Regular readers will know that I have spent quite a lot of time reading the…
How hard is it for the government to create some jobs?
The – Report of the Special Rapporteur on extreme poverty and human rights – for the UN was released this week (July 7, 2020). It was Philip Alston’s last report in that role. It is a shocking indictment of the way neoliberalism has distorted our societies and the way the governments with the capacity to ‘move mountains should they wish’ have been co-opted as agents of capital and perpetuate those distortions. The Report is 19 pages of horror. It also resonates with the latest information coming out of Australia’s Closing the Gap campaign, which aims to bring indigenous Australians up to the material level of non-indigenous Australians. The first ten years of the campaign have been an abject failure. And the latest targets don’t inspire any confidence that the outcomes will be any different. A lot of talk. A lot of consultants. But little effective action – for example, like just creating some jobs to reduce unemployment, allow for income security and poverty alleviation. How hard is it for the government to create some jobs?
The UN Report brings all the issues to a head:
The world is at an existential crossroads involving a pandemic, a deep economic recession, devastating climate change, extreme inequality, and an uprising against racist policies. Running through all of these challenges is the longstanding neglect of extreme poverty by many governments, economists, and human rights advocates.
I could have ended today’s post there really.
All of these ‘threats’ are manufactured by the neoliberal order and the compliance of states, and, dare I say, progressives, the latter who would rather feel good about themselves throwing statues into canals than facing up to the reality that our traditional Left parties have completely abandoned the space.
The UN Report highlights a number of failures in the way the international community is dealing with poverty:
1. “COVID-19 is projected to push more than 70 million additional people into extreme poverty, and hundreds of millions more into unemployment and poverty”.
2. “More than 250 million people are at risk of acute hunger.”
3. “Poor people and marginalized communities have been the hardest hit in almost every country, both in terms of vulnerability to the virus and its economic consequences.”
4. “Climate change, temporarily eclipsed from the front pages, is also on target to exacerbate the phenomenon of ‘climate apartheid,’ ensuring that low- income people bear the brunt of unconscionable climate policies designed to protect the status quo.”
5. “And governments continue to pour money into repressive practices and carceral systems, while depriving poor communities of basic rights such as decent healthcare, housing, and education.”
Emphatically, the UN Report:
… criticizes the mainstream pre-pandemic triumphalist narrative that extreme poverty is nearing eradication
You know the story – ‘we are nearing full employment’, ‘never had workers had it so good’, ‘the Eurozone is about convergence’, etc
The UN Report argues that the only way we can claim any progress to eliminating world poverty is because we rely on a ridiculously and deliberately set low hurdle – the “World Bank’s measure of extreme poverty”.
Using more appropriate measures shows “only a slight decline in the number of people living in poverty over the past thirty years.”
Further the “Millennium Development Goals” and the “Sustainable Development Goals (SDGs)” are inadequate and set up to distort reality.
At the centre is the World Bank (surprise surprise) who use their “financial and intellectual clout” to:
… ensure that almost all of the most glowing accounts of progress use its IPL statistics.
IPL is their ‘international poverty line’ measure.
It is “not based on any direct assessment of the cost of essential needs” and is “well below the national poverty lines of most countries”.
So it is little wonder using the World Bank data that poverty declines are substantial. The reality is clearly different.
The UN Report talks about a “scandalous lack of ambition” and the IPL:
… is explicitly designed to reflect a staggeringly low standard of living, well below any reasonable conception of a life with dignity.
The World Bank’s response to the criticisms over the years has been to remain “resolutely ambivalent”.
In recent days, the Victorian government has introduced very harsh lockdown rules on some low-income residential towers in Melbourne. They say they are to protect the residents but they are also protecting the well-heeled who continue to enjoy more freedom.
The problem gets worse in poorer nations.
The UN Report notes that:
The public health community’s mantra for coping with COVID-19 encapsulates the systemic neglect of those living in poverty. The pithy advice to “stay home, socially distance, wash hands, and see a doctor in case of fever” highlights the plight of the vast numbers who can do none of these things. They have no home in which to shelter, no food stockpiles, live in crowded and unsanitary conditions, and have no access to clean water or affordable medical care. Far from being the “great leveler,” COVID-19 is a pandemic of poverty, exposing the parlous state of social safety nets for those on lower incomes or in poverty around the world.
If social protection floors had been in place, the hundreds of millions left without medical care, adequate food and housing, and basic security would have been spared some of the worst consequences.
Why are these floors absent?
Mainstream economists telling governments that fiscal surpluses are responsible when social housing is depleted, when people haven’t enough work, when public health is being degraded, and all the rest of it.
I doubt many of these economists, most with well-paid tenured positions, are doing it tough at present.
The UN Report concludes that in relation to poverty, these goals:
… call for an ‘end to poverty in all its forms everywhere.’ Yet the targets set do not actually seek to eliminate poverty … [the] … targets are patently inadequate to actually end poverty, and the prospects of achieving them are rapidly receding.
The same can be said for the advancement of human rights.
The UN Report criticises the reliance on privatisation to deliver the goals, “especially for the most vulnerable whose inclusion may not be profitable”.
Reliance on private sector funding will not achieve sustained improvements. Where profit is the motive, social needs fall by the wayside.
The UN Report talks about the “cherry picking, self-promotion and self-positioning” of participants to the international discussions.
