The Guardian editorial says this morning (and I quote in appreciation and so unapologetically):
Last month one of the US academics in the thick of Democratic debates, Fadhel Kaboub, outlined persuasively a UK job guarantee scheme at London's City University. The speech was a welcome departure from the current damaging orthodoxy that sees inflation controlled using restrictive monetary and fiscal policies coupled with a cushion of high levels of unemployment and underemployment. Instead, Professor Kaboub called for deficit spending — along with private demand — to ensure that all workers who want to work could find jobs. He made the case, which has the virtue of being true, that since the UK could issue its own currency to purchase idle resources there is no real constraint to its spending. While the financing would be national, jobs can be offered by locally viable projects selected on the basis of community needs. Work in environmental clean-up or social care would not displace private sector jobs — they would only offer employment under-supplied by the private sector. The complaint that such spending would be inflationary should be discounted because any restructuring of relative wages would be a one-off event.
The idea that in the jobs market supply creates its own demand is demonstrably faulty; instead we have ended up in a nightmare scenario where part-time, casualised work grows while secure public sector jobs shrink. The government ought to reassert itself as an employer of last resort to absorb economic shocks. This is an urgent need as an industrial wave of automation and artificial intelligence crashes on our shores. The World Bank has foolishly put forward the idea that further eroding workers' rights is the right way to cope with the impact of technological change. This race to the bottom ought to be avoided. The shift will indeed create unemployment. But how many are affected, how long they stay unemployed, and how hard it is to find jobs is determined by demand in the economy. The government must take social and economic responsibility to deal with such issues with human-centred, not profit-focused, policies such as a job guarantee.
The Job Guarantee is, of course, part of modern monetary theory: the editorial hints at that but does not say it.
As some will know, I have always inclined against it, believing it could be draconian because it might be sanctionable. I am beginning to change my mind on that. First, I think it can be combined with a universal basic income, which is actually a minimum income guarantee i.e. a floor below which we simply will not let people go. But, second, I think that a Job Guarantee would now be a powerful weapon in its own right. People do want to work. They have a right to go to work. And it's a myth that this is being offered now.
A Job Guarantee delivers useful work.
It does give working people freedom by permitting choice.
And it does push up the price of labour.
Whilst guaranteeing social gain.
I think it's time to admit a change of mind.
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Aside from the important economic questions, there is an interesting social/philosophical question about which is better, UBI or JG, or if a combination as you suggest would be best.
Pure UBI assumes that people are naturally creative, organised, and self-motivated, to say nothing of having access to appropriate physical, capital, social and cultural resources, so that they will go out and create something meaningful to do once they no longer need to work to live, and that somehow this will get done what the society needs done. This might be true in a utopia where everyone had was as high up on Maslow’s hierarchy as they can get, but in our current society I suspect many would gravitate to some activity organised by someone else, be it social entrepreneur or capitalist or local government, and there would be gaps in provision.
Pure JG assumes that whoever provides the jobs (state, region, city, community, neighbourhood) knows best what that social group needs to be done, and that somehow that’s also good for the people who get the jobs (e.g., self-worth from the job rather than the self). This might be true in an engaged democracy in which the elected representatives really do represent, but in our current society I suspect it would fall far short.
So which is best, or is some combination best?
Almost certainly some combination
Nigel,
In simple demand terms alone I can’t realitically see how UBI could be an adequate substitute for a fully paid, fully employed workforce.
Like you I’ve been somewhat ambivalent about the JG scheme in favour of a Basic Income. And I’m still not sure that either one is the ideal solution. Coincidentally, a couple of days ago I received this in my mailbox (confusingly from another Mitchell) who is very critical of the JG, with some valid arguments – https://mythfighter.com/2018/05/02/the-mmt-jobs-guarantee-con-job.
One thing seems certain and that is governments will have to invest significantly & directly in people in order to maintain future social stability & viability. Maybe some combination of the 2 ideas can offer a pragmatic solution. However, it’s unlikely the UK gvt. will embrace either with any enthusiasm and only then when they’ve exhausted their socially regressive neo-liberal options.
“another Mitchell” writes: “You work to obtain money, so you can buy and do the things you really want to do.”
This is a very odd view – working only to obtain money is neoliberal slavery. We should be able to choose what work we want to do, we may choose to become a baker because we believe it is worthwhile to provide our community with bread, we become a brewer because we want to brew and share our beer, we become a Doctor because we believe it is worthwhile to cure people of disease, we become a teacher because we believe it is worthwhile to share knowledge.
I agree
But some charlatans really do think they work for greed
‘We need to be able to choose what work we want to do’
We can do that now – whether there are jobs is part of the decisions people take.
