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Australia’s job recovery stalling and soon to head south again

I am back into my Wednesday pattern after experimenting or the last 10 weeks with the MMTed Q&A series. Soon there will more video content coming as skills are refined. So today I just report my notes as I analyse the latest Australian Tax Office payroll data – Weekly Payroll Jobs and Wages in Australia, Week ending 25 July 2020 – released yesterday (August 11, 2020) by the Australian Bureau of Statistics. Regular readers will know that I have routinely analysed this dataset ever since it first became available in March this year. It uniqueness is that it provides the most recent data upon which an assessment of where the labour market is heading. The monthly labour force data is about two weeks old by the time this data comes out. And the most recent release gives some insights into what the impact of the renewed and severe lockdowns in Victoria (the second largest State economy) has been. The data shows that the jobs recovery has stalled and emphasises the need for more federal fiscal support – but that support does not appear to be forthcoming.

Relevant blog posts as I trace this data trail over time are:

1. “We need the state to bail out the entire nation” (March 26, 2020).

2. The government should pay the workers 100 per cent, not rely on wage subsidies (March 30, 2020).

3. A Job Guarantee would require $A26.5 billion net to reduce the unemployment rate by 6 percentage points (April 30, 2020).

4. Latest employment data for Australia exposes Federal government’s wilful neglect (May 5, 2020).

5. The job losses continue in Australia but at a slower pace (May 19, 2020).

6. Worst is over for Australian workers but a long tail of woe is likely due to policy failure (June 16, 2020).

7. Latest Australian payroll data suggests employment damage from shutdown is worse than thought (July 20, 2020).

In terms of the coverage of the ATO Single Touch Payroll data, the ABS report that:

Approximately 99% of substantial employers (those with 20 or more employees) and 71% of small employers (19 or less employees) are currently reporting through Single Touch Payroll.

Broad assessment

1. Last week, the monthly Labour Force data showed that while employment grew in June, full-time employment went backwards – see my review – Australia labour market – one step forward up a gigantic mountain (July 16, 2020).

2. The Labour Force data was based on a survey that ended around the second-week of June, so by the time the data is published it is a month out of date. The next Labour Force survey data will be published tomorrow.

3. The latest payroll data from the ATO takes us up to July 25, 2020, which means it is more representative of where we are at now (although still two weeks out of date).

4. In the period after the last Labour Force survey, the second-wave of the virus has hit Victoria and after a 3-week Stage 3 lockdown, the Victorian government responded to the escalating infection numbers by introducing even tougher restrictions (Stage 4) for 6 weeks. This data will only tell us what the impact of the Stage 3 lockdowns have been.

5. The assumption by the Federal government that the economy would be rebound quickly is ill-founded. There is mounting evidence that many businesses will not ‘make it across’ the lockdowns, especially given that Victoria is back in tight lockdown and NSW is looking like it will have to follow.

It is obvious that it will have to continue to offer massive fiscal support for an indefinite period – probably a decade or so. So the question then arises – what is best form of that support and at what level should it be provided.

That is the background to analysing the latest payroll data.

Jobs recovery appears to have stalled

Here is what has happened to total employment in Australia since January 4, 2020 (the ATO data starts at the beginning of the year). The index is based at 100 on March 14, 2020 which appears to be around the peak employment, although it was slowing since February 29, 2020.

Overall, there has been a 5.5 per cent contraction between March 21, 2020 and July 25, 2020. The trough came in the week ending April 18, 2020 and the total employment loss was 8.9 per cent.

As the lockdowns were eased, employment started to return until July 4, 2020, after which there was a 0.3 point contraction in the following week, as the new Victorian lockdown came into effect.

I expect the job attrition will rise when the data is next available, given the severity of the Stage 4 lockdown in Victoria.

Here is the same series decomposed by gender.

While the pattern was almost identical for males and females up to March 22, 2020, the data for the earlier parts of April showed that the crisis was impacting disproportionately on females.

This bias was driven by the occupational segregation that has women dominating the sectors that were most impacted by the lockdown (accommodation, hospitality, cafes, etc)

As the lockdowns ease and businesses reopen, women are gaining jobs at a faster rate than men.

As the recovery has stalled both sexes are impacted more or less evenly.

The accompanying ABS press release – notes that:

The number of payroll jobs nationwide remained steady through July (-0.1 per cent) while Victoria saw a fall … Payroll jobs remained 4.5 per cent below mid-March, when Australia recorded its 100th confirmed COVID-19 case … Payroll jobs fell by 1.5 per cent in Victoria through July ahead of the introduction of Stage 4 COVID-19 restrictions in the state, with total job losses of 6.7 per cent from mid-March …

Around 40 per cent of jobs lost in Victoria by mid-April had been regained by 25 June, but by the end of July this had reduced to 24 per cent …

The question is now how quickly the jobs will recover and how many businesses have been lost altogether. The latter statistic will determine the residual unemployment that will remain.

A guide to the answer to that question can be formed from last week’s Labour Force data.


Answer: because we know that the composition of total employment is already changing away from full-time work.

The following butterfly graphs are constructed from ABS Labour Force data.

They show for full-time and part-time employment indexes set at 100 for the peak in total employment in the downturns for 1982, 1991, GFC and now the COVID-19 cycles.

For the first three events, they show the trajectory for 90 months after the peak, capturing the dynamics of the cycle.

The pattern in a usual downturn are demonstrated in the first three episodes – even as full-time employment declines as the recession bites, part-time employment continues to grow for a while, until it becomes obvious that the recession is deepening.

At the peak before the 1982 recession, the ratio of part-time to total employment was 16.2 per cent. By the time, full-time employment had reached the peak level again (after 41 months following the peak), the ratio was 17.6 per cent (and rising).

The 1991 recession was particularly bad and there was a major shift away from full-time work. At the peak before the 1991 recession, the ratio of part-time to total employment was 21 per cent. By the time, full-time employment had reached the peak level again (after 65 months following the peak), the ratio was 22.3 per cent (and continuing to rise).

The GFC event was reduced in intensity by the substantial fiscal stimulus that the Federal government introduced. But the part-time ratio still rose and full-time employment took 23 months to return to its pre-GFC peak. The part-time to total ratio in February 2008 (peak before the downturn) was 28.3 JobKeeper cent. After 23 months, the ratio had risen to 30.1 per cent.

While the ratio is rising on a trend basis as the labour market is increasingly casualised and job protections are wound back under the aegis of government policy designed to tilt the playing field towards the employers, there is an acceleration in the ratio during recessions when employers scrap full-time work and replace it in the recovery with part-time, fractionalised and insecure work.

The COVID episode is different given the nature of the job loss – lockdowns – which have directly impacted on the sectors where part-time work dominate.

But it is clear from the observations we have (lower-right panel) from the peak in February 2020 until June 2020, that as the lockdowns were eased, part-time employment rebounded but full-time employment continues to decline.

Experience tells me that that suggests that there have been major business failures which will leave a legacy of elevated unemployment.

What does this imply?

We can do some ‘back-of-the-envelope’ calculations with some assumptions to see what this might imply.

  • The Labour Force survey is usually completed by the 11th day of each month.
  • The most recent Labour Force release showed that in the four weeks to June 11 (about) total employment rose by 4.6 per cent or 210.8 thousand, unemployment rose by 69.3 thousand and the participation rate rose by 1.3 points. That meant that the labour force rose by 280.1 thousand. Of course, since March 2020, the labour force has fallen by 384.6 thousand.
  • If added those workers who have left the labour force due to a lack of employment opportunities back into the official unemployed, the unemployment rate would have been 10.04 per cent rather than the reported 7.45 per cent – see Australia labour market – one step forward up a gigantic mountain (July 16, 2020).
  • What the latest ATO data shows, is that total employment has fallen by 0.1 points in the three weeks since the last Labour Force survey was completed – which based on the current labour force data would amount to a further 13 odd thousand jobs being lost.
  • If we assumed the participation rate over those three weeks was unchanged, then the official unemployment rate would have risen only marginally from 7.5 per cent (which excludes from the calculation the decline in the labour force).
  • However, just as the labour force is still lower by 384.6 thousand workers, when compared to March 20.
  • If we assumed no change in participation, but added the hidden unemployed who left the labour force in April back into this revised estimate of the official rate, then the adjusted unemployment rate would be around 10.1 per cent.

