Job Guarantee Versus Basic Income Guarantee

Yves here. I’ve been remiss in not putting this video from November on a discussion of the merits of proposals for a job guarantee versus an income guarantee. The talk was hosted by Dissent Magazine, Jacobin, and the New Economy Coalition, and is explicitly anticapitalist, so you may need to filter out the occasional ideological leap.

The participants were Alyssa Battisoni from Jacobin, activist Jesse Myerson, Darrick Hamilton of the New School, and Pavlina Tcherneva of University of Missouri, Kansas City. There are some strong moments. For instance, Pavlina begins her critique of a basic income at 37:00, and closes with, “if the issue is capitalism, you have to change property rights. Just allowing people to not work is not enough” (~45:30)

As much as many readers advocate the idea of basic income, I suggest you consider the results of the one time it was implemented in historically on a large-scale basis: the Speenhamland system, in early industrial England. As Karl Polanyi describes at length in his classic, The Great Transformation, the long-term results were disastrous for the laboring classes. I strongly suggest you read the long-form discussion here, but the short version is that the guarantee wound up lowering wages and serving as a subsidy to employers. From that post:

The experiment was the Speenhamland system, which was implemented in England 1795 and dismantled in 1834, was intended to make sure that country laborers had enough income to live. It was intended as an emergency measure to help the poor when grain prices had risen sharply due to meager harvests. The justices of Berkshire decided to offer income support to supplement wages, with the amount set in relation to the price of bread and the number of children in the household, so that the destitute would have a minimum income no matter what they earned.

Even though it was never codified as law, the Speenhamland approach was adopted in country towns all across England and in a weaker form in some factory towns. It was widely seen as a “right to live.” It was neither universal nor consistently implemented, but it nevertheless appears to have been fairly widespread. It reached its peak during the Napoleonic Wars, and was wound down in many small towns before it was effectively abolished by the new Poor Law of 1834. Not surprisingly, the Speenhamland system existed in its strongest and most durable embodiment in areas where the threat of violence by the impoverished was real. But another reason it lasted as long as it did despite the costs it imposed on local landlords was it kept the poor in place with their wages fixed at a bare subsistence level. Rural property owners wanted to keep workers from decamping to towns and cities in search of better paid employment. A smaller pool of local laborers would lead to higher wage levels.

Karl Polanyi explains how a well-indended program over time proved damaging to the very group it was intended to help. And it is critical to keep in mind that Polanyi is acutely aware of how treating labor and land as commodities is at odds with the needs of society.

Polyani details how the initial seemingly positive effects of the Speenhamland system became corrosive as it discouraged work by driving wage rates so low that it was economically rational to go on “the rates” as they were called then. Even so, per Polanyi:

The backlash against the Speenhamland system, which came via the Poor Law Reform of 1834, was the establishment of workhouses designed to force the poor to work. As Wikipedia explains: “The workhouses were to be made little more than prisons and families were normally separated upon entry.” “Outdoor relief,” which then meant aid to the poor without requiring that they enter an institution, was discouraged in the Poor Law Reform and then abolished in the 1840s. Polanyi again: “But….[t]he majority of the countryfolk…preferred any kind of existence to the status of a pauper.”

And the unwinding of Speenhamland was brutal. Again from our post:

The backlash against the Speenhamland system, which came via the Poor Law Reform of 1834, was the establishment of workhouses designed to force the poor to work. As Wikipedia explains: “The workhouses were to be made little more than prisons and families were normally separated upon entry.” “Outdoor relief,” which then meant aid to the poor without requiring that they enter an institution, was discouraged in the Poor Law Reform and then abolished in the 1840s. Polanyi again:

Never perhaps in all modern history has a more ruthless act of social reform been perpetrated; it crushed multitudes of lives while merely pretending to provide a criterion of genuine destitution in the workhouse test. Psychological torture was cooly advocated and smoothly put into place by mild philanthropist as a means of oiling the labor mill.

I’m sure you will have much to discuss!

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123 comments

  1. Brett

    Speemhamland’s only a guide if you’re arguing for a Negative Income Tax style approach to the Basic Income, versus the “stipend” variety. Tests on that type of thing since then have been more mixed – the trial projects with an NIT in the 1970s led to longer spiels of unemployment, AFDC may have led to long-term unemployment, and so forth.

    If you’re doing a Basic Income, then doing it that way is the wrong way. It’s better to do it the “stipend” route, mailing the same monthly payment to all citizens and legal residents 18 years and older. It’s much more expensive, but also has a broader base of support and no disincentives in terms of wages or work except insofar as weakening employers’ ability to use the loss of low-paying jobs to control workers.

    . . . All that said, the Job Guarantee is much more politically plausible in the US than the Basic Income, which has a better chance abroad but almost zero chance here in the US. Of course, it’s also more likely to be corrupted into a policy that lets states offer subsidized workers to employers, or that turns into “Workfare” – lots of the conservative-controlled states would love to turn their Medicaid programs into subsidized vouchers to buy private health insurance, for example. And as Matt Bruenig has pointed out, it’s poorly targeted due to two-thirds of the poor being of the “can’t work more” variety.

  2. alex morfesis

    Arthurdale west virginia…the “reedsville” project…those who dont even know there is a history are doomed to be crushed by it…we already spend 60 billion a year funding a jobs guarantee program…just the jobs are in keeping people in jail…30 grand per year times 2 million people… A basic opportunity is what is needed…not a job…not an income…an opportunity…and everyone should be able to tap a govt line of credit…few strings attached…five grand at a time…some people would game the system…but most would use it constructively…it would be non dischargeable in bankruptcy but also pay backable with community service opportunities for those who might hit a wall in paying it back…

    Burp…
    Being greek leads to too much trypto at first of year family…
    burp…dinner…

    Not gonna eat for three daze…

    1. Leonard Tekaat

      To the future Presidents of USA

      We need our children to understand that there is more to creating a great nation, and an inclusive economy than Liberty and Justice.” Our children should know that Liberty and Justice cannot be maintained without people being Responsible and Opportunities being available for people to succeed. That when people are irresponsible they lose opportunity.
      Our children should learn that all four of these cornerstones of our market economy and Republic must be emphased, and are necessary to return our economy, and nation to the best it can be for all of our children!

      How can we help our children learn these basic truths. I propose the words Responsibility and Opportunity be included in the Pledge of Allegiance they say each morning.
      This emphases Responsibility and Opportunity at the beginning of each day. Their teacher will have the opportunity to discuss the meaning of the words with her students. The Pledge would become more personal to our children because they would be talking about their futures. They will learn that they are responsible for making themselves ready for the opportunities that will be available to them in the “Land of Opportunity”

      The “new” Pledge of Allegiance

      I pledge allegiance to the Flag of the United States of America, and the Republic for which it stands, one Nation under God, indivisible, with Liberty, Justice, Responsibility, and Opportunity for all.

      Thank You
      Leonard C.Tekaat

      Sent from my iPhone

      1. tegnost

        Absolutely, look at bankers and how their irresponsibility led to less opportunity for them!/s, and if they say the pledge in a monotone drone kind of like the nicene creed then exceptionalism will also be a religious experience….also maybe some kind of simple hand gesture to accompany the rites of responsibility and opportunity, and not that silly “hand over your heart ” thing, there must be something that implies more assertiveness…. I agree with your assessment that a jobs guarantee has more opportunity for workers than the income guarantee, on the other hand there may be more opportunity for bankers with the welfare like income guarantee, as there is with food stamps…and of course there’s always beating the children who fail to toe the line, recalcitrance shouldn’t be tolerated after all this responsible effort put into central planning

        1. participant-observer-observed

          Bankers and the like are all for guaranteed income….so long as it is orders of magnitude and grotesquely greater than middle and working classes.

        2. tony

          The bankers are not irresponsible. They are predatory. If they had not built the political power to protect themselves and worked very hard and diligently they would be in prison.

      2. flora

        I’d take out the word ‘responsibility’ because that is the tag the neo-liberal project used to quash dissent. e.g ” it’s irresponsible to stir people up, it’s irresponsible to promote changes that would hurt profits, it’s irresponsible to unsettle established relationships…” Add to that the insinuation that being irresponsible is a form of irrationality (another neo-liberal project tag) and you have the perfect construct for shutting down democracy, reducing to something for private life instead of public contests. That’s how the neo-liberal project uses the word responsibility. Responsibility to what, to whom?
        ‘Justice for all’ is enough. To bad the current admin won’t apply it to banksters. Adding a word to the pledge won’t change that.

        1. flora

          for example: now that commerce and manufacturing and interconnections between govt and business are so complex it would be ‘irresponsible’ to let just anyone run for office, they couldn’t possibly understand the complexities. Or if an average person can run for office and win, then it would be ‘irresponsible’ of them not to let the experts write the laws; let Pharma lobbyists write the drug laws, let Hollywood lobbyists write copy write laws, let energy company lobbyists write environmental laws. Those lobbyists are the experts in their field.
          The neo-liberal project is already far down that path by using the idea of responsibility. It would be ‘irresponsible’ for office holders ,who aren’t experts in a field, to write the laws. The twist here is that while you may think the word ‘responsible’ implies responding to law and citizens and the greater good, the neo-liberal project see the word as a tool to shut out citizens.

