil is in the practical details.

  4. Jim Haygood

    People said elegant and remarkable things, such as: “It’s a fallacy of composition to imagine that what we can’t afford individually is affordable collectively.” (From my perspective, that sentence is nearly as precise in pinpointing a fundamental “truth-confusion” as the comment by Steinbeck’s migrant farmer.)

    I believe you meant TROOF-confusion. But thanks for the shout-out!

  5. taunger

    Well, I think Alt does get it a bit, he just may not be the best communicator. He goes on to specifically site small-scale energy, which is a community or smaller level effort. Furthermore, I think that your dismissal of gardening orchids and cooking French cuisine disrespects the working poor; yes, they want to pay the mortgage and put food on the table. And they want leisure time. Are we to just leave them to the vagaries of cable TV once the mortgage is paid? And by “them”, I mean “me”, as a financially unsound, hugely indebted 30-something. I want to pay the rent, and then I would like the time to go take tango lessons with my likewise financially unstable girlfriend.

    1. tim s

      I agree with you, taunger, that efforts towards the arts are one of the best ways to keep your spirits up when you are otherwise feeling mighty low, and lord knows many of us are feeling mighty low.

      We are certainly at a major transition point, and with options for changing that which is outside of you being VERY limited, and for many people the only thing left for people to draw on is what is inside. Crushing realities are born easier when there is something inside to work toward and which gives you joy. If you have joy, you are rich in spirit. One rich in spirit can push through the hardest times and the deepest despair – or better put, that richness carries the person through. This richness is also felt by those around you and can create change in and of itself.

      I admit that some of the examples given such as cooking Thai or raising orchids rings of hoity-toityism, but plenty of people in difficulty have found comfort by losing themselves in gardening, writing, making music, etc. according to their inclinations, for even a brief time. This respite may make the difference between making it to sleep to rest for another round of the good fight, or slitting their wrists. These arts are not intended to keep a persons in denial, but only to add something positive to what may be entirely negative days/weeks/years from their perspective.

      Do we still try to make the change on the many issues brought up in this blog? – absolutely, but we must sustain ourselves at the same time, because it is unlikely that we will see the fruits of our labor in anything on a large scale, if we ever see them at all. I wish the best to those few who will effect large scale change, and I will help given the opportunity, but the average person will not have that satisfaction.

    2. Yves Smith Post author

      And why do you think I suggested this “disrespects the working poor”? First, it’s class bias on YOUR part to treat growing orchids as something the working poor might not do, and I never mentioned French cooking. Alt did. Second, you can be money stressed at much higher levels too. Think of middle class people with kids and a sudden decline in income, or someone in the family gets seriously sick and someone gets stuck with a $75,000 medical bill they though was covered by insurance. This is a “struggling to survive” problem and you can be under serious financial stress even with much nicer trappings than the working poor have. The job market is unstable and hostile and people can take large reversals very quickly.

      Personally, I think it makes people more dispirited to hold out a fantasy: “Shouldn’t you be deeply involved in your favorite leisure activity” when you can barely figure out how to get through the week or month, money-wise. That’s what I was reacting to.

  6. Banger

    There is a failure here to communicate. My guess is that we would all agree about what a convivial society might be like. Alt made the distinction between groaf and growth and I agree, more or less with at least the general idea of a World City. I believe that we do have the technology to create such a scheme as I’ve argued here before.

    However, I don’t agree that throwing money at “education” is going to be particular positive. In theory, it makes sense, but our current educational system from pre-K to grad school needs drastic reform. Let’s go back and take a look at the evidence. What society is in denial about climate change where almost half the people don’t believe in evolution? What kind of educational system is that? And let’s not go on from there because the record is too depressing. If I’ve found out anything (and all my four children went to either highly-rated public schools or, with one child, a top private high school, is that educators rarely understand child-development, neuroscience nor learning theory or at least those that increasingly write what they are forced to teach. On balance, not only is there a serious lack of intellectual knowledge but Americans, at least, are by any standards moral imbiciles. We need a drastic change in collective consciousness–we can start here by really listening to each other and emphasizing where we agree.