I once did some work to develop a development plan for an indigenous community in Australia. They used my services because the main consultant in this exercise was moving through the remote communities with his ‘cut and paste’ finger well and truly exercised, producing multiple reports that said the same motherhood statements about ‘complexity of challenge’, ‘difficulty with x’ etc and just altered the name of the community and other specific references.
Growth and poverty
The UN Report makes the obvious point that while mainstream economists urge economic growth, particularly export-led growth as a way ahead:
… the promised benefits of growth either don’t materialize or aren’t shared.
Poverty rates rise as large energy and mining projects extract resources from poor nations.
Cash-crop agriculture displaces communities, “separating people from land they depend on for food, shelter and livelihoods, and resulting in impoverishment.”
The IMF and World Bank model for development is really a big vacuum cleaner sucking out resources and wealth and leaving nothing for the locals.
And then they impose harsh austerity on the government in return for debt enslavement which attacks public health, education and infrastructure.
The UN Report rejects the assertion by mainstream economists that:
… pro-market policies automatically benefit the poor …
The claim is “at odds with the evidence”.
They favour global corporations and harm citizens through:
1. “poorer labor conditions”.
2. “weaker labor rights”.
3. “decreased state capacity”.
4. “reduced healthcare access”.
5. “higher neonatal mortality”.
Pretty much everything we should care about.
The UN Report calls for a a return to a central role for government.
In – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017) – we argued that the government didn’t just vanish.
It was co-opted and reconfigured by neoliberalism.
It is still central but has succumbed to all sorts of demands for legislation to tip the balance to capital.
He also rejected the neoliberal ‘public-private partnership’ model for delivering prosperity.
The UN special rapporteur said that as governments had adopted austerity measures:
… multinational companies and investors draw guaranteed profits from public coffers, while poor communities are neglected and underserved …
Closing the Gap – Australia
In part, the ‘Black Lives Matter’ surge in recent weeks characterises the dilemma.
Yes, racism is horrid.
Yes, as a white male I don’t perceive the issues of colour from an experiential perspective.
I don’t apologise for my whiteness nor my maleness. I am constantly vigilent of my status though and watchful.
But all the around the world I have seen a lot of symbolic ‘middle class’ activity – flags being burned, statues ripped down, police departments being threatened with dissolution, etc – but not a lot of awareness of a sustained solution.
Why haven’t the middle class staged global street marches over the last 30 years to protest about mass unemployment and underemployment?
In Australia, we have had the – Close the Gap Campaign – which set out in 2008 to improve the lives of the most disadvantaged Australians – our indigenous people.
In many ways it illustrates all the things that Philip Alston was observing in his final report discussed above.
Lacking ambition in goals.
Flawed indicators and ridiculously low hurdles.
Lots of motherhood statements.
The – Closing the Gap Reprot 2020 – was released in February 2020.
When the campaign began in 2008, the goals by the end of 2018 in relation to employment were:
Halve the gap in employment outcomes between Indigenous and non-Indigenous Australians within a decade (by 2018).
The Report tells us that “The target … was not met”.
In fact, there was virtually no progress made over the decade.
Indigenous Australians have an employment rate of 49 per cent while for non-indigenous Australians it is 75 per cent.
The “gap has not changed markedly” over the decade.
On other goals:
1. Child mortality – “the gap has not narrowed”.
2. School attendance, reading and numeracy – the targets “were not met”.
3. Life expectancy – “closing the gap in life expectancy within a generation is not on track to be met by 2031”
4. Early childhood education and Year 12 targets “on track”.
The campaign has largely failed in other words.
In the last week, there has been a lot of publicitly about a new ‘agreement’ among leaders for the next decade.
Among the more bizarre targets to emerge was that the Campaign was considering a target to achieve parity in incarceration rates (currently heavily skewed towards indigenous Australians) across indigenous and non-indigenous by … wait for it … you couldn’t make this up … 2 …. 0 …. 9 …. 3. Yes, 2093.
It is almost too large a number for me to calculate how many generations of indigenous Australians will be locked up unnecessarily – usually for crimes of poverty – while banksters who defraud people of their life savings roam free enjoying the largesse that they illegally socked away in some legal trust or something similar.
Here is the data:
1. Indigenous Australians equal 3.3 per cent of the total population per the 2016 Census.
2. They make up around 29 per cent of the total prison inmates.
3. According to ABS data – Prisoners in Australia, 2019 – the imprisonment rate for indigenous Australians has risen by 60.6 per cent between 2009 and 2019 – the period since the Closing the Gap campaign began in 2008.
Non-indigenous imprisonment has risen by 44.4 per cent over the same period.
Withdrawing funds from the police would not seem to go to the heart of the problem.
Even imprisonment rates for non-indigenous are rising dramatically.
Why is that?
Neoliberalism has created a raft of losers.
In a world where aspirations are cultivated to mean success is a big house, huge SUV for driving kids to school, and all the rest of the mass consumption artefacts, increasing numbers of Australians are failing – perception wise.
Young people are being denied access to jobs.
And then they are called entrepreneurs because they drive around at break neck speeds on ill-suited scooters with big boxes delivering food and whatever to those too lazy to break with Netflix and go out.
For that they supply their own capital (scooters), earn a pittance, have no job security, no holiday pay, no sick pay, and no superannuation prospects.
They cannot access home mortgage loans because traditional lenders do not reward the precarious.
They cannot afford child care so how does that work?
And then to get the artefacts of success some realise that pushing drugs or selling their bodies pays well. Prison follows.
And this type of insecurity is creeping into the middle class.