Surely there have to be jobs/opportunities available at some point to provide the work.
If everyone wants to be a baker, how will that work?
I leave this nonsense to you Charles
@ Charles Adams
Interesting. I obviously read differently between his lines. I understood him to be agreeing with what you say about ‘work’; hence he considers a UBI more liberating.
@ Marco Fante
Maybe his American take on the topic is too far removed from our domestic situation, but personally I can relate to his general philosophical criticism of JG re. prevailing concepts (morality) of wealth. Also the bureaucracy inherent in executing a JG. But, then, on the ‘Political Compass’ I’m far out in the left-hand corner – lol.
Having said that, I still agree there’s a rôle for a JG. However, based on the UK’s lame track record in implementing social programmes, I wouldn’t bet on either fulfilling the human potential they offer.
I’m sorry but it is this that is a very strange view.
As far as I am aware most people really do work only for the money.
To assert otherwise merely reveals that you are either extremely lucky, or wealthy enough to treat work as leisure.
People becoming doctors or teachers, albeit primarily in the past, not out of interest or pro-social motivation, but purely for a decent and steady income, are literally sterotypes.
I have to say that my experience of work, and as an employer and colleague, is that you are very, very wrong about this
Sure people need money: I know that
But to suggest people only work for money is so far from the truth that I see daily I am not sure you and I are on the same planet
John D,
I had a look at that link and that guy looks like a needlessly aggressive crank, full of loose informal conjecture. He just fabricates nonsense at will. He thoughtlessly asserts dumbed-down, demonstrably false ideas like this :
“There are two beliefs underlying the jobs-guarantee:
Jobs are hard to find, which is why people are unemployed.
Working for money is morally superior to being given money.
Both beliefs are wrong. The facts are:
Jobs are not hard to find. There a many millions of jobs available. Look in any newspaper and you will see hundreds of jobs. Go online and you will see many thousands of jobs.
The problem is, they are the wrong jobs. Either they are in the wrong location, require the wrong skills, or simply are not something you want to do.”
Really, that is just plain embarrassing. All that anyone needs to do is compare the total number of job vacancies against the total number of unemployed. Yes, there’s more unemployed, there has been for a long time and anyone who knows anything knows that.
This guy is an American, blowhard jackass. His heart may be in the right place re. inequality and the 1% but that does not make him credible.
Bill Mitchell has been pushing job guarantee in preference to universal basic income and I bought into his arguments when I read his book recently. If only the Labour Party would push these ideas instead of the bland ‘for the many not the few’ mantra. After the poor local election result it’s time to put some flesh on the bones and kick ‘how are you going to pay for it?’ Into the long grass.
I’d prefer Labour’s motto be “For the Many and the Few” since a mixed economy with a focus on full employment, ecological sustainability and social sustainability would genuinely be better for everyone.
I believe that the Job Guarantee, which is part of the MMT package, is the way in to John McDonnell’s attention. I hope by now he’s dropped the UBI idea. It’s never going to work.
What ‘poor local election result’? It seemed very positive to me.
It fell below expectations.
Excellent!
I tend to favour job guarantee over UBI as the focus is on the real resource (labour) and what gets done (as voted on by the collective), rather than allowing the virtual world of finance gain to have control of what gets done. A UBI in isolation is not a solution as it treats citizens as mere conduits with money flowing in at one end and immediately out again, more often than not, to the rent seekers.
I have come to that conclusion
Unfortunately, you fail to see some rather stark errors in your thinking, Charles.
To call finance ‘virtual’ and to equate it with BI is erroneous. Nowhere does BI advocate an economy controlled by ‘the world of finance’, whatever that means. If you’re referring to dominance of the financial sector as a neo-feudal rentier class, then ensuring all citizens have a free access to an income stream independent of any political control or private coercion, is essential to democracy.
Labour is but one ‘resource’ in an economy (unless you’re a strict Marxist, which might be true given your statements that finance is a ‘virtual world’), and a progressively shrinking one in the 21st century. It’s not empirically false to model citizens as economic nodes, situated in pathways of income and expenditure, it’s just a simplified abstraction, necessary in any progressive economics. In a very important sense, people are conduits for value circulation.
You’re correct to highlight the ‘rent seekers’ as the problem – but you fail to notice that having the people work for their supper in no way euthanises the rentiers – it just forces them to toil at what will undoubtedly be a set of ‘bullshit jobs’ (to use David Graeber’s phrase) before they get the money that dutifully flows to the rentier.
