I was asked during an interview the other day from Paris whether I was a…
Employment as a human right
As I indicated earlier this week, I will progressively add notes to the body of work that will become the manuscript for my next book (with long-time co-author Joan Muysken) on the – Future of Work. As I write bits and pieces, I will post them here for comments and feedback. The book will be published sometime in 2018. At present, I am working on the philosophical considerations that we will deploy to underpin the more prescriptive elements (policy proposals) that we will produce. Today, I have been writing about the ethical basis for work. This is derived from work I did at the turn of the century. Part of the text today was written in collaboration with a former colleague John Burgess and the body of work we produced was subsequently published in several periodicals and book chapters around that time. However, the ideas sketched here were taken from parts of the papers that I mostly wrote although trying to decipher the exact division of labour is impossible. In that sense, I acknowledge the fruitful nature of my interaction with John at that time and the body of work we produced together.
Introduction
Quite separate from the obvious material advantages of maintaining full employment that accrue to workers (and capital) and the massive, broad-ranging costs that mass unemployment brings, one can make a case for full employment on deeper philosophical grounds.
Clearly, mass unemployment has acted as a form of social exclusion perpetrated against particular sections of the community, in general the young, the old, the poor and those lacking skills and education.
The burden of unemployment is not shared evenly across the community.
We also note that mass unemployment arises for one reason – that there is insufficient spending in the economy relative to that which would generate sufficient sales and demand for labour to provide jobs for all
Accordingly, unemployment is a direct consequence of inadequate and misplaced government policy.
In Modern Monetary Theory (MMT), it is emphasised that the government, when all is said and done, chooses the unemployment rate at any particular time.
After all the spending (and saving) decisions of the non-government sector have been taken and implemented, any idle labour is the result of the net spending position of the government being lower than is required to generate full employment.
So if there is mass unemployment, we know at least one other thing – the fiscal deficit is too small or the surplus is too large, depending on the circumstances in the non-government sector.
Given that a currency-issuing government can purchase anything that is for sale in its own currency, including any idle labour, the existence of mass unemployment is thus a political rather than a financial outcome.
Within this context, an empirically based, experiential notion of human rights suggests that governments are violating the right to work by refusing to eliminate unemployment via appropriate use of fiscal deficits.
Mass unemployment is not compatible with fundamental human rights in that unemployment denies those affected access to income and hence participation in markets, it reduces the opportunity for advancement and stigmatises those affected, and violates basic concepts of membership and citizenship.
Without the right to work, afflicted individuals are denied citizenship rights as surely as they were denied the right of free speech or the right to vote.
As long as employment is not considered to be a human right, a portion of the community will be excluded from the effective economic participation in the community
The concept of work as a human right is not new, and has spanned the ideological domain for the past 300 years.
In this last century, both the United Nations and the International Labour Office debated with the right to work question.
A good account of those debates appears in Richard Siegel’s 1994 book – Employment and Human Rights: the International Dimension.
Siegel noted that (p.4):
Images of mass unemployment cannot match the intensity of television pictures of starving and diseased babies or of homeless adults in India or America. Yet the raw numbers of the unemployed and underemployed also reach into the hundreds of millions. These numbers also represent misery and hopelessness, and often trigger crises of sickness, homelessness, hunger, violence, and early death … unemployment is like many gross violations of human rights violations in being a price that a ruling elite or even a majority of the population is willing ot pay periodically to achieve other ends.
His reference to “other ends” is in relation to using unemployment to “control … price and wage inflation” as one example, where unemployment has become a policy tool rather than a policy target.
In doing so, governments have clearly violated human rights and abrogated on their responsibilities under international agreements that they signed and endorsed in the immediate Post Second World War period.
[Reference: Siegel, R.L. (1994) Employment and Human Rights: the International Dimension, University of Pennsylvania Press, Philadelphia.] (Siegel, 1994, Ch.1).
Siegel (1994: 19) argued the “right to employment evolved from conceptions of national solidarity and welfare state obligations in the century before World War II” and “It first received broad international recognition in the post-1945 era, with its inclusion in the United Nations Universal Declaration of Human Rights and International Covenant on Economic, Social, and Cultural Rights as well as in the Council of Europe’s European Social Charter”.
There are many other “conventions and recommendations concerning full employment” in statements made by the OECD, ILO and other European Community organs.
It is clear that the international community signed up to guaranteeing a right to work.
In this book, we argue that this right should be embedded in relevant and enforceable legislation – in other words it should be a statutory right.
Flowing on from that:
1. The State should bear the responsibility for implementing this right.
2. Access to work should not be conditional.
3. The right to work means there must be a viable full employment policy.
4. A full employment program, encompassing the right to work, can be implemented which also guarantees price stability.
Employment as a fundamental human right
We can establish the right to work in two broad ways:
1. To assert a natural right along the lines of the doctrine of natural rights which dominated the thinkers of previous eras.
