We could solve unemployment immediately if we wanted to. Read 2 “sensible” proposals.

We don’t need to regulate prices with the pain of unemployment. There are other ways.

We wrote recently about economic systems that inflict pain, our prime example being classic “free market” economics (as it existed before FDR) and also neoliberalism (as it exists today, in post-FDR world). That piece is here:

Neoliberalism, “just deserts” and the post–climate crisis economy

A number of people, including Paul Krugman, have noted that we may well be entering a world, certainly in the U.S., where there may not be enough good jobs to go around, either because of technical innovation or because of job export by the already-wealthy, likely both. Does that mean that people should be consigned to their fate, to unemployment, simply to regulate prices and inflation?

I want to offer three angles on that question, three pieces that together, add up to at least one solution and its rationale (and the suggestion of a second). The first piece of this argument involves the philosopher Bertrand Russell. The second, an implementation of his suggestion. And the third — why his alternative, or one like it, doesn’t get implemented? Curious? Read on.

Why use unemployment to regulate prices?

Let’s start here with Bertrand Russell. This is from In Praise of Idleness (my emphasis and some re-paragraphing; h/t commenter “financial matters” here):

This is the morality of the Slave State, applied in circumstances totally unlike those in which it arose. No wonder the result has been disastrous. Let us take an illustration.

Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price.

In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?

If the ordinary wage-earner worked four hours a day, there would be enough for everybody and no unemployment — assuming a certain very moderate amount of sensible organization. This idea shocks the well-to-do, because they are convinced that the poor would not know how to use so much leisure. In America men often work long hours even when they are well off; such men, naturally, are indignant at the idea of leisure for wage-earners, except as the grim punishment of unemployment …

The fact is that moving matter about, while a certain amount of it is necessary to our existence, is emphatically not one of the ends of human life. If it were, we should have to consider every navvy superior to Shakespeare. We have been misled in this matter by two causes. One is the necessity of keeping the poor contented, which has led the rich, for thousands of years, to preach the dignity of labor, while taking care themselves to remain undignified in this respect. The other is the new pleasure in mechanism, which makes us delight in the astonishingly clever changes that we can produce on the earth’s surface.

Absorb that example. The same number of people, working four hours a day instead of eight, earning the same daily wages as before, will produce the same number of pins as will saturate the market, thus keeping prices stable and earning the same profit for the manufacturer. No one is unemployed; the price and quantity of available pins remains the same; nothing else changes for anyone. What’s wrong with that solution to technical innovation (i.e., increased productivity)?

The alternatives are (1) to keep everyone employed for eight hours a day, produce double the amount of pins — more than the market can bear, in fact — thus driving down the price of pins and hurting the manufacturer. Or (2) to lay off half the workers in order to keep prices stable, thus hurting the labor force. Obviously, Russell’s solution is much more reasonable, much less punitive to either party, a solution for “a sensible world,” as Russell calls it.

In a “sensible world” there is such a solution. It’s called Guaranteed Jobs.

The Job Guarantee proposal

In a nutshell, the Job Guarantee (JG) idea works like this. The work that’s available to keep prices stable is shared or offered around in a way that guarantees at least a living income for everyone who can work regardless of the number of hours worked. It includes the concept of an “employer of last resort.” Thus there’s always full employment.

(An alternative, by the way, that produces the same result for the citizenry is the Minimum Income proposal, in which the state gives a minimum income to its citizens regardless of the work they do. It’s not a function of deserving, and it’s not means-tested, since it’s not welfare. It what you get for being a citizen, like health care is in some civilized countries. Alaska has a “minimum income” regime through the Alaska Permanent Fund. No one in Alaska complains about it.)

Here’s more on how the Job Guarantee proposal works (my emphasis and paragraphing):

A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of inflation and unemployment. Its aim is to create full employment and price stability. It is related to the concept of employer of last resort (ELR).

The economic policy stance currently dominant around the world uses unemployment as a policy tool to control inflation; when cost pressures rise, the standard monetary policy carried out by the monetary authority (central bank) tightens interest rates, creating a buffer stock of unemployed people, which reduces wage demands, and ultimately inflation. When inflationary expectations subside, these people will get their jobs back. In Marxian terms, the unemployed serve as a reserve army of labor.

By contrast, in a job guarantee program, a buffer stock of employed people (employed in the job guarantee program) provides the same protection against inflation without the social costs of unemployment, hence (it is argued) fulfilling the dual mandate of full employment and price stability.

You can read more at the link, but you get the idea. Now, why doesn’t this sensible idea, or other non-punitive sensible ideas, get implemented?

