Tracing the roots of progressive views on the duty to work – Part 1

This will be a multi-part series and is part of the new book that Thomas Fazi and I are finalising. The series could have easily been sub-titled: How the middle-class Left abandoned the class fundamentals, became obsessed with individualism, and steadily descended into political obscurity, so much so, that the parties they now dominate, are largely unelectable! Because the discussion largely covers that problem. I have been thinking about why a modern so-called ‘progressive’ position draws a line in the sand about retaining a pernicious unemployment benefits system, which provides below poverty rate payments coupled with a harsh system of work tests, despite there never being enough jobs, and think that a guaranteed employment commitment from government with benefits that allow for a decent life, is somehow offensive. The corollary is that somehow the educated Left think that a duty to contribute to society through work is also offensive and they would rather people who can work be able to have the right to output when they are not prepared to contribute to the production of that output. None of these people would approve of a person walking into their homes and raiding their fridge for food. None would approve of some person taking their expensive racing bike parked outside some cafe while they were inside sipping latte! And yet, they do not seem to seem to appreciate the contradiction, when they also rail against capitalists who access the distribution system without contributing to the generation of output. It is no wonder that the traditional working class find the modern ‘Left manifesto’ repugnant and vote accordingly. This is Part 1 of an extended discussion that is the product of some months of research (work!).

Critique of the Gotha Programme 1875

I spent many hours in my teenage years sifting through all sorts of radical books at the – International Bookshop (operated by the now defunct Communist Party of Australia) in Elizabeth Street, Melbourne.

It offered a magnificent array of Marxist literature among other wonderful books.

I used to split from school (truancy) and head into the city and read for hours.

Later, when I was a university student without much cash at all, one – great staff member – there used to give me an orange on a regular basis – she always had one available and I guess she knew I haunted the place. She thought I was malnourished.

One of the influential books (document) I read during those formative years was the – Critique of the Gotha Programme 1875 – which was one of Karl Marx’s last important works.

It was written in May 1875 to the Social Democratic Workers’ party of Germany and it was the most authoritative statement by Marx on how he viewed the transition to socialism and communism, which he saw as a two-stage process as economic and social changes adapted.

Marx died before the document was made public.

His commentary on the – Gotha Program – which formed the manifesto of what has become the German Social Democratic party, were critical as he considered the proposed merger between two political groups to create the SPD compromised too much on workers’ rights for political expediency.

Ever the ‘progressive’ way it seems.

The importance of that document, though, for progressive socialist thought, is that it outlined what the appropriate duty of workers would be and what distributional expectations workers might reasonably have.

In Part I, Marx disclosed early ‘green’ credentials by disputing the claim that “Labour is the source of all wealth and all culture”. He recognised that “Nature is just as much the source of use values”.


He understood that the basics of life, stripped of celebrity, fashion, discourse, and whatever – is about transforming nature.

That is a fancy term for work.

He wrote:

… man was a savage after he had ceased to be an ape – who kills an animal with a stone, who collects fruit, etc., performs “useful” labour.

He also considered that ‘labour’ contributed to ‘society’ and clearly had a well articulated construction of what we now call the collective will (more about which later).

In determining the different claimants on the current output produced by the workers, Marx discussed the idea of whether those who did not work should have access to the “product of labour”.

He was opposed to that prospect.

He discussed various ‘deductions’:

1. Depreciation of existing machinery and equipment, new working capital, insurance against accidents, calamities, etc

2. Administrative costs – overhead labour etc.

3. “that which is intended for the common satisfaction of needs, such as schools, health services, etc. From the outset, this part grows considerably in comparison with present-day society, and it grows in proportion as the new society develops.”

4. “funds for those unable to work, etc., in short, for what is included under so-called official poor relief today” – aged, under-age, sick and mentally ill, etc.

We recognise all these categories in the modern debate.

Marx clearly considered a progressive society would be one where all those who could work would contribute their efforts to advancing society, while creating surpluses, which would ensure that all those who could not work, would still enjoy a material prosperity in line with the nations’ resources and productivity.

He conceptualised the distributional principles that might apply in transition from capitalism to socialism, the first stage towards a communist society, which he said would still be “stamped with the birthmarks of the old society from whose womb it emerges”.

In other words, social changes were slow moving and there was path-dependency involved.

Accordingly, he considered that:

… the individual producer receives back from society – after the deductions have been made – exactly what he gives to it. What he has given to it is his individual quantum of labour.

He understood there were problems with this – for example – how does one assess the contribution of labour, given that “one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time”, if we aim to establish an equal right principle in dsitribution.

In other words, the distribution of the output had to be “unequal” to address the heterogeneity of the workers (capacity, marital status, children, etc).

But once society is ready to make the full transition to communism (where the means of production are the “co-operative property of the workers”) and:

… labour has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!

That last phrase became the classic statement of progressive aspiration.

Each person should work if they can and contribute to the social product, which would then be distributed according to material need.

People who couldn’t work, would still have their material needs covered.

That distributional principle was seen as the exemplar of a just state.

Individuals had a duty in a progressive state to contribute to the commonwealth as best they could.

The principle, of course, predated Marx’s Gotha publication.

You can trace it back to utopian manifestos in the C18th and religious statements from the early 1600s. In other words, one did not have to be a Marxist to consider that principle the appropriate benchmark for a progressive society.

For example, the French writer – Étienne-Gabriel Morelly – is attributed to the 1755 publication The Code of Nature – which laid the foundations for socialist thinking and the progressive critique of French society of the time.

He wrote:

Every citizen will make his particular contribution to the activities of the community according to his capacity, his talent and his age; it is on this basis that his duties will be determined, in conformity with the distributive laws.

Louis Jean Joseph Blanc, in his 1851 book – Plus de Girondins – referred to Marx’s later articulation “De chacun selon ses facultés, à chacum selon ses besoins” (from each according to his ability” etc) as the “base fondamentale de la société future, pierre angulaire du monde nouveu” (the “fundamental basis of the future society, cornerstone of the new world”).

Surplus output production and distribution

This all made further sense to me as I progressed through other literature as a young scholar – Michał Kalecki, Oskar Lange, Mykhailo Tuhan-Baranovskyi, Joan Robinson, Roy Harrod, Evsey Domar, John Hobson, Maurice Dobb – to name a few.

I pondered the question about work responsibilities and distribution – and I was also reading sociology and psychology literature to place this thinking in a broader concept of humanity and society.

In a technical sense, I was also very interested in the dynamics of two-sector economic models: capital and consumption goods sectors – and the implications of the production of surpluses within each sector for the accumulation of capital, full employment and the possibility of crises.

That agenda has driven my work over the years.

Establishing the framework for full employment and analysing how societies depart from that desired state.

The point was that it was clear that workers in the consumption goods sector had to produce surpluses which were expropriated from them, irrespective of who owned the material means of production.


So the workers in the capital goods sector (making machines etc) can eat food! To put it in the most obvious way.

They were getting food expropriated from the labour of the consumption sector workers. But they were not getting it for nothing. They were contributing their own time and skills to producing plant and equipment that was used within to produce the food.

But it was an important point. The path to socialism does not stop surplus production and expropriation.

Many young socialists of the day used to wax lyrical about the end to exploitation and expropriation. But it was clear that in a progressive state, workers would still be exploited.

This understanding then led me on a journey to think about the principles of justice and how surpluses were to be distributed among those who relied on them for survival.

As an aside, when I was a postgraduate student, I had the wonderful opportunity to attend a workshop held by two senior economists from the – Gosplan (the State Planning Committee) – which was the central planning agency in the Soviet Union that implemented the five-year economic plans across the USSR.

It was a really interesting seminar and it was at a time that I was working through all this justice stuff.

I asked a question during that workshop along the lines of: What is the difference between a worker who gets up on freezing Moscow morning to go to work and works all day creating a surplus which is then expropriated by the Soviet State and a worker who gets up on a freezing Melbourne morning and works all day creating a surplus which is then expropriated from them? In both cases, the product is alienated from the producer.

The answer was that while they acknowledged the expropriation existed in the Soviet system, in the former case the surplus was a ‘public good’ whereas in the latter it was privatised and taken by the capitalist.

They said that under socialism ‘workers exploited themselves’ with the capitalist removed.

I also asked them about the so-called ‘Parasite Laws’ that prevailed in the USSR and followed on from the Article 12 of the 1936 – Constitution (Fundamental Law) of the Union of Soviet Socialist Republics.

Article 12 of the old constitution read as:

In the U.S.S.R. work is a duty and a matter of honour for every able-bodied citizen, in accordance with the principle: “He who does not work, neither shall he eat.”

The principle applied in the U.S.S.R. is that of socialism : “From each according to his ability, to each according to his work.”

That was a pretty blunt statement, which reflected the times and the fact that the USSR, after helping the West defeat the Germans, and taking massive losses in the process, were then under siege from the West, who toyed with the idea of continuing the military push east.

The last version of the – Constitution (Fundamental Law) of the Union of Soviet Socialist Republics (1977) – changed the wording to suit the times.

Article 14:

The source of the growth of social wealth and of the well-being of the people, and of each individual, is the labour, free from exploitation, of Soviet people.