After failing categorically to achieve the targets, the Closing the Gap campaign, which feeds a host of consultants, talks a lot, probably is now helping Zoom prosper, and all the rest of it, have a – new national agreement – which has been labelled an “historic new deal”.
The co-chair of the Joint Council, an indigenous woman, claimed that:
We are making history … A real game changer for this next phase of Closing the Gap is that the expertise and experiences of Aboriginal and Torres Strait Islander people on what works and what is needed is at the centre.
Apparently, the new targets on matters such as employment, will be achieved by “structural reform across government”.
You may ask what that buzz phrase means? For I don’t know.
The new “draft targets” under Economic Development are:
1. “65% of Aboriginal and Torres Strait Islander youth (15-24 years) are in employment, education or training by 2028.”
2. “60% of Aboriginal and Torres Strait Islander people aged 25-64 years are employed by 2028.”
So another 8 years.
Why, for example, are the targets so low? So drawn out?
What ‘structural change’ in government will allow these targets to be met?
Stand ready for failure to be announced in 2028.
The only change that the government(s) in Australia have to make is to take responsibility for ensuring that there is full employment.
Why wait until 2028? When in fact, we have been waiting for decades.
What do you think would happen if the Australian government just announced today that there was to be a Job Guarantee and anyone who wanted to work at a decent, socially-inclusive wage could get a job unconditionally?
The gap would close very quickly.
The only ‘structural changes’ necessary within government are to change the sign of Centrelink (the overseer of the unemployment industry) with a Job Guarantee office sign and send the staff inside away for some re-education to disabuse them of the sociopathological tendencies that the pernicious unemployment system has required them to exhibit when dealing with the most disadvantaged citizens.
I recall a meeting in South Africa where all sorts of high level officials were present describing the unemployment problem there as a ‘complex, multidimensioned problem’ that ‘evades solution’, etc. This sort of self-style narrative is often heard in these gatherings.
Consultants and officials from multilateral agencies talking big, making themselves sound erudite and committed.
At that meeting, when it was my time to speak, I asked what is complex and multidimensional about creating some jobs!
Anytime the government creates jobs, unemployment falls and workers can rise out of poverty.
Pretty simple actually.
I will write more about our plans under JUST2030 to offer real solutions and to better articulate the challenge that is faced in the coming weeks.
Our work is gathering pace.
And as the UN Report notes, we ned to:
… to avoid sleepwalking towards assured failure while pumping out endless bland reports
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.
This Post Has 35 Comments
“Why haven’t the middle class march staged global street marches over the last 30 years to protest about mass unemployment and underemployment?”
Why hasn’t Oxfam sorted out famine after 50 years? Because lots of people earn their living “alleviating problems”. The therapy industry in the USA is the same. As is arguably the pharmaceutical industry. When groups make a breakthrough they continue asking for something ever more ridiculous – because the people working in them are addicted to agitating and alleviating rather than solving.
Nobody wants to address the “root causes” of an issue because it would mean them having to get a proper job. They want to be in the fish distribution business rather than the fishing education business.
If we get government to end a problem permanently, those in the ‘symptom salve’ industry are out of work. We’re back to Upton Sinclair: “It is difficult to get a person to understand something, when their salary depends upon them not understanding it”
Very good article. Some dot points of thought I have had recently regarding jobs and disadvantage:
1. Globalisation doesn’t guarantee an increase of a countries standard of living without proper taxation of the growth. Compare Norway and Australian outcomes on energy fuel exports.
2. The whisperings from Canberra early on in the pandemic was that Treasury were pushing to get Jobkeeper (I know Bill doesn’t like this) for 3 weeks before the Govt accepted the advice. I personally know dozens of businesses that would have sacked staff and shut had it not happened. Some still will in October if it cuts off cold.
2. The fact that the Melbourne resurgence has come form marginal communities is not surprising. They were out working and so forth while those that could stayed safe. An interesting study would be to determine how many of those diagnosed recently missed out on the Govt support due to being recent migrants, internationals trapped here, casuals with lack of long term job security and so on. I know in a main CBD shopping centre in Bris the traders that remained open were ALL recent migrants who had to try and make some money after being locked out of government assistance. The amount saved will probably be exceeded if we end up with uncontrolled community transmission up the east coast!
3. Saving many ABC jobs would have had minimal cost compared to recent expenditure. In fact the Govt actively chose to throw those workers on the jobless list. $50M was given to private media (75% Murdoch) the following week AFTER they had sacked regional staff and closed titles. This is a clear demonstration of the party ideals at play.
4. During the recent work-from-home period, the poor choices made in the Coalition NBN plan were apparent. NBN speed were insufficient, lower socioeconomic groups didn’t have affordable access to services and failures were common. The fact that mobile phone calls were failing is also a symptom of this as the original NBN plan was to sell fibre to the mobile networks. The poor choices made have resulted in a system capable of 4% of the original capacity/speed potential at 50% the price. That is bad business, economics and politics. That the broader community don’t know how poorly the NBN was rolled out reflects on the progressive side of the table. I heard today that some 800 workers will be axed from NBN by the end of this year. Once again, at the worst time. The cost to upgrade the NBN to FTTP was slated at $7B, over 3-4 years hardly enough to break the bank compared to $30B for war machines! This would add to the long term productivity of the economy, but rather we give money for house renovations (this equates to around $650/worker in that industry).
All very discouraging!
“when it was my time to speak, I asked what is complex and multidimensional about creating some jobs!”
Yes. Exactly. Not rocket science.
Loved this article Bill.