What’s wrong with rewarding workers? Do the rich and the poor differ in their goodness?

Why aren’t proposals like Job Guarantee or Minimum Income enacted? Russell hints at the reason in the quote above:

[I]n the actual world this [proposal] would be thought demoralizing. … There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?

The key word is “leisure.” In the world of the 18th and 19th century, the justification for the Industrial Revolution and its extremes of work and income — great rewards for the few, crushing deprivation for the many — is found in “moral” statements about the way leisure affects differently the rich and the poor, and in turn, what is needed to motivate the two groups to be “productive.”

For example (my emphasis and, again, paragraphing):

Girl pulling a coal tub in mine. From official report of the parliamentary commission in the mid 19th century.

Girl pulling a coal tub in mine. From official report of the parliamentary commission in the mid 19th century.

These beliefs [of classical “liberal” 18th and 19th century thinkers] were complemented by a belief that “labour”, i.e. individuals without capital, can only be motivated by fear of hunger and by a reward, while “men of higher rank” can be motivated by ambition, as well. This led politicians at the time to pass the Poor Law Amendment Act 1834, which limited the provision of social assistance, because classical liberals believed in “an unfettered market” as the mechanism that will most efficiently lead to a nation’s wealth.

Adopting Thomas Malthus‘s population theory, they saw poor urban conditions as inevitable, as they believed population growth would outstrip food production; and they considered that to be desirable, as starvation would help limit population growth. They opposed any income or wealth redistribution, which they believed would be dissipated by the lowest orders.

Note, “dissipated by the lower orders” (and only by them; the wealthy don’t dissipate, they “spend.”). I could have bolded the whole quote; I hope you have time to read it through. (The footnoted source for the explanation is this book.) Here’s more on Malthus, the Poor Law amendment Act of 1834, and the “morality” behind his ideas:

An Essay on the Principle of Population by Malthus set out the influential doctrine that population growth was geometric, and unless checked, increased faster than the ability of a country to feed its population. This pressure explained the existence of poverty, which he justified theologically as a force for self-improvement and abstention. As a political moralist he opposed the old poor laws as self-defeating, removing the pressure of want from the poor while leaving them free to increase their families, thus leading to an unsustainable increase in population. His views were influential and hotly debated[.]

It’s easy to see that operating in modern terms:

▪ The rich seek leisure because they’re more productive and deserve it (think, rewarding your the CEO with time to golf). Therefore, the best motivations for the wealthy are the incentives of leisure and money. They’re more productive that way.

▪ The poor seek leisure because they are lazy and don’t deserve it (think welfare queens, or in 21st century terms, shiftless immigrants, cashing food stamps and fifteen fake Social Security checks to buy steaks for illegitimate children who drive Cadillacs and deal drugs). Therefore, the best motivations for the poor are deprivation and need. They’re more productive that way.

Dinnertime at St Pancras Workhouse, London

Dinnertime at St Pancras Workhouse, London. Click image to enlarge and notice the faces.

We’re back to the 19th century, which we never really left. The wealthy can and should be motivated by ambition and the promise of a maximum reward (leisure and money). The poor can and should be motivated by deprivation and offer of the least reward; this keeps them from dissipating their lives. (There’s a history of the intersect between money and morality in Western thinking, by the way. It’s contained in Erich Fromm’s seminal book Escape From Freedom, but that’s for another day.)

Bottom line — We can change the minute we want to

So to answer our opening question, why isn’t Bertrand Russell’s “sensible” Job Guarantee proposal, or an equally sensible one, like Minimum Income, enacted broadly? Because we as a society have decided that we want to enforce a just-deserts regime, and the poor “deserve” what they get.

Why have we decided that? Partly because the idea has been “in the air” for literally hundreds of years, and has infected every aspect of our discourse, including many of our “Christian” churches. Partly because the need to torture is strong in too many of our fellows. And partly because, sadly, the mass in the middle don’t see themselves as poor — yet.

And also because, it must be said, the current system keeps the comfortable rich very comfortable indeed. In an age when the rich control the messaging — what’s “in the air,” including in the churches — we’re in a perfect loop. These ideas will be “in the air” as long as the wealthy want them to be.

When will this change, this forced unemployment? The minute we want it to change. If history is a guide, things changed radically in the 1930s, when the just-getting-along became the newly minted poor themselves. Can things change without that horrible pressure and pain? Yes, of course — because these truly are choices. We can change to a “sensible” solution the minute we choose to.

Yours in good choices,

GP

To follow or send links: @Gaius_Publius

(Facebook note: To get the most from a Facebook recommendation, be sure to Share what you also Like. Thanks.)