The state exercises control over the measure of labour and of consumption in accordance with the principle of socialism: “From each according to his
ability, to each according to his work” …

Socially useful work and its results determine a person’s status in society. By combining material and moral incentives and encouraging innovation and a creative attitude to work, the state helps transform labour into the prime vital need of every Soviet citizen.

And significantly, Article 60:

It is the duty of, and a matter of honour for, every able-bodied citizen of the USSR to work conscientiously in his chosen, socially useful occupation, and strictly to observe labour discipline. Evasion of socially useful work is incompatible with the principles of socialist society.

And what was the State’s responsibility?

Article 40:

Citizens of the USSR have the right to work (that is, to guaranteed employment and pay in accordance with the quantity and quality of then work, and not below the state-established minimum), including the right to choose their trade or profession, type of job and work in accordance with their inclinations, abilities, training and education, with due account of the needs of society.

This right is ensured by the socialist economic system, steady growth of the productive forces, free vocational and professional training, improvement of skills, training in new trades or professions, and development of the systems of vocational guidance and job placement.

That is, the system recognised the concept of reciprocity and social responsibility within a mutually obliged system.

The state would generate and maintain full employment and those who could work were expected to, not as punishment, but as the means to improve the material prosperity of everyone – of society.

This was the statement of collective will, which I will return to.

What we will learn in Part 2 was that these principles – centred on a duty to work and the aspiration that everyone would contribute to society if able – were not confined to Stalinist USSR.

There are many examples in the West where official statements and constitutions had these requirements.

I will also discuss the ‘parasite laws’ in the USSR, which relate to the question of duty to work.


For now though, consider the Left-wing anthem sung by progressives everywhere – The Internationale.

How many leftists still get up with their hands on their hearts and sing the song with gusto and feel good that they are representing the grand progressive tradition?

This is what they are singing about:

And here is our battle cry:
All the power to the people of labour!
And away with all the parasites!

Only we, the workers of the world
The great army of labor,
We have the right to own land,
But parasites never!

How many know they are actually articulating a view in the song that decries ‘parasites’ who do not want to work but still want access to the production of others?

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

This Post Has 103 Comments

  1. There was an opinion piece in the Morning Star online yesterday in which the author, advocating for a UBI, decried the “Work Ethic” as reactionary, and used the argument that, because the rentier class thoroughly enjoyed their successful defection from the world of work, then why should the rest of us not have the ability to do the same?

    But he ignored the obvious and more revolutionary solution, that the rentier, instead, should be put to work!

    What is the Morning Star coming to when it invites contributions from writers who consider themselves not as proud workers, but as temporarily inconvenienced aristocrats?

  2. In our culture work has also ceased being about personal aspiration and development for some reason I don’t understand. If one devotes nearly all time to a certain project, it’s considered unnatural to most that one would’t prefer spending time on a beach or in a bar or at a barbecue but rather learn and work to become masterful at something. It’s an exaggeration but with some validity. I hope this will change and work will become central again in the human psyche as accomplishment leads to a greater happiness.

  3. Thanks for this post, Prof. Mitchell. A display not only of erudition, but also of moral courage. I hope you won’t take much flak for it.

    Although I myself I’m more of a libertarian Marxist (closer to Luxemburguism) and not much of a Marxist-Leninist, not even a Trotskyist, I have to applaud your lucid exposition. Particularly, the part relative to Gosplan was entirely new to me.

    One quibble, though: the CPA has been reduced to a ghost, but it still exists (well, sort of).

    Thank you again.

  4. Nothing is mentioned in any of these works about how to remove the risk to life and limb daily work presents for most people . Why does anyone dream of wealth beyond the need to begin with if not to free themselves from this constant threat? Why do economists believe they truly understand the working class if they’ve never endured it themselves?

  5. I thought of myself as a communist when I was 16/17 years of age. I had read some of the derivative Marxist literature etc., etc..

    It wasn’t long before I tossed it all out the window having become increasingly aware of the terrible history of socialism through the twentieth century. And as time went by I came to witness real time some of the horrors of socialist life (Berlin Wall shootings, invasion of Czechoslovakia, cultural revolution, Pol Pot etc.) . I was taught latin by a high profile (in his country) Slovak intellectual who had to escape Czechoslovakia in the 1950s. His brother had been murdered by the communists.

    And reading about the parasite laws above it occurred to me whether these laws applied to the upper echelons of the ruling socialist parties in the various socialist states. We often see how these people live – like emperors. The revelations of the living habits of the East German regime come to mind. And given the socialist maxim, “From each according to his ability, to each according to his work”, these people must have worked bloody hard.

    I think the case Bill is obviously building all sounds rather hollow.

    My question is, here and now, not in some far off into the future socialist/communist state, what do you do with, let’s call them, the flotsam and jetsam of society?

  6. The modern left have swallowed the Third Way koolaid and want capitalism to do the dirty work of extracting a surplus from the workers they can then commandeer after the fact.

    Markets launder history. They hide the ugly extraction process in an abstraction, sugarcoating it with an “unboxing” experience.

    And the Third Way mob love this. They can spend their time dreaming up new ways of taxing capitalism so they can play Robin Hood and redistribute The Surplus to the people they consider deserving. The laundering works for them too – particularly as they are obviously the most deserving of all.

    How The Surplus comes about? Ah. Yes. Oo look a squirrel.

  7. @Henry Rech,

    Murder, genocide, enslavement, assassinations: only thing that can compete with the “terrible history of socialism” …is the terrible history of capitalism!

  8. Engels apparently didn’t even think we would have developed the ability to walk upright yet without the intricate dance that takes place between labor and evolution.

    Kind of puts AI and robotics in proper perspective. If labor becomes subservient to and dependent on technology, instead of evolving with it, seeing as just another tool, it’s the end of our story; humanity moves in a direction along the lines of the stuck civilizations depicted in dystopic science fiction.
    This can’t be allowed to happen.

  9. “They said that under socialism ‘workers exploited themselves’ with the capitalist removed”.

    Never lose sight of the fact that (inconveniently for Bill’s thesis) this reported statement was being made by the servants of an organ of the Soviet state. At the very same time another organ of that same state, the KGB (lineal descendant of Felix Dzerzhinsky’s Cheka) manned by hundreds of thousands of camp-guards in the Gulag, secret policemen pervading every nook and cranny of society, prison personnel including torturers and executioners – need one go on?), was for its own part fully occupied with ensuring compliance by “the workers” with every despotic diktat of the Party apparatus and in particular its absolute ruler the General Secretary of the Party.

    Bill’s faithful reproduction of the Soviet model (as it was represented by those two glib apologists – note “senior economists”) strikes me as being more in accord with the canons of the school of “socialist realism” (as ordained by the distinguished aesthete and art-critic Josef Stalin) with its endless depictions of joyous farm-labourers, heroic machine-operators and kindred “approved” subjects than with the *real* gritty realism to be found in much “decadent”, “Western”, art – and under czarism in Russian art too by wonderful painters such as Repin and writers like Dostoevsky).

    In the light of the known historical reality, I know which of the two alternative types of exploiters posited in Bill’s question – the *real-world* Melbournian (as opposed to the ideologically-slanted Soviet one) – I’d prefer to be exploited by! At least with the first there was always the possibility of non-compliance or even active resistance. In the contemporary Soviet context there was no such possibility: anything of that kind meant the Gulag – or a bullet in the back of the skull.

    It only goes to show that one can believe *anything* if only one wants-to enough (or, as in the case of the ordinary Soviet citizen, could be terrorised or otherwise conditioned enough).

    Bill lavishes approval on the provisions of the 1977 constitution which he cites as if they were direct counterparts of those of any such conforming to (for want of a better term) the liberal Western tradition. To cite the terms of *any* Soviet so-called constitution as though any of them were ever intended by their authors to be honoured *literally and in full” strikes me as peculiarly inappropriate in the light of what we know to have been the historical reality. They were grisly charades with passages like the ones he quotes as their window-dressing behind which all manner of horrors on an unimaginable scale could be, and were, carried out by a merciless despotism.

    While the 1936 constitution was, symbolically, “in force” the show-trials were taking place, accompanied by the executions of (at a modest estimate) tens of thousands of innocent victims and the consignment to the Gulag, where they could be worked to death as expendable slave-labour, of many hundreds of thousands of others)!

    What sort of “model” of a constitution is it, the promulgation of which is accompanied by its flagrant violation *by the very state authorities* of both its spirit and much (most?) of the letter of its provisions – by the use of extreme coercion, up to and including terrorisation, of the populace?

    In 1977 Brezhnev, having been for the previous 13 years General Secretary of the Party in succession to Kruschchev (whose tentative attempts at reform he reversed), became as well Chairman of the Presidium of the Supreme Soviet. While, under Brezhnev’s rule, the 1977 constitution was theoretically in force the Gulag continued to be operated “as normal” while any form of dissidence was routinely subject to brutal repression – in fact “business as usual Soviet-style” continued to be the order of the day.