2. To use factual experience and analysis of outcomes derived from these experiences. This is a pragmatic, instrumentalist approach.
This dichotomy follows the distinction made by Marc Tool (1998, 285):
The natural right to employment . . . is a non-empirical, non-experiential, extra-causal, conception of what ought to be. Its credibility derives from the acceptance of an antecedent metaphysical belief which cannot be integratively incorporated into the human inquiry process. The human right to employment is grounded in the continuum of factual experience and rational appraisals of actual consequences experienced and is validated by inquiry-embedded instrumental social value theory.
[Reference: Tool M. (1998) ‘Employment as a Human Right’, in Reati A., Michie J. (eds), Employment, Unemployment and Public Policy, Cheltenham, Edward Elgar, 279-302.]
Crane Brinton wrote in 1947 that establishing employment as a natural right is difficult (p.300):
The doctrine of natural rights is … not a theory, not an attempted description or ordering of the facts, but a faith, the essential dogmatic basis of what Carl Becker has called the ‘heavenly city’ of the eighteenth century.
The crucial difference is that the natural right approach relies on faith to motivate the conclusions.
Tool (1998: 285) said that the validity of a natural right:
… is a function not of causal demonstration but of antecedent reverential belief. It embodies and recommends a value premise that must be accepted prior to inquiry and is validated not through causal demonstration of connectedness but through a priori deference to God, Nature, or other metaphysical ‘determinant’ (sic)” (emphasis in original)
[Reference: Brinton, C. (1947) ‘Natural Rights’, in Seligman, E.R.A. (ed.), The Encyclopeaedia of the Social Sciences, New York, Macmillan.
The calls for full employment based on various Papal Encyclicals (for example, Rerum Novarum , 1891; Laborem Exercens, 1981) and other Catholic writings fit into this approach.
The content depends on the prior faith.
While the Christian Democratic ideals embodied in the All Souls concept in Catholicism provide a firm basis for solidarity or collective will in society and thus a justification for government intervention to drive unemployment to its irreducible minimum, they still require one to accept the prior belief system.
However, the conclusions can be separated from the prior beliefs and be based in the empirical, causal level of perception.
In contradistinction, Mathew Forstater (2015) suggests that we should not abandon the argument for a natural right to employment just because it might be harder to establish and rely on faith statements.
He writes (2015: 63) that:
… the natural rights argument can be combined with other rationales to bolster support for the right to employment. One compelling reason not to reject the natural rights argument is that it is the ‘most traditional, and probably most legitimate, Western frame of reference concerning rights’ (Siegel, 1994: 78). In addition, a number of important supporters of the right to employment base their case on natural rights. These include prestigious scholars, but perhaps most importantly the Roman Catholic Church has long supported the natural right to employment. The nat- ural right to a job is usually deduced from self-evident first principles of natural law, such as inalienable rights to ‘life, liberty and the pursuit of happiness’.
[Reference: Forstater, M. (2015) ‘Working for a better world: Cataloging arguments for the right to employment’, Philosophy and Social Criticism, 41(1), 61-67.]
In this book, we do not resort to these non-empirical and extra-causal concepts for our claim that employment should be considered a human right.
Discussion of human rights tends to concentrate on civil and political rights, where citizenship and membership are relevant concepts.
As noted in the Introduction, the Universal Declaration of Human Rights does include the right to work, the right to food and the right to social security.
Both the United Nations and the International Labour Office have ratified the right to work with the 1946 ILO Declaration of Philadelphia asserting full employment as a national and international goal.
Siegel (1994: 25) points out that countries have been reluctant or unable to mandate such a right, often within the context of their reluctance to codify and enforce any human rights for citizens.
Given these issues it has been acceptable to regard the right to work as a non core right that should be left to individual countries to enforce or to be interpreted in the context of rights of work, including EEO, non discrimination and freedom of association (Siegel, 1994, 28).
An examination of the procedures adopted by various governments leads to the conclusion that the concept of employment rights has been narrowly interpreted as encompassing the rights of those in employment and excluding any rights to those who are unemployed.
We can justify regarding work as a human right in a number of ways.
First, labour income constitutes the major income source for the majority of individuals and households. Without income, ability to participate in a market economy is curtailed.
Advanced nations have recognised this by introducing income support for those who cannot earn income because they are old, sick or are otherwise engaged (for example, in caring).
These income supports have also been extended to the unemployed in various guises.
Second, access to income also governs access to other rights, including minimum requirements of clothing, food and housing.
In this regard, paid employment shares a direct relationship with food and water as a requisite for subsistence in many societies.
As Siegel noted above, being excluded from work often is accompanied by misery and early death for millions of people.