          1. susan the other

            I think this describes Tcherneva’s cryptic reference to “property rights” which Yves points out. Vested interests exclude citizens so that in order to have more equity and equality those vested property rights, as well as all property rights, must be limited in a manner that promotes the social good. Otherwise I was left wondering exactly what Tcherneva meant.

      3. nothing but the truth

        in the current system, money is pure nothing, and the ones who have the power to create it give it to themselves, their friends, and future employers (the alternative is “deflation” we are told). For the rest of us, we have to “compete” and (these days, the buzzword) “innovate” to get access to the money.

        why was this so difficult to predict when the system was created in 1970?

        1. jrs

          Money is pure nothing, they get for free, and we do whatever they ask us to in order to obtain, mostly it’s a means of enslavement of us for their benefit.

  3. Jesper

    & the argument against JG is the current state of government. As is there is a limited JG in place: Join the military. Would an expanded JG be better or would it, as now, be abused by the esteemed elected representatives?

    As for one failed experiment….. In science one failed experiment means almost nothing. Repeat the experiment, examine the variables and then come with conclusions. But then again, Economy is not much of a science.

    The way forward is more likely to be the shortening of the maximum working time. It is what is called a compromise – the BIG proponents gets to work less and the JG proponents gets to share out the blessing of work.

    1. Skippy

      BIG is the corporatist solution, you just simplify all the currant gov subsidies like food stamps et al into a freedom payment every month, then get some consumerist liberty with it.

      JG on the other hand has more to do with democracy at a local and federal level rather than a stipend ‘doled out’ so you can shop a the company store…

    2. Bottom Gun

      Re the military being a job guarantee: I’d say your thinking is outdated on that. The military draws principally from the working and middle classes, in my experience. The least advantaged often don’t have the preparation to pass the ASVAB (basically an SAT for the military) and, I’d guess, are most at risk of being stopped by things like past drug use or legal issues. (Aside: from the other end, if you’ve grown up among the most advantaged, on the other hand, you have to be unusually mature and self-aware to hear a call to service among the din of typically safer, more conventional and better-paying options.) A LOT of the enlisted guys I met in the Navy were there in large part because they had more brains than money.

      There’s a compelling reason for this: we sure as hell are going to screen folks for academic achievement before we put them in front of a reactor control panel. Even the stereotyped “meathead” MOS, infantry, needs well-developed cultural and negotiation skills in this day and age (one of the smartest guys I know was a Green Beret sergeant). Military value depends on high-order skills now, and that trend is going to accelerate, not recede. This isn’t Eisenhower’s military planning to crush the Bundeswehr through sheer force of numbers anymore.

      I have to give some thought to BIG versus JG, but as a veteran I needed to make the factual correction.

      1. Jesper

        Both the JG and BIG are for the working/middle classes so I don’t see a disagreement here and therefore I don’t see a need for a correction.

        1. Bottom Gun

          Then what do you envision to cover the least advantaged? Would you structure BIG and JG to skip them over, and why? Would there be other programs in their place?

            1. Bottom Gun

              Actually, I do think there is a need for a correction. Your characterization of the military as a jobs guarantee program is an inaccurate throwback that hearkens back to things like Steinbeck’s description of Adam Trask, and in any event it only approached being true for white males between 16 and 35. More important, though, it is one example of a larger trend that augurs poorly for the implementation of any JG.

              The military’s current trend toward needing fewer people with higher-order skills is not unique. (In the military setting, there is a HUGE benefit that accelerates this trend: if I absolutely have to send a destroyer into harm’s way, I’d rather send one with three dozen crewmembers than one with almost ten times that many, as we routinely did against the Japanese.) We’re getting textile mills back in the USA now, but it’s no longer low-skilled work for lots of people: it’s much smaller numbers of high-skilled people to oversee automated processes. The joke down South is that you can run a textile mill with two guys and a dog. The guys are there to feed the dog, and the dog is there to keep the guys away from the machinery.

              So unless I hear more details, the question is: are we confident that we could find productive work for everyone, including those with the least education and job preparation? As both a businessman and a former federal official, I can assure you there are a lot of people I wouldn’t hire at any price, for any productive task. The headache and risks are just too great. And this trend is only going to snowball in the future: in ten years, I’m not certain I would want to hire anyone to drive my truck or flip my burgers when a robot will do it for far less, without complaint, and without any human obligations.

              How would we make a JG work in such an environment?

              1. Left in Wisconsin

                the question is: are we confident that we could find productive work for everyone, including those with the least education and job preparation?

                It all depends on how you define “productive.” There is all kinds of socially useful work to be done: caring for children and elderly, preparing for climate change, etc. I would call all of this “productive” but that doesn’t necessarily mean profitable for a private employer.

                A sensible JG program IMHO could get at two otherwise intractable problems: providing care to those who need it and providing employment opportunities to those the private sector chooses not to employ.

                Give anyone a year or two to develop work habits and the number of people a private employee would not want to hire (for lack of skills) would go way down, though the number they may not want to hire due to increased worker dignity and demands might go way up!

                1. washunate

                  That’s the interesting question, for me at least. What is a sensible JG proposal? From what I’ve seen, Wray, Mosler, Tcherneva, Firestone, and others have not bothered offering a concise summary in plain English of what they actually propose. Even the MMT primer at NEP doesn’t actually propose anything concrete in the section on “Job Guarantee Basics: Design and Advantages”(!).

                  That’s the opportunity that has been here for several years for MMT academic economists and other advocates: put out a specific plan to explore, discuss, and critique rather than just whining about BIG/UBI (and mostly ignoring universal unemployment insurance).

          1. jrs

            The least advantaged are the sick, the disabled, the retarded, the seriously mentally ill (so no least advantaged is not just someone who lacks a STEM degree or something). And no system will probably ever employ all of them, that is absurd. We have a safety net full of holes for them now (disability) and would need it.

      2. jgordon

        Well, military isn’t the only guaranteed jobs program currently in operation in America: there are millions of people gainfully employed in US prisons after all, and unlike the military prisons have no such high-bar requirements to get into. Considering the political climate of America, and “Jobs Guarantee” program that is more widespread will certainly resemble the prison/interment camp model rather than whatever else the idealists are imagining.

    3. cwaltz

      Teach for America is another example of a government “jobs guarantee.” How has that worked out?

  4. PlutoniumKun

    Just as an addendum to the comments on the Speenhamland system, as a corrective it should be pointed out that in the 1840’s in Ireland (where Speenhamland was never implemented to my knowledge), there was a form of ‘job guarantee’ in the form of what were known as Famine Works. These were created as a reaction to the way Poor Law houses were overwhelmed by the famine. You can see the results all over rural Ireland – little harbours in every bay and roads which go nowhere, built just to provide work for the poor and starving (something like 750,000 people were employed on these). I’m not aware of any deep academic work on it, but it was generally seen as a form of darwinism, whereby those who were relatively strong, or who more specifically had a physically strong male in the family, could survive through the income from those works. Those who didn’t, died.

    I confess not to having read Polyani on this, but from what I have seen and read about his writing on Speenhamland, the work is considered somewhat limited in that it did not take the totality of Britain and Ireland – in Ireland at the time the condition of the rural poor was much worse than in Britain and a very different system applied, not least because there wasn’t just class warfare involved, it was religious warfare too, poor catholics being seen as a strong threat to the nation. The Poor Laws were enacted in a very vicious manner in Ireland without any incentive from a non-existent Speenhamland system – hence I see the notion that one led to the other as dubious.

    1. Torsten

      Agreed it is unlikely the Speenhamland system led to the workhouses by some intrinsic logic. Most likely and causative was the development of railways in England which accelerated industrialization, urbanization, and the economic motivation to keep workers on the farms.

      1. Left in Wisconsin

        Not sure what you mean by “the economic motivation to keep workers on the farms.” One thing Polanyi makes clear is that workers did not voluntary leave rural areas for the lure of cities. They had to be starved out of their birthplaces. Same as now.

        1. Uahsenaa

          Scotland and Ireland (Ulster, at least), were also subject to “clearances” throughout the latter half of the 18th and early 19th centuries. They weren’t starved so much as simply removed.

  5. financial matters

    I’d say in ‘The Great Transformation’, Polayni came out more explicitly for a BIG.

    When talking about an economic Bill of Rights he said that ‘The list should be headed by the right of the individual to a job under approved conditions, irrespective of his or her political or religious views, or of color and race.’

    Also:

    ‘Compulsion should never be absolute; the “objector” should be offered a niche to which he can retire, the choice of a “second-best” that leaves him a life to live. Thus will be secured the right to nonconformity as the hallmark of a free society.’

    And he believed in a minimum wage or living wage not set by the market:

    “To take labor out of the market means a transformation as radical as was the establishment of a competitive labor market. but the basic wage itself, are determined outside the market.’