Gaius Publius is a professional writer living on the West Coast of the United States. Click here for more. Follow him on Twitter @Gaius_Publius and Facebook.

Share This Post

  • Bomer

    And here I thought they had been left back in the 19th. That’s depressing.

  • Bill_Perdue

    You get ‘muscular christianity’, aka colonialism, sexual abstinence and the desire to robustly beat your inferiors http://www.victorianweb.org/authors/hughes/muscular.html

  • http://www.rebeccamorn.com/mind BeccaM

    Debtor prisons? Ohio was doing it until their state supreme court overturned the practice just this past month. But it’s still going on anyway.

    http://www.huffingtonpost.com/2014/02/05/debtors-prisons-ohio_n_4732596.html

  • Bomer

    I keep waiting for them to bring back debtor’s prisons as well as work houses.

  • 4th Turning

    A last word before this thread rides off into the sunset…
    “Frances Perkins (born Fannie Coralie Perkins; April 10, 1880[1][2] – May 14, 1965) was the U.S. Secretary of Labor from 1933 to 1945, and the first woman appointed to the U.S. Cabinet. As a loyal supporter of her friend, Franklin D. Roosevelt, she helped pull the labor movement into the New Deal coalition. She and Interior Secretary Harold L. Ickes were the only original members of the Roosevelt cabinet to remain in office for his entire presidency.
    During her term as Secretary of Labor, Perkins championed many aspects of the New Deal, including the Civilian Conservation Corps, the Public Works Administration and its successor the Federal Works Agency, and the labor portion of the National Industrial Recovery Act. With the Social Security Act she established unemployment benefits, pensions for the many uncovered elderly Americans, and welfare for the poorest Americans. She pushed to reduce workplace accidents and helped craft laws against child labor. Through the Fair Labor Standards Act, she established the first minimum wage and overtime laws for American workers, and defined the standard forty-hour work week. She formed governmental policy for working with labor unions and helped to alleviate strikes by way of the United States Conciliation Service.”
    http://en.wikipedia.org/wiki/Frances_Perkins

    “Perkins’ strategy of reticence worked. Although the men sometimes acted like schoolboys and passed notes about her during Cabinet meetings, Perkins managed to achieve many of her “bright ideas,” like the minimum wage, work-hour limitations and the Social Security Act. Indeed, if Perkins had completely realized her vision, national health care would have long been an American reality.”

    Just checked amazon and a used paperback lists for $.98. In my top ten favorite set the record
    straight books
    The Woman Behind the New Deal: The Life of Frances Perkins, FDR’S Secretary of Labor and His Moral Conscience
    by Kirstin Downey

  • Silver_Witch

    It is that way here – expected overtime – and when you complain they moan but we are paying you time-n-a-half…why are you complaining – you should be happy you can save to get something.

    I tell them I am old and that my LIFE is worth more than 1.5 the pay….I enjoy my dogs more than I enjoy the money these days – especially having to stay longer with the insufferable wealth generators.

  • http://www.rebeccamorn.com/mind BeccaM

    Aye, I know what you mean.

    Remember that much-derided Cadillac commercial from the Superbowl? The one where Neil McDonough waxed poetic about the virtues of never taking vacations and working oneself to death?

    I mean, really, how sick are we as a society not to see there’s value in people having time to enjoy these brief lives of ours? To spend time with our families, pursuing non-work pleasures. Reading a book, writing some poetry, or painting a landscape.

    As Gaius points out, all of these finer things are deemed to be the absolute right belonging to those with wealth and power. But a poor person can’t even ask for a paid day off to take care of a sick kid without being accused of being a leech or malingerer?

  • ComradeRutherford

    The biggest problem is that the American People have this absurd notion that they should be paid for their work! Silly commoners, only the Ruling Class has that right. In America we have two classes of people, a tiny few Better People who are better than everyone else because they are rich, and the vast majority of Common Folk who have no rights and should all just be enslaved, since that is what the Ruling Class has always wanted anyway.

  • Silver_Witch

    It is funny how they always seem to turn it back on the poor. Little do that know, I suppose, that working women (and men) need that 8 hours with their wee ones, lovers need time to reconnect with each other and families thrive when they actually know each other. That said, I have worked for many wealthy people who do not know the value of “family” or “personal time” because all they know is the gathering of gold.

  • http://www.rebeccamorn.com/mind BeccaM

    What’s really sad is how the arguments presented back then against the 8 hour workday, 40 hour workweek, and minimum wage are the same ones the pro-corporatists use today. How it supposedly infringes on a worker’s right to work for a pittance and kill themselves through overwork.