Third, having paid work enhances the choices available and the opportunities for advancements. The unemployed are often prevented from accessing credit, which limits their consumption possibilities.
They are typically deprived from accumulating wealth in the form of homeownership. They cannot engage in risk management through saving and thus have less chance to take vacations, invest in their own education and training and maintain fixed assets that we deem to be essential (housing, motor vehicles, etc).
Fourth, while their choices are constrained by their lack of income, their exclusion goes beyond this. They are not accorded the status attached to employment and they make no contribution to market activity; the barometer of worth in a market economy.
The right to work is thus established. But what exactly does that mean – what is a ‘right to work’?
We argue that it is a State responsibility for ensuring that those who wish to do so should be able to obtain paid full-time (or fractional) employment.
The guarantee should be made operational by the State and if the non-government sector cannot generate sufficient employment to match the preferences of the workers, then the State has a legally enforceable duty to ensure there is full employment.
We then encounter all manner of detail about the quality of the work guaranteed, the remuneration that would be guaranteed and the working conditions that come under the umbrella of state responsibility.
In general, the guidelines that the State should apply is whether the work provided is safe and advancing both the worker and societal well-being.
The guaranteed wage should permit a worker reliant on it to enjoy a socially-inclusive life relative to the norms of the society they live in.
This is not a ‘subsistence’ wage. It encompasses broader considerations and would be supplemented by public goods (so-called ‘social wage’ components) such as child care, free education, and other benefits.
The guaranteed wage would become the legal minimum wage and all workers would receive the standard protections consistent with the right to work – holiday and sickness benefits, protection against unfair dismissal, and occupational safety.
The reason these rights are not enjoyed by all workers is due to failings of government and any neglect of the right to work by such governments, enables unemployment to flourish across the globe.
The link between full employment and the right to work
Full employment was regarded as a standard objective of economic policy in the post war period. An economy cannot be efficient if it is not using the resources available to it to the limit.
The concern about full employment was embodied in the policy frameworks and definitions of major institutions in most nations at the end of the Second World War.
The challenge for each nation was how to turn its war-time economy, which had high rates of employment as a result of the prosecution of the war effort, into a peace-time economy, without sacrificing the high rates of labour utilisation.
The challenge and aspiration was articulated in the advanced nations in the immediate Post War period in the form of White Paper statements.
For example, in 1944, the British Government released its Economic Policy White Paper – which set the Post-War policy agenda that the government proposed.
Its opening statement is that:
The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war … A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level … Total expenditure on goods and services must be prevented from falling to a level where general unemployment appears.
It was left to the British economist William Beveridge to define what was meant by full employment.
His 1944 book – Full Employment in a Free Society – said that full employment (p.18):
… means having always more vacant jobs than unemployed men, not slightly fewer jobs … It means that the jobs are at fair wages, of such a kind, and so located that the unemployed men can reasonably be expected to take them; it means, by consequence, that the normal lag between losing one job and finding another will be very short.
Today, we would express this in gender neutral terms but the intent would be the same.
Beveridge’s definition does not mean zero unemployment:
Full employment does not mean literally no unemployment, that is to say, it does not mean that every man and women in this country who is fit and free for work is employed productively on every day of his or her working life.
Some unemployment will be associated with full employment due to frictions (people moving between jobs) but full employment meant, in operational terms, that there would always be more unfilled vacancies than unemployed workers.
The Nobel Prize winning economist William Vickery said in 1993 that full employment is:
… a situation where there are at least as many job openings as there are persons seeking employment, probably calling for a rate of unemployment, as currently measured, of between 1 and 2 percent.
In terms of the time that was reasonable for a person to remain unemployed, he considered full employment meant that an unemployed person “can find work at a living wage within 48 hours”.
[Full reference: Vickrey, William, 1992. “Chock-Full Employment without Increased Inflation: A Proposal for Marketable Markup Warrants,” American Economic Review, American Economic Association, vol. 82(2), pages 341-45, May].
Who was responsible for maintaining full employment? Beveridge (1944: 123-135) said
The ultimate responsibility for seeing that outlay as a whole, taking public and private outlay together, is sufficient to set up a demand for all the labour seeking employment, must be taken by the State…
So he was in accord with our right to work approach.
There were other major White Paper-type policy statements in advanced countries that followed the British White Paper and Beveridge’s book, which defined full employment as a fundamental aim of the national government.
The wording of these documents was clear – full employment required active government support to ensure that aggregate demand was sufficient to maintain employment opportunities for all those who desired to work.
The commitment to full employment by governments started to wane in the mid-1970s.
From the early 1970s and the first oil price shock, unemployment edged upwards and full employment has either been either redefined or ignored.
Indeed, unemployment became an important tool for reducing inflation and stabilising inflation expectations.