    1. Matt

      I agree that the current educational system requires drastic reform and that this is where we should focus our efforts. One of the problems with the internet is that the specialization of sites leads to intelligent people spending a great deal of time and effort discussing/debating 1% degree of separation…

      1. Banger

        Good point Frank. What you describe about with internet communities is a result of people craving connection and acceptance and is actually healthy. What is not healthy is not clearly acknowledging how valuable it is to feel at home in places like NC–only by including these needs can we start to move beyond just noting what is going on which is ok but does not approach the heroic effort required to help change the career of the current power structure.

        1. Moneta

          Interestingly, every time I come to this blog I mentally prepare myself for attacks. I come here for the sounding board and not to feel good about myself.

          To feel good about myself, I have my hobbies where my work is judged my me and those close enough to care.

          1. Banger

            I think we ought to prepare ourselves for both attacks and for support–we agree here far more than we disagree. I do think some people come to this sort of forum to fulfill ego needs–but this can also be a way of establishing connections and not just contesting–we complain about the nature of society but it is precisely this view of going on attack and trying to pin the other guy that is creating serious and measurable dysfunction in our world.

    2. allcoppedout

      Education is a bigger problem than we imagine. It is primarily functionalist when there are many other ways of addressing the world, and also ridden with learning discipline. One of the problem in change is we forget the soaked-up meanings of terms may not describe what we want.

  7. washunate

    Oops, I did one of the data heavy posts too early this morning :)

    So let me keep the issue of government entrenching inequality short and sweet:

    Does MMT propose treating JG employees like preschool teachers and substitute teachers and school cooks, are we going to treat them like econ professors and health specialties professors and law professors?

    http://www.bls.gov/news.release/ocwage.htm

    1. telebob

      MMT does not propose anything, it describes. The description it supplies shows that we have a much wider fiscal policy space than is currently understood by the mainstream. Various MMT proponents hold different opinions on how to use that space.

      JG, defined here as providing socially valuable work at a living wage to all comers, where-they-are and how-they-are, would force private employers to treat their employees at least this well. Notice that this provides a much needed investment in our tattered and frayed commons, while alleviating financial stress on the left tail of the income distribution. Stacking functions is a key component of permaculture philosophy.

      1. washunate

        “…a much wider fiscal policy space than is currently understood by the mainstream”

        ??

        The largest legal system on the planet would like a word. So would the largest national security state. And the largest healthcare system. And somewhere we find the space to fund academia and fossil fuel and agribusiness subsidies, too. And then there’s the horrific nature of our IP law…

        We have net deficit spent over $10 trillion in the Bush-Obama years. What exactly is not understood by the mainstream?

        1. telebob

          Do you contest the idea that “mainstream” economic discussions about social insurance programs center around “affordability” issues? (To a lesser extent “moral hazard” is also invoked, but mostly by those on the right fringes, not the “mainstream.”) If you want to argue that “mainstream” discussions don’t reflect the actual policies adopted by the government, I’m with you, but that’s a straw man vis my prior comment.

          I also answered your JG question in my previous comment, and will only add that the JG is designed to provide a wage floor that the private sector would have to account for in setting its own wages. This would positively affect preschool teachers and school cooks, and might even translate upward to professors, though that is not the primary intent.

          1. washunate

            Alan Greenspan and Ben Bernanke are about as “mainstream” as you can get. Both have unequivocally stated the ability of the sovereign government to credit bank accounts and generally guarantee any level of cash payments over any time frame. The debt ceiling and related talk is kabuki theater, not actual disagreement.

            MMT is barking up the wrong tree if it is trying to convince people in DC that we have more fiscal space. Everybody knows we have lots of room to print currency – the question is of desire, not capability. When somebody blathers about not affording social insurance, what they are saying is they don’t want to spend money on social insurance. The proof is in the pudding – the massive net deficit spending of the past decade plus spanning multiple Presidents and Congresses.

            And no, you didn’t answer the JG question. My question was whether your preferred JG would be treated like preschool teachers or econ profs? The response that MMT doesn’t propose anything doesn’t answer that, nor does the generic living wage response.

            I want to know how many JG employees one econ professor is worth. And whether the TSA and the DEA and SWAT teams and so forth count as socially valuable work.

  8. washunate

    FYI, there’s a fun Freudian slip in the link back to NEP. It currently goes to the ‘forget the 1%’ article rather than this one. That’s particularly funny when talking about education, since much of the disparity is within the 99%. It’s the educated technocratic elites in academia, medicine, and law that enable most of the day to day oppression and injustice in our society.