    “This was the statement of collective will, which I will return to”. (Bill)
    (Bill, what evidence of the working of the “collective will” do you discern, precisely, in a totalitarian state? It takes my breath away that you clearly intend that description to be taken at face-value rather than as the piece of (seemingly unconscious) deep, deep irony it in fact is).

    What has all this political positioning to do with MMT?

    As Bill frequently asserts, MMT is a lens. It is of no less applicability to a non-marxian analysis as to a marxian one. Bill is as much at liberty to apply MMT theory in accordance with a marxian analysis of society as anyone else is to do so in accordance with a radically different or even opposed (I will call it for the sake of argument) liberal one – and I don’t mean “classical liberal” aka neo-Keynesian as that term is defined narrowly within the field of economics. Speaking for myself, I believe that MMT shows us the only way to go to get ourselves out of the mess we are in. But I don’t accept that achieving that goal necessarily demands its being yoked-together with unqualified acceptance of the particular set of political beliefs Bill chooses to give his allegiance to.

    Nor, I suggest, do many (if any) of the other leading MMT proponents take that (in my view extreme) politically-positioned stance as some sort of litmus-test of anyone’s “commitment to the cause” of MMT.

    I would venture to suggest that the body of macroeconomic theory called MMT is likely, if accompanied by that particular prospectus propounded in so uncompromising a manner, to repel more potential supporters than it might be likely to attract – and deserves to – minus that accompaniment. But it comes down to personal inclination of course. My own preference happens to be Warren Mosler’s politically more accommodating (without sacrificing one jot of intellectual rigour) approach.

  10. “…the Third Way mob … redistribute The Surplus to the people they consider deserving” (Neil Wilson)

    Exactly as you yourself propose doing, methinks.

  11. The common problem with capitalist, socialist and communist organizations, seems to have been the development of a division of people into leaders and followers; ableism, invariably confers a sense of entitlement upon those who want to lead. This is the seed that grows into inequality and social strife.

    Shouldn’t we try figure out how to move away from concentrated leadership, and toward a more participatory society if want to have our cake and eat it too? That is to say balance the needs of the individual with the collective.

  12. A now-forgotten late 19th Century American author, in two sequential novels published nearly a decade apart, put forward a remarkably detailed, concrete, and comprehensive vision of a radically egalitarian socioeconomic order based not upon materialism and class conflict but rather upon the Golden Rule and the Preamble to America’s Declaration of Independence. Some Marxists hated him; others, like Lenin’s wife, loved him. Both novels are free to read on the net, and those willing to wade through Victorian prose may find in them, as I did, a breathtaking glimpse of what our world might look like, FEEL like, were the best in the human spirit to prevail.

  13. To RobertH:
    You are attributing things to Bill that he did not write. This is the first of a multi-part series so I suggest you wait to see the rest before passing judgement. In the years I have followed Bill’s writing I have never found he supports what you say he does.
    With respect to MMT, it is obvious this series will be a broad counter-argument to the concept of a Universal Basic Income (UBI). UBI is a widely popular alternative to the Job Guarantee which is the MMT inflation anchor. UBI is seriously problematic in a variety of ways as Bill has written in the past: it’s inflationary, atomises and disempowers workers rather than bringing them together; being on the UBI dole and excluded from participating in society through work can be psychologically damaging; it’s an individualistic solution to the collective problem of a lack of jobs; it serves as a wage subsidy that allows employers to underpay worker; plus other aspects I can’t think of at the moment.

    I have never been a supporter of UBI for a rather simple, practical reason. There is so much work to be done why on earth would you pay people to stay home and do nothing? I live in Canada, on the whole a good place to live, if you have a decent income. However 10% of our population doesn’t have enough to eat; our public schools are understaffed and of mediocre quality; our provision of long term care is poor, with some exceptions (home care is grossly inadequate and public facilities are understaffed); our health care is adequate but could be greatly improved; public transit and intercity transportation are mediocre at best; our cities are mostly ugly and unimaginative and too dependent on cars and should be redesigned and rebuilt; our natural environment is being continually degraded; the great majority of artists and other creative people struggle to get by. And so on.
    There are decades of worthwhile work for millions of people to do in solving these problems. The UBI does not address any of these issues. It is a very conservative, throw up your hands and give up, solution to an unemployment problem that shouldn’t exist.

  14. So someone calling themselves ‘warren mosler’ had a brief comment on a previous post.

    warren mosler
    Tuesday, August 4, 2020 at 3:41-
    “Also, I believe that a gov who’s tax policy has created more unemployed than it desires to employ has a responsibility to either employ them or transition them to the private sector employment.”

    So what does this mean? Here is what I think it means.

    MMT points out that it is government policy that, by seeking to provision itself by way of imposing taxes in its own currency, causes the condition we call ‘Unemployment’ as a result of that policy. Similar to what economists call a negative ‘externality’ such as when pollution occurs as a negative side effect of production. Like production processes that impose an unintended pollution cost on the rest of society, a tax policy, while maybe allowing a government to provision itself sufficiently, may have the unintended negative consequence of leaving some in the state of unemployment. The Job Guarantee is an economic policy intended to correct that negative externality caused by the government tax policy.

    So that is a basic economic justification of a government job guarantee program- it is intended to correct a negative side effect caused by the government itself. It helps clean up the mess created by the government when it seeks to provision itself. This basic justification does not say anything about providing resources to those who are not ‘unemployed’- those who are not looking to provide their labor or services in exchange for the government’s currency.

    That doesn’t mean that in a democratic society we can’t decide that we want government to do more than just clean up its own mess. We may believe we have further responsibilities to those who aren’t willing or able to provide labor- but that isn’t necessarily part of the job guarantee program itself. The extent of those additional responsibilities should be argued separately from the basic Job Guarantee program. The Job Guarantee should not be thought of as the cure to all that ails society. It isn’t.

    My apologies to Mr. Mosler if my interpretation is way off.

  15. “Exactly as you yourself propose doing, methinks.”

    Then you think wrong. Very wrong.

  16. “So what does this mean? ”

    It means something that few people realise. MMT leads to the conclusion that you have to peg the currency, but that you have to peg it to something that cannot be stocked.

    Currency pegs to other items break down because somebody somewhere always has a stock of the thing you peg to, and who then releases that stock and breaks the peg.

    However if you peg the currency to labour hours then there can be no stock as nobody can save today to use tomorrow.

    But for a peg to be a peg there has to be a permanent ability to convert the underlying (labour hours) into the currency, as well as the ability to use the currency to obtain the underlying.

  17. Excellent article.

    Very nice to see the professor’s encounter with the socialists, the critiques, the questions raised, and what the professor distilled from these encountered.

    Its good for professor to show what USSR stood for despite it being turned into an imperialist power since Krushchev. I see people denigrate USSR too often without recognizing its progressive origin.

    Bravo. Very succinct article that analyzes reality but combines it with the aspirations for people who desire social justice.

  18. Imagine falling asleep tonight and waking up tomorrow in another world.

    You discover that Disney is out of magic.
    Paris is no longer romantic.
    New York doesn’t stand up anymore.
    The Great Wall of China is no longer a fortress/
    And Mecca is empty.

    Simple acts of love – hugs and kisses – become deadly weapons and not visiting parents, children and grandchildren, becomes an act of love.

    Suddenly you realise that money, economics, power & celebrity are worthless – and you can’t get the oxygen you’re fighting for to breathe.

    But the world continues its life and it is beautiful. It’s only looking after itself, with confinement of humans to cages and an early death. It is sending us a message:

    “You are unnecessary. The air, earth, water and other residents here are fine without you. Your lesson is this – if you ever return to this place, you are my guests, never my master.”

    James Lovelock warned us of the revenge of Gaia – and there have been innumerable examples of Mother Earth sending her own during my lifetime. And yet, even at the brink, we still are driven by a momentum we don’t understand, but will surely consume us all.

    Witness the horrific events in Lebanon tonight.

    Perhaps our only hope is that enough good people survive the next few years that humanity may one day recover to fulfil its potential.

    Just bought two dozen sets of Elixir phosfore-bronze strings for my Fylde and heading to a remote beach in the Hebrides with my wee dog, airstream and my dreams.

    See you on the other side.

  19. MrShigemitsu, I’ve had articles and letters published in the Morning Star against UBI. Ben Chacko interviewed Bill early last year and this was followed up by an article on MMT by Chris Williamson (then still an MP). And last month they published my article on MMT which prompted several positive responses. So don’t give up on the Star.

  20. No worries Carol – I was just messing about.
    Well done for getting your article published, and for the positive responses.

  21. Dear robertH (at 2020/08/04 at 11:03 pm)

    Your tirade barely got approved by me. Your portrayal discloses your own paranoia.

    Academics like me often conduct forensic historical analysis. I am tracing the antecedents of a concept and the way it has been applied. There was no “lavish approval” of anything.

    Left-wing activists after WW2 adopted the sort of ideas I outlined. That is a reality. The USSR turned out to be something they did not foresee. That doesn’t alter the fact that Marx guided progressive thought during this period.

    And if you had have waited until the series is finished you might have seen that the West, which hated Stalin and the rest of them, adopted very similar views on the duty to work.