In abandoning the responsibility to maintain full employment, governments, effectively, also denied workers the right to work.
To restore the human right to work, governments would have to actively pursue a full employment policy.
The implications of a full employment policy are considerable.
First, it would mean greater use of labour and capital resources, as mentioned the single most significant efficiency reform that could be implemented in Australia is the elimination of unemployment. The direct financial benefits to the economy would be enormous in terms of additional GDP every year.
Second, it would mean fewer fluctuations in aggregate economic activity. It would be clear that government policy would trigger mechanisms to generate jobs for those who are made redundant by the private sector.
Such a situation would offer greater certainty for investors in the private sector since investment decisions would be undertaken in an ongoing full employment economy.
Third, the extent of social exclusion and alienation and the poverty associated with unemployment would be significantly reduced.
A full employment policy is a policy that facilitates social inclusion.
Fourth, employers would be forced to contemplate how to better utilise labour and how to raise labour productivity through investment in machinery, technology and training.
There would no longer be the emphasis upon cost cutting, lower wages and static efficiency gains associated with surplus labour conditions.
What is the way in which a progressive government can integrate the right to work within a full employment policy?
A Job Guarantee
The starting point for a full employment policy should be the introduction of a buffer stock employment function, which we now refer to as the Job Guarantee.
While later chapters will consider this policy in more detail, the essential characteristics of the framework satisfies the necessary conditions to guarantee the right to work within the legislative structure of a nation.
Effectively, the government uses its fiscal capacity to guarantee the right to work by offering a guaranteed, socially-inclusive minimum wage to continuously absorb workers displaced from the non-government sector.
The Job Guarantee would automatically increase government employment and spending as jobs were lost in the non-government sector, and decrease government jobs and spending as the non-government sector expanded.
In other words, it constitutes a mechanism through which the right to work could be delivered.
Conclusion
To eradicate the burden of mass unemployment governments must implement new policy structures.
First, the right to work must be recognised and codified within legislation. Governments must be held accountable for their responsibily to enforce the legislation, which means they have to stand ready to provide sufficient work for all those who desire it.
Second, by guaranteeing the right to work, the State is forced to develop and implement a full employment policy.
Third, the introduction of a Job Guarantee offers a means for realising the right to work and full employment objectives. It is a practical solution and should be the minimum policy offering for any government serious about maintaining the human right to work.
The series so far
This is a further part of a series I am writing as background to my next book with Joan Muysken analysing the Future of Work. More instalments will come as the research process unfolds.
The series so far:
2. Employment as a human right.
The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due out in 2018 and will probably be published by Edward Elgar (UK).
That is enough for today!
(c) Copyright 2017 William Mitchell. All Rights Reserved.
Bill,
I find the Tool quotes verbose and filled with jargon perhaps you could highlight the key points he is attempting to make.
Regards
There is both an ethical right to work and an economic argument for real full employment. The understanding that the ‘market economy’ is a system of rules and norms that people created to work for them to enable society to prosper ties these together. Lets get a Job Guarantee.
My only query is how do job vacancies match up to the aspirations of potential employees. In the post war period the spread of job opportunities was more in tune with the workforce abilities. I don’t think that now.
What happens when the job opportunities are menial or too far away from suitable job seekers? I recall you said if they didn’t want to work, it was ok they stayed poor. But that means they have to relocate to follow jobs, which takes their children out our school and loses friends etc so it’s draconian. The job may be of an impermanent nature which means relocation will be a big issue.
So the job guarantee has to overcome these obstacles. It has to find appropriate jobs for a wide range of skills within the local areas. Forcing people to follow jobs is only OK for some, like single persons, but it is not a one size fits all scheme. FIFO schemes work for some already, but it’s a particular arrangement.
I am not confident the government will be very successful achieving a guaranteed employment, unless you find physicists cleaning up parks for example.
Has this been thought through?
“how do job vacancies match up to the aspirations of potential employees.”
Normally jobs are created and people are matched to them. The Job Guarantee works more the other way around. You take the people as they are and create something for them.
Hence why you’ll likely push the task onto ‘Social Entrepreneurs’. You are, after all, trying to fix the matching problem.
That doesn’t mean you necessarily get your first choice. It is still a negotiation. But because Job Guarantee is really an extension of social care it is tailored to your needs and the needs of society as much as any such system can be.
Only the Job Guarantee creates Jobs for the People.
I agree with John Doyle. Currently in the UK we are in the fruit-picking season and growers are having difficulty in recruiting pickers. For quite a few years most of these workers came from East European countries such as Roumania, but this flow is starting to dry up because of Brexit fears. Here we have unemployment still of around 4.5% amongst the indiginous population (whatever you count them to be), and the under-employment rate is around 15% (figures from my highly suspect memory). But, as John points out, and reiterated in a recent TV feature, underemployment mainly resides in the North-East, whilst the fruit is grown mainly in the South-East where there is very close to full employment. (And, I read today in an ONS report, a very considerable fiscal surplus of 14.9% of GDP – ONS figures for 2015/16, not my memory). So the part-time workers in, say, Leeds, can hardly get on their bikes and nip down to Faversham for a day to pick strawberries. It is also, surprisingly, a highly skilled job as the TV reporter descovered when put to work in the poly-tunnels.