So this information (which is 2 weeks later than the last Labour Force data) suggests that recovery has stalled and there is considerable downside risk for the labour market.

Wages paid decline over July 2020

The ABS report that between March 14, 2020 and July 25, 2020:

Total wages paid decreased by 4.8%.

Which suggests the worst is far from over.

Age breakdown of Job Loss

The age breakdowns for Australia as a whole are shown in the next graph.

I have now decomposed the data into the job loss period (peak-to-trough) and the recovery period.

It is clear that our youth bore the brunt of the crisis, largely due to the industrial composition of the job losses – services, accommodation etc.

They are also recovering more quickly.

The other insight from this graph is in noting that the prime-age workers lost about 4 per cent of their employment during the peak-to-trough period but in the period since the lockdowns have been eased, their recovery is very muted.

This links with the full-time, part-time analysis above and is suggestive of a conclusion that businesses have disappeared and the recession will be worse than the government has allowed for in their policy support.

The following sequence of graphs gives the age profiles of the job loss for each State/Territory – be careful to appreciate the difference in the vertical scales.

But for most states and territories, the teenage job loss in the descent was in excess of 20 per cent and many were not being supported by the JobKeeper wage subsidy because of their casual status.

The recovery is very muted for teenagers but much worse for the prime-age workers (as above).

Job Loss and Recovery by Age, March 21-July 25, per cent

Industry job loss breakdown

The following graph shows the percentage decline in employment between March 21, 2020 and April 18, 2020 for the Australian industry sectors (peak-to-trough) and the gains since the recovery to July 25, 2020.

The turning point is taken from the time the Accommodation and foods services stopped shedding jobs (week ending April 18, 2020).

The idea of a discrete ‘recovery’ period will give way next release, given the second wave effects in Victoria.

As expected the worst hit sectors were Accommodation & food services (decline of 35.1 per cent) and Arts & recreation services (decline of 28.2 per cent).

The first stages of lockdown easing have allowed some cafes etc to open, which is why employment in the Accommodation and food services has rebounded by 17.2 per cent since April 18, 2020. The Arts and recreation services sector has recovered by 13.1 per cent.

But the pace of recovery has slowed dramatically in those sectors and will turn negative in the coming week (Stage 4 lockdowns).

As above, what the residual damage will be once the final stages of easing are in place in the coming months depends on how many business and employers go broke in the meantime.

It is clear that in the last week, several sectors have shed employment.

Taken together, these sectors are probably reflecting factors that have arisen from the wider impacts of the lockdowns as the damage permeates the supply chain across the industrial structure.

The deeper this cross-industry penetration the worse the longer lasting effects will be.

State job loss breakdown

The following graph shows the employment losses from March 14, 2020 to July 25, 2020 for the States and Territories (blue bars), while the orange bars shows what has happened over the last 2 weeks.

Clearly the renewed lockdowns are impacting on Victoria. But it is worrying to see the recovery stall in several other jurisdictions.

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Music – Chapter One: Latin America

This is what I have been listening to while working this morning.

This track is from the late Argentinean tenor player – Gato Baribieri – and is taken from his 1973 album – Chapter One: Latin America – released by Impulse! Records.

After a decade of playing free jazz, Gato Barbieri – started his series of albums devoted to Latin American fusion.

I had purchased his earlier free jazz albums in the early 1970s (bugging the import shop guy to get them in from the US).

But this one was my favourite (apart from the album that immediately preceded it – Bolivia) – of his Latin jazz era.

This track – To be continued – was recorded at Odeon Studios in Rio de Janeiro.

The album has been called “one of the all but forgotten masterpieces in 1970s jazz”. I play this record regularly.

What a collection of great players this is!

I just love the way the instruments slowly build the tension as they are introduced – from the bombo drums through to various percussion instruments, to bass, guitar and then the tenor finale. A wonderful development of sounds.

Here is a Rolling Stone obituary (April 3, 2016) – Gato Barbieri, Latin Jazz Great and ‘Last Tango in Paris’ Composer, Dead at 83.

That is enough for today!

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

This Post Has 55 Comments

  1. hi Bill

    just a note on the most recent 2 weeks – it will probably get revised upwards in future releases. This has been occurring with each release. For example if you look at your graphs on the July 16 post the June 20 index value is ~95 and June 27 is ~94. But in your post today these are both closer to ~96. Might be less gloomy in the next release

  2. “The pattern in a usual downturn are demonstrated in the first three episodes – even as full-time employment declines as the recession bites, part-time employment continues to grow for a while, until it becomes obvious that the recession is deepening.” This has become a familiar story, and it’s time IMHO that MMT spoke much more directly and forcefully about the process, so dear to the neoliberal heart, of substituting bullshit jobs for decent jobs; i.e., being forced from a mid-management corporate position to a gig as an Uber driver. Too much quantitative analysis, at the expense of qualitative analysis, has been one of the hallmarks of neoliberal economics. God forbid that MMT follows suit, which is not to imply that this is what Bill is doing here. However, I have sensed a gradual paring down of the JG, by some MMT economists, to a level of QUALITY more acceptable to neoliberalism, AND IT BOTHERS ME.

  3. Every now and again, usually in the small hours, I have a clear vision of what I guess you all describe as “neoliberalism”. It’s just a word, with little meaning to most folk – but I guess everyone is acutely aware of what it actually translates into.

    You guys have shone a light into the darkness of government and banking operations – and for most people, the implications are immense. Suddenly, it is obvious how the enormous wealth divide has developed – and how some individuals have amassed wealth and money way beyond what the ordinary man could even contemplate. And how it has been hidden.

    We have acquiesced to this nightmare. Indeed, most support the endeavour, even though they don’t fully understand it – or what the consequences may be. They are happy to play the game.

    But the game is a busted flush. Keeping the masses content and distracted has become the standard practice for as long as I can remember. Should anyone “rock the boat” – like Mr Assange – then God help them.

    In the small hours, it’s simple and blindingly obvious.

    As is the solution.

  4. Newton,

    “I have sensed a gradual paring down of the JG, by some MMT economists, to a level of QUALITY more acceptable to neoliberalism, AND IT BOTHERS ME.”

    There is a variety of socialist dogma but they all emphasis the collective over the individual – the individual is dispensible and expendable. So it is no wonder that socialist principle is being brought to bear to justify a certain treatment of those unemployed not willing to participate in a JGS. There is no compassion for people damaged by society. They are to be left to their own devices and effectively cast on to the scrap heap of society. The socialist principle is being camouflaged by invocation of similar principles that are in operation in modern neoliberal society. However, make no mistake, at the base of the justification is dogmatic socialist principle.

  5. Henry, as a socialist myself of a somewhat peculiar stripe, one who affirms a spiritually-based socialism developed and popularized by Edward Bellamy, I do not understand how “the socialist principle” works against “compassion for people damaged by society.” Indeed, in Bellamy’s vision, ALL who are locked into the aggressive, competitive, and relentless struggle for economic (and therefore physical) survival–EACH ONE OF US, be we winners or losers, who must directly or indirectly scramble over the backs of others to get ahead–are deeply damaged not only in our social and personal relations but in the depths of our souls. So please, if you have the time, would you kindly explain to me what you mean when you say that, according to the socialist principle, “the individual is dispensable and expendable.” I can understand such a statement in light of the worst abuses of authoritarian communism, but not in the context of the long and venerable tradition of humanist socialist thought yet to be brought into political being, apart from the localized and often short-lived experiments of various communes, including the early church. Here’s hoping we can talk further and increase my clarity.

  6. Newton,

    Looking at the history of socialism in the 20th century (you might have noticed I’ve been banging on about it for a few days to many people’s chagrin), it is clear, to me anyway, that the collective has primacy and the state dictates and directs the functioning of the society. Individual freedoms are curtailed, dissent is discouraged and even punished. Classes other than the proletariat (the bourgeois, the petit bourgeois, the lumpenproletariat) are effectively enemies of the state, society and the socialist cause. All kinds of abominations were perpetrated in the name of the state and the preservation of the state. This is not socialism in theory. This is socialism in practice. (If there were any socialist states that arose in the 20th century that did not conform to this pattern, I would like to hear about it.)