” You know the story – ‘we are nearing full employment’, ‘never had workers had it so good’, ‘the Eurozone is about convergence’, etc”
Richard Murphy has launched some kind of you tube channel / podcast type thingy because his ego must have dropped 80% after MMT Q&A was launched. There was Stephanie and a group of MP’s from Westminster having a chat. With ( I’m going to change all of Europe by voting for the status quo) Murphy answering questions.
I never watched it and never will tune in, and I could be wrong, but I am way passed caring about it at this point. I would imagine it would have been a bunch of “folks” from the liberal middle class with their art degrees patting each other on the back. In a severe cloud of Cognitive dissonance.
Were any leavers who supported leaving the European invited on ? With ( I’m going to change all of Europe by voting for the status quo) Murphy answering their questions ? Has he even the courage to engage with them on a MMT level. When he consistently lies when he looks through the MMT lens when it comes to Europe.
If not. These are a group of people who voted for the status quo and tried to overturn the Brexit result talking about ” The Deficit Myth ”
Think about that. Think about the level of Cognitive dissonance needed to chat about “The Deficit Myth” and completely ignore Brexit and the HUGE role these middle class liberals played with their art degrees.
Which brings us back to Neil’s point. “It is difficult to get a person to understand something, when their salary depends upon them not understanding it”
If you watched it I didn’t. Then you probably wouldn’t have learned anything new. These people don’t want to learn and then teach voters the truth. They look at voting polls and act accordingly.
I got blocked by all of the Scottish people on this chat via Twitter ten days ago.
All I said was….
Ah good you’ve read ” the deficit myth ” now you know that
a) The Scottish Growth Commission
b) The SNP stance on the EU/ EFTA
Are both ridiculous.
I wonder if Stephanie knows that Murphy and his merry band of liberals from the left are using her ? They tried the exact same trick with me when I put together MMT Scotland. Difference is, I saw what they were trying to do from a million miles away.
Probably a gamble posting what I have posted considering I never even watched it. Not at all interested in what ( I’m going to change all of Europe by voting for the status quo) Murphy has to say.
Those who did watch it. Can let me know if the EU was even mentioned at all or if any of these difficult questions were even asked.
I for one want to thank Bill Mitchell for his tireless work at changing society.
As someone who has been impacted by unemployment at various times of my life, I speak from the heart.
As a male, I have always felt that unemployment cuts deep. It impacts every area of your life. I am unmarried with no kids. I dont wish to be rich or greedy, just to have a secure job where I can afford to raise a family. Unemployment destroys your prospects in this area and it is hard to ever fully recover.
I find some of Bill’s posts emotionally moving, as we travel ever closer to a point where MMT becomes mainstream.
Bill will ultimately help change many lives and indeed, save lives. Far more than the social warriors who echo like an empty oil tanker.
“The SNP stance on the EU/ EFTA
Are both ridiculous.
It is. Even when you run the most basic of neoliberal models you realise that wages only improve when labour markets become tight.
A country that produces highly trained individuals that businesses want to use and then maintains a relatively “closed shop” in their currency area so that business has to compete for labour will drive up the wage share.
Which beats the “forget about the wage share, let’s just nick the capitalist’s dividends” approach that seems to be all the rage on the left at the moment.
” because the people working in them are addicted to agitating and alleviating rather than solving”
We can add Guardian so-called journalists to that list.
When a once-in-a-blue-moon politician comes along who actually proposes to deal with the issues that need solving, they set about systematically destroying him.
Now that continuity neoliberalism is safely back in the driving seat, the usual whinging and handwringing at the Graun can carry on.
Reading this now inspires me to put on some Max Romeo, Head A Go Roll, Warning Warning.
“Neoliberalism has created a raft of losers. In a world where aspirations are cultivated to mean success is a big house, huge SUV for driving kids to school, and all the rest of the mass consumption artifacts, increasing numbers of Australians are failing – perception wise. Young people are being denied access to jobs. And then they are called entrepreneurs because they drive around at break neck speeds on ill-suited scooters with big boxes delivering food and whatever to those too lazy to break with Netflix and go out. For that they supply their own capital (scooters), earn a pittance, have no job security, no holiday pay, no sick pay, and no superannuation prospects. They cannot access home mortgage loans because traditional lenders do not reward the precarious. They cannot afford child care so how does that work? And then to get the artifacts of success some realize that pushing drugs or selling their bodies pays well. Prison follows. And this type of insecurity is creeping into the middle class.” It’s so heartening to me, and I’m sure to others, when Bill gets worked up and lets it rip in prophetic style. Though it may appear as a modest proposal to improve the operation of free markets, the JG, as Bill and many other MMT economists know, is nothing less than the advance guard of revolutionary change. By creating a job for everyone who needs one, and making that job a decent and secure one, an ever-widening crack of humane socialism would be created in the cruel, hyper-capitalist foundation of neoliberalism. And before long, neoliberalism’s prior “policy decisions” to use scarcity and austerity to weaken the masses, to use unemployment/underemployment to keep them in desperation so that the elite could “live large” and ever-larger on their exploited labor, would come to be seen as having had nothing to do with economics per se and everything to do with the perverse pursuit of sadistic pleasure.
Excellent article and an indictment of politicians and economists. Yes, I also agree with the assessment that the changes have been symbolic at this moment.
I think the cultural criticism is also on point about what success should mean.
I agree with Neil. I feel like there are a lot of careerists that are not really interested in solving problems and just want themselves a middle-class lifestyle.