    —–

    Speenhamland was an experiment in England from 1795-1834. It was right at the beginning of the Industrial Revolution and society was trying to adapt from small rural villages where people generally looked after each other to large urban areas based on large manufacturing plants with more of a loss in social cohesion.

    From Polanyi:

    “The mechanism of the market was asserting itself and clamoring for its completion: human labor had to be made a commodity. Reactionary paternalism (Speenhamland) had in vain tried to resist this necessity. Out of the horrors of Speenhamland men rushed blindly for the shelter of a utopian market economy.”

    ———-

    Some of the more modern applications of a BIG seem to be showing good results and as Jesse Myerson points out in the video a BIG and JG don’t need to be seen as contending ideas but can be complementary.

    1. Lambert Strether

      “The right of the individual to a job” <-- How is that not "explicitly" coming out for a JG? I imagine they could be complementary, but I'm not sure how strong the analysis is supporting that, simply because there aren't many people working on the problem. The dividing line between the two could be fuzzier than we think, too. For example, we might consider the reproduction of labor power as not only work, but a job, and a job that qualified for the JG. Why not?

      1. financial matters

        Definitely. I think he was for both a JG and a BIG. For the JG part he favored the idea of the minimum wage not being set by the market. For the BIG part he did not presuppose how the money should be spent by the individual.

  6. craazyboy

    Still waiting for what the implementation would be of a “job guarantee program”. Like job description, employer name…stuff like that.

    Example:

    Keynes Enterprises, LLC

    Job 1: Dig ditch
    Job 2: Fill ditch

    Ya know, A bit of detail.

    1. Bottom Gun

      You’ve got a point. I think His Majesty’s Government has tried that repeatedly over the past few decades, with the result that, reportedly, (a) Japan has lots of bridges to marginal places, and (b) it also has 200% debt to GDP (and a rapidly aging population to try and cover that).

    2. craazyman

      It has to be an ecologically sustainable and feminist ditch and it’ll work.

      Professor Tcherneva looks pretty hot! She actually made some sensible points about money printing and the result of money printing. I had insomnia for a while last night so listened to it until I fell asleep.

      It’s hard to think clearly about reality if you’ve spent your whole life in a school. It’s hard to think clearly about humanity if the only ones you deal with are in your school and think like you. But if there aren’t any jobs, why leave school? It’s a circle, or maybe a spiral, or maybe a vortex, or maybe a volcano. If it keeps up, it’lll be a volcano. Always good to put the thinking caps on anyway. I give them all A’s for effort. The dude from the New School made some good points too I thought. Any sensible person realizes it’s not enough to urge scholarship upon people that have no money. It won’t matter for most of them. Unless they’re lucky.

      1. craazyboy

        Someday you just have to leave the nest and go out in the world. Print up some money, become a ditch digger boss for Keynes Enterprises, LLC and she’ll pay one guy to dig the ditch and another guy to fill the ditch. It’s carbon neutral, so their could be cap and trade credits in it too!

        BTW: I didn’t know they sound like Valley Girls at UMKC? What’s with that?

        1. craazyman

          If they made it a beautiful ditch they could call it art and they could be artists. That would change everything. Maybe they could sell it for a few million dollars and go to wine and cheese parties in Manhattan. You gotta think outside the ditch!

          1. optimader

            she’ll pay one guy to dig the ditch and another guy to fill the ditch. It’s carbon neutral…
            I think digger & filler need to poop in the hole for it to be Carbon Neutral. Put a part-time videographer and editor on the payroll to film it, if they poop in the hole also it ‘ll be carbon positive!
            Grow grass there, have a sheep eat it and give milk for making a nice artisan soft pecorino cheese to be served during cocktail hour at the MOMO gala art-film presentation of: “Digger & Filler”.
            The circle of life is complete!

            1. craazyman

              guys should stay away and let the women run the show. the women could even hire women guards. if a guy tried to meddle without invitation, he gets the Rhonda Rousey treatment. This is how Rhonda dealt with her boyfriend after he took nude pics of her, evidently;

              ***

              “The longer I waited, the madder I got. Forty-five minutes later, he walked in the door. He saw my face and froze. He asked what was wrong and when I didn’t say anything, he started to cry. I slapped him across the face so hard my hand hurt.

              After multiple expletives from both sides, Rousey wrote, she continued the altercation:

              “He wouldn’t move. I punched him in the face with a straight right, then a left hook. He staggered back and fell against the door. … I slapped him with my right hand. He still wouldn’t move. Then I grabbed him by the neck of his hoodie, kneed him in the face, and tossed him aside on the kitchen floor.”

              The fight ended after Rousey went to her car and he jumped into the passenger seat, grabbing the steering wheel. “I walked around the car, pulled him by the neck of the hoodie again, dragged him onto the sidewalk and left him writhing there as I sped away.”

              ***
              Wow. You really have to be a blockhead to cross your girlfriend if she’s Rhonda Rousey. The women can dig this ditch without the men. Stand back guys and don’t do anything unless you’re asked. if it doesn’t work, it won’t be your fault. it’s just a policy experiment anyway

        2. craazyman

          Also, didn’t you notice that none of them were funny. That shows how hard it is to make economics jokes that are funny. I think an ecologically sustainable and feminist ditch is pretty funny, but it’s not funny enough to be a joke by itself — unless somebody actually dug it! hahahah

    3. Torsten

      Let’s not be facetious.

      In the U.S. there are plenty of jobs that need doing but that capitalists don’t want to do. For starters:

      1. Fill in the ditches, er potholes.
      2. Let’s scratch # 1 and build a modern rail system. It’s greener.
      3. While we’re at it, get the petroleum out of agriculture. Hire more farmhands.
      4. As for the gender-neutrality of the JG, where petroleum *is* needed, women can handle machinery as well as men. The only place brawn is needed is in the WWF.
      5. Raise some import tariffs and bring some manufacturing back to the U.S.

      Enough jobs yet? I’m sure more can be done. America isn’t The Beautiful anymore. Raise the minimum wage and hire more gardeners.

      And finally, this debate raises an unnecessary dichotomy. The answer likely is both and, not either or.

      1. Steven

        I don’t think you can have a serious discussion of this subject – basically access to money, the right to life in a market economy – without considering the context within which either a BIG or JG program would of necessity have to operate. Many so-called ‘reformers’ seem to take for granted the continued existence of an international monetary system that permits nations like the U.S. to pay their way in the world by creating financial toxic waste – “debt that can’t be repaid (and) won’t be”.

        If there is to be such a thing as a global economy, its constituents – whether nation-states or just debt serfs ground down to subsistence levels of existence in a global race to the bottom – need to create wealth in proportion to the money created by their bankers, financiers and governments. Any other arrangement is a fraud either on the people beyond the borders of the country ‘printing’ the money used to pay either a BIG or JG program or upon the country’s ‘savers’, i.e. citizens led to believe they can ‘store the value’ of wealth they chose not to consume immediately.

        To make the equation work you have to have some idea of what constitutes ‘wealth’. In pre-industrial civilizations, wealth or at least its creation was tied to land. But for the last two hundred or so years wealth has been derived from coupling inanimate energy sources with machinery to produce the means of subsistence. There are, of course, other jobs besides producing marketable commodities that need to be done. But even many of these require some familiarity with the state of the arts, i.e. the science and technology, underlying the employment in question.

        This issue of what constitutes wealth production – and how much consumption of it a nation can sustainably afford – HAS to be addressed before a country decides who is going to get how much and possibly for what (work). It determines issues far larger than just social equity and stability. The U.S. has had close to 40 years of Wall Street’s and Washington’s ‘wealth creation’ now. It is increasingly being forced to turn to the use of ‘hard power’ both beyond and within its borders as the greed of its bankers, financiers and their 0.01% clients erodes the once considerable ‘soft power’ of an economy that produced something besides guns and bombs.

        It is way past time to try something different.

    4. PlutoniumKun

      I think this is the crucial problem with the jobs guarantee. What form will they take? Will they be permanent, pensionable jobs? If not, how do you stop these displacing permanent, pensionable jobs in the public and private sectors? What happens if people given these jobs simply clock in and go home? What happens if people say they have physical or moral objections to the particular job they are given to do? Do you fire them? And then what? It seems to me that a ‘jobs guarantee’ is something that could be much more easily be maintained through a macro economic policy aimed at full employment.

      I think that Tcherneva’s objections to the basic income contain a number of straw men arguments. Her arguments are obviously correct if it is funded through a ‘free money’ policy advocated by those who misunderstand the basics of MMT (I think those arguments are found more in the US than among guaranteed income advocates in Europe and elsewhere). But there are plenty of other proposals which avoid this issue – Henry George advocates would, for example, advocate using property taxes to finance it, while other schemes are based on a more complex system of taxes and tax credits.

      I’m not a pure ‘basic income guarantee’ person because I’ve read enough about the topic to recognise the genuine difficulties in getting the figures to add up. But it seems to me that the ‘guaranteed jobs’ advocates haven’t been given anywhere near the same tough grilling about the details of how it would work in practice.