    Further, the ‘senior economists’ were very well educated people even in the way we think in the West. Your dismissal of their status is one of disrespect, which I note you exhibit in your interactions with some other commentators here.

    Finally, my question to the Gosplan economists was actually an expression of my own disdain for what was going on in the USSR. How were these workers better off was the intent!

    best wishes

  22. Mr Shigemitsu,

    “Murder, genocide, enslavement, assassinations: only thing that can compete with the “terrible history of socialism” …is the terrible history of capitalism!”

    Yes that’s true.

    But then there is still a choice.

    It seems to me virtually every socialist state that emerged has quickly devolved into a brutal totalitarian machine. Totalitarian machines can brook no dissent. There is no prospect of ever there being an alternative. There is no appeal to justice. There is only one way it can go. It is the domination and suppression of the many by the few.

    I live in a democratic capitalist state. I can’t remember the last time I was made to think in a certain way, to live in a specified location, to do specified work. I can’t remember the last time I was summarily incarcerated for speaking my mind. I can’t remember the time I was shot at for attempting to escape a system I deplored. I can’t remember the last time I was taken into a room and shot in the back of the head.

    Have you ever read “Darkness at Noon” by Koestler?

  23. Bill,

    “The USSR turned out to be something they did not foresee. That doesn’t alter the fact that Marx guided progressive thought during this period.”

    Marxist thought also outlined the historical progress and development of society and economic relations governed by what Marx believed to be immutable laws. Revolutionaries became impatient and attempted to help history along a tad. This is the source of the grotesque history of the development of socalled socialist/communist states. Reality trumps theory. You can theorize all you like about this or that but patience is required waiting for history to take you to where you want to go. Skipping ahead does not seem to work at all too well.

    “And if you had have waited until the series is finished you might have seen that the West, which hated Stalin and the rest of them, adopted very similar views on the duty to work.”

    So what? An appeal to authority is not a valid argument for anything. I am not referring to the respective rationales for your call to the duty of work but your using, in effect, of the fact that they both land in the same place (according to your interpretation) as a justification for your position. They could be equally immoral and untenable in other’s eyes.

  24. Neil,

    “The modern left have swallowed the Third Way koolaid and want capitalism to do the dirty work of extracting a surplus from the workers they can then commandeer after the fact.”

    Capitalism if left to its own devices will devolve into fascism – the state and the oligarkic owners of private property mutually supportive.

    Socialism if left to its own devices will devolve into totalitarianism.

    Give me the third way koolaid any time. There is a centre ground.

  25. Henry, in the USA the Third Way refers to the group of centrist Democrats that led the Democratic Party beginning in the early 1990’s or late 1980’s. These were and are politicians who espouse supposedly ‘free market’ based solutions to solving economic problems rather than what they would call ‘government interference’. Neoliberals is what they would be called here on this blog. The Third Way politician could be called anti-Keynesian and is exactly the type that would allow capitalism to devolve into a form of fascism so long as they could claim it was meritocratic while it devolved.

    I had supposed Neil was referring to that group of centrist type politicians and their supporters in his comment. But I could be wrong.

  26. @ Henry Rech,
    With all due respect.
    Do you realize the “the Third Way”is a code phrase and has a specific meaning?
    It is the Dems new (begun in about 1990) plan to move away from being the party of the working class to being the party of the upper middle and lower upper classes. It embraces Neo-Liberalism in full. In fact now that the Repuds have gone over to using the fiat currency to enrich the already rich with so-called deficit spending that increases the so-called US national debt, the Dems are the only party that enforces the dictates of Neo-Liberalism, with “pay-go”, etc.

    So, what is your vision of a different third Way?

    I think that mine is to reform capitalism by dictating *in the Constitution* that MMT is correct and its view of what is possible is to be the nation’s guide for economic policy. Maybe this sort of capitalism will not devolve into Fascism. This form has never been tried before so history can’t tell us how it will evolve.

    As I have said before here and elsewhere, my lesson from the history of how the New Deal was washed away is to enshrine the lessons of the New Deal into the Constitution so that they can’t so easily be washed away. Lessons like:
    1] The Gov. shall have a Soc. Sec. Program and use credit if necessary to pay for it.
    2] The nation shall have a top income tax rate of 90% with deductions or 85% with no deductions on all income over 2000 times (or some such large num.) the income of a *full-time* worker making the *min.* wage or working in the Gov. Job Guarantee Program. This shall incl. so-called Capital Gains. It is likely that the next lower rate will be much less, as little as 50%.
    3] The Gov. shall fund all Fed. election campaign expenses, incl. Primaries.
    4] The Gov. shall have the JGP that MMT has described over the last 26 years.
    5] The Gov. shall have a program that provides *good* healthcare to all citizens and legal residents, and maybe to illegal residents also. This program will allow people to buy better healthcare if they want.
    6] Other ones too.

    Remember, this is in the Constitution to make it hard to change.

    I think we should try this “Fourth Way”.

  27. @ Jerry Brown

    Where Mosler identifies the imposition of a tax regime as the source of unemployment, I would observe that the private sector propensity to save exacerbates the unemployment problem by adding an element of demand destruction (along with imports).

    Unrelated, I think that the question “who will own the robots?” (or more precisely their production) remains important.

  28. There is something missing from this argument.

    Before there were large state powers and governments people ‘worked’ is the sense that they needed food and shelter in order to stay alive. Any person who wanted to stay alive and was not disabled simply went out into nature and took what they needed in the most effective way they could think of.

    Move forward a few thousand years. Now it is not legal for any person to go out into nature and take what they need to stay alive. I cant take oranges from my neighbour’s tree, or set up a farm or hunt wild animals in a spare bit of national park.

    In return for this loss of freedom to do what it takes to live, the state owes a basic living to every citizen

  29. @ eg,
    Also, if there are any special taxes on robots.
    I think the robots should have a 100% (or more) of their value (that is the cost to make or to buy them, not reduced over time for depreciation ) FICA tax on them so they help fund Soc. Sec.. Tax what you don’t think is socially valuable, right?

  30. eg @13:35.
    I concur? with your observation. Don’t think it absolves the government from responsibility for unemployment though.

    The imports aspect is somewhere that I might disagree with Warren Mosler as far as I understand it. But in either case MMT says the government should counter the propensity to save in the currency. I think.

    I don’t own any robots if that is important to know 🙂

  31. Steve, Jerry,

    “Do you realize the “the Third Way”is a code phrase and has a specific meaning?”

    I didn’t think Neil was using it in that way – he was talking about the Left in general – but thanks for pointing it out.

  32. Steve,

    “So, what is your vision of a different third Way?”

    In general, I word say individualism balanced by a strong sense of social interests and values.

  33. Third way, fourth way – just how many are there.

    One thing that stands out during this pandemic is the amount of volunteering that has been offered. Not just in the case of the NHS either – just this week an English grape grower (yes I know it sounds like a paradox) received help from volunteers when he announced that he was short of his usual foreign labour.

    You also see a greater communal appreciation of risk faced by workers in the front line of infection such as supermarket staff, bus drivers and similarly below average earners. It seems reminiscent of the spirit during WW2.

    We will probably return to a more mendacious environment when this health trauma is over, but as in the case of the two world wars, the periods that follow may install a more humane social order and sense of political priorities.

  34. Bill,

    A very interesting and informative article as always, I look forward to part 2.

    One comment: while RobertH’s tirade was just that, I am not surprised that one person did respond that way. This is the internet, and many people will take a bland reproduction of a positive statement by the USSR (without comment) as an endorsement of the USSR, and given the lack of comment I feared you might actually be doing just that (which I understand most of the left-wing academia did re the USSR in days gone by). I think when one posts on the internet setting out a series of positive statements both made about and by the USSR which has an extremely bad reputation among most of the English-speaking world these days, it’s worth including a disclaimer – perhaps here saying what is in the constitution is not necessarily what the USSR in fact did with the surpluses, but that was supposed to be the guiding principle.

    I understand the perspective that this is an academic discourse and should be conducted as such, but it is still on the internet 🙂 .


  35. On ‘surplus value’?

    “A barrel of conventional crude oil contains the equivalent of roughly 4.5 years of continuous human labour; or around 11 years at 35 hours per week, 48 weeks of the year.  But the capitalist doesn’t pay for the value of the fuel, merely the cost of extracting it.  For a mere £49 (at pre-pandemic prices) the capitalist purchases £330,000 worth of work (at the current UK median wage).  It is the exploitation of fossil fuels rather than the exploitation of labour which generates the vast majority of the surplus value in an industrial economy. . . .

    As Nicole Foss once put it – if conventional oil was like drinking draught beer from a glass, fracking was the equivalent of sucking the spilled dregs from the carpet.”

  36. Matthew,

    “In return for this loss of freedom to do what it takes to live, the state owes a basic living to every citizen”

    Interesting argument.

  37. Eg and Steve_American I think it would be a terrible idea to tax robots or any other machine or system for improving productivity. Rising productivity and innovations are the main driver for rising living standards through cheaper goods and services, more added value and higher wages for the remaining employees – provided all gains are not simply diverted to profits and therefore to the owners of the enterprise. We should not in general tax beneficial outcomes like productivity. MMT informs us that we can have full employment regardless of increased use of automation and artificial intelligence.