    Alt, you do know that President Obama is a huge fan of destroying public schools, right, through programs like NCLB and RTTP amidst the general philosophical approach of public private partnerships?

    1. Yves Smith Post author

      Fixed the link, thanks!

      Yes, we know that Obama is in favor of the “privatization” of schools.

    2. allcoppedout

      It’s the educated technocratic elites in academia, medicine, and law that enable most of the day to day oppression and injustice in our society.
      Just worth saying that again Wash. There is a problem at the other end of society too. Rabbles at the top and bottom.

  9. Nobody (the outcast)

    The diagnosis is pretty simple, IMO. What we have is this. What we need is this. Bill Mitchell (a dreaded MMTer) gets it.

    The path to it is daunting and does require a drastic change in collective consciousness. Permaculture design is the only system I’ve come across that gives practical solutions on how to get there but the ethical basis has to be adopted which makes it a non-starter to most who have adopted a Western lifestyle.

    The ethical basis is
    1. Care for the earth
    2. Care for people
    3. Reinvest surpluses to further the first two.

      1. washunate

        Yeah, we almost all agree on the desired outcome, the vision, of caring for the planet and our species. The question is, how does a JG do that in a society that produces tens of millions of crap jobs for the masses while subsidizing outsized consumption by a few in academia, law, medicine, finance, media, and elsewhere?

        1. Banger

          By organizing into communities rather than continue living in a culture of narcissism–that process (the results or success thereof doesn’t matter) will by itself start to fix things and restore our society to some semblance of health.

        2. Nobody (the outcast)

          JG jobs that contribute to realizing the vision/outcome can only be a good thing. How many people would quit their crap jobs to do something that contributes to the vision/outcome? I say a couple million in the U.S., easy. Add to that a good portion of the millions of unemployed or underemployed and you have a multitude for positive action. One vision of the JG is as a locally directed program that the Federal Government “writes the check for” and it could never be perfect. But as Yves wrote, that is not where we are now, not even at the local level in most places.

          1. washunate

            That’s the interesting discussion, in my mind, of implementing a JG in the US. How many workers are we talking about? The better the wages and working conditions, the more people will leave the crap jobs. A real job guarantee to everyone wanting work at decent wages in a good working environment will easily attract 50 million applicants. 100 million is not out of the question. Tenured professors and doctors and judges and DEA special agents and police chiefs and so forth are great jobs precisely because they make so much more money than most workers and have so much more control over their work environments than most other work environments. Who wouldn’t want the same kind of decent wages and good working conditions?

            The national security state is something on the order of 5 million-ish workers, and we have a terrible time trying to manage that, in terms of everything from fraud to prisoner abuse to sexual harassment. How are we going to build out 10 or 15 or 20 more of those? That to me is where MMT advocates will need to head next if they want to make policy proposals – trading monetary theory for management theory.

            As far as locally directed programs, I would really encourage looking at the recent NYPD twitter outreach program. Local government of our major cities is ground zero of authoritarianism in America.

            1. allcoppedout

              So how would we get to MMM Wash? Descartes (who was wrong anyway) could see it was going to take time to re-evaluate everything against his theory. So you needed something in the meantime. He came up with trust in god.

              These days we might come up with an honest accounting system, which would mean outlawing off-shore. And maybe real-time electronic spending which we could presumably control kin real-time. ON the JG maybe we could use colleges and armed services in training on work that needs doing as we build the skills fir a bigger greening project?

              1. washunate

                My short answer would be rule of law, something that MMTers tend to talk around when discussing aggregate demand or the particular notion from Alt here that the psychopaths will embrace change if we just ask for it nicely.

            2. Calgacus

              The better the wages and working conditions, the more people will leave the crap jobs. A real job guarantee to everyone wanting work at decent wages in a good working environment will easily attract 50 million applicants. 100 million is not out of the question.

              A) As I have pointed out before, you wildly overestimate the size of the JG. Off by an order of magnitude from the MMT economists’ number-crunching.

              B) It would be a VERY GOOD THING if you were correct. You are hyperoptimistic – basically impossibly so – compared to the MMT economists. You are saying that US society is currently being deprived of this colossal number of people’s work.