      Its also worth noting that recent studies indicate that those countries which come closest to ‘guaranteed income’ policies, such as Sweden and Denmark, are by many criteria the most creative in terms of start ups and the arts. Quite simply, give people a guaranteed safety safety net, and they are far more likely to set up a business, try out that crazy idea, or just make music. In the longer term, that has huge economic benefits. It was, I think, those well known deep thinkers the Gallagher brothers of Oasis who pointed out that making people on the dole do work schemes meant that rock ‘n roll in the future would be dominated by rich kids only. I’m just listening to Coldplay on the radio now…

      1. financial matters

        Yes, I think the straw man arguments come from tying the value of money too closely to labor rather than seeing money as a more general social political construct.

        She seems worried that a BIG would undermine capitalism but I think in a strict sense the same thing could be said for a JG at a living wage.

        Single payer and subsidized education may also undermine capitalism but I think what we are looking for is a more equal and distributive economy.

        Also she seems to focus on more demand as driving up prices rather than using underutilization for useful items and giving productivity gains more to the labor force.

        I think both a reasonable BIG and a living wage JG are empowering to labor and to society as a whole.

        1. Lambert Strether

          However, only the JG provides democratic control over wages and working conditions as part of its program design. If BIG does that, it’s indirectly. I don’t see the two as being commensurate along that axis at all.

          1. financial matters

            I see a BIG as being subordinate to a JG and purposely not as structured. It’s for the individual to be able to exist and to have flexibility to pursue something of their own choosing.

            Pavlina should trust her own research here. She found that people wanted to be socially productive if given the chance.

      2. jgordon

        Everything you said makes a lot of sense. I have a lot of paranoia when it comes to this guaranteed jobs thing. I’m certain that under such a program I’ll end up with a job that I loathe–which would quickly lead to me being disgruntled. Then I’d develop a workplace injury and go on disability–which is a sort of guaranteed income anyway.

        If we’re going to have any sort of universal safety net it’s going to have to be a lot closer to guaranteed income than guaranteed job. Our Western/American system at present is way too close to Fascism for any sort of a guaranteed job to have a positive outcome for individuals,the environment, or society.

        1. Left in Wisconsin

          Too much economist thinking! While no system is likely to operate flawlessly, shirkers exists in much higher numbers in economists’ heads than in real life. I don’t know anyone who has been out of work awhile who wouldn’t jump at the opportunity to do socially-useful paid work. Also, we have a historical example from the 1930s, where I think the evidence is clear that the upside of work programs far outweighs the downsides. I’m sure there were shirkers around then, too. We just didn’t let outsized concern about them derail our compassion and common sense.

          1. jrs

            “I don’t know anyone who has been out of work awhile who wouldn’t jump at the opportunity to do socially-useful paid work.”

            yes well so would many people with jobs! Unfortunately they don’t have socially useful work, they merely have jobs and they may well be more socially useful unemployed depending (this often doesn’t work because since they have no certainty about money they get depressed and aren’t of much use to anyone including themselves).

            Saying whatever exists starts out from a f-ist system in the U.S. isn’t really economics thinking, it’s basically correct (even if slightly overstated) thinking about the system.

          2. jgordon

            Shirking huh? The whole interstate highway system to be an abominable waste of resources, yet any jobs program the government comes up with will almost certainly involve maintaining and upgrading it. A worker who sabotages said system while working on it would be doing a noble deed that’s beneficial to humanity. Getting “injured” and taking disability–thus adding extra burden to the system and causing it to deteriorate as a whole–is an option that is almost as generous and good. How could such worthy efforts possibly be considered shirking?

          3. Art Eclectic

            You won’t ever be able to eliminate the shirkers completely. There is always a certain number of people who automatically look for a way to get over, no matter what. SSDI is a necessary option for people who really and truly are unemployable due to disability and health. I know one person on SSDI who is truly unemployable due to health and other trying to get on it who is employable but can’t find a decent paying job where he can keep his hands clean, so he figures he can get in on the game.

            There will always be a sector of people who figure that they can benefit from a program meant to help those truly in need. Just look at the way handicapped parking has been abused…. No good deed goes unpunished and no benefit will go unabused by douchbags. It just is and you have to accept a certain amount of it – which doesn’t mean that you don’t put systems in place to keep scammers from taking advantage.

        2. hunkerdown

          Whereas today you’d go straight to disability, another place where surplus workers are warehoused.

      3. craazyboy

        For starters, just putting in “protective” tariffs will force the domestic economy back towards more domestic production of what gets consumed in this country. Then our “economic planners” at least have Occam’s Razor on their side. Plus, during the time it takes for the economy to transform back to something more balanced and functional, we collect tax money.

        I’ll also take the opportunity to stump for luxury taxes, gas guzzler taxes, Old Master’s 100% sales taxes, and Wall Street transaction taxes. Oh yeah, progressive income taxes. MMTers always want to “create money” then tax it back latter somehow. I advocate a direct approach. Get it now. It’s been long enough.

        From there, the central planners can come up their ways to meet goals not effectively served by free enterprise and figure out how to employ people towards those goals. Healthcare would be a ripe area.

        1. Brett

          For starters, just putting in “protective” tariffs will force the domestic economy back towards more domestic production of what gets consumed in this country.

          No it won’t. You’ll generate a small amount of manufacturing jobs, and drastically accelerate automation in said manufacturing industry. It’s stupid to focus on them, anyways – overall manufacturing employment worldwide is down, and in places like China it’s way down from what it was 20 years ago. The whole sector’s slowly going the way of agriculture, with few workers and a lot of machines.

      4. jrs

        Yea, we have economic policies that destroy jobs (trade policy especially) and then we come up with utopian schemes to try to solve the problems policy created, as if the system that created such policies is even capable of solving them.

        Mind you I think people should work a LOT less, the only argument I can see against this is if saving the planet needs so much labor that becomes impossible, and we’re not working currently at saving the world, but at actively destroying it, so it’s a moot point under this economic arrangement.

        1. participant-observer-observed

          Yes. The current modus operandi for solving unemployment problems is to make the planet uninhabitable for millions of life forms (aka humans, their food, and habitats), and force whoever survives to have something worth trading!

    5. Brett

      You’d want to do work that is labor-intensive, and which can add a lot of labor over random intervals reflecting the way people will just show up at varying times in the JG Offices (of course, it will go up and down with overall macroeconomic conditions).

      Honestly, the best thing I can think of would be environmental clean-up and reconstruction. You can always put more people to work planting trees, cleaning up garbage, ripping down unsafe structures (with the right safety equipment), and so forth. You’d also have a set of specific projects to do stuff like kinds of infrastructure, etc New Deal Style.

      That’s the ideal, though. More realistically, a Job Guarantee would be a hybrid Active Job Search Assistance program coupled with jobs either created directly (less likely in much of the US) or with subsidies for private employers. It could actually end up making work conditions worse in the latter case, and also lead to a serious stigma against JG folks.

  7. Andrew Watts

    They don’t seem to understand the effect that power and privilege would have on their proposals. In the modern setting a job guarantee would be used as an excuse to dismantle the safety net under the current neoliberal regime. Safety net programs would be declared redundant and be promptly abolished. At about 59:10 an individual tried to tackle my concern with this and failed. While a basic income guarantee could provide cover to dismantle public unions under the guise of abolishing the bureaucracy. This would further weaken the labor movement as a whole.

    Both proposals risk the suppression of wages and widening the disparity in the distribution of wealth. Unless the concentration of wealth is under siege any scheme designed to improve the condition of the lower order is doomed to failure. The Speenhamland proposal is a classic example and empirical proof of that.

    These people have no answers to the predicament Galbraith raised when he spoke about the need for the presence of countervailing power. They mistakenly believe that social arrangements are the source of our social ills and the power of unenlightened self-interest can be managed by various schemes without the necessity of coercion.

    1. Left in Wisconsin

      Agree that the notion you could implement either as “public policy” in the current political climate is ludicrous. The countervailing power would have to come first. Which means government actively taking the side of working people against big business. Which means you would have to win the political battle first, implement JG or BIG second. And while you were at it, you could rewrite labor law for the 21st century, which would help to (re)institutionalize organized labor as another countervailing power.

      1. financial matters

        Yes, I agree. Jesse Myerson addressed this in that he considers mass social movements with direct action as being very important in this regard. He sees Occupy, Black Lives Matter and Climate Activism as being important in that regard and helping to fuel the grassroots support for the Sanders campaign.

      2. GlobalMisanthrope

        You bring up a very important piece that is neglected in the video, relocating control over work and wages. I’m not sure I agree that we need to “rewrite labor law for the 21st century.” The problem is that the hard-won labor protections of the mid-twentieth century were almost entirely rolled back in its last decade and we allowed it. We allowed it. So whatever replaces the current system has to be built such that protections are somehow structural. I like Richard Wolff’s ideas about worker ownership for addressing this.