    As a former Toyota production engineer in Australia I can enlighten you that the level of productivity and build quality were world class, profit margins were minimal and vehicle pricing was internationally competitive with developed world suppliers but about 10% more than equivalent imports from Thailand and China. Government support was also minimal by world standards despite most media commentary.

    Manufacturers are in general not suitable as cash cows for raising large sums of taxation revenue as most are subject to tough international competition and the nations that succeed in this area like Japan, Korea, China and Germany instead offer substantial assistance to manufacturers and other promising industries especially during the start-up phase. This strategy works for them as large industry sectors are established that employ many from unskilled to academics, goods and services produced have in general high added value and intellectual content, substantial export revenues are earned or imports substituted, these industries usually have good future prospects if they evolve and innovate when needed, they have complex supply chains that benefit other industries and start-ups, they provide the environment to more easily spin-off enterprises in allied areas, offer adequate profitability and even have national defence implications. The main benefits arise from the presence of these industries and not from their net tax revenue.

    Marx may be surprised to now learn that ownership of the means of production is not the path to riches in an internationally competitive market place at least when that production is located in the developed world. Off-shoring of production to developing world ‘work houses’ can however be very profitable. In Australia other areas like natural resource extraction and the FIRE sector have much higher true profit margins. The FIRE sector has managed through political cronyism to engineer massive profits for itself through the explosion of household and business debt, speculation induced investment bubbles, fee gouging such as from superannuation and through rent extraction but that could all be remedied through appropriate legislation.

    The vulture capitalists have supplanted and in fact have almost completely destroyed the factory owning class in Australia primarily through the imposition of excessively open markets but also through inadequate levels of governmental support. Similar trends have occurred in the rest of the neoliberal dominated Anglosphere and much of Europe.

  38. eg,

    “Where Mosler identifies the imposition of a tax regime as the source of unemployment, I would observe that the private sector propensity to save exacerbates the unemployment problem by adding an element of demand destruction (along with imports).”

    Just as taxation frees resources for the use of the government sector, saving frees resources for the use of the investment sector.

  39. Postkey but the capitalist does not extract £330,000 worth of work from a barrel of oil even if that is the equivalent quantity of physical human labour/work that a barrel of oil can provide. The truck or train or other machine less all operating and capital expenses in a competitive market place usually just delivers enough profit to exceed that profit which could instead be obtained by investing in something else with a similar risk. Lucky if the capitalist earns 10 or a 100 pounds profit for every barrel purchased. Cheap energy has however enabled enormous productivity improvements over animal or human physical labour which has lowered the cost of many goods and services, raised living standards and provided many new opportunities such as cheap air travel.

  40. Re , as a fellow Brit (I think) Neil is probably referring to the Blair years when the ‘third way’ was the way to squash Labour Party members’ hopes for a socialist government.

    Interesting that Warren appears to identify “the imposition of a tax regime as the source of unemployment”. Georgists (the LVT single-taxers) say the same.

    @eg, “… who will own the robots?” Robots are capital, so the owners of capital.

    @Anthony, agree this is a “very interesting and informative article”. It has my mind buzzing.

  41. @Henry

    “I didn’t think Neil was using it in that way -”

    Have you ever thought about asking, rather than assuming?

  42. Sorry about not checking beginning of last comment.

    Re earlier comment about UBI in Morning Star. There’s a good letter rubbishing the article referred to by Mr Shigemitsu – so I don’t have to (quote: “The man or woman without a job is lost and open to alienation in all its forms”). Trying to contact writer as she needs to see this blogpost (and next).

  43. Neil,

    If I was to ask clarification for every statement made by anybody of interest to me, the blog commentary would be filled with a plethora of my seemingly inane questions.

    Given you chose to frame you statement in a parsimonious manner I looked to the context in which you made your statement.

    So instead of being obtuse why don’t you explain your intended meaning of the “Third Way”?

  44. “Just as taxation frees resources for the use of the government sector, saving frees resources for the use of the investment sector.”

    Depends precisely what you mean by savings, however that wouldn’t be the MMT view. MMT leans more to the Kalecki model – Capitalist investment brings forth its own savings.

    Both savings and taxation free up resources for the government sector to use. It’s the excess net savings of the private sector that causes the unemployment the Job Guarantee corrects.

  45. “So instead of being obtuse why don’t you explain your intended meaning of the “Third Way”?”

    Enter “Third Way” into Google. Click search. It’s all there on the first page.. There’s a massive Wikipedia entry on the subject.

    Capitalised terms are usually definitional in English. Is that not the case in your English?

  46. Neil,

    “Depends precisely what you mean by savings……”

    Firstly, I used the word “saving” not “savings”. There is a difference as far as economists are concerned. “Saving” is defined as the part of aggregate income not consumed – it is a flow. “Savings” are what individuals have in their bank account – it is a stock.

    “MMT leans more to the Kalecki model – Capitalist investment brings forth its own savings. ”

    Presuming you mean “saving” it’s the old chicken an egg story, isn’t it. If a part of aggregate income was not “saved” there would be no room for investment. From a macro dynamics point of view, changes in investment causes changes in income which causes changes in saving. At equilibrium planned investment = planned saving.

    “It’s the excess net savings of the private sector that causes the unemployment the Job Guarantee corrects.”

    This framing follows from the abuse of the sectoral balance equation by MMT.

  47. Neil,

    “Capitalised terms are usually definitional in English. Is that not the case in your English?”

    I’m Australian. Luckily we have our own version of English which in this case probably conforms to your version of English.

    “Enter “Third Way” into Google. …………There’s a massive Wikipedia entry on the subject. ”

    The Google entry exposes a very broad church of ideas. My interpretation of your statement is in keeping with this broad interpretation and my response entirely appropriate.

  48. “If a part of aggregate income was not “saved” there would be no room for investment”

    Which isn’t the case, since investment is simply consumption that is classified as “not used up” and therefore doesn’t shrink the balance sheet. At the cash level it is the same process. If there isn’t any orders nothing is produced in the first place. Demand causes the supply.

    Investment causes saving at the same time simply definitionally. when you move from a cash account to a profit account the journal creates investment on one side and saving on the other. That’s the process of capitalisation.

    The choice to order a computer is what causes both the investment and the matching saving – and simply because you are classifying the computer as a balance sheet item rather than an income statement item.

    Computer makers get a signal to increase production. Which either they can, or there is either a price change or a time change (order delay, which then delays the capital item being brought into productive use. ie, you get queued).

    The limit is that you run out of is time in the accounting period to do any more transactions.

    It’s easy to test this out. Run two entities trading with each other moving the same money backwards and forwards a set number of times in exchange for goods. Do one on an expense basis, and the other on a capital basis. Then produce the flow accounts. Same level of activity – different numerical outcomes.

  49. Neil,

    ” since investment is simply consumption that is classified as “not used up” and therefore doesn’t shrink the balance sheet. ”

    What has investment to do with “the” balance sheet? Which balance sheet are you talking about? For starters, you are confusing flows with stocks (again).

    ” when you move from a cash account to a profit account the journal creates investment on one side and saving on the other. ”

    Please do elaborate.

    “Do one on an expense basis, and the other on a capital basis. ”

    Please demonstrate. Sounds fascinating (if completely nonsensical).

    “That’s the process of capitalisation. ”

    What do you mean by capitalization?

    I’m going to bed. I guess I’ll catch your responses in the morning. (Seems I will have to instruct my brain to erase everything I ever learnt about economics while I sleep.)

  50. @Mathew
    So now it has become both Left and progressive to champion the lumpenproletariat.

    @Neil Wilson
    Have you gone back and read Mark Twain’s insights into Argument.

  51. “(Seems I will have to instruct my brain to erase everything I ever learnt about economics while I sleep.)”

    That’s generally the best idea. Pretty much anybody can understand the MMT viewpoint better than somebody who has been through a traditional mainstream economics course.

    All I’m describing above is standard accounting practice and how firms actually operate and account for things.

    One of the reasons for running a small closed model with a set of entities in it and running actual transactions across them is so you can see how the aggregates you are talking about arise in practice from actual institutional operations.

    In terms of national accounting (and keeping it in corporations for simplicity), if you expense the computer you will create a Quadruple entry (DR Production Account/Intermediate Consumption 120, CR Production Account/Output 120, DR Financial Account/Deposits 120, CR Financial Account/Deposits 120). That leaves both the production account and financial account balanced with no change to the current or accumulation accounts.

    Whereas if you capitalise the computer as an investment you will create a Quadruple entry (DR Capital Account/GFCF 120, CR Production Account/Output 120, DR Financial Account /Deposits 120, CR Financial Account/Deposits 120). That causes a balancing entry on the Capital account called “Change in Net Savings” of 120 and a balancing entry on the Production account called “Value Add” of 120, which trickles down to the matching “Change in Net Savings” in the consolidation of the Current Accounts.

    Same transaction, different classification, different effect on the current and accumulation accounts – which when stocked alters the balance sheet.