    Bill, in building his case for his position on the unemployed not willing to participate in the JGS, quoted several articles from the old Soviet constitution:

    “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.”

    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.”

    He also posted some lines from the Internationale and said:

    “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?”

    The purport of these statements is pretty clear. There is no room for compassion.

  7. Yet Bill has repeatedly been explicit that those who cannot work because of age, infirmity, or other unavoidable circumstances MUST be provided for in adequate and dignified fashion. It seems to me that Bill draws upon certain tenets of the old Soviet Constitution in much the same way that Bellamy draws upon the Preamble to America’s Declaration of Independence. There is much in that Declaration, for example, that is objectionable, and much more in the history of the country that so declared its independence. But do these historical facts detract from the truth of the sublime ideals set forth in the Preamble: that all human beings are created equal, are endowed with inherent rights including life and liberty and the pursuit of happiness, that governments are created by human beings to ensure their equality by securing such rights, that any government which does not do so should be altered or abolished, etc.? The fact that ideals are abandoned or betrayed has no bearing IMHO on the value of the ideals themselves. I could point to many an unhappy or dysfunctional marriage, but do those facts constitute a cogent argument against an institution in which two persons choose to take each other “to have and to hold, to love and to cherish, from this day forward, for better or worse, for richer or poorer, in sickness and in health, till death do us part?”

  8. Newton,

    Yes, Bill has said that the incapacitated will be tended to. He has also been explicit that those who refuse to work will receive no benefits.

    There are now people who refuse to work and are still are able to receive a basic dole (in Australia at least). How they manage to do this I am not quite sure.

    I have seen long term homeless people up close. While some seem to have issues such as exhibiting the effects of long term drug use, others seem to be not incapacitated.

    There are people who have been damaged by their upbringing. They have been brought up in very difficult circumstances. They seem to reject society and want no part of it and manage to escape work. What do we do with them? Do they fit into Bill’s incapacitated category? Should society perpetuate the damage and reject them?

    It’s fine to have ideals but what matters is how those ideals find expression in reality. The reality of 20th century socialism as practiced, universally (as far as I can see) was abhorrent and devolved into totalitarianism. You can dream about utopias all day long, the facts don’t change.

    States that were and still are nominally socialist are now fascist. Their socialist principles have failed them and they have to resort to capitalism (of the oligopoly kind) so as to have their societies prosper in a fashion comparable to so-called democratic capitalist societies. They are also totalitarian and engage in ruthless coercive practices designed to protect and preserve the monopoly of state power.

  9. It appears that neither of us is going to change the other’s mind, and so be it. Reasonable people can and SHOULD disagree, at least about some of the more ambiguous or complicated things. I’ll leave you with the invitation to compare Batista’s Cuba with Castro’s, and then to compare present-day Cuba with Haiti, the DR, Jamaica, or other nearby, somewhat similar countries. Generally-recognized statistics on health care, literacy, severe poverty, unemployment, homelessness, crime rates, etc. are useful yardsticks in such an exercise. Then ask yourself in which of this group of neighboring nations, none of them even close to perfect, you would prefer to live and raise a family?

  10. Newton Finn @23:38, it seems to me that Bill has been consistent in criticizing low quality uber-type jobs as well as the shift towards part time jobs for a long time now. And also consistent in specifying that the Job Guarantee wages and benefits should be based on the aspirations of society- not ‘market forces’ (such as they may apply to the labor market, an idea that is problematic on its own). There has been no ‘paring down’ on this quality that I have seen over the years.

    What kind of process determines what the ‘aspirations of society’ really are, and therefore would determine the wages and benefits of a JG? I would say it is a political process primarily, hopefully informed by ethics, but also one that has to recognize what resources are available to society. In a functioning democratic system, that political process would reflect what most consider to be fair as a minimum standard of living. If what ‘most’ consider to be fair is not in your or my opinion actually fair, then it would be upon us to convince more citizens that we are in fact correct. Bill has never said that we should not try to do that. Of course, we aren’t even at that point where we can argue that JG compensation and quality are inadequate- we are still arguing to implement a JG in the first place. One step at a time.

  11. Newton,

    “I’ll leave you with the invitation to compare Batista’s Cuba with Castro’s,”

    Yes I will do that. That will require some work.

    Elsewhere in these comments I said Cuba was defined by “rumba, rum and sunshine”, meaning to suggest it had a better disposition than other socialist countries. However, to get from Batista’s to Castro’s Cuba required a certain amount of bloodletting. And it survived economically largely because of long term aid from the Soviet Union and suffered greatly when the Soviet Union collapsed.

    And of course you have chosen the most benign of cases to argue from. The rest of the socialist world has had a more problematic history.

  12. Vietnam? They suffered more from my country’s attempts to ‘win their hearts and minds’ by blowing them to bits than they suffered from socialism.

  13. And Australia accepted 50,000 Vietnamese “boat people” in the 1980s fleeing their country – 10 years after the bombs had ceased falling.

  14. Jerry, I made it a point to exempt Bill from my concerns about some in the MMT camp seeming to pare down the JG to make it more acceptable to the neoliberal status quo. Bill pares down NOTHING. But I have noticed that the proposed hourly wage to be paid to JG workers seems to have shrunk for some in the MMT community, going from what had been in the mid twenties to what is now sometimes spoken of as being in the teens. I understand that the effort is to create minimum wage work, but should there not then be a corresponding push to raise the minimum wage to one that is FULLY livable, without having to incur substantial debt and thus fall again into the neoliberal trap? On the other hand, you’re quite correct in suggesting that we must proceed one step at a time, and perhaps I’m being a bit unreasonable here…or overanxious.

  15. Given that:- the avowed aim of the JG idea is 1) to supplant today’s actual existing *involuntarily unemployed” labour-market buffer-stock (excluding those temporarily so whilst of their own volition transiting between their last job and their next one and adequately provided-for meanwhile) with an *employed* one and, 2) to set the price-level (ie hourly wage plus basic standard non-wage benefits) of that buffer-stock; AND that the practical purpose at which it is aimed is to set the price-level for all other prices in the economy, by their *relativity to* the hourly-rate (plus benefits’ cost) of the buffer-stock –

    I personally don’t comprehend what the purpose is supposed to be of all the discussion about socialism. The JG is in itself neither “socialist” nor “non-socialist” – any more than was the Australian wool-price stabilisation scheme which Bill has described the JG idea as emulating in his own mind when he first conceived it.

    That discussion having anyway been embarked-upon (relevantly or otherwise) I agree unreservedly with the views expressed by Henry Rech.

  16. Robert,

    “I agree unreservedly with the views expressed by Henry Rech.”

    Thanks for saying so.

    I’d say we are probably it! πŸ™‚

  17. If we take a step back for a moment and consider our predicament.

    Our complete economic system has collapsed by the emergence of coronavirus, but it is merely a catalyst – the inherent weaknesses were already there and at breaking point. No economic system can work unless it functions in a sustainable, habitable environment. Good luck to Mr Musk and his Martian ego-trip, but perhaps someone could point out that the red planet has neither.

    Even if our closest celestial body – the moon – had the same atmosphere and habitat as earth, with our rate of population growth, it would be full after just one decade. Even if we could, why should we permit colonisation when it’s abundantly clear that humanity is a parasitic and destructive entity that’s trashed its home and wiped out many of its other vital species and ecosystems.

    When you consider the scientific evidence objectively, it is difficult to see how we can survive beyond the middle of this century – a mere three decades away.

    We are fast running out of the one component critical to our survival – oxygen. Not just from the loss of rainforests and atmospheric pollutants – but with the rapidly increasing acidification of our oceans. Half of our oxygen production comes from phytoplankton in our oceans – more than every other oxygen producing system combined, but decreasing ph values in the preceding three decades has led to a rapid reduction in phytoplankton density. Change the environment – and a species that has been around for millennia – disappears.

    The same process is now happening to us.

    Add in all other factors, global warming, climate change and their drivers such as increasing methane expulsion from the retreating polar ice caps and the vast amounts of toxic chemicals, radioactive isotopes and micro plastics we continually dump in the water, we are on the cusp of a mass extinction of all marine life.

    Today there are reports of an 80% reduction of migratory fish returning to freshwater rivers in the last twenty years. By 2050 there will be no fish or seafood that will be safe for human consumption – even if any stocks survive.