Not trying to pour cold water on Bill’s points, but there are problems about it that, as John says, would need to be addressed. Maybe there are public works projects that could be started in Leeds, for example, which is what I assume JG is all about. In fact, the recent agreement with the DUP to increase spending in Northern Ireland by £1bn (which some say is a bribe for DUP votes) will hopefully serve to aleviate some of the unemployment that exists there. I suspect that sort of increase was already pencilled into Hammond’s October budget anyway, along with more help for all the regions. And it’s only a budget forecast, the actual fiscal outcome may well be much higher because the devolved administrations are responsible for allocating a good proprtion of spending and, as I understand it, the Treasury just foots the bill, unlike what happens in a federal system. The infamous Government Expenditure and Revenue Scotland (GERS) demonstrates that.
John Doyle,
In an earlier blog post, Bill said he and his MMT colleagues have done surveys on what jobs will be available under job guarantee and they have written extensively on the subject.
Check out “There is more to the Job Guarantee literature than a few blog posts” on this website.
We can (and should) look at the literature to get an idea of what JG people are saying before making any conclusions saying that this/that won’t work or anything along those lines.
Chances are they have already looked into those problems.
Nigel Hargreaves,
You have unemployment/underemployment in North-East. Fruits are grown in South-East that need to be picked. The South-East is very close to full employment. The Romanian fruit-pickers are leaving the South-East.
Problem is Romanians leaving and farmers do not have fruit-pickers now =(.
If the farmers/society want the fruits to be picked, then they will have to offer incentives for people in South-East to leave their current jobs to pick fruits or enough incentives for people in North-East to relocate to South-East to pick those fruits.
Usually when I think of foreign food pickers, I can’t help but think that the farmers use foreigner because of the foreigners are hard-working and are willing to work for low wage (though many Mexican migrant farm workers in terrifying conditions), so I’m guessing that’s the case in Ireland but with Romanians instead of Mexicans.
The country has grown reliant on foreign fruit pickers. When the pickers leave, then the private fruit sector can either use market incentives to bring people in from other places, have the government help by subsidies, or maybe even let government take the industry over. Private sector will have to train their workers (I know right, they thought they could get free lunch); if they can’t afford that then government must take it over if they want to maintain domestic fruit supply.
I believe that over-reliance on Imports have the potential for other countries to strangle you.
If the government can pay for an unproductive/invasive military and unproductive science researches (and many are, just the way scientific researches are; a huge number of them cannot be replicated), certainly it can pay more to farmers to make their lives better.
What do you think?
For your second paragraph, you are saying that some companies are being enriched because of government corruption? I agree with that, Warren Mosler does not seem to talk about fighting corporate greed at all (but Michael Hudson and Bill Black do that quite a bit though).
“but there are problems about it that, as John says, would need to be addressed.”
Do you not remember “Pick your own”?
As anybody who comes from Lincolnshire, etc will tell you none of this stuff was grown in the UK prior to there being armies of cheap labour available. So what will happen is that we will go back to growing stuff that can be harvested by machine, or distribute the growing around the nation closer to where people live so they can do the ‘pick your own’.
And that means we will have strawberries grown for flavour, not ones that are robust and flavourless but can stand being shipped hundreds of miles to a supermarket.
Brexit means change. Those that have invested based upon getting cheap labour will go bust and be replaced by those who are prepared to pay a living wage.
There is no justification at all for paying state tax credit subsidies to foreign workers so that people in Waitrose can have cheap soft fruit.
Tom, you are quite right, I did read that post and had it in mind when I wrote my reply. Maybe I ought to read all those posts before putting finger to keyboard.
Neil, you are quite right too. I may be guilty of buying into the media hype. I remember when I was a kid in the ’50s there were all manner of fruit grown on my doorstep (in the Southwest). There were huge cherry orchards, all of which are gone and replaced with housing estates. It might also be that the fruit-growing areas are only in the southeast because that’s where the Romanian seasonal migrants can get to and from easily. The UK isn’t that big, and with global warming it may well be just as easy to grow strawberries in Leeds as in Faversham. There are even vineyards in Yorkshire these days. However, I am clear that indigenous workers don’t want to pick fruit. And have you seen the price of fruit in Waitrose lately??