    And that’s all “investment” actually is with “saving” just an automatic balancing item.

  52. @Mute
    Mark Twain’s wisdom is close to my heart. My thesis on that and its correlation with JK Glabraith’s insights into evidence will be forthcoming once I have sufficient material examples.

  53. Neil,

    ” Pretty much anybody can understand the MMT viewpoint better than somebody who has been through a traditional mainstream economics course.”

    Bummer. Somnolent erasure failed.

    I ‘m afraid I believe your explanation to be complete gibberish.

    I’m happy for you that you have MMT as you understand it.

    I ‘m stickin’ with conventional Keynesian macro.

  54. @Neil: “Pretty much anybody can understand the MMT viewpoint better than somebody who has been through a traditional mainstream economics course”. I have an economics degree – never understood money until I discovered MMT. But it was only a 2.2 (taken when I had a husband and 2 toddlers – that’s my excuse). Also I never believed much I was taught anyway and was allergic to econometrics.

  55. Neil

    Mark Twain’s wisdom is close to my heart. My thesis on that and its correlation with JK Glabraith’s insights into evidence will be forthcoming once I have sufficient material examples.”

    BTW, perhaps you should reconsider what Mute was endeavouring to convey to you and also heed his call to go and play in the dogmatically pure enlightened Marxist’s sandpit. 🙂

  56. @Henry Rech

    “I ‘m stickin’ with conventional Keynesian macro.”

    Very good. Do that.

    The rest of us will continue to follow Bill’s blog.

  57. Mute,

    “Very good. Do that.”

    Thank you for supporting me in my endeavours.

  58. “I ‘m afraid I believe your explanation to be complete gibberish.”

    You will – since you are a member of a cult and therefore invulnerable to reasonable argument.

    The indoctrination must be pretty powerful since I had another Australian mainstream economists argue that ESA accounts don’t increase in size at the reserve bank when a government payment is made. And that the central bank is more powerful than parliament or the government – even after referencing the Reserve Bank Act 1959 that explicitly states the opposite (Part II, Div 2, 11).

    It was quite entertaining tying him up in knots over the accounting as well. And getting him to insist that the Governor General would cause another 1975 constitutional crisis to defend the superiority of the central bank. Apparently what happened subsequently to John Kerr would be no deterrent.

    But it is important to bring these things to light. So we know the level of zealotry we’re up against.

  59. Neil,

    So I am now a mainstream economist?

    I might have a degree in economics but I would hardly call myself an economist.

    And luckily for me I was taught macroeconomics when Keynesianism was still being taught. (Although, monetarism was rearing its head and Lucas was in the process of writing his seminal papers and the manslaughter of Keynesianism was imminent.)

    I thinks its sad that you resort to this kind of labeling when clearly your responses above have no cogency or relevance to the questions asked.

  60. Neil,

    “Pretty much anybody can understand the MMT viewpoint better than somebody who has been through a traditional mainstream economics course.”

    Modern Monetary Theory is a grand name for essentially a collection of observations about government spending, deficits and debt and generic monetary operations of the central bank. These observations have been central and crucial to the dismantling of mainstream economics’ mythologies about these matters to the point it even appears the high priests of the mainstream view, the Murdoch press, see MMT as the salvation of capitalism in the current crisis.

    The only feature of MMT that come closes to a theory is the JG.

    All the other appendages, chartalism, its propositions about foreign trade etc. are distractions from the powerful message of its core.

  61. I have to agree that the edicts of a dying totalitarian regime, the communist party of
    the soviet union in the 1970’s, is a very strange place to go to validate the historical
    progressive nature of the duty of work.I would not suggest you go to print with such
    an example.

  62. Dear Kevin Harding (at 2020/08/07 at 2:53 pm)

    There was no validation going on. Historical analysis traces chronology and players. Fortunately, credible publishers are less inclined to censor history than you seem to be.

    best wishes

  63. Kevin Harding wrote:

    ” the edicts of a dying totalitarian regime, the communist party of
    the soviet union in the 1970’s, is a very strange place to go to validate the historical
    progressive nature of the duty of work”.

    Bur classical liberalism, in so far as it promotes the “sovereign” individual over and above society, leads to un/underemployment disasters.

    No doubt there are valuable insights in both philosophies (Marxism v. classical Liberalism) which we can run with, as Bill has done in this current article.

    Rule of law is required to avoid anarchy. And lack of international rule of law is still a great danger, as nations still insist on absolute national sovereignty. Which is why the neoliberal West is ganging up on China right now; the latter with its state-funded capitalism may well prove to be a more productive, dynamic and prosperous system than our own.

    I would much rather see a friendly competition with China, than all the paranoid sabre rattling against China going on at present. Democracy has its economic problems – eg based on acceptance of the NAIRU dogma – which MMT can help solve. Will private bankers allow MMT?

    And meanwhile, a functional economy ought to provide universal minimum above poverty participation, via money creation in BOTH the public and private sectors, subject to the resource and productive capacity restraint.

  64. Dear Bill

    When you write about MMT you are the unquestioned authority here, the teacher, and we your readers are the pupils. I have enormous respect for your scholarship and your prodigious energy and perseverance in promoting MMT – initially in the face of almost total rejection from an entrenched and hostile, benighted mainstream academic establishment. To dispute with you about an aspect of your own field, over which you clearly have complete mastery, wouldn’t even cross my mind. You completely convinced me, some time ago, since when I’ve been more than content to be the humble pupil trying to learn as much as I can – and only too conscious of my own shortcomings in that regard.

    However, this blog article is not about MMT or macroeconomics more widely, and the fact that it follows so closely on the heels of the debate in the Comments section of your blog article “Setting things straight about the Job Guarantee” (which arose out of the question posed by one commenter (Mark Kelleher):- “‘What happens to people who choose not to work. Is there some form of residual unemployment payment ?'”) can surely not be a coincidence, can it?

    Opinions – not only mine – about that issue of social policy proved to be sharply polarised and vehemently expressed *on both sides*. It’s a question which is bound to arouse strong feelings. In the course of the argument I expressed revulsion at the (as I saw – and still see – it) extremely inhumane nature of some of the policy-positions being advocated. Note:- at the policy-positions not the persons advancing them. I sincerely hope that – when you accuse me of “(exhibiting) disrespect … in (my) interactions with some other commentators here” you don’t have those exchanges in mind. It had always been my impression that Australians preferred a spade to be called a spade and to my knowledge none of my comments was ad hominem.

    So, “forensic:- (adj) Pertaining to, connected with, or used in courts of law; suitable or analogous to pleadings in court” (Shorter OED). Plainly, you are engaged – not as presiding judge, but as advocate – upon presenting the evidence for your case. And the evidence you chose to begin by presenting was Marx’s opinion (which drew as you say partly at least upon Enlightenment thought) and some of the content of two successive Soviet Union constitutions. So be it: an advocate is free to present in support of his case whatever evidence he chooses. But he won’t of course be taken aback or adopt a censorious atitude when an advocate arguing the opposing case exercises exactly the same freedom in choosing his own grounds, *including* questioning the credentials of the cited authorities and the credibility of their statements as evidence supporting your case.

    To expand on the analogy, both you (and others who think as you do) and anyone taking an opposed position are, equally, pleading their cases before the bar of public opinion and public opinion (for which the readership of your blog stands as some kind of proxy) will be the judge.

    If you were to take an active role in politics (such as standing for parliament) you wouldn’t (I hope) expect the fact that you are an esteemed professor in economics to protect you against disagreement (possibly vehement, certainly emotive) with the political platform you were standing on. Do you expect the situation to be any different in the context of your blog? After all, it was you who *chose* to blog (a choice for which I among many others am very indebted to you – insofar as MMT is concerned), and in this and other articles you have *chosen* to promote a particular political agenda – mostly concerning, as on this occasion, social policy. Fine: you have the absolute right to do so – and so have others to express their dissent if they don’t subscribe to your agenda and/or question the validity or germaneness of the grounds on which you base your argument.

    If you were to decide to delete such dissenting comments (as some other bloggers who’ve been mentioned here are wont to do habitually) – fine, again: it’s your blog. But I must say I’ve always admired how sharply you have differentiated your blog from theirs by as a matter of principle refusing to follow that path no matter how much you might sometimes disagree with commenters’ opinions. So I wish to pay tribute to your forebearance in my own case in the face of what you clearly regard as dire provocation. All honour to you!

    Yours sincerely

  65. I see that everyone seems to be up in arms when the USSR is brought up. =)

    Just want to be on the record so we are more nuanced with regards to USSR’s legacy. Still, we should not go any further off-topic. So i probably won’t enter into debate

    1. If we truly go the socialist route, we keep our own eyes open and not to repeat mistakes and fix mistakes we counter along the way. We build a society that We want to live in. History offers lessons.

    2. If top echelon’s of the socialist parties are living like kings then that seems like capitalist restoration to me.

    3. Capitalism related (wars, slavery etc) deaths does not count for capitalist apologists.

    4. People still make the case that communism somehow is in the same gutter that capitalism is. Sorry no. Fact is communism tries to go to equality and end exploitation under capitalism. It is not the same as capitalism. Ending slavery is better than having slavery. Nowadays, the term financial capitalism should be used instead.

