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.
The event featured Dr Fadhel Kaboub and was chaired by Dr Sandy Hager from my own department and took place at City, University of London. Unfortunately, I could not be there as I was lecturing in Cambridge that evening, but given the significance the event has now acquired this is more than worth sharing:
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This is also good https://www.thepileus.com/economics/4-what-is-the-job-guarantee/
Thanks for this. He presents a very easy-to-follow, logical argument. Certainly more ‘user friendly’ than Bill Mitchell, Randy Wray or even Warren Mosler. What’s not to understand or agree with? Yet neo-liberal ideology continues to dominate western political agendas. For how much longer? Hopefully it’s simply a question of time.
As a post-script … while I appreciate the need to ensure maximum productivity, I still believe governments should also ‘offer’ a UBI option wherever socially appropriate and to fill in ‘gaps’ left by the JG.
Erratum: Of course I don’t mean a UBI in parallel with a JG, which would be a contradiction in terms. I meant to say a BI, complementing the JG, at a level sufficient for a person to participate in mainstream society, compatible with a JG wage and the private sector. I’ll leave the maths to the experts!
UBI without a JG might be a ‘neoliberal con’ (as some MMTers like to say). A JG without UBI might be little more than workfare. JG and UBI need each other. And versions of both could be implemented in ways that are either progressive or far from progressive. They are both good ideas – potentially. I see no reason why they could not be complementary. I’ve mentioned it before, but even Bill Mitchell seems to agrees with that:
”I grant you that the basic income policy and the Job Guarantee could be complementary but I generally prefer to concentrate on the latter”
http://bilbo.economicoutlook.net/blog/?p=37109#more-37109
I have little doubt that we need both
Wow, I’ve just viewed. That’s the best economics lecture I’ve ever heard. Thanks.
I now feel I don’t have to finish the book, which has lingered on my to-read pile for too long – a lazy person’s dream.
Thank you for this. The best explanation of MMT that I’ve heard.
There are a couple if things that I don’t quite get about a job guarantee.
1) The idea that it’s good because being unemployed is bad because it’s psychologically damaging. Would this be less damaging than an unfulfilling job. Licking stamps for charity is all well and good but if you really need to be looking after your own children or parents, it may not be so psychologically beneficial.
2) if UBI is unaffordable because it does no increase productive capacity then what does it mean for a state pension? That too doesn’t increase productive capacity and will be equivalent to a UBI
1) I suggest we would still have a safety net for need
2) Are you suggesting we should make people work in old age? Have you noticed we’ve managed not to do so to date?
2) No Richard. That was the point I was trying to make.
If a giving someone a UBI contributes to an inflationary spiral because it adds to demand without increasing the productive capacity of the economy why isn’t this true of the state pension? Isn’t a UBI the equivalent of a pension age of zero. I must be missing something but I can’t see what
In a sense you’re right
And so there is a limit to the extent to which we can afford it
That, I think, is an appropriate interpretation of the argument
Little in economics is linear – not either / or, but what mix of each?
Peter Beal :If giving someone a UBI contributes to an inflationary spiral because it adds to demand without increasing the productive capacity of the economy why isn’t this true of the state pension?
In depression conditions a UBI can temporarily add to productive capacity. But generally speaking, all it will do is inflate, because it is so universal, which makes it huuuuge.
State pensions are best thought of as deferred compensation, forced (real) savings. Old people worked for, deserve their pensions, because they once worked – not really because they paid into some pension scheme.
No matter what economic or monetary system one has, the work of workers, almost all of working age, not young or old, supports the rest, the young, the old, the infirm, the idle rich etc. The now old deserve support of the young (now working) because the old (when working) once supported the young (when children). Simple as that.
A good rule of thumb is to think about things completely ignoring money. Or think only about money, financial things. Nobody really makes or misses crazy mistakes when they do either, when they try to do a complete job of either. The mistakes come in when you combine the nominal and the real and do it badly and leave out things. You have to be obsessively careful not to say things that sound right or are right in one or the other context, but in the combined context are nonsense.
Isn’t a UBI the equivalent of a pension age of zero.
Yes. That’s a good way of looking at it. Saying one can design a UBI that is workable then equates to the idea that we can all live off the work of unborn fetuses. Neither are very likely.
Let’s be clear though: a JG does in no way remove the need for benefits
Is all government income effectively tax? In “The Joy of Tax” there is a long list of other taxes as well as income tax that are often ignored in discussions about tax.
Whilst I appreciate that government neither the same as business or household it sometime looks very similar. If I park in a private car park the rent I pay goes to the owners to spend. If I use a publicly own car park my local councillor says they use it to pay for the street lighting.