I would add that I am currently reading “The Second Machine Age” by Erik Brynjolfsson and Andrew McAfee, and just wonder whether we ought to be preparing for a future without work. There are, for example, 1.5 million workers in the UK who drive for a living. By 2022, maybe earlier, there will be self-driving trucks coming on stream and the transition will be complete within a decade. I read elsewhere today that even 50% of finance sector jobs will be gone within the same timescale. The Luddites fought against mechanisation for fear it would destroy jobs when it actually increased them. I don’t think the same can be said about AI.
Full employment was needed when there was a real threat of communism. At least as it was perceived by the top end of town, they were once also afraid of democracy – the common man might vote in their class self-interest. The awareness of these threats was much higher among the top end of town who was well aware of how unjust society was organized.
Then it come more and more obvious that communism was no serious threat and full employment could be phased out. After all it did have “nasty” side effects, it increased economic democracy and gave working people real clout to have a saying on how society should be organized. “all” agreed that it have handed to much power to the masses. Including Social democracy and Labour parties.
It was done without any serious protest against it, people have been so dumbed down on macro-economic issues that today they hardly even have to pretend and lie about it as some necessity for the common good.
The rising up of the masses haven’t happen and will not. Not whiteout charismatic leadership.
A fair society should give all a decent living standard and livable wages. If this a threat to cause inflation it’s the better of middle class that must pay with reduced consumption space. If the goal should be achieved. There could be plenty of good reasons to tax the rich, but to balance aggregate demand isn’t one. They are too few and consume only a small part of their income and wealth.
The lefts nonsensical view on economics is that take from the rich and all poor could live well.
How many decades will it take to reform the lefts view on money and finances? Is it at all possible?
Sweden have a so called leftist gov. they now think Public Private Partnership (PPP) is a good way to build general infrastructure as roads and highways. In the late autumn budget the finance minister explained how banks was functioning as middle man between savers and borrowers! She was educated at Sweden’s prime economic university – Stockholm School of Economics and pursued graduate studies for 3 years and have studied some economics at Harvard and in Wien Austria. Her husband is professor on Stockholm School of Economics.
She is constantly boosting about the “strong” public finances.
How could these leftists be changed?
She advocates PPP in a situation where there was budget surplus 2015/16 and will be in 2017 and she project the surplus to grow to 2020, in a country with low general gov. public debt (~40% of GDP) and net surplus (~18%). AND a record indebted private sector (~235%).
The 4 major banks are in much “financing” the record indebted private sector in foreign currency, the four major banks have about 180% of GDP in foreign currency liabilities.
Lasse,
“The lefts nonsensical view on economics is that take from the rich and all poor could live well.
How many decades will it take to reform the lefts view on money and finances? Is it at all possible?”
I like this one. It is quite true. although I think it is just to tax the wealthy in order to make a more fair egalitarian society, the focus should be on making the poor live better and about how to perceive&manage the economy properly.
Like when Bernie said he was going to pay for free college tuition with tax on wall street speculation. While both ideas are good for the public, the tax is not needed to pay for free college. It can be frustrating but, on the other hand, it’s also a white lie because everyone is so brainwashed that reality seems mad to them.
Of course, you may argue that its better in the long run for people to know the truth about sovereign government spending. I can agree to that.
For Sweden private debt, yes, I first learned about that when Steve Keen talked about private debt being too high.
How much the right wing here would love to see Sweden crash when their private debt becomes so high it can’t be serviced. They will blame government and socialism and takers…etc. The mainstream left would have no answer to that.
Nigel Hargreaves,
I think that we have been brainwashed into thinking we can’t do anything about making jobs available to people.
Before inventing all these institutions and economic knowledge, I think people knew the number of brick houses a village can built is only constrained by space, material, and labor (real constraints).
It’s that we have been living in this system for so long, we think that money is a real constraint when it’s not. Like when I hear other people in the science research say, “we are running out of money.” The question to that statement should be to inquire whether the private sector is able to produce those reagents? If the lab didn’t buy the reagents, would the reagents be used in some better ways? Does the production of that reagent damages the environment too much? We should be asking questions about real constraints–not financial constraints.
If robots take over jobs, fine, we will do other jobs. Now, I haven’t read that book you are reading, but there will be more need for government jobs because businesses will become so efficient, they simply cannot hire enough people (maybe 2 more robotics engineers and some people who can repair).
If a nation can manage its economy well by running enough deficit, its citizens will be able to enjoy their lives (as they should!) because of technological progress. (simple fact is that as technology get more sophisticated, humans will be lead more sustainable/healthy lives).
I think neo-liberalism is a much bigger problem than technological progress. neo-libearlism hurt huge number of people for no reason and creates hopelessness and desperation; it distracts us from what we need to do.
@Tom
We at least have a fairly large current account surplus. If and when it crashes it will of course be blamed on the bottom end of society, living beyond its means. And not least the left as in Social democrats who will explain this with a grave voice to the people and explain there is no alternative to austerity.