        1. jrs

          Left in Wisconsin is probably right about needing to rewrite labor law. The problem dates way further back than the last decade of the 20th century. It’s the Taft Hartley act and so on, the seeds of the destruction of labor were sown in the vaunted and ludicrously over-hyped mid-twentieth century. Though that wasn’t immediately evident because they took awhile to fully play out, and other factors like globalization were also used against labor.

          The right to unionize is written into the constitution in some countries, not so the U.S.. That is the absolute minimum of structural protection that is needed, but it’s merely a legality it is true. But it is downright pathetic we don’t even have that. Worker ownership would be good.

    2. participant-observer-observed

      And then once ss and other instruments were abolished it would be easy to kill or lower the basic income or job!

    3. flora

      I agree. See Bill Clinton passing NAFTA which ships jobs out of the US, and at the same time ending ‘welfare as we have come to know it’ with (you can’t make this stuff up) the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

      1. jrs

        They both serve the same aim: disempowering labor. A desperate labor force of welfare mom’s who would probably be better off taking care of their kids, seeking any job no matter how bad, is of a piece with a desperate labor market made more desperate by outsourcing all the decent paying jobs.

    1. Yves Smith Post author

      Another commentor who has also done research begs to differ (see later in the thread) and points out that Marx reached similar conclusions to Polanyi.

  8. Jamie

    Each of the proposals tries in it’s own way to ameliorate the problems of wealth inequality, and each is vulnerable to the same criticism, viz., in a society of large inequality, whatever temporary benefit is gained by the lower classes will be quickly drained away through the machinations of the owning classes. This is the lesson of Speenhamland, not that assistance to the lower classes is futile, but that the good intentions of wealth distributors will not be impervious to the bad intentions of wealth aggregators. In the final analysis, neither proposal reduces the wealth gap that makes the wealthy disproportionately powerful in society, and so neither offers anything more than a temporary palliative. From my point of view, we would be much better served by talking about instituting maximum wage and wealth tax proposals. When the baseline wealth distribution is more equal, these kinds of proposals (BIG and JG) lose their urgency. There is, in other words, a fair bit of desperation behind both proposals.

    This is quite analogous to proposals for a minimum wage. Without a corresponding cap at the high end and some mechanism to reduce overall wealth disparity, the gains from an income floor will always be ephemeral.

    1. Left in Wisconsin

      This is quite analogous to proposals for a minimum wage. Without a corresponding cap at the high end and some mechanism to reduce overall wealth disparity, the gains from an income floor will always be ephemeral.

      Say what? A $15/hour minimum wage would raise wages for about 40% of the workforce and help bring a significant portion of them out of poverty. How is that “ephemeral?”

      As much as inequality has captured the imagination of the political class, for most working people poverty and the lack of good-paying jobs is the more immediate concern. Refusing to implement policies that would address the more immediate problem because of concern or belief they wouldn’t get at long-term inequality seems wrong-headed, not to mention cruel.

      1. Norb

        The conversion from using ones labor to sustain a local community or be self-sufficient in nature, to one of working for wages is a dead end. The wage system can always be rigged in some manner to promote inequality. A rise in minimum wage is only meaningful if a cap on prices is also initiated and certain goods and services are provided at public subsidy. Advocating one without the other is at best kicking the can down the road.

        No one wishes or desires the cruelty, but maybe the problem lies in that the cruelty can be hidden or pretended away. Those of us working have the ability and leisure to view the problem form a distance. We are not driven to poverty- yet. However, advocating the minimum wage increase without the demand for further reform is destine for failure. Yes, increase the minimum wage, but be prepared for the fallout and backlash.

        FDR’s second bill of rights opened up the discussion on this matter. His vision demanded a strong federal government promoting its implementation. Well, that federal government is gone and not likely to return any time soon. However, the ideas and vision were sound. Knowing what you are fighting for is half the battle. More progress seems possible at the local level- for now. Taking hold of our own individual responsibilities and working locally provide immediate results.

        When more people punish businesses for not supporting a living wage the better. The nature of businesses and goals must change.

      2. GlobalMisanthrope

        Ephemeral because the value of a minimum wage erodes over time and because it is an incentive for a race to the bottom.

        We want to improve incomes by whatever means we can get on the table, of course. But we recognize that a minimum wage is not a panacea. So if the goal is a policy that produces economic justice, we need to step back and consider very seriously whether a minimum wage is a tactic that supports the strategy. This is a complicated question, but I think that Pavlina Tcherneva provides some framework for how to begin as a lay person to think about it.

      3. Jamie

        Refusing to implement policies that would address the more immediate problem because of concern or belief they wouldn’t get at long-term inequality seems wrong-headed, not to mention cruel.

        Yes I agree, and I favor an increased minimum wage and would be thrilled if we win the $15/hr. battle. I just don’t see it (or BIG or JG) as complete solutions. A minimum wage is an expression of society’s commitment to prohibit extreme worker exploitation. That’s a good thing. But it leaves unaddressed some larger questions of systemic, institutional exploitation, corruption and injustice.

  9. Arun Demeure

    We should keep in mind the real goal of these policies: giving everyone an *unconditional* opportunity for a happy and meaningful life, full of joy and human connection, without fear of doom or death. Everything else is a compromise, and I don’t think we should compromise.

    I used to support Basic Income (and technically still do) but I now strongly agree with Yves and the speakers that it would not achieve this goal in the current system. This is for economic, political, and technological reasons and I think it means a Job Guarantee is the only solution for the next 10+ years.

    We need a holistic approach and unfortunately both systems, especially Basic Income, risk hurting us in other ways. The greatest risk is that they get hijacked by libertarian principles and destroy the safety net. It doesn’t matter if you have a job if you can’t afford to treat your cancer or pay for chronic pain management.

    Darrick Hamilton makes the excellent suggestion in the video that we could include health insurance as part of the job guarantee, effectively pushing single payer through the back door. He cleverly suggests that we give seed money for education and business ventures, because they are often limited by wealth rather than income. This could be implemented gradually and solves a lot of the concerns I had with the job guarantee.

    I also agree that Basic Income risks causing inflation in our state of technological advancement. I don’t claim to completely understand it myself yet, but it feels like we have a choice between inflation (high basic income -> enough to live without a job) and misery (low basic income -> below poverty line and same problems as Speenhamland).

    Fundamentally we don’t have the level of automation required for agriculture/transportation/healthcare/etc to be able to sustain our population with a much smaller workforce. More demand with less supply would inevitably lead to inflation and inefficiency. With greater automation, we might be able to exceed demand anyway (*if* the earth’s resources can keep up) but we can’t today.

    This will change. As technology gives us an opportunity to move towards “luxury communism” in the next 50 years, we need to make sure that we create economic frameworks where the benefits are shared by all beings. At that point, requiring people to work to fill their basic needs would only be a way for the powerful few to control everyone else. We don’t want that!

    I strongly believe that Basic Income is the right solution for that. Pavlina Tcherneva made the important distinction between freedom and substantive freedom and argued that a Job Guarantee is better for the latter. I agree today, but I feel this will no longer be true in the future. Basic Income might give us the same benefits as luxury communism but without central planning and with greater individual and collective freedom.

    Maybe supporters of Basic Income already imagine a world like this. Maybe they think that it would be enough on its own to push us in that direction. I used to think the same, and I really wish it was true, but sadly I don’t think it is yet. I am confident that we will get there, but we should never sacrifice the present for the sake of an imagined future.

    That’s why I support a Job Guarantee. I realise there is a risk that it will be mismanaged and not always result in productive or meaningful work. But I think that *if* we can pass legislation for a Job Guarantee without dismantling the safety net and we keep improving it over time, it has a real chance to make the world a better and more beautiful place for everyone to live in – including the rich.

    The greatest battle of our age is against the ideology that not all beings are equally worthy of love, respect, and happiness. Whether it is religious fanaticism, xenophobia, or class warfare, it’s all the same. This is the fundamental obstacle to pushing universal programs including both Job/Income Guarantees and Single Payer Healthcare. For the sake of all humanity, I really hope we’ll win…

    (P.S.: Sorry for the extremely long comment, I hope someone will enjoy reading it. I’ve been lurking NC for more than 7 years, and this is one of the few subjects about which I care so deeply that I couldn’t resist posting. Thank you Yves, Lambert, and everyone else for the amazingly valuable work you’ve been doing all this time!)

    1. nihil obstet

      I appreciate your thoughtful comment. I think the economic problems of the JG and BIG are similar; given our current systems, providing sufficient funds to everyone to permit full dignified participation in the society will cause price increases that quickly make the funds insufficient unless people rather than businesses have pricing power. That means that on the way to Utopia we must support public control of necessities, either through regulation or public ownership and provision. As long as medical care, education, utilities are all industries that can charge pretty much what they want, no JG or BIG will accomplish what we’re looking for.

