{"id":39198,"date":"2018-04-26T18:41:39","date_gmt":"2018-04-26T08:41:39","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=39198"},"modified":"2018-04-26T18:41:39","modified_gmt":"2018-04-26T08:41:39","slug":"critics-of-the-job-guarantee-miss-the-mark-badly-again","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=39198","title":{"rendered":"Critics of the Job Guarantee miss the mark badly … again"},"content":{"rendered":"

\t\t\t\tMy blog post last week – On the path to MMT becoming mainstream<\/a> (April 17, 2018) – discussed the way in which the language and concepts that have been developed by the Modern Monetary Theory (MMT) authors are now permeating mainstream narratives and the media. While this has increased the pushback and hostility from both the Right and Left opposition to MMT, it is also a sign that the public understanding of the way in which the monetary system works and the policy options available to currency-issuing governments, is improving. Most recently, there is been a flurry in the US media discussing employment guarantees, which is a welcome relief from the previous saturation coverage of impoverished UBI ideas. It is fabulous, that at the policy level, the idea that the state can eliminate mass (involuntary) unemployment if it so chooses is becoming more acceptable. That’s down, in part, to the great work being done there by my MMT colleagues. There are also derivative public sector job creation proposals getting ‘airplay’ which I do not consider to be MMT-inspired nor are what I would call Job Guarantee initiatives, but which are still, to their credit, raising awareness of the need for the state to ensure there are sufficient jobs for all rather than dispatch citizens who are unable to find work to the unemployment queue. The push back is increasing and that is a sign that dissonance is being felt by the neoliberals who oppose the state taking responsibility for mass unemployment and using its fiscal capacity to render it a thing of the past. Many of the critics from the Left do not have the courage to come out and say they prefer the alternative to a Job Guarantee, which is entrenched unemployment. That leaves them carping away with no legs to stand on. The Right objections are venal as they always are – they want mass unemployment to persist to dampen wages growth and allow more real income to be captured by the top-end-of-town.
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Before we get into the specific topic of today’s blog post, I note that various social media discussions still don’t quite grasp the idea that the Job Guarantee is a specific and intrinsic element of Modern Monetary Theory (MMT) rather than a policy choice that might reflect progressive Left values.<\/p>\n

I have explained this point several times in detail, here are two blog posts (among others) for you to reflect upon if you’re uncertain as to what I meant in the last paragraph:<\/p>\n

1. Whatever – its either employment or unemployment buffer stocks<\/a> (December 30, 2011).<\/p>\n

2. MMT is biased towards anti-crony<\/a> (December 28, 2011).<\/p>\n

The point is that in macroeconomics we care about ‘efficiency’, which means that wasted productive resources that are willing and able to be deployed (referring obviously to labour resources but it generalises to all productive resources) are being used to advance societal well-being within a context of sustainability of the natural environment.<\/p>\n

That also means that macro stability is important, which includes a goal of price stability. In other words, full employment and price stability are key macroeconomic goals, and a body of theory must seek to outline an achievable path for both, by understanding how the economic and monetary system operates and the policy choices available to the government within that system.<\/p>\n

As I explained in the blog post – Modern monetary theory and inflation – Part 1<\/a> (July 7, 2010), to achieve price stability in a fiat currency monetary system there are only two options available to government, and both involve the use of buffer stocks:<\/p>\n