Our lefty finance minister doesn’t seem to make any connection between her “strong” public finances and huge private sector debt. So, she “save” in our sovereign currency while the banks borrow money in foreign currency to prop up our domestic economy with more and more loans on peoples housing, about 70% is increased debt on already owned property. Household debt is about 85% of GDP and about 150% is non-financial corp.
And now she thinks it’s a good idea to make the private sector in debt them even more for PPP projects. Despite public sectors “strong” finances.
The main theme among the established left here is that those at the bottom should climb the social ladder to save them self from low wages and poverty. Normal logic says that far from everybody can do that. That those at the bottom doing the “dirty” work should have decent wages doesn’t seems to occur to the elite left, no, they should climb the social ladder.
I would say the real left died many years ago.
Lasse,
I didn’t think Sweden was that bad before I learned about its private debt accumulation (I’m American).
I recently read a book by Thomas Frank called Listen Liberal. In it, he laid out the same observations you made there. The elites’ solution for people is to make excuses: why haven’t you gone to college? why have you chosen that major? why haven’t you chosen that particular major in that particular institution? why haven’t you done internships?
At the same time, they let the FIRE sector run amok.
Many people don’t understand the fallacy of composition. We simply can’t all be successful when those in charge keep squeezing the economy and cut government deficit. Also, not everyone likes engineering; not everyone has the resource.
Chrislongs: IMHO Tool’s distinction between natural & human rights is largely nonsensical, and to the extent Bill Mitchell follows such, his work suffers. It would be a better book without such pointless, wrongheaded criticism and irrelevancies. Forstater’s point of view is more serious, fruitful & scientific, while Bill Mitchell, Marc Tool etc are looking at things from a point of view which while dominant in the 20th century is becoming ever more antiquated and rejected.
E.g. distinguishing between:
1. To assert a natural right along the lines of the doctrine of natural rights which dominated the thinkers of previous eras. … & “The content depends on the prior faith”
2. To use factual experience and analysis of outcomes derived from these experiences. This is a pragmatic, instrumentalist approach … & “However, the conclusions can be separated from the prior beliefs and be based in the empirical, causal level of perception.” … & “we do not resort to these non-empirical and extra-causal concepts ”
Tool’s “antecedent metaphysical belief which cannot be integratively incorporated into the human inquiry process” is slander that applies to nobody, no thinker in history. For 2 is simply impossible without something like 1. There is no getting away from “metaphysics” a la #1.
It is fact of empirical experience that the (worldly) philosophers who are most captured by their own metaphysics, their own “faith” are those who do not scrutinize their own metaphysics, who use the word as a term of abuse, and who then convince themselves that something like 2 is possible. That description fits (bad) neoclassicals to a T.
But thankfully, neither Tool nor Mitchell practice what they preach, they do not follow their own sort of bad advice and bad philosophy – they’re both good thinkers. All this is just a decoration, which should be ignored. It is just literary fashion criticism of the way other thinkers and traditions have presented “metaphysical presuppositions” which in fact are basically the same as the one that Bill, Tool, etc use, but don’t call that.
“In general, the guidelines that the State should apply is whether the work provided is safe and advancing both the worker and societal well-being.
The guaranteed wage should permit a worker reliant on it to enjoy a socially-inclusive life relative to the norms of the society they live in.”
This is a very good beginning and needs to be unpacked in terms of the occupational hazards of forced idleness or underemployment (example of the latter: high school math teacher unpacking groceries onto shelves). Occupational habilitation means maintaining skill sets through usage, but linked to that is the hazard of personal degradation that occurs when a person is forced to sit idle for say more than three months. The costs to the larger society are tremendous but the costs via the intrapsychic conflict (a mental struggle arising from the clash of incompatible or opposing impulses, wishes, drives, or external demands) are incalculable. People not only lose self esteem from being forced to not work but there is a very real physical sense of worthlessness that builds as the victim observes there skill sets fade into a field of non recoverable objects. In short, forced unemployment is debilitating in ways that are not usually talked about.
We need to start talking about it.
Jobs Guarantee – Bring it on! For people in or facing unemployment getting the ‘perfect skills fit’ in a Jobs Guarantee scenario is of LITTLE IMPORTANCE over securing an income stream (above Newstart poverty level), that keeps mortgages and bills paid, families together and lives intact!
IMO JG could be considered as a temporary employment measure, that does not preclude the recipient whilst on JG from chasing more ideal matching roles in the public/ private sector.