      Our government currently promotes economic activity whose purpose is to create profits for a few while insuring that the many receive no benefit. The big obvious one is the military-industrial-congressional industrial complex, and its current children, the militarized police forces and NSA homeland surveillance. There’s also the government support for the creation of consumer desire; we could do lots of good stuff if we simply cease to allow businesses to deduct advertising from their taxes. You express a fear of more demand with less supply. I agree that it would be a problem, so let’s increase supply (those munitions factories should make machines for peace) and reduce demand (quit supporting the creation of desire).

      In other words, there’s a lot that needs to be done to enable the society to treat most people as full human beings.

      You say there’s a risk of mismanagement with the JG. I see it not as a risk, but as a certainty. I just can’t see how you can maintain a system with the complexity and flexibility that JG proponents claim. For those who can, please, take over your local school board and run it to address the needs of all the children with the staff and volunteers available, and make it work great this year! I could be wrong, but I’ve found a little actual management experience especially at the local level tends to lower one’s estimation of how perfect a system can be. This is not a problem with BIG.

      I am a big BIG proponent. But to get there and to have it work well, there are a lot of other things that need to be done, too, and we should be working on those on the way.

      1. Jamie

        …insufficient unless people rather than businesses have pricing power.

        Yes, this is the key. We are indoctrinated to believe that we do set the prices through our spending “choices”, but this is clearly not the case. There are lots of ways to approach returning pricing power to the masses, but one way or another, it has to happen or we will continue to suffer, even if we are guaranteed a job and subsistence income.

  10. Norb

    No where in the discussion is it mentioned that the way we live as humans on this plant is wrong. Call it a spiritual component or just the elephant in the room as they say- but until people get the fact that we are totally disconnected form life on this planet we are wasting our remaining time and continue down the wrong evolutionary path.

    What good is consciousness and rationality if you don’t use those faculties to support life? A JG or BIG without the proper goal is really more of the same. Greed and over consumption will find different avenues to express themselves if not held in check in some manner. Enabling people to survive on a JG or BIG in order to live unhealthy lives or buy useless trinkets in not a longterm solution. Also, the prison industrial complex is a system already well underway that seems to economically provide all that is needed to keep the existing power structure securely in place. The tricky part is finding the right mix of inmates and wealth providers to keep the system going.

    The idea that we as humans can somehow live apart or conquer nature is the underlying false assumption that will be our undoing. This is the main propaganda message projected every day to maintain the existing system. Listening to tech and business elites describing their visions of the future where technology will provide immortality and a liberation of the body are truly frightening. It demonstrates a total lack of connection or concern for the actual world in which we live. A view of only taking and not giving back.

    The JG and BIG are both important tools but they must be discussed in a larger cultural context. Supporting life must be the goal, and the culture is built around that concept.

    1. TheCatSaid

      Battisoni comes from an environmental justice perspective. She made numerous points relating to this–agreeing with you that there’s no point having labor/production in a context that causes more damage to the planet.

      We need to transition our understanding and actions. Certainly not towards consuming “more” to “improve the economy”. But consuming “less” is also not the answer in itself. We must learn to consume “better/wiser”–quality, not quantity–and ultimately focus on consumption and actions that are regenerative–that increase and improve the total resource base rather than destroy or use up resources. It’s possible, and there are already tools & resources for those who desire to move in this direction. The biggest obstacle might be that we’re not used to thinking this way. Even in the video, and the comments so far, I don’t see acknowledgement that living in a restorative or regenerative way is possible / desirable / necessary. Regeneration of our home planet is as important–and perhaps linked to–our evolution as individuals and as societies, at a deep level.

  11. Rob Lewis

    the guarantee wound up lowering wages and serving as a subsidy to employers.

    …in much the same way that current antipoverty programs serve as a subsidy to low-wage employers like McDonald’s and Wal-Mart.

    A decent minimum wage would solve a lot of problems!

  12. JEHR

    If I were able to change anything in capitalism, it would be uncontrolled profit-making. Companies can have successful businesses without this rampant profit-making. Creating more profit every year a company is in existence is as unsustainable as compound interest is to savers and everyone else. Why do company executives always feel they have to have increased profit year after year after year? If there were no incentives to create every increasing profits, then everyone could possibly be better off.

    It is unfortunate that citizens have become “consumers” only for the benefit of companies who try to sell more to more citizens as part of their profit-making goals. Consuming is really a way of maintaining health by eating what is needed and not eating more than is needed or healthy. We need another word for consuming inedible commodities (how about “deplete, drain, exhaust, expend”) so that our words are really descriptive of what is happening.

    As usual, by our words we shall be known. If people were seen as citizens or just human beings, then they would not be expected to “consume” everything in larger and larger quantities. Thus the profit-making is supported by the “consumer” who abides by the dictum to accumulate and “consume” more and more just as the company abides by its own edict to make bigger and bigger profits. We may have to learn a new language and I don’t see that happening any time soon.

    1. Rob Lewis

      “Uncontrolled profit-making” is pretty much the definition of capitalism. Actually, the theory is that competition will “control” the profits of a company, though there are obviously plenty of ways that the theory can break down. Companies constantly try to increase profits because:
      1. Investors like profits, and they will deploy their capital in companies that make them. Unprofitable companies will find their access to capital severely limited.
      2. Company executives get bonuses and stock options for increasing profits, thereby pleasing their investors. And the way to make the value of their stock options rise is to…increase profits. The terribly destructive consequence is that the people running the company have a hard time seeing beyond next quarter’s earnings statement. Which is why we need the government to step in on projects that require long-term planning, such as basic research on clean energy, to give only one example of a critically important effort that the private market failed miserably to address.
      As consumers, we have to accept part of the blame because, no matter how often we profess the wisdom that material goods can’t bring happiness, our actions make liars of us. Too many of us are stuck on a treadmill chasing the bigger TV, the faster car, the fancier house—as though these things will fill the emptiness inside.
      By objective measures, the happiest country on earth is Denmark, where average income is lower than the U.S. and the total tax burden is double what we pay. What do they know that we don’t?

      1. jrs

        Even if we had econ 101 perfect competition, it might limit profits but the competition ITSELF would lead to most of the ills mentioned (such as externalities where these are not sufficiently punished, exploitation of labor where there is no pushback like unionization, the incentive to get people to buy more and more etc..). The necessity of economic competition itself leads to disregard for the big picture, competition as it is understood economically has huge negatives.

        Consumerism, yea but we pick easy targets if we pick those chasing a bigger t.v., or fancier car or house. Because does anyone, except those who don’t have their basic needs and what they need to participate in society met, really need more of ANYTHING? Yes stuff wears out and must sometimes be replaced, and one might seek continual learning and experience or something (books and events?) but other than that?

  13. JEHR

    The first speaker in the panel “ummed” herself right out of my consciousness. Can’t listen too long to umm, umm, umm, umm every other phrase. Went elsewhere.

    1. financial matters

      Not the best public speaker for sure, but I liked the sense of honesty and trying to work through innovative topics like trying to tie in environmental justice with social and labor justice.

      She has also written some incisive Jacobin articles.

      Alive in the Sunshine

      “”While making people work shitty jobs to “earn” a living has always been spiteful, it’s now starting to seem suicidal””

      How to Change Everything

      “”Thus the more extreme versions of what Anthony Galluzzo calls Jetsonian leftism aspire to an ultra-modern luxury communism in which everyone can have everything. Meanwhile its opposite, a deep-green outlook fundamentally skeptical of human efforts to control nature, suggests that no one can have very much of anything at all.

      Klein aims to navigate a way between the extremes of cornucopia and scarcity. She puts forth a vision of society built by a re-enlightened — or perhaps de-Enlightened — left, one more circumspect about human ability to shape the non-human world to our liking and more accepting of limits to the planet’s capacity.””

    2. MRW

      I totally agree with you, JEHR. In addition, Alyssa Battisoni didn’t make any sense. The umms combined with the glottal stops and Millennial throaty whine (can’t remember the fashionable ‘name’ for it) drowned out any message she was trying to get across. This kind of sloppiness is exactly why a candidate like Trump gets traction.

      University should first teach kids to communicate (and I’m getting fucking fed up with their PC bs, probably my age). And if you’re so smart, you should be able to make your points clearly. Stephanie Kelton has an IQ at least 30 points above her body weight, but she can reduce complex ideas to simple terms for ordinary people. That is something only a brilliant person can do. [Hemingway could write 12-15 pages a day. It took him two weeks to reduce those 12-15 pages to one paragraph.]

  14. nihil obstet

    As I understand it, the Speenhamland system simply topped up income to the level of a very low wage. It gave the worker no real freedom from compulsion. In that, it appears to resemble a non-means-tested BIG just as the workhouse resembles a JG. In other words, not much.

  15. WanderingMind

    I confess that I do not follow Pavlina Tcherneva’s micro analysis of the effects of the income guarantee.

    Let’s say that there is a$20,000.00 per annum payment to everyone. Let’s also assume that the minimum wage doesn’t change.

    So, now I am a person who will receive $20,000.00 no matter what, plus food stamps if I need them, plus medicaid if I need it. I will also be guaranteed an additional $10.00 per hour if I decide to take on a job.