    Nothing I have read in my lifetime addresses these fundamental issues in any meaningful way. No economic system has been proposed to redress the damage we have inflicted, whilst harmonising our relationship with the environment. The changes we need to make are literally incomprehensible – and if presented to the global society, would likely be rejected as unworkable and unpopular! Goodness, the one obvious weakness in our response to Covid is our addiction to air travel – and despite the unfolding horror, we still can’t quit flying! Just think how difficult it would be to do everything else when faced with such ignorance and stupidity?

    But change is a-coming, whether we want it or not. We are being necessarily culled. We have destroyed and endangered much life on this wonderful place within such a short time – two centuries.

    And still we argue about semantics and what to do. A job guarantee? Political ideology? Money? Rights and responsibilities? Self-fulfilment?

    All fast becoming completely irrelevant. If we can’t change our addiction when faced with a simple contagion, what chance have we to redress everything else necessary for our children to survive. And we want to send them back to school!

    To learn what?

  18. Mark, as is often the case, nailed it. Time to go back on track, the one that alone can take us, and all living things, to the destination/destiny of not mere survival but mutual flourishing. It’s obviously THE issue of our time, and yet, as Mark indicates, we seem to want to talk about, argue about, everything BUT it. Recently reread “Ishmael,” which made a splash a couple of decades ago. Still a damn fine refocusing tool.

  19. Newton – I don’t see any MMTer paring down. Older work on the JG may use smaller wages simply because there has been inflation since then.

    Really, the hourly wage doesn’t matter socially all that much. It just has to be high enough to be realistic, to attract a large JG workforce, and then it fully emerges as the measure and standard of all labor and money. Even less do the piddling details which people have been arguing about in the last few posts matter. They’re just a distraction. How much should societies provide for people who refuse or can’t work in a JG? It’s each society’s decision, not yours, mine or Bill Mitchell’s. It must be based on local conditions at each time. Exactly what MMTers should NOT peddle their Bright Ideas about as Holy Writ for the Uninitiated.

    It’s the principle that matters. Is there a JG that deserves the name, or not? That’s all-important – the devil (or god) is NOT in the details. As usual almost the only people who understand this are the Bad Guys.

    Is there a duty to work? The experience of mankind is that exhortations and laws about the duty to work are misguided and worthless at best. The whole point is to set things up so they aren’t needed. For humanity as a whole and to some degree individually, they’re like suggesting laws that objects should fall down due to gravity when you drop them. It’s how God made the world, and needs no human laws or enforcement.

    robertH- Of course the JG is a socialist measure – and a crucial one. The wool-price stabilization was too, just not as important, as general human labor is more important than wool. if an entire economy were based on wool provided by individual “unskilled” shepherds, the two measures would amount to much the same.

    Consider Marx’s very important but usually misunderstood words (I misunderstood them at first) -, from The Class Struggles in France, a passage that Engels drew attention to the importance of, almost 50 years later as the first clear expression of “modern working class socialism”.

    “But behind the right to work stands the power over capital; behind the power over capital, the appropriation of the means of production, their subjection to the associated working class, and therefore the abolition of wage labor, of capital, and of their mutual relations. ”

    So “Capitalism” + JG sure ain’t “Capitalism” no more. Precisely how much it is on the road to “Socialism” – whatever that final destination is, is an unimportant semantic quibble. But there is zero doubt that it is a major, decisive – dare I say “revolutionary”? – step on that road.

  20. Thank you, Newton, for your kind words.

    I just wish that people would understand that there is a much greater force and energy creating a different kind of momentum we find difficult to comprehend. We can’t fight it, we just have to change and adapt. If we don’t or can’t, then it really is game over.

    Any existence here is fragile – there aren’t any other places we’ve discovered in the void that could sustain life other in our fantasies – but we have trashed this planet to such a degree that it has endangered the basic necessities – water and oxygen – to ensure any chance of survival.

    Stop all carbon emitting machinery and utilities.
    Stop eating meat.
    Stop all air travel.
    Stop extracting oil.
    Stop the manufacture of plastics.
    Stop the use of chemicals and pharmaceuticals in farming.
    Stop fishing.
    Stop dumping pollutants in waterways and oceans.
    Stop the emission of radioactive isotopes from the unrecovered corium in Fukushima.
    Stop killing animals for food or sport, especially the latter.
    Stop our wastefulness.

    Job Guarantee? There is so much work to do – real important work, not the great service industries of the consumptive classes. We must repair the damage we have done – and continue to do – if our children and grandchildren are to have a chance of surviving the transition with any meaningful standard of living.

    Well, yes – Bill et al. have good proposals for a better use of money in society – but in reality, the economy which you all envisage helping isn’t there anymore. It’s gone – and any attempt to resurrect it will prove our greatest folly.

    Instead, I respectfully suggest you use your knowledge and apply it to the post-apocalyptic world we will soon find ourselves in. We need food and clean water, the very basics. Then build from there. We have to organise ourselves differently – and keep a clear focus.

    Anything is possible. We can make anything happen should we so choose. End wars. End the grotesque wealth divide. End injustice. End poverty. End pollution.

    But we need a different momentum and energy – and the really crazy thing – it’s right there in front of every one of us. Just open your eyes.


  21. Some Guy: my complaint, however warranted or unwarranted, is that the JG was first put forward for two purposes (among others): to prevent unemployment AND to fix a base for the minimum wage, which private employers would have to match to attract workers. IMHO, there has been a tendency among some in the MMT community (NOT Bill) to focus more on the former purpose than on the latter, to make the JG more acceptable to the status quo by mitigating the demand for a fully livable minimum wage. This is tantamount to doing something any lawyer (like I used to be) knows NOT to do–begin a negotiation by reducing your initial demand (called “negotiating with yourself”). This issue is not worth going on and on about, especially in light of Mark’s incisive and corrective comment, but I initially thought that maybe a few others who read this blog sensed what I thought I had sensed. What does deserve further discussion, however, is the apparent feeling of some that work, in and of itself, is degrading or oppressive. THAT would seem to be the result of the distortion of work by capitalism, especially in its neoliberal form. There’s a long tradition in spiritual and humanist thought, however, popularized by E.F. Schumacher, which sees work as fulfilling a worthy fourfold purpose: (1) to draw people out of their natural or acculturated egocentricity, (2) to help people develop their innate skills and talents, (3) to learn to coordinate work with others to accomplish necessary or useful tasks; and (4) to bring forth the goods and services essential or beneficial to a viable, dignified human existence. One could add in, I believe, the feelings of agency, competence, and self-reliance that accompany the doing a of decent job well. I think that when work is viewed in this broader and deeper fashion, a JG coupled with a strong support system for those who cannot work beats the living hell out of a UBI.

  22. It is indeed a strange world we have created and encouraged – a grave distortion of the enlightenment offered by the likes of Hume and Smith. Maybe there was a choice then too – a crossroads of sorts. Much like where we find ourselves today. Pray what road to travel this time?

    My week in this twilight place.

    After recording two tracks and submitting an essay last Monday, I sat down to catch up on my online reading in my garden with my wee dog, when two uniformed Police officers appeared. They had come to arrest me and take me into custody for an offence of breaching bail.

    They were very nice – no threatening behaviour – even when I asked them what they were talking about. But they were very insistent. I had to leave my dog with a neighbour, collect a few things – have a wash (with an officer in attendance in the bathroom) before being whisked off to a Police station and processed through custody. We have one of the highest Covid transmission rates in the UK presently – yet precautions were at a minimum.

    I was kept in a cell overnight – after being charged with a breach of bail offence without being told what it was all about or shown any evidence. It wasn’t an easy night. I hadn’t been terribly well at the weekend and had a sickness and diarrhoea bout in the middle of the night with no toilet facilities. They were short staffed and had no male security officers on duty, so I couldn’t clean up for four or five hours.

    In the morning I was allowed a shower and new prison clothes, then taken in handcuffs and chains to the local Magistrates Court and spent five hours in a filthy cell. I wasn’t able to speak to my solicitor, but was told bob a security guard if I pleaded guilty, I’d get bail and could go home, otherwise I’d be remanded in prison for the foreseeable future.

    I was led up into the dock in chains. The Judge confirmed my name and DoB then told me there had been an “administrative error” and I was free to go. Four days later, I am none the wiser.