              You are probably ignoring the “multiplier” effect of the new federal spending. The private sector would expand and almost certainly hire more people than JG would. Also ignoring the increased productivity of the last 40 years, the fact that working conditions were better back then in many, probably most ways, etc. In other words, we’ve done it before in more or less half-assed ways when we were poorer. No reason to not do it again, better, now that we are wealthier.

              1. washunate

                The issue is distribution, not aggregate wealth.

                “Off by an order of magnitude from the MMT economists’ number-crunching.”

                That cracks me up. Are you aware that there are 6 million Americans just under supervision right now? 60 million Americans make less than $20K a year. Millions more aren’t working at all.

                Which calculation exactly are you using? The one that supports the drug war, doesn’t provide health insurance, pays people $9 an hour, and keeps in place the myriad inefficient existing welfare schemes that trap people in cycles of poverty and dependence rather than giving them currency to spend as they see fit? I mean, sure, if I was in an LIHTC property, I wouldn’t want to take a government job, either, if it meant I made too much to keep the housing tax credit for the developer but too little to afford the actual market rate.

                1. Calgacus

                  It’s just a fact that your estimates of the size of a JG are much higher than the MMT economists’ more plausible and grounded ones. Though my guess – which they’ve suggested is quite possible – is that these are underestimates, though not by nearly as much as you say. But this just makes the argument for the JG stronger.

                  They’ve made various calculations and educated guesses – based on various wages. From the minimum wage to something like $15/hour I think they get something in the neighborhood of 5-10-20 million people on the JG. “Perhaps a big JG would on average employ 5% or 8% of the working age population” How BIG is BIG Enough: Would The Basic Income Guarantee Satisfy The Unemployed? (with 150 million workforce, this gives numbers around 10 million for a big JG) Sorry couldn’t quickly dig up a better source.

                  Are you aware that there are 6 million Americans just under supervision right now? 60 million Americans make less than $20K a year. Millions more aren’t working at all.

                  Yes. So? The point is that I or the MMTers don’t disagree with these facts – which seems to be the assumption in your response. It is the logic, going from these facts to a 50-100 million person JG – logic which you don’t even state, because it is probably assumed to go without saying – which is suspect.

              2. washunate

                P.S., if you want a really interesting part of the rabbit hole on how stupid (sorry, inefficient) our various anti-poverty schemes are, try to reconcile HUD’s requirement that people in Continuum of Care (COC – formerly SHP) units have leases in the name of the subcontracting grantee (ie, the local government or community nonprofit administering the program) with the IRS requirement that people in LIHTC developments have leases in the name of the resident.

                Of course, the insanity is even clearer just with the basic task of trying to read the Internal Revenue Code or the HEARTH Act or whatever.

  10. Chauncey Gardiner

    We err in assuming key infrastructure will continue to last indefinitely without effort or resource outlays. I am concerned about our long-term capacity to maintain existing complex physical infrastructure in an environment of resource constraints and ongoing attacks on public education.

    As an example, a large dam on a large river in a western state recently developed a large crack. The dam is not only a source of hydroelectric power for the region, but water from its reservoir is also necessary for irrigation of agricultural crops in a wide area. Further, the dam is immediately upstream from a heavily contaminated nuclear waste site near the river and several cities lie further downstream.

    Repairing the dam is not a simple undertaking of applying concrete patch. The rock that underlies the dam is permeable columnar basalt. An engineer who is knowledgeable about the situation told me there is likely a significant volume of water flowing under the dam, and a shifting in the ground under the dam has likely resulted in the deterioration.

    Although I believe the necessary remediation and repairs are well underway in this particular instance, I am particularly mindful of Murphy’s Law and its corollaries with respect to key infrastructure. The stakes can be high.

    1. allcoppedout

      In a sense, we are trying to fix problems with the tools that caused it. “Money” severely restricts how I cost anything, In some areas, like costing a murder enquiry or MBA course, this is pretty easy as long as you can work out resources and count. The same is true of building a coal-fired power station. “Money” seems to work rather well. Yet in all such use of “money” we can find other issues. In deciding to do the murder enquiry, that’s £2 million not going on, say, the problems of Fiona Pilkington (who killed herself and her child after years of anti-social behaviour). Has MBA teaching done is any good at all? And we don’t want the coal-fired power station. “Money” doesn’t help us do the right things. Money is only a convention, so how might we change the convention to help us do the right things?