    Why does an employer like MacDonald’s have to pay more than the minimum? Will there not be enough people who want to buy stuff with the extra money they can earn from the jobs?

    On the other hand, if not enough people want the jobs at $10.00 per hour and the wage goes up, Yves has pointed out that the wage bill is not the greatest expense of an enterprise, so the wage increase does not automatically translate into higher prices. In fact, the oligopolistic nature of the economy argues against it.

    What is more likely, to me, is that employers will reduce the need for labor in their production process rather than raise wages to the point where they will fill all of the currently necessary job slots.

    To me, the greater issue, whether one is for the job guarantee or the income guarantee, is political power. It will require a bottom up political movement to produce and maintain either one and the current crop of oligarchs will fight to prevent either one from coming into existence. If either one does come into existence, they will then fight to degrade if not eliminate it.

    1. optimader

      Let’s say that there is a $20,000.00 per annum payment to everyone
      What better way to trim population growth!

  16. Alex

    Soooooo Yves,

    You’re saying Basic Income has only been implemented one time in the history of the world and that one time it failed (in GreenEggsAndHamLand no less)?

    Hmmm.

    How about that.

    What about Canada?

    What about Alaska?

    1. jrs

      Is an alternative to an income guarantee just to give people the necessities of life? Which is the most important reason to have an income anyway.

      For instance there’s a lot of thinking recently that the best way to solve homelessness is simply to provide the homeless with housing. It’s not providing them with income that might merely go to some landlord jacking up rent. It’s not trying to employ the homeless either. It’s simply providing them with housing period which is a huge chunk of what almost everyone is working to pay for.

      1. diptherio

        There are no doubt some goods/services that are best provided in-kind, and housing may well be one of them, and others that are best provided by “the market.” In-kind provision is what we do now and it’s not a great system for lots of stuff. It turns out to be less expensive and more humane to just provide cash stipends to people, rather than making them gather at the poor-people places to receive the goods/services directly.

      2. TheCatSaid

        I agree. Something I’ve learned from my brief exposure to Integral Accounting (M-CAM) is to avoid changes in state, as this is where losses occur. (For example, in energy generation, there are high losses when mechanical energy is changed to electrical energy of one kind, then transformed to energy of a different kind, then used in a device to create heat, etc.)

        David E. Martin & M-CAM practise this on an everyday basis in their company. Sometimes what is needed is a certain kind of experience, not money. When we keep changing things into exchanges of money not only are there losses, but often we lose sight of what it is that we were trying to accomplish (e.g., providing housing, in your example).

    2. Leigh

      Alaska’s is a small, fluctuating dividend from a sovereign wealth fund set-up – which works out at about $40 per week per adult/child based on residency (with the restrictions of intending to remain an Alaska resident indefinitely and not having felony/misdemeanor convictions), it’s also taxable income.

      Dauphin’s was a means-tested minimum income level – set at Canada’s low-income threshold (which varied in its treatment of individuals & couples), with deductions for income earned. So more like a Negative Income Tax.

  17. Pelham

    Basic income “kept the poor in place with their wages fixed at a bare subsistence level.”

    Then the solution is to elevate the basic income well beyond basic subsistence.

    If the past 40 years has taught us anything, it has been that the elites — however they’re defined — can no longer be trusted to deliver a decent standard of living for the rest of us, the people who make the extravagant lives of the elites possible.

    Therefore the basic income should be based on per capita GDP, perhaps 50% of this amount. That would be a nontaxable $26,000 or so per year for every man, woman and child — giving a household of four enough to sustain not just a crappy life but a decent level of consumption to make true middle-class life once again possible. And we could scrap the minimum wage, welfare and Social Security (all to the delight of the wealthy), although we’d have to offer Medicare for all, with full negotiating powers.

    With this basic income in place for all households earning less than double the median household income, the elites would be welcome to the remaining half of GDP to monkey around with as they please, building aircraft carriers or yachts or whatever their little hearts desire.

  18. akaPaul LaFargue

    . . . For anyone who’s read Karl Polanyi’s Great Transformation, the current debate conjures up the image of Speenhamland and the perverse effects of a set of locally administered guaranteed minimum income schemes that lasted from 1795 to 1834. (Or, alternatively, anyone familiar with chapter 24 of volume 1 of Capital might remember Marx’s description: “At the end of the 18th and during the first ten years of the 19th century, the English farmers and landlords enforced the absolute minimum of wage, by paying the agricultural labourers less than the minimum in the form of wages, and the remainder in the shape of parochial relief.”) Much more recently, Fred Block and Margaret Somers (In the shadow of Speenhamland : social policy and the old poor law) did a terrific job describing the history of the Speenhamland story (including its role in Richard Nixon’s exploration of a Family Assistance Plan), challenging the perversity myth (the decline in rural incomes had much more to do with England’s decision to restore the prewar value of the pound in relation to gold than the patchwork of poor relief), and drawing the contemporary lesson: it is time to reject the ideological claim that the best way to fight poverty is by imposing increasingly stringent conditions on ever shrinking transfer payments to poor households.

    As it turns out, the Earned Income Tax Credits (EITC) may turn out to be a much better fit for the perversity story than Speenhamland. Jesse Rothstein, for example, has argued that the EITC program induces an increase in labor supply that may drive wages down, shifting the intended transfer toward employers.

    In all of the scenarios that I consider, a substantial portion of the intended transfer to low income single mothers is captured by employers through reduced wages. The transfer to employers is borne in part by low skill workers who are not themselves eligible for the EITC and are therefore made strictly worse off by its existence.

    Given the ability of employers to capture “a substantial portion of the intended transfer,” perhaps it is no wonder that attention is being directed toward EITC and thus away from programs that would directly help the working poor: a higher minimum wage and a universal guaranteed annual income.

    https://rwer.wordpress.com/2013/12/14/out-of-the-shadow-of-speenhamland/

    1. Jim

      Block and Somers narrative largely stands in contradiction to Marx and Engles.

      Marx and Engles essentially argue that the use of the bread scale facilitated unilateral wage reductions by employers with farmers shifting costs on to the parish to save on their wage bills.

      Block and Somers (based partially of the research articles of Mark Blaug) argued instead that the bread scale was not widely used and rural impoverishment was primarily caused by a massive shift of industries to the North and deindustrialization in the South, unemployment, enclosures and decline of crafts with a key mechanism being the general economic contraction after 1815 and by England’s return to gold at the prewar parity along with increases in agricultural unemeployment and rural poverty. The outcome was that poor relief significantly buffered the rural poor against unemployment and loss of other income sources.

  19. diptherio

    There is another form of basic income in Brazil, the Bolsa Familia, that is very popular and goes to a wide swathe of the population. Recipients are required to get their kids vaccinated and send them to school.

    Experiments in India have been successful as well, lowering costs of social service administration, reducing corruption, and improving health and educational outcomes in villages where basic income has been tried

    I don’t think the historical data is quite so thin, or so one-sided as Yves makes out, from what I can tell.

    JG or BIG, I’ll take whichever we can manifest first. I think both would improve the lot of a lot of people, though neither is perfect, nor a panacea.

    1. PlutoniumKun

      Yes, the Bolsa Familia is an acknowledged success, even though its coming under attack from the usual quarters. Even the Economist magazine has praised it. I mean, who’d have thunk that giving money to the poor could be a good solution to poverty?

      But yes, I find the discussion a bit frustrating as there are so many variations on what might be considered a ‘basic income’, as with a ‘jobs guarantee’. Much of it is of course culturally related. In Japan, for example, there has long been a sort of implied jobs guarantee, but enforced more through collective consensus rather than specific policies.

      In reality, either option will likely have to be specific to particular countries – a scheme that might work in a prosperous western country won’t necessarily work in Africa, and vice versa. In reality, the complexity of real life will mean that there will have to be complex additions and alterations in order to prevent perverse outcomes or unexpected impacts on behaviour.

  20. Jim

    Some apparent empirical and theoretical issues embedded in generally accepted Speenhamland narratives:

    The Royal Commission Report of 1834 issued a damming indictment of Speenhamland and apparently created pressure for the New Poor Law.

    How sound was the empirical work in this Commission report? The report was primarily based on hundreds of stories of local parish officials–mostly clergy. How reliable are these stories by the local elites?

    How many actual recipients of relief were ever questioned?

    There does appear to be data on total Poor Law outlays of 15 thousand parishes in England for selected years from 1802 to 1834, do we know precisely how the expenditures were divided among assistance to the vulnerable populations?

    What is the exact causal linkage in the assumption that employers would deliberately lower wages to take advantage of the Parish’s guaranteed wage supplement? Where the characteristics of one particular type of parish general across the countryside?

    How common was the Speenhamland system?

    Could it just as persuasively be argued that the rising Poor Law outlay were a response to the loss of established forms of family income, rather than a cause?

    What if poor relief did not hurt the poor but helped to protect them from structural changes in the economy that had made it difficult for them to earn a living?

    Is it historically accurate to say that a floor under incomes would be transformed into a ceiling during the Speenhamland period?