    I’m not black or Muslim, fortunately – not that I would mind in the slightest if I was. But the outcome might have been substantially worse if I had been. Just because of an “administrative error”. And a system in terminal decline.

    Yes, I know about compensation for illegal arrest and detention – but it’s not the point. We’re marking up the score in the wrong way – as Newton has eloquently written. We have to change everything – and fast. Leave all the injustices and recrimination behind and move on. There is little time left.

    I’m fine. Just a little bemused and tired with it all.

    Can we at least have just one last try?

  23. Good God, Mark! Not even an apology after putting you through that nightmare? I suppose that the last words of the last officials in charge of the world, right before the nuclear missiles hit or the global ecosystem collapses, will be that there had been an “administrative error.”

  24. @ Some Guy

    You (cleverly) smuggle-into your argument the unexamined proposition that a JG equates to implementation of “the right to work”. I would say that that was by no means a self-evident fact but you treat it as if it were. For it to play a valid basis for your statement that the JG *is* “socialist” you would need to have at least set-out the grounds on which you base it: until then, the jury is still out. merely stating it doesn’t establish it as fact.

    You will no doubt argue that my own statement to the contrary is in exactly the same category, and I wouldn’t deny that. The only difference is that my assertion was based on simple deduction from the actual nature of the JG (based on the wool-price stabilisation scheme). By equating wool harvested by unskilled labour (which in fact it isn’t – it’s extremely skilled) for labour employed by a JG scheme in jobs not demanding specialised training (or any, above a rudimentary level, plus the willingness to serve community needs) you try to “prove” that the wool price-stabilisation scheme was “socialist”.

    I suggest to you that that attemp fails: that scheme’s aim was functionally purely economic in nature – a government intervening in the commodity market to equalise supply of with demand for wool at a guaranteed price to even-out the random swings which would otherwise occur – in order to protect the graziers against the risks they were otherwise exposed-to and to obviate wasteful over-production. That may be your definition of a socialist measure but I don’t believe it would be many other people’s.

    The mechanism of the JG functions in an analogous fashion which is why – IMO – it cannot be categorised as either “socialist” or “not socialist”. Of course if you choose to take the ultra-neoliberal position that *any* intervention by government in *any* market (except to prop-up failing corporations) is “socialist” there’s no more to be said.

    “So “Capitalism” + JG sure ain’t “Capitalism” no more”.

    I disagree, and I don’t think your argument in support of that declaration holds water. Perhaps you should invite Warren Mosler to comment on it? You might care to ask him at the same time whether he agrees that MMT is socialist in its nature.

  25. “Capitalism” + JG sure ain’t “Capitalism”

    Certainly not pure market based capitalism. But when was there pure market based capitalism? Certainly not after Keynes. Keynes, in formulating a new macroeconomics, saved capitalism and saved it from itself. He humanized capitalism. The Left have never forgiven him.

    It’s not socialist. In a socialist state there is theoretically no unemployment. A JGS is not needed.

    The JGS is needed because the (somewhat tainted) market system does not always deliver full employment.

    “……it is a major, decisive – dare I say “revolutionary”? – step on that road.”

    It’s as about as revolutionary as Blair introducing New Labour.

    There is no stepping along to socialism. A socialist state owns all capital and controls all of society’s institutions. Either the state is so constituted or it is not.

  26. Well this discussion is more about different definitions of what socialist and capitalist mean than about the Job Guarantee. I don’t particularly care what you want to call a jobs program that is entirely administered by the government and funded by the government and who’s work product is intended to benefit society and is not owned or controlled by the private sector. If you want not to call that ‘socialist’ for some reason, perhaps an aversion towards that name, that’s ok with me. Sticking labels on policy is not all that important in the scheme of things. Getting the policy implemented for its social and economic benefits is far more important than classifying it using names that are perhaps outdated or ill suited for understanding what economic functions it will perform.

  27. Jerry,

    It’s not quite that simple.

    Socialist principles are being invoked to justify a particular version of the JGS.

    It’s a matter of being clear about what is being proposed and why .

    The discussion has ranged far and wide, so what?

  28. No, it is that simple Henry. For me, in this case. It comes down to it being a very good idea if not the most perfect ideal for each situation that someone can imagine. I don’t care if the JG is called capitalist or socialist or whatever- I think it is a good idea whatever it is called. It makes sense to me ethically, economically, socially, and philosophically. The reality is that it is a hard sell politically.

  29. Jerry,

    If you are worried about “selling it” then selling it, as Bill is doing, as being based on a socialist principle, is not going to make it easy to sell in the West generally.

    And yet, because it has a hard edge, it might appeal to the right wing. The Murdoch press were happy to print Bill’s JGS manifesto. I can’t imagine the Murdoch press realized they were promoting macro policy based on socialist principles.

  30. Yes Henry, I guess it is possible it has a ‘hard edge’ in terms of current Australian policy. But honestly, it is all peaches and cream considering the state of social and labor policy in the US. Perhaps that is why I have not seen it discussed in that American Murdoch property, the Wall Street Journal.

    It is interesting though that not all of the wealthy capitalist types and tools are automatically opposed to MMT and MMT inspired policy. I have my opinions why that might be. That would be an interesting discussion for me. I’m not sure Bill would be interested in sponsoring that discussion though. But it sure would be a fascinating topic for a blog post if he ever was looking for a topic πŸ™‚

  31. Jerry,

    I’m thinking that the reason the Murdoch press published Bill was because they see MMT as a way of rationalizing bailing out business in the current crisis. There has to be self interest involved. Monetary policy has failed.

  32. “It’s not quite that simple.
    Socialist principles are being invoked to justify a particular version of the JGS”. (Henry Rech)

    Yes Jerry. And it goes further.

    There is an element which (whether you like it or not) has latched-on to the JG for its own sectarian purposes – as an instrument towards their ultimate goal which is nothing short of the replacement of capitalism by some other, entirely differently-based, form of societal organisation.

    That might not be such a bad idea in itself – depending on what it is aimed to replace it BY.

    In most cases, ominously, this is some version of marxian socialism (such as was expressed in the original goals of the British Labour Party. penned at its foundation by Sydney Webb:- “The common ownership of the means of production, distribution and exchange”). Whether – as in that particular case – that revolutionary goal is to be achieved by strictly democratic, parliamentary, means or by extra-parliamentary (and by inference non-democratic or even bloodily-violent) means is seldom or never alluded-to. But be in no doubt:- the over-riding motto is always “the end justifies the means (whatever they have to be)”. Because the end is, in the eyes of the true believer, a sanctified one, thus brooking no compromise or dilution.

    If the human race hasn’t learned by now (after Robespierre, Lenin, Stalin, Mussolini, Hitler , Franco, Mao, Pol Pot) to what sort of consequences blindly following that absolutist amoral motto leads peoples and nations, it never will.

    Personally I’m a pessimist: the capacity of mankind to go repeating the same follies and mistakes seems inexhaustible.

    Meanwhile, back on planet Earth what we have is a form of capitalism. A (partly-, less so than before 1970) mixed economy, a substantial (albeit reduced and in retreat) public sector, a welfare state (ditto) in some countries more flourishing than others, etc, etc. We have a form of democracy, leaving much to be desired of course (but then it was never going to be perfect was it? – although It could do with a lot of improvement). MMT if its lessons were absorbed and applied could go some way towards improving the functioning of our existing, mixed-economy, capitalist- based, democratically-governed (by intent, at least) society.

    If you are worried about “selling it” then selling it, as Bill is doing, as being based on a socialist principle, is not going to make it easy to sell in the West generally”. (Henry Rech)

    I echo that view. Letting MMT be hijacked via using one element of it – the JG – as a weapon in an ideological crusade is IMO a sure and certain way to guarantee its rejection by the great majority of voters.

  33. Newton et al:

    Sonia Sodha has an excellent article in this morning’s Observer, which explains far more eloquently than I managed, just where we really are at this moment.

    “We’ve got to start thinking beyond our own lifespans if we’re going to avoid extinction”

    In a biology lesson about the bacterial growth curve, the parallels with the climate crisis were hard to miss. Stick bacteria in a test tube with food and their population will grow exponentially until, eventually, they run out of resources and kill themselves off. Even a couple of decades ago, the comparison with humanity’s predicament felt glaringly obvious; and we have not really strayed since from the inevitable path to extinction.