      Now is this question like one that might arise in science where on might expect communicative rationality (and no doubt some petty jealousies)? Or is it more like challenging a religion with instruments of torture and other silencing techniques?

    2. Banger

      On the positive side, tools, materials and techniques are much better today than in the days infrastructure was built so things might not be so bad in the long-term and critical fixes might be less expensive. On the other hand, is anyone really minding the store? If we are so focuse on the short-term then we might worry whether people are keeping track of these things or not.

      We have been lucky. We have had few disasters–roads are not so bad, considering their age and use, bridges are not falling down, there has been no additional financial collapse. Climate change, however goes on unabated, as I wait severe storms and possible tornadoes to hit our area.

  11. financial matters

    JD Alt is right on the mark as usual. An amazing communicator and a review of his past posts should be mandatory reading for anyone who has anything to do with political economy.

    And he respects NC readers. Especially a certain ex-cop.

  12. allcoppedout

    It would be interesting to see what a few of us could really set out from experience Banger. Blogs are sadly limited, not least least by trolls, SNERTS and such. Infrastructure creeks on in the UK. I’m pretty sure we have better ways to “see” a lot of what is happening. I’m now appalled by the shiny and managerial things in an almost immediate vision. I suspect some kind of perceptual censorship has hold of us.

      1. allcoppedout

        I bet whoever came up with that one Skippy, must catalogue their massive CD collection in hexadecimal code!

  13. allcoppedout

    I’m pretty sure no theory tells us what to do in any of this. Much of the scholarship is very partisan and nearly all of it based on a couple of centuries of failure, and little regard for modern conditions and real history. I’d guess it comes down to revolution – ad that’s what really scares me. Without a plan for after ‘Paradise spring’ we look doomed. I don’t think we have much clue on what an economy after honest accounting would be like. And frankly, we can’t see what our economy might be based on now if there had been no coal, oil or gas and we had mastered solar power instead.

    I would have thought it important in a democracy to be able to choose to go green without some peculiar economist religion getting in the way as easily as groaf-jawbs does. We always get incomplete stories. Green power is more expensive so it can’t compete with burning the planet. And yet we could all use green power and run power costs out of the competitive equation. When it comes to a vote I want the small (death with dignity) and the apparently impossible on the list. My guess is nearly all this is about a new form of democracy, not economics. I believe we could simulate such a democracy across the world and that in the first place this could be done in a business model.

    1. Lambert Strether

      “I believe we could simulate such a democracy across the world and that in the first place this could be done in a business model.” The simulation — and why not swap in the simulation, when sufficiently tested — would be a form of Gene Sharp’s Method #198: Parallel sovereignty. That is what the IVCS would be for, IMSHO.

      What would the business model look like?

      * * *

      Style note: I think groaf-jawbz reads as even more stupid, grandiose, and malevolent.

  14. Vatch

    It’s a little late for me to post a message about this article, but this recent piece by Paul Ehrlich is quite relevant to the topic:

    Economists’ Growth Insanity

    He begins:

    Virtually every economist rejects the concept of limiting growth – by which they normally mean growth in GDP. As Larry Summers, famous as a major cause of the recent U.S. financial disaster, once stated, “The idea that we should put limits on growth because of some natural limit is a profound error, and one that, were it ever to prove influential, would have staggering social costs.” More typical of the intellectual contributions of mainstream economics, John Makin of the American Enterprise Institute recently asserted that “There is no magic bullet for stimulating long-term growth, which depends largely on persistent technological change and population growth.”

    Later:

    How does one explain that economists, many of whom have knowledge of mathematics, consider that 3% per annum is a “healthy” or “decent” economic growth rate? After all, a simple calculation shows that if the U.S. (or any other) economy grew at 3% for about 23 years, it would double in size. In less than 150 years the economy would be 100 times as big. Picture the drought situation in California or the air pollution in Beijing with a doubling of economic activity occurring in only 23 years. Then picture a doubling again and again every couple of decades. Is this the future we want for our children and grandchildren?

    It’s not long, and it’s worth reading in full.

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