On the same lines, if a public utility is privatised would any profits join other government inflows to recover public expenditure. But if that utility is currently part owned by say the French state that profit is a foreign currency earning for them and a loss from the UK
I know this probably sounds a bit mixed up but I have a mental model of how business and household finances work. My understanding of government finances is still a little hazy
Thanks Peter
You are making a fundamental mistake here
You are assuming the business of government and the business of business are the same
They are not, although of course thyey overlap
Business dos not run state pensions, education, health, defence, the police, prisons and so on. Nor could it: they can only exist as they do as state supplies. Car parks are odd exceptions
I suggest that you think of the state as a state model – which is what the vast majority of what it does is
And then the fact is that the state spends – at will and within approved budgets (hopefully) – and can do so by simply instructing the BoE to make payment for it. The role of tax is then to cancel the money created
The secondary role is to deliver social policy
You make me think I should write another book
Thank you for sharing this Richard.
I was pleased to be able to attend Fadhel’s lecture, he is an excellent speaker. His framing of the Job Guarantee was just right. It is not a silver bullet, but goes a long way in resolving many of the catastrophic problems in the U.K. brought about by capitalism’s inability to provide full employment. Time to rethink work.
Let’s hope a The Labour Party follow the lead offered by Bernie Sanders and make a JG/BI a centre piece policy?
I think it was a great lecture
Really clear
Good if John McDonnell would watch it
That’s what I was thinking and wondering how this could be achieved. I do know his PA and will try.
The idea that there is loads of work to be don’t sounds reasonable at first but may well be difficult in practice. There wouldn’t necessarily be plenty of work to be done locally.
For example someone living in a small market town and reliant on public transport may want to a guaranteed job but could one definitely be found for them?
Really?
The Fadhel Kaboub video is excellent.
Richard, Fadhel made several mentions of Bill Mitchell. You know Bill and you are pro MMT, as well as the job guarantee idea.
You also are probably aware that Bill is scathing of the EU, in particular, the Eurozone, and dismissive of the alleged utopian belief in the possibility of EU reform. He presents excellent arguments in support of Brexit and indeed for the breakup of the EU for the benefit of all its members. As things stand, I agree with Bill. However, my mind is open to counter evidence and arguments, if anyone is prepared to carefully spell them out.
The Guardian is not worth reading on very much these days outside of identity politics concerns (which I support) and magazine type trivia. It is a rabid centrist (Blairite) newspaper which blindly promotes Remain. In the run up to the local elections, it blandly promoted all the false news put about by the Blairite rump to discredit Corbyn.
You are a different kettle of fish. You have the capability to present a good case for Remain, if there is one. You could might even defend the Single Market , as well as the much milder Customs Union.
I am asking you give the detailed arguments that support your beliefs, and of course ask Bill to enter into a dialogue.
Well?
I confess I see little reason to engage with Bill
He is too abusive to make the prospect attractive
And in a nutshell, his objection to the EU is the euro, and we’re not in it
Once that is said there’s little left to discuss
Mitchell and Fazi wrote “Why the Left Should Embrace Brexit” in Jacobin. So, the argument was not merely about the Euro, as you would also know reading their “Reclaiming the State”. Yes, Bill is caustic and possibly arrogant, but that does not detract from his arguments. The issue for me is that I have yet to read a thorough economic and political argument for being part of the EU – Varoufakis is certainly very critical in a not dissimilar way to Mitchell, but believes the EU to be internally reformable.
I will not pester you again on the subject, but I’m disappointed.
As for European history – it is not the history of the EU. Nor can we leap to conclusuons that somehow the EU is the guarantor of peace in Europe. So much for trivial QEDs given by one of your other (I count myself as one) fans!
I am human
And so finite
I have worked on two requests this weekend
I can’t do everything
I am not going to apologise very much if you think that unreasonable
And candidly the case for the EU is so obvious I am not sure it really has to be made
Bout you may want economic meltdown and think that’s win. I don’t
I think the fact that you describe yourself as a “fan” is telling; you write with the careless insouciance of a fan. You are, however speaking for yourself alone, I do not “do” fanship. As for the glib rejoinder that the EU is not European history, this is simply a category mistake, hanging on a limp geographical distinction.
The EU was the necessary post-war response to the overwhelming lesson of European history, that finally found a workable solution in the EU. Largely, and though far, far from perfect, the EU has worked to the benefit of its people (unlike Britain, that now seems to have settled for slowly falling apart). The EU has transformed the politics of Western Europe, and particularly the destinies of France and Germany, and for their neighbours; indisputably for the better.
The problem of the EU is exaggerated by desperate British exceptionalists who see Universal Monarchy in European unity. The wish is father to the British Exceptionalist thought; the Brexiteers are desperate for the EU to fail; and that is unforgivable.
The EU is so bad that almost all European states not members wish to join; and even some states with loose claims on being European wish to join. The only member ever wanting to leave is Britain; but it was the only member who joined while being completely insicere. Britain has largely been a wholly disruptive member that has not had the interests of Europe at heart; a cuckoo in the nest. The EU is too important to succumb to a British desire for a permanently divided Europe. The EU is a work-in-progress and moves towards a strong confederation of independent states with common interests, and common purposes.
A good argument for the EU? European history. QED.
Of course this assumes that a little time and effort is expended reading, thinking and reflecting on, European history. It isn’t difficult, but it requires time, endeavour and sincere intent. Unfortunately, as I have learned to appreciate over my life, the words “Europe” and “sincerity” do not happily live harmoniously together in Britain.
Agreed
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