Readers of this interesting and helpful blog article might also be interested in an oped piece in The Guardian today, which critiques the motivations of wealthy supporters of ‘Universal Basic Income’ and similarly advocates alternatively for what I have previously raised as needing to be legislatively inserted into a definition of a jobs guarantee/full employment: ‘We should be fighting for a society in which everyone has the right to a decently paid job that provides them with autonomy and fulfilment” (extracted from article).
https://www.theguardian.com/commentisfree/2017/jul/10/mark-zuckerberg-universal-basic-income-facebook-tax
If a UBI is not supported, and some people consider that a jobs guarantee is better – do we need the definition of a ‘jobs guarantee’ to be clearer (ie so it is not just part time casual low paid insecure now and then jobs) – so that an unequivocal definition is legally enshrined in our Constitution or in a future Human Rights Act – just as this oped article says? “… the right to a decently paid job that provides autonomy and fulfilment…”? I look forward to seeing such discussions, expanding across all aspects of Australia. What seems bizarre in Australia – is unemployment and under-employment, including amongst university and even PhD graduates with HECS debts – whilst 457 visas have now been extended to include the importing of, for example – ‘university lecturers’? A jobs guarantee seems to (rightly) return power to the people/employees – which may not be what employer/1% groups, want? Is this why UBI is contentious? I still remain open minded presently, on these issues.
Thank you for these blog articles and the opportunity for public discussion.
Dear Magdalene D’Silva (at 2017/07/10 at 9:55 pm)
The MMT definition of a Job Guarantee job is the anathema of a “part time casual low paid insecure now and then job”.
We have written about the structure of JG jobs and remuneration forthcoming often.
best wishes
bill
Dear Bill
Many kind thanks for your help; just realised there is a JG guarantee archive on your Blog here so will begin to look through these.
*Is the main difference between UBI and JG that: in the former, you are provided a sufficient basic income to live and survive, without any pressure whatsoever to get a formal ‘job’ at all so there is no legal ‘contract’ relationship of ’employer/employee’ first, in order to receive a basic income to cover one’s subsistence living costs, because a basic income to live, is given as a human right?
**Whereas a JG also guarantees a basic income, but only for those who are willing to first enter into a legal contractual relationship, in the form of a ‘formal (long-term guaranteed) job’ as employer and employee? The ‘state’ becomes a guaranteed permanent ’employer’ (you can quit this state guaranteed job at any time: for no income or, to go to the private sector)?
I am noting David Graeber’s observation that neoliberal capitalism seems to have created a whole raft of (highly paid) ‘bull s….t jobs’ (which might account for the modern epidemic of workplace bullying, office politics and the subsequent explosion of ‘ethics advisers/risk and compliance specialists’ and ‘corporate governance experts’ etc)? So will read through the JG blogs to see how a JG might deal with any risk of exacerbating a potential phenomenon of bulls…t jobs?
I understand there also seem to be feminist critiques (potentially by male and female scholars) generally, of the definitional concept of a ‘job’ which does not always respect and recognise, the value of labour done by all people in situations of: the home, between friends and colleagues, caring for children, caring for parents, caring and supporting friends, counselling or helping strangers etc.
Alot of such ‘work’ is done by people everywhere, daily (whether or not they are married or have children etc) – but our legal-economic system (still) does not recognise all these essential human efforts as a ‘job’ because: none involve a legally sanctioned relationship of ’employer-employee’?
For example, after the Manchester Bombing tragedy recently – various homeless people (presumably not formally employed in a ‘job’) and taxi drivers, reportedly came to the rescue of victims, selflessly, without expectation of any thanks or for any payment.
How would a system of a formal ‘JG,’ reward and support such people who act altruistically and spontaneously – without being in the legally created contractual relationship of employer -employee ‘job’?
I understand a ‘job’ to be: a legally enforceable contractual relationship between two or more people as ’employer and employee’ that involves the employee being paid money (consideration) by the employer, for their agreed labouring/work/efforts/services? (ie. not the same as either ‘workfare/work for the dole’ or a ‘volunteer’ both of which still involve ‘labouring/work efforts’ but neither of which is an employer-employee relationship that recognises or treats the working person as an ’employee’ who is not paid money ‘for’ their actual work/efforts/services)?
Thank you again for this public blog discussion which is very helpful as I am still presently seeking to understand the fundamental differences and arguments between a ‘UBI’ and a ‘JG’?
Perhaps others might assist me with their responses?
Best, Magdalene
I would hope that the enlarged fiscal stimulus would provide most of the required employment growth and that the Job Guarantee would then provide work opportunities for the residual unemployed. The reason being the major challenges of transitioning to clean energy and environmental sustainability, economic restructuring, providing universal affordable health care, free education, increased infrastructure spending such as on public transport, ensuring affordable housing for all, adequate aged and disability pensions, affordable childcare and similar, are best provided or funded at the national or state level. The Job Guarantee on the other hand appears to be primarily a local government responsibility so suits local activities like community health, local infrastructure, parks, community arts and similar and so has a quite limited scope.