A strong and universal BI forces all employers, state or otherwise, to attract free labour that doesn’t have to work unless it chooses to. It’s the power of choice, to say no. A world of job guarantee is just a world of feudal corvee labour reminiscent of ancient Sumeria rather than a socialist/humanistic economy, but I suspect many are too enraptured by the old Protestant Work Ethic nonsense and the myth of the ferocious work-shy mob, to embrace true freedom for all citizens.
tend to favour job guarantee over UBI as the focus is on the real resource (labour) and what gets done (as voted on by the collective), rather than allowing the virtual world of finance gain to have control of what gets done. A UBI in isolation is not a solution as it treats citizens as mere conduits with money flowing in at one end and immediately out again, more often than not, to the rent seekers.
Phillip
Are you sure you are discussing the JG and not enforced work as a condition of benefits?
Have you checked what a JG is? I think you may have it wrong
And have you noticed that some are proposing BI from far from ideal motives?
Richard
“It does give working people freedom by permitting choice.”
You are having a laugh surely. If I would like the choice to offer my labour in a record shop for £5/hour and the proprietor would like to hire me for that price, and we make a mutual agreement, then the law has been broken.
I think you need to do some reading
That is exactly not what this is
Rod Hull says:
“ If I would like the choice to offer my labour in a record shop for £5/hour and the proprietor would like to hire me for that price, and we make a mutual agreement, then the law has been broken.”
This is really failing to take into consideration the seismic change of attitude needed to even consider UBI.
Given a basic income the minimum wage is no longer applicable. So if you chose to work in a record shop and it isn’t well paid you have that freedom. On the other hand if you wish to make a higher wage/salary you may have to do something less to your liking. Dirty jobs, that nobody wants would have to offer a premium or they wouldn’t get done.
This is in reality not a socialist Utopia idea; quite the reverse. What it does is says that Labour is a marketable commodity and the market will settle the price.
I recommend you read Rutger Bregman’s ‘Utopia for Realists’ before dismissing the idea as being silly. It’s not silly – but it’s not going to be easily implemented even with the best will in the world.
Personally I think some form of Job Guarantee scheme may need to run alongside a basic income scheme, but that has to not be confused with workfare.
Good man Richard! It’s a sign of excellent character when someone listens to alternative perspectives, thinks on them and is able to incorporate them constructively into their own view.
I think you’re absolutely spot on about the issues of implementing a good Jobs Guarantee – active local democracy is essential. Like you say, we don’t have enough of that at the moment.
We don’t even have enough competent planning and management staff at local authorities to look after the work that’s currently supposed to be being done on extant local infrastructure and for existing local public services.
However, the environment into which a future JG is likely to be introduced is one of increasing automation so more and more people are going to have time on their hands as traditional production and service jobs are automated away. This is both a crisis and an opportunity.
Implemented well the JG could actually help to build up the local democratic engagement required to make it work. One of the reasons people do not engage with local democracy is lack of time and resources. If JG initially made resources and time available for pubic spirited people who want to help set up local initiatives then that might produce a self reinforcing positive feedback loop.
For example: I’m interested in permaculture (permanent agriculture) and would love to be able to set up a local group to cultivate public land and domestic gardens. This could bring people together as a community in an entirely non-political fashion that would help build friendships and community networks as well as producing tangible products/services.
It’s not difficult to imagine how other local initiatives could grow out of this: local manufacture of tools/equipment required for gardening, collection/distribution of produce, education projects, art, photography, writing etc. Of course some new stuff that grew out of one JG project may only be related to the old project simply by it being where like minded people met and realised they had a common interest they could turn into another worthwhile community project.
There’s even scope to connect projects that grow out of JG work with the for-profit private sector economy: in my example land might need clearing, structures may need to be built, specialist equipment manufactured, delivered and installed, educational material edited and published etc.
None of that is financially viable at present but potentially could become so within a JG and I’m sure there are many other ideas among the multitude of hobbies and interests out there.
The great advantage of the Job Guarantee is that it is always counter cyclical and it kicks in automatically. But unless there is compulsion, in fact there has to be the option of the dole, which could perhaps be called a Basic Income.
I’d like a bit more in the way of Univeral Basic Services, because it restricts the area in which the market operates http://www.progressivepulse.org/economics/the-real-argument-for-universal-basic-services.
Free local bus travel seems an obvious win and should be good for pollution/congestion and is an area where the market doesn’t work anyway. And free water, as in Ireland.
Interesting points Peter,
I do wonder though if the context of all this will be within a post-cyclical (post-capitalist) world.
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[…] I am grateful to Prue Plumridge for sharing this video with me. It's from the event that gave rise to yesterday's editorial in Guardian on the Job Guarantee. […]