    5. Internal letters showed that the NKVD was expelling people so that they could create discontent to dislodge Stalin. The real world is always bloody and muddy, capitalists have this unrealistic expectation for socialists/communists. Fact is 95 percent of population was not affected by the great purge. Fact is that Trotsky, Krushchev, and Gorbachev all helped the West to propagandize against the USSR. There is so much anti-Stalin propaganda out there. Whats your source?

    6. As the professor quoted Marx, people in socialism inevitably bear the birthmark of capitalism. I don’t see how this fails to explain why people behave like in the old days.

  66. Tom Y,

    I cannot understand how anyone can take an apologist stand for the USSR.

    You say that 95% of the Soviet population was not affected by the purges. So that means 5% were. So what happened to them? Were they expendables for the great cause of socialism. And of the other 95%, how many of them lived in fear? How many of them were muzzled? How many of them had to do and live where they were told? When the Soviet tanks rolled into Hungary and Czechoslovakia how many citizens were murdered and summarily incarcerated?

    Why do the apologists for the USSR turn a blind eye these facts of history.

    You say there are lessons to be learnt from the history of socialism in the 20th century. That is correct. The lesson is that socialism always devolves into totalitarianism.

    The history of both socialism and feral capitalism is marinated in blood and misery.

  67. Tom Y,

    “If top echelon’s of the socialist parties are living like kings then that seems like capitalist restoration to me.”

    Yes it may be what you call it but what happened to high socialist principle?

    Socialism has always devolved into brutal, murderous, corrupt totalitarianism.

    The socalled socialist/communist states (China, Vietnam) are fascist states – state hegemony in partnership with oligarkic private property ownership. Russia doesn’t even bother to call itself socialist/communist – it’s a flat out fascist state.

    There’s always Cuba of course. How to explain Cuba? A mind numbing admixture of rum and sunshine. 🙂

  68. Henry Rech writes:

    “Socialism has always devolved into brutal, murderous, corrupt totalitarianism.”

    And yet the world must become ‘socialist’, if civilisation is to survive.

    Your reaction to the word ‘socialism’ displays an unbalanced ‘individualist’ philosophy, of the type we are witnessing with Trump’s support of secessionists – “fighters for democracy” – in Hong Kong.

    The living standard of the average Chinese is now 10 times better than in the Tiananmen Square days; I do not see massive discontent in mainland China, comparable to BLM in the US.

  69. Neil,

    “And yet the world must become ‘socialist’, if civilisation is to survive. ”

    I can’t see why this is necessarily the case and the history of the 20th century suggests this is not the way to go.

    “Your reaction to the word ‘socialism’ displays an unbalanced ‘individualist’ philosophy, of the type we are witnessing with Trump’s support of secessionists”

    This is just another ludicrous proposition. As I have said several times above I believe in individualism balanced by strong social values. Please get it straight.

    “The living standard of the average Chinese is now 10 times better than in the Tiananmen Square days”

    So why did hundreds of thousands of Hong Kongese march the streets last year in defiance of Chinese threats?

    And China is not a socialist or communist state – it is a fascist state. Speak against the regime, as many do, and see what happens to you and your family.

  70. Not debating you.

    Just want to be on the record that nobody reading the comment section should listen to Henry Rech’s regurgitated narrow-minded petty-bourgeois Western propaganda nonsense about countries whose people they don’t know and really in truth care nothing about.

    We move forward with MMT as our torch.

  71. Tom Y,

    “…regurgitated narrow-minded petty-bourgeois Western propaganda..”


    Your only defence is the standard labeling straight out of the revolutionary’s manual. (No reference to running dogs – disappointing.)

    If you want to live in the world of patently failed Marxist theoretical dogma and totally ignore history and reality that’s for you.

    Marx famously said: “History repeats itself, first as tragedy, second as farce.”

    This could appropriately apply to the practical application of revolutionary theory. How many more Stalinist purges, tank brigade invasions, Pol Pot genocides are needed before reality dawns.

    Marxist/Hegelian dialectical materialism specifies a formulaic progress of history. Unfortunately, the early 20th century revolutionaries decided they could skip ahead, violating the Marxist laws of history. With hindsight we can see it was not a good move.

    So where do we find the two great socialist experiments of the 20th century? Both are now fascist states, having needed to introduce an element of capitalism into their functioning, and oligopoly capitalism at that. Perhaps the early 20th century revolutionaries should have read their Marx more assiduously.

  72. @Henry, Russia and China were and are ruled by communist parties. There has never been a ruling socialist party so far as I’m aware. Please correct me if I’m wrong.

  73. Carol,

    They call themselves communist but they are nothing of the sort and never have been.

    It an homage to an aspiration.

    They have all been socialist in practice.

  74. But Bill the title of this blog is tracing the root of progressive views on the duty of work.
    Do you think the communist party of the soviet union by the 1970’s is any way part of
    progressive views?
    Yes it is history but not progressive history.Far from it.

  75. Dear Kevin Harding (at 2020/08/08 at 6:56 pm)

    I don’t know how old you are or how much you know about the evolution of socialist thinking but the Soviet planning system was seen as the aspirational goal for progressive leftist thinking in the West in the post war period up until at least the 1970s.

    Left-wingers used to go there on study tours from the West as a sort of pilgrimage.

    You might think that was misguided but you cannot airbrush the historical reality.

    And if you were patient enough to wait until Part 2, you would have seen that most western social democracies in the post war period had very similar duty to work statements in their policy documents, constitutions, and practice.

    They were not Stalinist regimes.

    best wishes

  76. How in anyway could my comment in anyway be construed as censoring history?
    These polemical devices are very much apart of progressive history unfortunately.
    There is also a disingenuous at work here.
    The progressive history of attacking parasites is very much aimed at wealthy capitalists
    {the fire sector} not the poor , when the international was written progressive governments had
    not introduced welfare support ,the lumpen proletariat were the criminals of want
    urged to rise.
    There are also comments which actually use the shirkers v workers narrative.
    The professor is very good at the importance of language.Always extolling us to break free
    of neo-liberal framing .
    As we must know hostility to the poor and unemployed is classic neo liberal framing

  77. I am 60 bill foolishly considered myself a trotskyist ,member of the militant tendency by 1980 as a naive nineteen year old.There were very few pro kremlin CP members around by then, generally
    insulted by the term Tankies .
    The history of the soviet union has been a massive blight on the realisation of progressive goals.
    I do not think you are going to persuade anyone by quoting a repressive dying regime.

  78. To explain the word tankies. Those who justified the use of soviet tanks on Hungarian and
    Czech workers.

  79. I also would like to be on the record so readers are more nuanced than some people here.

    My father has lived in Hong Kong for 50 years and would love the Chinese government to liquidate the real estate tycoons and just rip up last remnants of the British colonial laws that have been destroying his birthplace in order to give young people there basic economic rights and a real future to look forward to. He would also love to see young people reeducated and CIA NGOs nests of spies behind the right-wing pro-west petty-bourgeois protest cleaned up as well. All these are verifiable, just like Cuba’s condition before the revolution and after.

    It is easy for a westerner to say things about Hong Kong after reading two articles about what is going on and taking whatever the Western press for granted.

    Also, people reading must realize that all arguments presented above have been scrutinized by people other than myself. I just happened to to know most of them and so none of them have been able to impress. Even if they are not true, they still serve as lessons that we can learn from as we transform our society.

    I think it is important that I must write down what I did above. All i am saying here is that we agree to disagree and we must have some nuance, now if the person would let me go, that would be great.

  80. Tom Y,

    “… if the person would let me go, that would be great.”

    You haven’t the decency to name me or is it that what I say is so odious it is unbearable? I feel like the “grammatical fiction” in Koestler’s “Darkness at Noon” – an identity fiction. I would like nothing better than to “let you go”. This discussion is tiresome. I hate thinking and talking about the monstrous history of socialism in the 20th century but you want to put me out of your mind just like you find confronting the truth unbearable and want to put it out of your mind. There is no nuance. The rivers of blood may have stopped flowing but the stench of socialism as practiced in the 20th century still hangs. You talk about “liquidating” the property tycoons in Hong Kong. Now there’s an interesting word. Can’t bring yourself to say murder? Another fiction. What about the property tycoons in Beijing that nestle up to the leaders of the regime and are feted? Are you blind to this also? You disparage my comments on the revolt of young people in Hong Kong. Night after night for 6 months I watched these masses of young people and occasionally their seniors, confront the forces of the Chinese regime, putting their lives and futures at great risk. Why did they do this? Because they were mightily duped by some clandestine manipulators from the West? Another fiction you indulge yourself in. It is not I that has to let you go but the fictions you entertain.

  81. Neil H,

    “The living standard of the average Chinese is now 10 times better than in the Tiananmen Square days”

    But how did it achieve this?

    By introducing CAPITALISM – NOT by reinforcing high socialist principle!

  82. I will admit to making an error.

    I previously said Cuba was an admixture of rum and sunshine.

    Actually, Cuba is an admixture of rumba, rum and sunshine.