My more radical opinion below:
We agree that the problem is that capitalists are making the decisions and not the people.
There can be no reform if the state is captured by capital. The solution is clearly to recapture government. Then, we can introduce the job guarantee and all the other goodies (so as we say: reclaim the state!)
But if we believe that the state must be claimed by working people so that working people can introduce socialist policies to benefit human beings instead of capital. How can one not characterize what we aim for as a socialist revolution?
If we want to change our social definition of success and shift our focus towards human beings instead of capital, then how can we not characterize our own aim as a cultural revolution? Are we naïve enough to think that the mindless careerism or materialism is not a cultural problem? Can we not see that our ignorance (or even the blame-the-victim mentality) of the unemployment problem as a cultural deficit?
Perhaps the way out is a revolution no less? Beyond MMT, we should all steel ourselves to read & practice Marxist-Leninist theories and join trade unions/political parties to pull the masses to the left and educate about surplus value as well as MMT anywhere/everywhere we go.
MMT has tremendous value in the current system and in the new society we create–namely that government is not revenue constrained. One can imagine people debating pointless budget constraints even in the new society because they carry the ignorance instilled by a previous order of capitalist exploitation and suppression of independent thinking at all levels. Finally, by reading these blog posts, we should realize that economics is not end all be all, but we HAVE to use economics to achieve certain social goals, which is the point of economics. MMT will be one of the tools to debate and knock out the people who want to go back to the barbaric system we have now.
In America, the hardline progressives have no problem with capitalism. They make every excuse saying that “oh, this isn’t how it SUPPOSED to be or Oh this is crony capitalism.” They always portray the inequality and dysfunction as anomaly and not a systemic feature of capitalism.
Lately, I have also had the same problem with the term neoliberalism. We can largely summarize neoliberalism as an order where capital and finance capital reign. They capture government to generate as much profit and destroy public enterprises as much as possible.
Isn’t this just capitalism? Surely, Marx did not make a new term up to describe the iniquities of capitalism. Yes, capitalism is the economic order whereby employers hire “free labor” to produce commodity and chase exchange-values, but all the child labor and destruction of families and brainwashing/apologetics by economists and violence of the state that come with it must be included in the analysis of capitalism.
“Why haven’t the middle class staged global street marches over the last 30 years to protest about mass unemployment and underemployment?” I would suggest it’s not just because they are happy to be in the ‘symptom salve industry’ (Neil Wilson) but because enough of them are desperately hanging on to the coat-tails of the really wealthy and trying to distinguish themselves from those who haven’t strived or made the most of their opportunities, or more perversely, have chosen some social job like nursing in the full knowledge of low pay.
With regard to, as Bill says of ‘Job Centres ‘send the staff inside away for some re-education to disabuse them of the sociopathological tendencies.’ Unfortunately, certainly here in the UK, re-education, or maybe a spell of unemployment, is needed for a much wider number of public sector employees – in the Home Office and Treasury for starters.
George Monbiot in the Guardian the other day was mulling over neo-liberalism and fascism and wrote ‘we (the US and UK) are nowhere near the conditions of the Great Depression … .’ Aside from just how close we get to millions being left without any adequate safety net, an immediate reaction should be, Greece, as well as those other eastern European countries whose people have trecked Grapes of Wrath style in search of work and support. Fortunate the Great Depression was forced on little Greece and not Germany.
Mr Shigemitsu, re the Graun, I share your disgust.
‘send the staff inside away for some re-education to disabuse them of the sociopathological tendencies’
I’ve been banned from posting comments on Richard Murphy’s blog. The punishment for disagreeing with him. He wrote a book called The Courageous State but ducks away from anything courageous. He was interviewed on the radio and in 15 minutes never once mentioned MMT. He wants omelettes but won’t crack the eggshells.
No surprise there at all.
We all know the reason he won’t crack the eggshells. He simply has no idea how to make an omelette. He always ends up with scrambled eggs.
Join the club, Rod. I consider it a badge of honour – but that only boosts Murphy’s ego. Last time I saw him was at GIMMS launch – when we were still on hugging terms.
Why, do you suppose, there are two very different narratives?
There is an entrenched establishment story, well rehearsed and presented again yesterday by the British Chancellor Sunak of borrowing, deficit and tax increases against a looming background of austerity and deep recession. The narrative was ably reinforced by the mainstream media commentators – in a BBC radio interview with Sunak this morning, the presenter said:
“Of course there is no magic money tree and you’re having to borrow all this money the government is spending. We have to pay it back with interest sometime. How soon before we see significant tax increases to repay the debt?”
Sunak was delighted. “Yes, of course you’re correct, but the government is doing what is necessary to protect vital areas of the economy..”
Then there is what I would call, the enlightened narrative – in its purest form on this blog and those of other forensic economists (I consider this a more appropriate sobriquet than MMT “advocates” – for that is essentially what Bill and others have provided: a detailed, forensic examination and explanation of a hitherto secretive practice in global finance).
I don’t need to explain that narrative in this post – I am still learning, just as much from many other contributors as Bill himself – you know what I mean.
After all this time – six months into a pandemic that still has the very real potential for catastrophic depopulation – and on the back of enormous environmental damage since the industrial revolution – do we even entertain such nonsense? Humanity is facing a cataclysm, which may take centuries – not years – to recover to something we might think of as ‘civilisation’ – another Dark Ages.
But we have the knowledge, technology and expertise – not only to navigate through the difficulties of Coronavirus and any other infectious disease – but to help restore the environment of this planet that we’ve badly damaged in such a remarkably short time.