    The hope seems to be that a big crisis might be the shock we need to change course. But we are living through the biggest global crisis for decades – and are travelling and consuming less as a result of the pandemic – yet it already seems unlikely that much will change. It’s easy enough to throw around the old adage “never waste a good crisis”. But when it comes to existential questions about the future of humanity, it has proved fairly useless.

    Coronavirus or not, we remain locked into a treadmill that measures progress by growing GDP rather than by wellbeing and environmental sustainability. This is an economic paradigm that has served most of us – particularly the most affluent – pretty well for decades. But the richer we’ve got, the more the benefits have tailed off. There have been a number of studies showing that, beyond a certain point, more wealth does not necessarily equal more happiness – true at a societal level as well as an individual one.

    There is a lot that could account for this flatlining. It was once assumed that increased productivity, driven by technological progress, would result in us having more leisure time: see John Maynard Keynes’s prediction in the 1930s that we’d be working just 15 hours a week by now. But instead, luxury beat leisure and an explosion in consumerism has driven us towards ever more consumption. The “happiness” economist Richard Layard has also pointed towards “disorders of development” such as obesity and tech addiction (although it should be noted that within a wealthy society such as ours, obesity is associated with poverty).

    The costs of this consumption have increased. Much of it is subsidised by labour exploitation, both at home and abroad. And then there is the small issue of catastrophic climate change, as we race towards “tipping points” beyond which global heating becomes self-reinforcing and harder to halt without unprecedented levels of coordinated international action.

    Stack all this up, and the idea of already-rich societies moving towards a “zero growth” economic model – once the preserve of the radical green fringes of politics – starts to look increasingly like a no-brainer. We would have to sacrifice gains in material living standards, but the potential prize would be preserving the planet and achieving a better worklife balance. If we could protect the least affluent from any negative impacts – which would require more redistribution, not to mention paying more for services such as caring and cleaning – what’s not to like?

    The big problem is, of course, no one knows how to get there. The 2008 financial crisis offered a chance to take stock. For a while, it looked like something might happen: economists designed global “happiness” indices and the UN General Assembly declared a “world happiness day”. But not only did nothing change: it was used as political cover for darker agendas. Bhutan adopted a measure for Gross National Happiness in an attempt to market itself globally as the “happiness” country, while papering over its record of human rights abuses and ethnic cleansing. In the UK, David Cameron pledged to set up a national wellbeing index as he cut back mental health services, youth services and children’s centres.

    We’re back there again: happiness advocates saying we can’t afford to waste this opportunity to rethink, even as the government has prioritised pubs over schools – economic recovery over broader measures of wellbeing – in relaxing the lockdown.

    This is no surprise. Our political and economic systems are utterly indisposed to the radical shifts we need to promote wellbeing over wealth and protect the planet. Short-termism is everywhere, from politicians who face elections every few years to company directors who must account for quarterly results. On the right, there are powerful vested interests who want to maintain business as usual – who go quiet in the wake of a crisis, or even appear to jump on the bandwagon (just look at Davos agendas in recent years), but who do all in their power to obstruct change. The left often makes peace with continuous growth, despite its costs, because a rising tide makes redistribution easier. And it is crazy to think that a shock to GDP caused by a financial crisis or a pandemic could be used as a bridge to a different world because the brunt of the pain is always, always borne by the least affluent and the young.

    So we need to think far more about the mechanisms and institutions that could get us on to a different path. The Long Time Project is exploring how humans could shift their time horizons so, simply put, we feel more emotionally connected to our future descendants. It points to the fact that we tend to view our future selves, let alone future generations, as strangers. We need to rewire the way we think about the future, and our own ageing and deaths; the projects’ founders believe that art and culture can play an important role. And we could learn from those times in history when humans have proved their ability to think beyond their own lifespan: “cathedral thinking” is based on those architects who planned spectacular buildings that would never be finished in their own lifetimes.
    It’s no exaggeration to say that, unless we find a way to think differently about consumption, wellbeing and sustainability, humans will be responsible for our own extinction. And it should be clear by now that crises – extreme weather, pandemics, financial crises – are never going to be the wake-up call that forces us to confront our own fragility. A good crisis inevitably goes to waste, and it is lazy and irresponsible to think otherwise.

  34. Mark thinks and feels (and, like many of us, more than occasionally despairs) that “we are living through the biggest global crisis for decades – and are travelling and consuming less as a result of the pandemic – yet it already seems unlikely that much will change.” As for “the mechanisms and institutions that could get us on to a different path” (from that of frenzied, ecocidal consumption and expansion in pursuit of futile, short-term happiness), “…(t)he big problem is, of course, no one knows how to get there.” Amen. In further response, let me copy a portion of a comment I made an hour so ago on Caitlin Johnstone’s blog, which I read religiously along with this one: “We can’t move anywhere without letting go. Which is not to say that we shouldn’t be aware of the reasons for letting go and beginning to lurch or stumble in a new direction. I suspect that as more and more of us (do this letting go) …our initial lurching or stumbling will evolve into a strong, steady walk–a venture/adventure for our entire species, as we learn for the first time in some 10,000 years to co-exist with the rest of creation.” I’ve said this before and I’ll say it again, to my friend, Mark, and to the rest of my friends who read or comment here: we cannot look to history or even to reason to find “how to get there.” The evidence from the past, and the conclusions we can draw from it, are entirely bleak. Albert Schweitzer knew this at the end of the First World War, knew exactly where we’d been and where we were heading, and searched his mind and soul to come up an alternative–an elemental, universal value which, if it caught fire, could forever alter human aspirations and, therefore, our species’ trajectory. What he came up with was a simple phrase–reverence for life–upon which he was certain could be built not only a viable but a beautiful new civilization. Like many of us, I see all the depressing things Mark sees. Like him and others, I also feel them, almost every waking moment. And also like Mark and others, these thoughts and feelings, at times, overwhelm me, leaving me at the bottom of an abyss. What allows me to claw my way out of that abyss are a couple of other things that Schweitzer told us. He said our ability “to get there,” in the way Mark describes it, depends upon the will, not the intellect. And he also said that “getting there” is not a matter of purely human effort; indeed, that we CANNOT get there entirely on our own. It will come instead as a GIFT from a source far greater than us, far greater than creation itself because it is the source of that creation. Our task, for each of us in our own way, whatever our metaphysics or lack thereof, is to be of modest assistance in the delivery of this gift, which means living our lives as a kind of prayer for its arrival. And this prayer surely includes the making of heart-wrenching/heart-stirring comments as Mark and others are wont to do, when they feel the urge to speak on this extraordinary blog gifted us by Bill.

  35. Newton:

    When I was at school, the games master was an ex-army dress sergeant with a way with words. Two of my classmates went on to represent Scotland in international rugby and others excelled in their sports in later life, so I guess he made a good impression.

    I enjoyed all sports – badminton and climbing were my great passions – and I’ve been rewarded in so many ways. Athletics, less so – but I recall a lesson when I was doing the high jump and trying to progress from the scissors jump to the Finsbury Flop. It seemed impossible at first, but one afternoon the games master took me aside and said, “the trick is to get as low as you can on the approach, then use the momentum to lift you over the bar”.

    That’s the best advice I’ve been given in my life. It is so relevant now.

    What we don’t understand – yet – is that we have been approaching this juncture from a very low angle. We think we are omnipresent. The nonsense we have surrounded and fetted ourselves with. Our technology. The notion that we are the “masters of the Universe”. Really?

    We are not. Nothing like it.

    We are, at best, custodians of a fragile place of beauty in the midst of the true void. That is all. We have the ability to exist here as long as we may care – and to enjoy the wonder of it all – and each other.

    Just remember what if feels like to be in love for the first time. The joy of it all.

    We’ve been given a remarkable gift – and at the moment, some juvenile delinquents are trashing the place for their own personal gratification.

    I’m nearly six decades old and still have the same dreams when the decades were just years.

    Long before we were here, our ancestors thought differently – the seventh generation concept. We must do the same – if we are to survive.

    The wheel will keep on turning. Whether humankind remains one of the cogs in that wheel is really up to us.

    Right. Now.