  83. Neil H,

    “I would much rather see a friendly competition with China….”

    Yes, while they infiltrate and pollute our polity for their own ends.

    And allow them to brazenly cast aside the legitimate interests of the Phillipines, Vietnam and Indonesia with the circumscription of the South China Sea with their Nine Dash Line which permits them in their minds to claim the waters from Hong Kong all the way down to the Indonesian archipelago.

    There is only direction the Chinese can viably project their power.

    To their north, north west and west are the Russians. To their north east is Japan and South Korea. To the east is the US. To their south west is India.

    The only direction viably open to them is to the south and the south east in the Pacific, onwards to Australia and the Antarctic where they are progressively occupying Australian territory without challenge or dissent.

    Here they come buddy!

    China could be a force for great good for ALL their people, their region and the globe. But they have chosen another path.

  84. Henry Rech,,

    I repeat: your reaction to the word socialism borders on pathological.

    Fact is: since the beginning of time humans have been progressing from instinctive, *unreasoning* individualism and tribalism, toward the first attempts at ‘reasoned’ rule of law with Hammurabi (“an eye for an eye”), through government via monarchy and empire.

    Fast forward several thousand years:

    Socialism arose after abuses arising from unbalanced conceptions of freedom of the individual left many people in the early industrial revolution living in poverty.

    Today the correct statement of Rights is presented in the UNUDHR, which not surprisingly is resisted by ‘sovereignty of the individual’ types eg the fools running around saying the police have no powers to enforce .covid19 edicts over ‘sovereign’ individuals.

    As for the ‘freedom fighters’ in HK: those fools need to start using their brains because HK will revert to China in less than 3 decades. Indeed the rich in HK want the student activists to go home, shut up, and stop bleating about ‘democracy’. Unless democracy delivers economic justice for all via a guarantee of above poverty employment, it’s no better than fascism.

    Meanwhile, China does not have to infiltrate our dysfunctional polity; we are rendering our democracies ungovernable all by ourselves. eg, how long before congress actually organises support for the unemployed in the US, instead of carrying on with their mindless Dem/Repub opposition.

    Abd If China understood MMT, they would be invincible with their vast productive capacity; while we would still be whacking tariffs on each other (see the latest bout between the US and Canada). . Pathetic.

    Google Ellen Brown’s article: ‘the American dream is alive and well in China’, to help you see past your instinctive, mindless, individualist tendencies.

  85. G’day Neil,

    I guess there is only one thing for it. It might be best if you drag me off to re-education camp.

    I could join the 1M Uighurs enjoying summer camp conditions in Xinjiang. Looks cool.

    “the American dream is alive and well in China”

    Sounds good, as long as I don’t make a sound.

    I guess you’re already over there?

  86. Neil,

    “your reaction to the word socialism borders on pathological. ”

    What I am pathological about is the history of socialism in the 20th century.

    With any luck re-education camp will cure me of the affliction.

    I just have to remember not to mention the 50M grammatical fictions (lumpenproletariat) that perished by starvation under the callous indifference of Stalin. I fact, I promise never to mention it again. (And I haven’t got my fingers crossed, truly.)

  87. Neil H,

    “Google Ellen Brown’s article: ‘the American dream is alive and well in China’, to help you see past your instinctive, mindless, individualist tendencies.”

    Yes and there’s all those nice business tycoons who love sharing dumplings with cadres of the Chinese Communist Party. I imagine they are extremely grateful that their CCP friends were wise enough to introduce capitalism into the country. (And well, we don’t have to mention that many of these nice business people are related to these nice cadres). And all the nice little people don’t mind if these nice business people make billions just because they are related to the right people. Sharing dumplings is such a great way to get to know people. Don’t you think?

  88. Neil,

    “…those fools need to start using their brains because HK will revert to China in less than 3 decades.”

    And who were they kidding with all those funny coloured umbrellas?

    Anyway, really,Hong Kong is already in the arms of its loving motherland. How sweet?

  89. Neil,

    “Unless democracy delivers economic justice for all via a guarantee of above poverty employment, it’s no better than fascism. ”

    Hang on a minute! Don’t talk about the motherland in that manner.

    Yeah, and democracy isn’t all it’s cracked up to be. I always close my eyes when I fill out those tiny little boxes. Donkeys couldn’t do better.

  90. Neil,

    “Fast forward several thousand years: ”

    Whoa boy! Mr. Marx would not be happy. History must proceed at the appropriate rate. You can’t rush thesis, antithesis, synthesis.

  91. Neil,

    “how long before congress actually organises support for the unemployed in the US, instead of carrying on with their mindless Dem/Repub opposition. ”

    Yup! 30 days in the cooler with Donny ‘ll fix ’em. They’ll behave themselves if he brings Melania.

  92. Neil,

    “Socialism arose after abuses arising from unbalanced conceptions of freedom of the individual left many people in the early industrial revolution living in poverty.”

    Unbalanced conceptions. Hmmm? Oh! you mean when they guy and the gal can’t agree who should be on top! Yeah, right. Always guaranteed to spoil the party. Luckily the industrial revolution saw the introduction of new sex toys. It could of gotten ugly otherwise.

  93. “toward the first attempts at ‘reasoned’ rule of law with Hammurabi (“an eye for an eye”)”

    Of course…but don’t forget a tooth for a tooth. The Boss won’t be happy unless you go all the way to guarantee the prisoner gives up the truth. Otherwise it’ll be off to the gulag for you know who.

  94. “Abd (sic) If China understood MMT, they would be invincible with their vast productive capacity; while we would still be whacking tariffs on each other (see the latest bout between the US and Canada). . Pathetic. ”

    Yep. Pathetic. Who’d ‘a’ thought whacking off on each other would be such a waste of time.

    Yep. Latest bout. Yep. US and Canada. Almost like one of those unbalanced conceptions. Bound to spoil the party!

  95. You know Neil, all this socialism and communism and stuff, well, I think I’ll just join you with the fascists. Dumplings for breakfast can’t be all that bad.

    I mean, when I was doing third year eco, I took a unit called Comparative Economic Systems. It was about the economics of socialist countries (with none of that horrible boring history stuff). We were in a tute one day sitting around a table. The tutor was explaining dialectical materialism and he was talking about communism. I must have been awake that particular morning. I remember asking him: won’t communism require a fundamental change in human nature? (An unusually profound question for me). Guess what he said? Yup. He said yup. We sat there for a few moments looking at each other in silence. You could just about hear them all thinking: “ain’t gonna happen anytime soon!”

    So sign me up to fascism (with steamed veggies).

  96. @Henry Rech

    Wow. 10 responses, to the one post, in just 90mins.

    Mate, sincerely, I have to ask…Are you doing OK?…Covid lockdown blues?

  97. Mute,

    “Are you doing OK?”

    Thank you for asking after me.

    Yeah, it’s tough.

    But Neil H has brightened up my day. Thank You Neil.

    “Covid lockdown blues?”

    Maybe. Maybe it’s all them dumplings. Dumplings for breakfast. Dumplings for morning tea. Dumplings for lunch. You get the picture. I’m just trying my best to be a good fascist. I hope Neil understands how hard I am trying.

    I am even seeking inspiration from the magnificent renderings of Russian folk song by Dustyesky:


    Inspiring. Well, half a bottle of Vodka probably is helping a tad.

  98. Mute,

    By the time I had finished the bottle of wodka, early this morning, I was having visions of the holy trinity – Marx, Lenin and Stalin – my grammatical fiction having been dissolved in the the ambrosia of the revolution – wodka!

    Did you like DustyEsky?

    My favourite is Ochi Chernye – but please don’t tell Neil. It is so contaminated with petty bourgeois romanticism.

    The Red Army’s rendition of the Hymn of the Soviet Union is always stirring and warms the blood.

    Can’t seem to find DustyEsky’s version on Youtube. Damn it!

  99. Henry,
    Can’t say I’ve read much of that history other than a Koestler bio.
    I do know that here and now Capitalism has it’s knee on throat of Labour and the next revolution will be in economics.
    Bills blog contains a lot of useful information.

  100. Mute,

    “Capitalism has it’s knee on throat of Labour”

    Yes it does. What I can’t fathom is how so few can dominate so many. It’s been that way through all of history. Socialism, capitalism, feudalism, whatever.

  101. Jerry Brown

    You say you don’t own any robots? So you don’t own a washing machine or dish washer?

  102. “From each according to his ability, to each according to his work,” What exactly does the second part mean? It’s an indefinite statement. As such I take it as indication of desire to deceive.

  103. @ Henry Rech writes:

    “What I can’t fathom is how so few can dominate so many. It’s been that way through all of history. Socialism, capitalism, feudalism, whatever”.

    Humans have widely differing capacities to compete in an economic system, so economic power naturally becomes concentrated in fewer hands (…and look at the blood bath which that economic competition has involved throughout history…..)

    Communism was an attempt to ameliorate the negative effects of this competition….but Stalinism failed to successfully channel the competitive greed of humans into community-wide harmonious creativity.

    I look forward to private sector free markets overseen by MMT-aware governments with public sector money creation, to achieve co-operative community systems.

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