Whatever we do, whatever system we choose to create and live within, however it is administered – humanity’s principle responsibility is to look after this miracle of a place we have been so fortunate to be part of. It doesn’t belong to us – we’re just the caretakers for future generations of all life here to enjoy and marvel at.
Our time on this planet should be as amazing as what it offers us. We really should be deliriously happy every single day – just to be alive and to experience what that means in its entirety. Whatever else there is, this place is the Garden of Eden. It is the here and now. Whether we are part of its future very much depends on what we do – all of us – now.
The first six months have not been used productively. The UN Special Rapporteur’s report is excellent – but hardly “breaking news”. We know this. Just as Bill has provided enlightenment in his field – others have too – and the warning signs have been obvious for decades. We ignored them to our peril.
In the summer of 1976 – I was fifteen and on a family holiday in a caravan, just north of Oban in Scotland. It was so hot my granddad burnt his feet on the sand and had golf-ball sized blisters. In the next-door caravan was a lovely family from England – the dad was a mad scientist and great fun – we’d all go fishing for mackerel late at night and he would tell incredible stories. It was a memorable holiday.
A few weeks after we returned home, I received a brown-paper wrapped book in the post with a photograph of all the kids on the beach. It was the Gaia Hypothesis, which he had published a few years before. James Lovelock provided us with another enlightenment – how we interact with this planet determines our future unequivocally.
But did anyone listen?
I think the reason there are two narratives presently is simply a reflection of the human condition. Our inclination to ignore things that don’t quite fit with our view – that might prove inconvenient or difficult to consider in an objective reality.
But when faced with the obvious, why then do we still see a complete denial?
I wonder how many parents have asked themselves the same question when they experience their child telling a lie for the first time – in spite of incontrovertible evidence to the contrary?
Because no one likes to be ‘found out’ – a basic survival instinct.
I suspect the reluctance to embrace the reality for the potential of money to do good for all – the lies the politicians and media still extoll – are simply founded in that atavistic instinct.
How can they justify the inequalities, poverty, exploitation and resource destruction without creating an understandable but brutal reaction?
Bring everything into context – and we have a moment – just one brief moment when we can make a decisive turn at the crossroads we find ourselves at – and travel down a completely different road and one that we can take care of and enjoy for as long as we can.
Or we can stand still and close our eyes and go on pretending we don’t have a choice.
Dear Carol Wilcox, Rod, Derek and others (at 2020/07/10 at 5:39 am)
Murphy is not an authority on MMT. He gleaned a few ideas that we developed and has used them to differentiate himself from others. But he fails to understand key elements of our work and should not be relied upon as a representative of our work.
Your collective experience suggests he is also rather unpleasant on a personal basis.
Thank you, Mark Russell, for what you said and how you said it. Your words made me realize that I and all the others who believe in Bill and come here to talk about his incredible work–hell, even to argue about it–are not merely peering through a lens of magnificent clarity but are also reaching out to one another in common spirit and purpose, in hope and solidarity. Genuine internet communities are rare and precious things. We have one here.
“i”ve been banned from posting comments on Richard Murphy’s blog.”
Haven’t we all. But then I’ve been debating with Richard since before the millennium when he was just a peculiar religious character on the AccountingWeb forums with a gift for self-promotion.
I hope that Stephanie knows what she’s doing.
What we need is some solid MMT informed tax proposals of our own that will be far simpler and more reasonable than the ones the Tax Justice Network are hoping to slip in on MMT’s coat-tails.
The functional part of tax (as distinct from the political part which I prefer to assign to duties and levies so they are clearly separated) is there to release resources for the public use and maintain the purchasing power of the currency. Tax policy should be targeted at that goal. Hence Targeted Taxation.
It is time we started pushing the point that a person’s contribution to society is the 8 hours they labour for the benefit of others. And we need a Job Guarantee to ensure that everybody has the opportunity to contribute to society.
The advantage of that view is that your contribution to society is as valuable as the millionaire in their mansion.
Tax is the monetary sewerage system. We need it, and it has to be sufficient to do its job. So it needs doing as efficiently and effectively as possible and preferably without the majority having to think about it.
The ‘tax as sewage’ viewpoint also helps when the millionaire complains that they create most of the tax..
I actually have Murphy to thank for introducing me to MMT when he had Warren answer questions. His blog had some good discussions. But I never considered him to be an economist, which he thinks he is – he’s a chartered accountant.
“Genuine internet communities are rare and precious things. We have one here.”
A defining characteristic of human behaviour is the undoubted momentum created by two opposing forces – our positivity and negativity; a real energy that provides us with the ability to be incredibly creative – but for good or ill. Individuals have the potential to create their own energy and if their message is cogent, clear and unarguable, it gives light for others to follow, see and understand – the knowledge gained is no more than a key to their own engine – and once started, you have movement and with a community – you have momentum.
Your contributions, Newton – and just as important as Bill’s – they way you interact with others and present your own experiences and proposals – have the same positive energy and potential for good. I very much agree with the notion that “small is good” – but would also suggest that we remember that tall oaks from small acorns, grow.
Much discussion concerns the Job Guarantee. Perhaps we might do well to consider what jobs we really need to create and how they may be truly beneficial?
Have a good weekend.
“Much discussion concerns the Job Guarantee. Perhaps we might do well to consider what jobs we really need to create and how they may be truly beneficial?”