  36. Henry Rech, RobertH: So Karl Marx cannot be presented as an expert on Socialism, on definitions? Really? If he says that a Job Guarantee constitutes power of the common man over the capitalist class and thereby institutes a significant measure of socialism, by which he meant putting the economy under democratic control rather than that of an upper class – one should just ignore that? As well as it being the position of practically every socialist, “Marxist” or not – since Marx? Really?
    Don’t you think common courtesy dictates that the socialists get to decide what are the socialist measures, just like Flat-Earth party members get to decide what flat-earthism is?

    RobertH: “A JG equates to implementation of “the right to work”. I would say that that was by no means a self-evident fact but you treat it as if it were. … You will no doubt argue that my own statement to the contrary is in exactly the same category, and I wouldn’t deny that.”

    No, I won’t argue that way at all. For my statement actually is in a completely different category from yours. Though I anticipated such an objection, I treated the equation as self-evident, because it most certainly is by every means utterly and obviously self-evident. Basically “Job Guarantee” is the same as “Right to Work” because right = guarantee and job = work and both phrases mean exactly what the words say. To fantasize they are not identical is to stop speaking intelligible English and can only be the outcome of having one’s mind fuddled by nonsense for years and years. And that’s what I am trying to do – unfuddle minds, so they can see the obvious as clearly as they could before they were fuddled, as when they were 13 years old, say.

    Marx was speaking of “le droit a travail” in connection with the French ateliers nationaux. Saying that a JG and a right to work are different makes about as much sense as saying that “le droit Γ  travail” is mystically different from “the right to work” – rather than being exact translations of each other. Bill Mitchell’s student Victor Quirk has written some relevant must-read papers- “The Job Guarantee of 1848” (on the ateliers nationaux) and “The problem of a full employment economy” as well as some guest blogs here based on them. As Quirk notes, in (legislative) debates at the time, people like Nassau Senior and de Tocqueville supported unemployment and misery for the lesser people and forthrightly declared that “the right to work is socialism”, “the right to work is communism” – thus of course meaning it was ICKY and BAD.

    Anybody not morally insane like Marx or Louis Blanc (or Louis XVI’s Prime Minister Jacques Necker 60 years earlier & Jesus 18 centuries earlier) understood and understands that a right to work, a Job Guarantee is very obviously GOOD, that not having one was MAD and BAD. “Money economy without a JG” rightly offended the keen French love of logic :-). But the practical but morally insane Right and the Left, as usual with its head in the clouds, either overheated with passion and unrealistic expectations or irrationally despondent, were not yet exposed to the heights of 20th century unreason, and could and did agree on the Job Guarantee, the right to work, being a major part of socialism.

    The argument that a Job Guarantee functions as a buffer stock mechanism is a true observation, but it says nothing about whether a JG is a human right, puts power into the hands of the working class or is a socialist measure. How on earth could it? You’re quibbling about a tiny easy leap I made (JG = RtW)- but making a gigantic one of you own – “if it’s a buffer stock mechanism, it cannot be socialist” Huh?! That’s a category mistake, not an argument.

    More later. Underlying both of your positions is the crazy idea of “government intervention” into a magically pre-existing “market” amply refuted by MMT (by Warren Mosler for one). That’s like saying your legs intervene into your walking. Markets are side-effects of government intervention, not something which can exist independently. Markets are monetary phenomena and money is a creature of the state.

  37. @ Some Guy

    I disagree with pretty-well every assertion you make. And the reverse applies of course. We are just talking past each other, because there is no common ground whatsoever between our respective positions.

    I can’t see that any useful purpose is served by continuing.

    Neither you nor I can decide anything. The ballot-box can and will – whatever either of us may think of the outcome.

  38. Some Guy,

    “So Karl Marx cannot be presented as an expert on Socialism, on definitions? ”

    This is the problem here. We seem to have different understandings of what socialism is. There are many varieties of socialism in detail but when it ‘s all distilled down the fundamentals are that the state owns all the means of production and controls all of society’s institutions. It also sets all wages and prices. There is no market mechanism. The JGS relies on the market mechanism. It’s stabilization function relies on the market mechanism once the minimum wage is set and relies on the capitalists competing with the JGS. Strictly speaking there is no unemployment in a socialist society so how can the JGS apply in that sense?

    The features of the JGS are rationalized by invoking a socialist principle, the duty to work, I have no problem with that. But some people who don’t know better might want to know what they’re getting and why.

    “You’re quibbling about a tiny easy leap I made (JG = RtW)”

    No. It is BIll that has connected socialist principle to the JGS and that makes it a big deal.

  39. The JGS sets a de facto minimum wage outside of ‘the market mechanism’ and offers to employ any who are willing to work at that wage. If you want to say that is just something that takes some of the sharp edges off of capitalist economies and therefore understand it as a refinement of the more or less better system of capitalism – that’s ok. If someone prefers to think of it as society using its government to regulate the labor market for the overall benefit of society- hey that is ok too.

    If we can agree that it is a promising proposal that might improve things- well, why argue too much about how to classify it. I like to argue as much as anyone, but at a certain point it doesn’t make sense. If on a certain day the ocean looks blueish-green to me but greenish-blue to you, how long does it make sense to debate it?

  40. Jerry,

    You have put that very well, however, the point is a socialist principle is used to incorporate a hard edge in to the JGS. Some think the hard edge is unconscionable.

    It is really a question of morality and compassion for some (not too many of us it appears) and for most it is a question of socialist principle, i.e. socialist principle almost demands it – there is no give.

    Personally, I think it is important for people to see where it is coming from.

  41. For some reason I doubt that Bill Mitchell would invoke the socialist principle and refuse to support an Australian jobs program that provided everything the Job Guarantee envisions but also provided some income for those who still refused to participate- as if that was the issue that was holding enactment back. He might refuse to call the program the MMT Job Guarantee, but I am sure he would respect the wishes of the majority of Australians if they were determined to provide some income to those who won’t work. It would be a much better world where the main challenge was in attempting to restrain the generosity of our fellow human beings…

  42. @ Jerry Brown
    “…If on a certain day the ocean looks blueish-green to me but greenish-blue to you, how long does it make sense to debate it?”

    An entirely reasonable observation, I agree – so far as it goes.

    But unhappily it doesn’t get to the root of the issue, which is that this is a clash of opposed ways of thinking. If you’ve never come up against people whose thinking is trapped within a closed system of thought you won’t know what I’m talking about.

    I can’t believe you haven’t (the religious Right in USA for instance?) but for the avoidance of doubt what I mean is a system of thought which takes as its fundamental tenet that certain defined ad hoc propositions are indisputably “true” (and of course that any others not in accord with them are axiomatically “false”). Upon that foundation it builds an entire edifice of self-consistent reasoning which even though it’s nonsense is completely immune to contradiction because it all follows entirely logically from the initial propositions (Alice encounters this phenomenon repeatedly in Wonderland, which is where much of the delight of those books comes from: remember Carrol was a mathematician/logician, as well as a clergyman). Such as:- that there is a God, or that the future course of history can be scientifically mapped-out, or that the moon is made of green cheese.

    Once the initial foundational premise is removed – just like when a single playing-card is whisked away from the lowest tier of the house of cards – the whole imposing structure immediately falls to pieces.

    Which is not unlike what many faithful Stalinist fellow-travellers in the Wesr experienced when forced to witness on their TV screens and in their newspapers the crushing of the Hungarian revolution.

    I never imagined even in my worst nightmares that I would live to see the day when some misguided intellectuals could once again become capable – like their self-brainwashed counterparts such as the Webbs and Bernard Shaw in the ‘thirties – of blinding themselves to the true nature of Soviet, Leninist-Stalinist, communism.

    It’s Lenin’s “useful idiots” all over again! Only this time it’s they – not the Cheka – who’ve built and manned the Potempkin villages all by themselves – in their own imaginations.

  43. @ robertH

    “I never imagined even in my worst nightmares that I would live to see the day when some misguided intellectuals could once again become capable…of blinding themselves to the true nature of Soviet, Leninist-Stalinist, communism.”

    Who has done that to you?
    Who are these ‘misguided intellectuals’?

    I have been reading this blog for about three years now and have never came across anyone promoting Soviet communism.

  44. @ Mute
    “I have been reading this blog for about three years now and have never came across anyone promoting Soviet communism”.