  • Silver_Witch

    Sadly BeccaM the first thing I thought of when reading Gaius excellent post was that soon enough the wealthy would turn them into work houses and we would be forced to work longer hours.

    It is truly unfortunate that the unions hard work is being lost, as well as the effort women put into trying to be recognized in the workplace.

    I love the 8-8-8 slogan! I would totally vote for that.

  • http://www.rebeccamorn.com/mind BeccaM

    Excellent post, Gaius.

    There are many today who have no true understanding or knowledge of the organized labor movement, or the workplace benefits which were won by groups and individuals derided as ‘socialist’ in their time.

    Even the 40 hour work week itself and the 8 hour workday were promoted as a means to share the available jobs among all who could work. “8-8-8″ was a slogan in the day — “8 hours of work, 8 hours of leisure, and 8 hours of sleep.” The concept of the weekend as well, although it was given a religious and slightly sexist cast, with the notion of a man having one day every week for himself and his family, and one for God.

    Around the time the 40 hour week began to be adopted as the standard non-overtime working arrangement, there were already calls to tie a shorter work-week of 35 or 30 hours to measured increases in productivity.

    I actually rather like the Job Guarantee proposal, quite a lot. That was one of the ideas behind the CCC and WPA in FDR’s era. But the one problem is we would need to make sure it wasn’t perverted to serve the Robber Barons as the workhouses were — and as our prison population is increasingly being forced to do today.

  • antifa

    Our unwillingness to share freely and see to the wellness of every member of our species is genetic. Not just tribal, genetic. Just as genetic as our sex drive. Territory, food, sex and a clear social order are innate to primates. Without them, we don’t function. It’s not our fiat money system, or a class war, or industrialization that causes our modern miseries, it’s us. We’re wired to make outcasts of those members of the pack who don’t contribute, don’t fit in.

    Wolves do it, horses do it, apes do it, humans do it. We genetically despise and reject free riders. It’s Darwinian survival in action.

    Now don’t run off, thinking I’m about to start quoting “Mein Kampf” about the weak not deserving to live and all that bullshit — my point is that we are no longer apes. We are human beings now capable of rewriting our own genes, reshaping and repairing our physical forms, and leaving the planet itself behind us to venture out into the universe, to a small degree.

    So why do we allow the “always fighting over bananas” behavior of our extinct ancestors to rule our modern world? Are we led by wolves? Alpha male baboons? We act like it. Everywhere.

    Maybe in 50 years there will be a pill given to babies that will turn off some of our genetic traits that make us fight over scraps. Who knows?

    But any discussion of why we act so dumb, when we are so smart, needs to go deeper than our current social systems. We have to look at what’s wrong with us in terms of “What’s wrong with us?”

  • 4th Turning

    And lest we should forget… Secular humanists. The adjective/catchphrase that always
    stood out in my reading was g-o-d-l-e-s-s socialism/communism. Never to forget that it
    was the AMA and not “the little people” that kilt earlier national healthcare efforts ie.
    sosalized medcine.

  • Ford Prefect

    Outstanding piece. I’ve been using the “poverty and unemployment are policy-driven” meme for a while and I’m impressed at how resistant some people are to that plain idea. This post ought to help with that problem, eh?

  • Ford Prefect

    Some sort of Neo-Calvinism perhaps? I guess that’s what happens when they confuse economics with pseudo-religious fervor.

  • MattBMO

    Who is this “we” you speak of? The majority of people in this country are primarily concerned about themselves and their families. Oh, they will speak with great empathy about “helping the poor”, but when it comes down to it the attitude is “us or them”. No matter where you place the blame, these people will never agree to change the current system as long as they feel that it benefits them and their loved ones. Particularly when opponents of the plan will immediately bring up those cursed words, “socialism” and “communism”. Using those words in relation to any government effort, at least in the United States, can kill it quickly and effectively.

  • 2karmanot

    Brilliant Gaius, thought provoking, well done. The tendency for fundamentalists toward ‘torture’ can be found in the religious fetish of suffering and crucifixion.

  • 4th Turning

    Just to add to the discussion…

    “At the age of 12, thanks to his father’s bankruptcy, Dickens found himself working in a rat-infested warehouse that produced bottles of liquid shoe polish. The work itself probably lasted for no more than a year, but it left scars on his imagination that never properly healed. His rage at social injustice, his sensitivity to the fate of abandoned children, his never-satisfied hunger for financial and emotional security: all this can be traced back to his time sticking labels onto bottles of Warren’s blacking.”