The primary goal of the Job Guarantee is to allow you to sell your 8 hours of labour *and* maintain that labour available to use if required (which is why it is superior to unemployment benefit). Beyond that it is like maintaining a standing army. What skills do you have to maintain to keep your workers ready for work – so they can be hired into the main private sector or public sector? Those are best maintained and enhanced in a full work environment – much as a standing army is best maintained in barracks.
Unemployment, on the other hand, is like trying to raise a mercenary army. You no idea whether the people are out of shape, or capable of doing what is required. Or if any of them are really interested.
The Job Guarantee is a transition position. A stopgap. The jobs are nice to have type jobs, not required jobs. And the tasks it undertakes have to be shelvable – or at least fungible (so people can drop in and out easily).
For anything that really needs doing permanently we need to hire people off the Job Guarantee into the main public sector. At that point you have to decide who is going to pay for the tax to fund that job as well as decide what the job is there to do.
‘At that point you have to decide who is going to pay for the tax to fund that job as well as decide what the job is there to do.’ (Neil Wilson above). I get that, with a Job Guarantee and full employment, additional tax is needed so that resources can shift from private to public delivery, but it should really be looked at in terms of whose consumption and savings choices need to be limited for the greater good. Of course, the top end of town could make things easier by being a little more socially minded when deciding their pre-tax reward.
” but it should really be looked at in terms of whose consumption and saving choices”.
More consumption choices. Saving is essentially voluntary taxation that saves you the bother of taxing spending capacity away.
If there is a public sector place required, then you have to transfer the consumption goods from somebody else that the wage level above the JG wage is expected to absorb. And preferably the right sort of consumption goods – to avoid relying on fungibility too much. Taxing Ferraris sales might feel good, but doesn’t release the housing near a hospital a nurse needs.
Relatively speaking the rich don’t consume that much. A 1000 ordinary people will consume far more than 1 rich person for the same amount of money deployed.
Hi Neil. Yes, saving takes spending out of the economy as taxation does, though it leaves the choice for future spending and future power to influence, in the hands of the savers or their future benefactors. Reducing power to influence, I think Bill would say, is reason to tax rich people, as well as the message to the middle classes who maybe won’t object so much to their consumption being hit by tax, if they at least see the savings of the really wealthy somewhat reduced. Also that influence is seen as much in buying choices – flaunting spending with no care for the environment or society division, as it is in buying politicians. Your point stands: a Ferrari tax, taking a rich man’s spare change won’t free up consumption for a nurse (will that ever get through to Polly Toynbee). Better to regulate the purchase of Ferraris (but first, Chelsea tractors which are not even fun) on the basis of their environmental harm and health hazard; UK streets have never been reconfigured to make them suitable for the gross modern cars that endanger my life as a cyclist.
“Reducing power to influence, I think Bill would say, is reason to tax rich people”
That’s a political reason, not an economic reason. I’ve been trying to separate out the two in thinking so that we don’t get tied up in knots. To the point of using separate words – levies, duties and fees for charges that are political and rebalancing in nature. Ultimately if they are successful they disappear, where as tax needs to remain in place no matter what to do its job of moving resources to the public sector.
The counter argument politically is that money may get you influence but removing money doesn’t take it away. For example if Rees-Mogg’s money was taken away would that remove his network of Eton contacts?
And of course how is anybody going to get in power to remove their money in the first place if they are as powerful and influential as is inferred. Generally a government can only remove money from the powerless and expect to stay in power. And unfortunately that’s a bit of a paradox.
Thank you for your explanation of the JGS and how you think it might work. I was thinking on more practical terms though. Bill’s title on this thread is “How hard is it for the government to create some jobs?” – and the first question people will ask is “What jobs do you have in mind?”
At that point there is a divergence of opinion again. The entrenched will immediately retort with “Your old jobs – we’ve just saved them – but you can now retrain for another if you’re still unemployed”
The enlightened will hopefully say “Well let’s just take our time and think carefully what jobs we want to create and why.”
It’s astonishing to note that none of the governments have yet to consider the crisis in the same context as the UN Special Rapporteur – we were in deep trouble long before coronavirus brought matters to a head. The immediate need is to protect and augment the health and care services whilst maintaining essential services and supporting individuals.
But beyond coronavirus, we have an incredible opportunity to stop for a while and think what might be achieved through through innovation, collaboration and cooperation across all societies? Take transport for example. What better time to transition from carbon to a hydrogen fuel economy?
Honda and Toyota have hydrogen fuel cell production cars for sale – they enjoy the benefit of uninterrupted driving and with zero emissions – but there is no infrastructure to provide the fuel due to powerful political lobbying from the oil industry.
We can create unlimited amounts of H2 from water using electricity generated by renewables – and the same technology can be used to power aircraft instead off jet engines. Clearly the oil barons won’t like the idea, but their time is surely over.
Think of the jobs that can be created in this one sector – providing the infrastructure, supply and logistics for fuel stations – then there is the manufacture of fuel cell units and motors – and a conversion programme for out existing vehicles. There is a significant workforce requirement straight away – technicians, engineers, mechanics and all the supporting jobs to service that industry.
The government can make the proposal and ask people with experience, knowledge, enthusiasm and initiative – to consider how best we might make this work. Not an advisory panel – but everyone in the nation – the new workforce who are waiting to find out what jobs might just be on offer.
Ask them how they might be able to contribute – and in different projects/proposals too. You might just be surprised what comes back. If we take our time and consider this carefully – you create the environment for positive thought and in time an unstoppable momentum.