    What of the role of larger economic processes such as severe agricultural deflation and a shift of industry to the North in explaining increasing rural poverty?

  21. susan the other

    I liked Tcherneva. She made similar points to Wray. In terms of economic stability and fiat maintaining its value with a jobs guarantee. That job guarantees are countercyclical balances to either a recession or inflation. In that those jobs can be offered to offset the recession and retracted as private businesses recover and hire more people. A JG will set the standard for min wage also, and good benefits. In terms of maintaining a strong dollar, which is currently done by inducing unemployment, the value of the dollar could be based on the minimum wage and full employment which are proof of a good economy which is what ultimately backs the currency – so the value of the currency would not only not erode, it would stabilize. Much like Wray recommended that we actually give the Fed a tool it can use effectively to create stability – a fiscal program promoting (ta da!) jobs as needed. And we most definitely need green jobs everywhere across the country – actually it could even be a good export. So somebody please tell Janet not to mess with the magic 2% solution, or the useless 6% solution; somebody tell Congress to butt out because they can’t fix anything and it’s high-time they admit it; and please call a conference of state governors to get good grass-roots countercyclical green jobs programs on the road. Because there is no problem paying for this, none whatsoever. Better still, make it a competition. Or alternatively, we can all just sit around like the idiots we are.

  22. financial matters

    Just to summarize Alyssa Battistoni’s 4 main points for a Universal Basic Income

    1) empowers workers (she mentioned that this is also true for JG)
    2) against creating jobs for their own sake

    she identifies herself as a political strategist and sees the next 2 as more political
    3) tends to concentrate on creating a life worth living (as an aside this was also an important part of Keynes’ thinking)
    and more politically pragmatic
    4) pulls together a wide coalition of marginalized people, an attempt at international solidarity

  23. nothing but the truth

    most people would prefer to be unemployed with a stipend rather than unemployed and starving, which is where the robots revolution is leading us.

    1. JEHR

      Paul Mason has written a book about this topic called Postcapitalism quoted below:

      Now what does it mean for the future of work? It means there is a struggle over time, but it is not the same struggle that it was in the 20th century between workers and bosses. It is a struggle to decide who shall control and determine the course of the automation that could now happen.

      The work of lawyers, of doctors even, is going to be automated, leave aside the poor person in the burger joint who suddenly finds out their front-of-house job has been replaced by a touchscreen. I argue we should do that a lot faster … we should automate the world fast.

      But in order to do we are going to have to aggressively delink work from wages. We need to pay people just to exist.

      See: http://www.cbc.ca/news/business/paul-mason-on-postcapitalism-why-the-world-economic-system-may-be-on-its-last-legs-1.3333672

  24. Russell Scott Day/Founder of Transcendia

    I designed Transcendia as a nation of airports to as ports moderate world economies through trade. Airports are new and do offer port connections to all nations. I was finished with the Passport which amounts to a Manifesto with the adoption of the Insurodollar.
    The Insurodollar is again: Whole life policies for all citizens from birth and buy in with partial share of the equity as the basis of the currency. It is a Treasury and Insurance company. There are two payouts. One at the age of maturity being meaning, when one starts higher education, and or creates a business. There may need to be some elasticity there, but higher education is just that and the citizen may need to travel to another nation to get it.
    My Transcendian currency, the Insurodollar is based entirely on human capital in this model. Otherwise the policy works like a normally understood Whole Life policy. This name has the advantage of being understood within the capitalist system. No real business exists minus insurance.
    The Netherlands is a nation well positioned already to adopt the insurodollar.
    I do not believe in a Fiat Currency. The US Dollar is a gift of Nixon and Kissinger, and is a Petrodollar. Other nations may pretend to have a fiat Currency, but as long as the Petrodollar is the World Reserve Currency, they have by extension a Petrodollar. I forget the name of Derek’s very similar plan. As a man who didn’t even think about things that he couldn’t afford I went to Community College. I am in the same class as the Black man who dare not seen a dollar without thinking about it.
    I am very grateful for the New Deal policies that gave us Social Security. Sanders idea of taxing Wall Street Transactions to fund education is fair in light of regressive taxes like the sales taxes and now in Not Conscious taxes on car repairs. The Tax breaks for the supposed Job Creators are such bullshit as to be no different from the “Big Lie”. Equivalent to them would be a living wage minimum wage.
    The working classes do not deserve to be so kicked around, down and at the same time work is supposed to be some justification for life itself, the flight from it and disrespect of those that do it would make any sane man feel fine taking a check to go surfing. For a recent statement far as economics view You’re Great on the youtube Channel Transcendian. More of where I am coming from is in Poor Buzz & Stories from Warning for my Daughter. As well there is the Transcendian and Transcendia Passport. “Nothing works if you don’t believe in it.” -RSD

  25. vlade

    As mentioned in a few posts above, JG and BIG very much depend on implementation. Of course, if your BIG income is just-enough-to-survive, and (like SH system) tied to a place (IRR, in effect you could not carry it with you to the factory town, which is likely a more important factor than the income in this case – imagine an unemployment benefit that would lock you to searching for a job within the next couple of miles?), it will fail and become a tool of oppression.

    If you implement JG as the Soviet Block did (yep, there’s a massive JG experiment there, how about writing on how successful was that, so both sides get hearing? For example about how the state denied the work to dissidents so that it could label them “parasites” and jail? Or to offer them work working in uranium mines, with life expectancy of a few years?), it will fail and become a tool of oppression too.

    I personally believe that well implemented BIG is better than JG, for a simple reason. I believe that a BIG can be designed to be at the same time less susceptible to human influence (corruption in allocating the jobs) and providing a more fungible benefit (no problem with matching the jobs needed to jobs required).

    Often quoted contra-argument is that people need jobs for social satisfaction and well being. My answer to that is that primarily people need to socialise and feel they are doing something good. There’s no guarantee that a JG would provide the second, and there’s no prohibition by BIG to socialise or to create something worthwhile. Indeed, one could say that for most of its history mankind existed without paid jobs for most of the population and it never stopped it from socialising or doing something worthwhile. I’d like to point out to a numerous stay-at-home wives when one income was enough to support a family well – are we saying that their lives were wasted because they didn’t have a job with an income?

  26. Jack Heape

    We need neither income security or job security. The problems associated with either, never mind the difficulties of getting any legislation passed that put them in place, are too great. What we do need is to think of our economy as a whole. That the productivity of it every year belongs to all of us, not just a few. We need to curb the inordinate share that the corporations and the wealthy take from our economy. For instance, corporate profits are at their highest level in 85 years. Corporations in 2014 had an after tax profit of 1.7 trillion dollars! The Commerce department also stated that in 2014 wages and salaries were the smallest percentage, 42.5%, of the entire economy, that have ever been recorded. Raising the minimum wage would be a good start. Follow that with strengthening social security, increasing disability payments, food support payments, lowering the cost of education, and instituting single payer health care. Decrease defense spending and increase infrastructure spending. All that is needed is to make it public policy that the average citizen share equally in the productivity of our country as a whole, rather than the 1% taking all of the benefits.

    1. JEHR

      It would seem to me that you need both BIG and JG AND curbing the greed of big multi-nationals in order for the former two to work well.

  27. casino implosion

    Seems obvious that some kind of basic income guarantee is coming here sooner rather than later. The political change has come rapidly. Can you imagine someone like Peggy Noonan talking about “the donor class” during the Bush era? I can hear Larry Kudlow scoffing from here. They even used to try to perpetrate that the GOP base actually wanted to privatize social security…all those Mises and Rand reading scholars in the heartland. Now all of a sudden the cat’s out of the bag that the opposition to Obamacare had not thing one to do with a desire for laissez faire economics and everything to do with perceived redistribution of wealth from the middle class to the underclass. (We NC readers knew that all along of course but you wouldn’t have heard a thing about it in the MSM ten years ago.) I’m sure whatever we come up with will be both paltry and humiliating, but the camels nose will be under the tent, as my Mises quotin’ buddy likes to say re such things.

  28. SeanL

    A basic income approach doesn’t have to be framed as a Marxist solution – it makes sense purely from an institutional efficiency and behavioral policy point of view.

    There will always be free-loaders. The real question is whether the basic income approach removes a whole heap of bureaucratic costs associated with providing the current complicated social security system. If the bureaucratic costs of the current system exceeds any free loading of a basic income approach – then we should go down the basic income path. (I suspect this is the case.)

    In addition, there will need to be policy focus on building a growth mindset within the educational system in order to capture the behavioural benefits of a basic income approach 1) removing the cognitive load problem of trying to survive financially that leads to poor decision making (which tend to benefit finance companies via punitive costs), and 2) removing risk and loss aversion that inhibits innovation and skill development and thereby increasing productivity.

    So yes this is a socialist approach in the broad sense but doesn’t need to be framed as an us/them Marxist approach. A basic income approach should actually strengthen capitalism not weaken it – the US’s problem is that mercantilism (a bit like mob extortion) is increasingly crowding out small business capitalism that underlies vibrant communities.

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