    Then all I can suggest is that perhaps you might not have been reading it very attentively at times.

    Much depends, of course, on the meaning attributed to that weasel word “promote”: what, exactly, constitutes “promoting” a regime? I suspect that you and I are very unlikely to reach a consensus on that.

    But you could start with some of the comments above (I’m not going to name names), and under these (recent) blog posts:- “Tracing the roots of progressive views on the duty to work – Parts 1 & 2”. (More of the same ilk can be found if you’re prepared to wade-through several earlier ‘Comments’ sections).

    I will cite just one, archetypal, comment (without attribution – you can find it easily enough if you want to):- “…I too still think revisiting the grand experiment that was the USSR and learning from Gosplan, what worked, what did not, Is vital. We’ve thrown out the baby with the bathwater since 1991. We have failed to acknowledge all that was good about the Soviet times, along with all that was abhorrent. I would love to know more about the Soviet economy…”.

    I’ve already expressed my own view in regard to the content of those blog posts and don’t propose to repeat it.

    “Who has done that to you?”

    Your question does not follow from the words of mine which you quote. No one has “done” anything to me. You’re just putting words in my mouth in an effort to score a polemical point of your own.

  45. “this is a clash of opposed ways of thinking”. So what Robert. I might not be a Christian Fundamentalist, to use your example, but if one told me “So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets” I am not going to reject the ‘do unto others what you would have them do to you’ part of it just because it is arrived at from a different way of thinking than I might be comfortable with. It is a Very Good Idea when examined from all sorts of different frameworks of thinking about ethics.

    The Job Guarantee idea is similar. I could probably arrive there just by extrapolating from the Golden Rule along with some knowledge of economic theory. It certainly isn’t contrary to it. If someone using socialist ideals comes up with it- so what? It is a good idea.

  46. Jerry

    “For some reason I doubt that Bill Mitchell …..”

    What reason would that be?

    Read what Bill has written. It is clear and it has been longstanding.

  47. Jerry

    “For some reason I doubt that Bill Mitchell …..”

    What reason would that be?

    Read what Bill has written. It is clear and it has been longstanding.

  48. @robertH

    So you respond by not naming any names, telling me my question was wrong and…”You’re just putting words in my mouth in an effort to score a polemical point of your own.”…adding another layer of paranoia.


  49. That would be for pragmatic reasons Henry. The reality of politics means that compromise is what you are going to have to accept if you want to make this world a better place. But once again- what is keeping the Job Guarantee proposal from being enacted is not that it is ‘too stingy’ that politicians are afraid to support it! You go ahead and move it forward so that Australia (or the US) will enact the Job Guarantee that Mitchell has outlined except that it also provides some income to those who won’t work. And I would support it in a heartbeat. I should not have speculated about what Bill would do at that point though. Why don’t you ask him yourself just where he would draw the line in this case?

  50. Dear Henry Rech and robertH and others (at repeated times)

    Your narrative and inferences are becoming boring. They are so ill-founded that I wonder what your motivations are. There has never been an instance in my writing here or over my career where I have given succour to Stalinist-type regimes. My own history as an activist within the Left would also disabuse you of those ideas.

    Yet you repeat them to the point of absurdity.

    And if you had have waited until Part 3 you would have seen that your “Reds under the Bed” storyline was equally absurd. The ‘duty to work’ sentiment runs deep within Western ‘democracies’ over many centuries and was articulated clearly and cogently in the Post World War 2 period. It has nothing to do with advocating USSR-regimes.

    So please stop the character assassination and the nasty type interactions with other commentators here. I will not allow that sort of ‘typical’ social media nastiness to take root here.

    And when you say, Henry, that my support of USSR-style regimes is “longstanding”, go find something I have written to support that lie.

    And, I don’t want a conversation about this. More comments along the previous lines will be deleted.

    best wishes

  51. Bill,

    I don’t recall saying you are or were a Stalinist.

    Please show me where I have.

    What I said was long standing is your position on no benefits for the unemployed not willing to participate in the JGS

    What I did say was that you had made a case supporting your position by invoking socialist principle. And that’s all.

  52. Bill,

    “It has nothing to do with advocating USSR-regimes.”

    I know. I didn’t say it did.

    “Yet you repeat them to the point of absurdity.”

    Yes there was a deal of repetition, but repetition to do with your position on the unwilling unemployed, only. People don’t seem to get how categorical it is and people would misrepresent or misunderstood what I said.

    “So please stop the character assassination and the nasty type interactions with other commentators here.”

    There was no character assassination.

    I did engage with others on various matters after being baited – happily took the bait. But I don’t think it was nasty at all. It was strident and to the point and when I tired of making my point and people kept coming at me I responded with droll humour.

    I make no apologies for taking these people on because I abhor the 20th century history of feral socialism and current socialist/fascist regimes. Feral capitalism is equally detestable.

  53. Henry Rech: “We seem to have different understandings of what socialism is. There are many varieties of socialism in detail but when it ‘s all distilled down the fundamentals are that the state owns all the means of production and controls all of society’s institutions. It also sets all wages and prices. There is no market mechanism.”

    That “distilled down the fundamentals” is not a standard definition. I am using more standard definitions – and applying the common sense – that NOTHING in the world is ever as black and white as what you are saying. Again isn’t it common courtesy to use socialists’ definition of socialism? You may not have heard of him, but Karl Marx was a pretty well known socialist. πŸ™‚ [Both of Michael Harrington’s two books entitled Socialism give a pretty exhaustive summary of definitions of socialism.]

    “The state owning all the means of the production” is not the be all or end all of socialism, or necessarily even socialism at all. What about “market socialism”? Even in the USSR, what about Lenin’s New Economic Program? As long as there is money, there is something like a market mechanism, something for MMT to latch on to. For MMT ancestor Abba Lerner simultaneously analyzed the capitalist and socialist economies of this day, applied his Functional Finance (MMT) to both of them – and this was understood and accepted by both Western and Soviet economists. “Socialist” economies of that type had no unemployment – but because they had a Job Guarantee or something understandable as one.

    Marx envisioned a future socialism where there still might be dialectical opposites of a Bourgeoisie and a Proletariat, but said that then the Bourgeosie would not be the Bourgeoisie, the Proletariat not the Proletariat – [because the Proletariat would have sufficient political power, the society/economy run democratically enough to call the situation “socialism”].

    Engels caricatured such thinking when he said, commenting on Bismarck’s nationalizations, that the state nationalizing bordellos is not socialism.

    “The features of the JGS are rationalized by invoking a socialist principle, the duty to work, ”
    I strongly disagree – and deny that this is at all a prominent argument used by MMTers for the JG. Mitchell is the only one who even mentions it. I am with you and RobertH opposing it. The JG is all about the right, not the duty to work. I made clear that I think “the duty to work” is a very silly idea – exactly the sort of thing that should not be directly legislated ever, for God took care of it when he made the world. πŸ™‚ It’s like saying people have a “duty” to eat, and then to “un-eat” as TV’s Mr. Monk, the defective detective, puts it. Remember that Oscar Wilde & Paul Lafargue were socialists – and worth listening to – on such points.

    So more power to you if you can figure out a way to not work! You get the Tom Sawyer award as a Hero of Socialist Slackerdom. But not if it means oppressing others of course by “shifting the burden of work to others” as Mr. Lincoln succinctly characterized an enormous variety of (Bad) ideas of how to run a society.

    Well, OK. I think if it were put to a vote, hardly anyone would consider a “Job Guarantee” to NOT be an implementation of “Right to Work” – or even understand how to think that way. They’re synonyms in any relevant context and are always treated as such, e.g. as by Quirk, without comment.
    Henry – of course my “tiny easy leap” remark was directed at RobertH’s straining at that gnat while asking me to swallow his camel.

  54. Some Guy,

    So what does it mean to be a socialist? Apparently anything you want it to mean. Rupert could probably define himself as a socialist because he pays taxes (presumably).

    “I strongly disagree – and deny that this is at all a prominent argument used by MMTers for the JG.”

    Fair enough but we are discussing, in this blog, Bill’s version of the JGS.

  55. SG,

    “So more power to you if you can figure out a way to not work! ”

    Simple, don’t get out of bed in the morning, except that the authority I fear more than any government might have something to say about it. πŸ™‚

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