    “…a “sickly bedridden humpbacked boy” in Nicholas Nickleby is described enjoying some hyacinths “blossoming in old blacking-bottles,” like a little SOS message from Dickens’s childhood that has suddenly bobbed to the surface of his prose.”

    http://www.williamlanday.com/2010/01/04/dickens-and-the-blacking-factory/

    My humble opinion. Organized religion is complicit in establishing and maintaining this chasm-
    wide divide between the have-neimanmarcuses and the have-walmarts. I was always dismayed by the large gathering of ragged, deformed human bodies (human beings) begging for “alms” at the entrances of cathedrals from my travels in the poorer countries of S.A. ALL southern churches condoned slavery as biblically ordained and to the eventual benefit of an inferior, uncivilized race.
    st. john’s in manhattan wasn’t built with 5 and 10 dollar online donations but from the profits raked in by captains of industry from countless neighboring sweatshops and tenement slums-a small
    price to pay for respectability and/or conscience-soothing.

  • Bill_Perdue

    The three greatest crises of a world ruled by the rich are the same now as they were a century ago during the depths of the First World War.

    No solution has been found for the military aggressiveness of the government on behalf of big business, for the huge and growing inequality of income between those who create wealth, workers, and those who steal it, banksters and the rich, or for the problem of using the government to police society in the interests of the rich.

    Obama’s wars and his work perfecting an American police state mimic that of Wilson’s ‘liberal’ government who railroaded Socialist candidate E.V. Debs (1) into a long prison term for sedition because Debs opposed Wilson’s dragging the US into the European war. The brutal suppression of the antiwar and union movements would soon lead to mass arrests and deportations in the Palmer Raids and the legalized murder of Sacco and Vanzetti. (2)

    Obama and both parties in the Congress pigheadedly refuse to increase the minimum wage to a meaningful level, to launch multi trillion dollar efforts to simultaneously green the economy and end unemployment, to regulate predatory banksters (who were deregulated by Clinton) and both parties continue to bust unions. Both keep adding legislation and policies to increase the oppressive powers of a police state.

    No solution to these overriding and insoluble crises can be found in the twin parties of the rich or in the legal and economic systems they administer for the rich. The solution can only come by working to build workers parties and then a workers state.

    (1) http://www.marxists.org/archive/debs/

    (2) http://saccoandvanzetti.org/

  • ferd

    Paul Ryan is a young, fit, exceedingly ambitious man. If he’s also a good and sincere man, maybe he could identify an exemplar of one of these so-called jobs which he believes “inner city” men could do if only those men weren’t so darn lazy. Then, to demonstrate his goodness and sincerity, Ryan could go DO that job for a year, or maybe 5 years. (He’s very young, after all, with plenty of time for learning, ambition, refinement.) It would be the noble thing to do. Don’t get hurt doing it, Congressman Ryan, but prove to the world that you can walk the walk you’re telling other men to take.

  • caphillprof

    Gaius, a quibble: (think welfare queens, or in 21st century terms, shiftless immigrants, cashing food stamps and fifteen fake Social Security checks to buy steaks for illegitimate children who drive Cadillacs and deal drugs).

    I think by now we know that Reagan’s “welfare queen” was basically one Chicago sociopath. See, e.g., http://www.slate.com/articles/news_and_politics/history/2013/12/linda_taylor_welfare_queen_ronald_reagan_made_her_a_notorious_american_villain.html

    However, the “shiftless immigrants, cashing food stamps and fifteen fake Social Security checks to buy steaks for illegitimate children who drive Cadillacs and deal drugs” basically suggests the efficacy of the minimum incomes proposal. Personally, if one objects to idleness, then the jobs guarantee would be the better approach. Much like the insufficient stimulus, food stamps and Social Security are a half-assed acknowledgement of minimum incomes.

    My experience is that immigrants are far from shiftless. But I always marvel at our failure to acknowledge driving Cadillacs and dealing drugs as both representing significant economic activity and part of our GNP.

  • Rambie

    A change this big, though possible, will never come without pain. As you said GP, the rich control the News, Media, and Politics and as long as they keep the masses under the boiling point, nothing will really change. But like pre-revolution France, unrest is growing.

  • pappyvet

    Another great article Gaius.

    Allow me to offer up a couple of quotes.

    “Our skilled wages are higher than anywhere in the world. “If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income.”
    Alan Greenspan

    And one from the other side of the coin.

    “The Roman arena was technically a level playing field. But on one side were the lions with all the weapons, and on the other the Christians with all the blood. That’s not a level playing field. That’s a slaughter. And so is putting people into the economy without equipping them with capital, while equipping a tiny handful of people with hundreds and thousands of times more than they can use.” Louis O. Kelso

© 2014 AMERICAblog News. All rights reserved. · Entries RSS