Most people are pre-occupied with two or three things during their life. Sex predominately, but also what they might do if money was no problem. In our old world, the latter would most likely be about the self amidst dreams of winning the lottery – but really, if money was no problem, what good could you do to make this world a better place?
Had politicians been honest and explained monetary policy and economics in the same way as Bill has, then that would have been the question they could have asked people all over the world to consider during the inevitable down-time we have all been experiencing.
Just think of the ideas we could have by now!
I do apologise – I meant to add this to the previous post.
I really wish that politicians had kept things simple. The various support schemes are clumsy, bureaucratic, operate on a trickle down basis – and extremely expensive and wasteful.
For those not working in the essential services, government could have simply offered a paid sabbatical for a year or two years – with a promise of a job or support to create a job at the end. That would have created a completely different perspective than what we have endured – and it would have given everyone immediate security and reassurance.
Regarding separating out the economic from the political: in terms of explaining central taxes to create fiscal space for public spending, whether large or small, and counter inflation (rather than funding anything) and explaining both taxes and a Job Guarantee as automatic stabilisers, we really shouldn’t get tied up in knots explaining MMT. The difficulty is overcoming a mindset not complexity. But that is not to say that economics and politics are not intertwined. No time or space for Marx’s crtique of political economy here, but suffice to say that if Rees-Mogg hadn’t been able to amass such a fortune so quickly in the hedge fund business, he might have delayed his entry into party politics, and if his fortune wasn’t so easily passed on to his descendents, they might have to compete in the world on a more even playing field rather than getting ahead with networking at Eaton.
“while mainstream economists urge economic growth, particularly export-led growth as a way ahead”
They think everybody should have “export-led growth”, that is net-export surplus. Then they should tell us where the deficit will come from.
And they demand fiscal balance or preferably surplus. Which usually require current account surplus. But a surplus requires an equal deficit somewhere else.
So poor countries must compete with China and many southeast Asian countries and the one of the richest regions in the world – EUrope – for those deficit moneys the US and a few more create for the surplus countries.
Europe is hellbent on the “export-led growth” dogma (and balanced budget thing). Germany will gladly do what ever it takes to have Current Account surplus, no sacrifice for the German people are to big, infrastructure can dwindle and so on.
While China buy Greek harbors and railroads across eastern Europe for their massive USD (deficit) surplus. Nothing that “poor” moneyless Europe can afford.
Replying to “Untitled” – https://billmitchell.org/blog/?p=45371#comment-68676
“I for one want to thank Bill Mitchell for his tireless work at changing society.”
Thank you to you also! It was quite moving to read your post as someone else who has also experienced unemployment. I also remember vividly the impact it had on my own father when he was out of work for the first time in his life in the late 80s – He and I were both lucky that our experiences were relatively short-lived, but still impactful. For my father, the stress of being out of work, even for just a year, was almost certainly a factor in the bowel cancer that killed him not long after he’d picked up work again. Thanks for the reminder that we are not alone in feeling the deep cuts of unemployment. Keep talking to others about MMT and the Job Guarantee proposal and you’re just as much a part of bringing about change for the better. Thx again 🙂
I don’t want to load Bill’s blog with personal anecdotes, but the effects of unemployment are very important to the study of economics. I’ve never been unemployed but my husband was for 20 years till his death by cancer, caused by drinking and smoking. He had no hope.
re: Rod White
Friday, July 10, 2020 at 4:01
I’ve been banned from posting comments on Richard Murphy’s blog”.
Join the club. It has other members here.
I’ve been banned from Naked Capitalism too, for being insufficiently deferential to Yves Smith’s extremist “Remain” views on Brexit. Cap that if you can 🙂
If I understand NC correctly from reading the comments there and contributing myself, Yves will tend to ban commenters who contribute in bad faith. To attribute to her extremist ‘remain’ views that she does not hold, thereby strawmanning her, would be one example of such behaviour.
I have read dozens of NC Brexit pieces published in the last three years or so. The thrust of them has been criticism of GB’s handling of Brexit, which has been utterly inept as she has pointed out, drawing on numerous sources. It is also to point out, it seems to me, that whether you agree with the EU ~project~ or not, withdrawing from it is a real-world process that entails consequences in the real-world, and is not to be treated as spuriously as the tory government has. I have found her analysis, and that of many others in the comments closer to Britain and Europe, to be highly valuable. To divine an extremist remain position from her posts is nonsense.
I hope this kind of backbiting against the well-intentioned is not a sign of things to come, or else MMT and its valuable insights will go nowhere, fast. The same goes for a yearning for ideological purity tests.
Basil Pesto, RobertH – There is some real bias at NC. A bit more reasonableness and their hitting some books could help. Mainly bad faith commenters are banned. But sometimes Yves doesn’t understand topics anywhere near enough to understand when comments are in bad faith. I was banned there long ago during the time of possible Grexit , not Brexit, for trying to explain completely uncontroversial points of international law and how to read the EU treaties. Things that are and always have been 100% accepted by everyone. She repeatedly claims that the EU would be within its rights to send tanks over the border if they didn’t like what Greece (or wherever) did. That this was a real – and legal – possibility!
Of course, as the UN Charter states, all treaties are subordinate to the UN Charter, which bans the use or threat of force with very narrow exceptions, not including exiting a currency union or regional organization. Most such treaties explicitly state this subordination also, When I pointed out where the EU treaties said this, I was banned because she thought it only applied to the subchapter where it was tucked into in the treaty, that I was deceitful to say otherwise!