>Pfeffer quotes Article 23 on the "right to work," and indeed full employment has always been a bizarre fetish for Keynesians, social democrats, Marxists and conservatives. The Protestant work ethic is the right-wing version of the labor theory of value. It is a contradiction how so many bemoan the supposed rat race working conditions and then advocate the "solution" of having the state put everyone into the rat race through full employment policy.
There's a really banal reason for this. The vast majority of people want jobs.
In Argentina when they implemented an incredibly popular "right to a job" scheme (Plan Jefes) and then replaced it with basic income (i.e. get the same money but you don't have to turn up to work), a majority continued to do their jobs.
It helped that the jobs that the state were paying them to do were, by and large, necessary and rewarding - looking after the elderly, etc. I doubt if the work they were doing were debt collection or cold calling to sell insurance they'd have wanted to continue working.
But the whole sentiment that looks down on poverty and exalts exorbitant wealth in of itself which the author underlines, emerges from the same train of thought that treats labor and full employment as the end of all ends. There's little functional difference between the conservative presenting a just world where hard work ensures success, from a social democrat who argues for large-scale centralization to shuffle people into the same capitalist institutions they allegedly look down on because "people want jobs". They're both far-reaching implicit assumptions of a labor theory of value in structuring a society.
Indeed, it was the neo-Keynesian focus on full employment that led to short-sighted reliance on economic models like expectations-agnostic Phillips curves and IS-LM models with interest-sensitive money demand to the exclusion of other macro considerations, that ultimately culminated in a stagflation bust in the 1970s. Nor was this even a perversion of Keynesianism. It was Keynes himself who formulated simultaneous-equations IS-LM in lectures from 1933-1934.
Employment as end in of itself also led to mercantilist-era injustices.
But again, this is tangential to the issue of money.
Full employment doesn't mean everybody has a job. It just means that everybody who is looking for a job can find a job.
As far as I can see, only industrialists who profit from lower wages and a more docile workforce would be against this.
>Nor was this even a perversion of Keynesianism.
Neo-Keynesianism was absolutely a perversion of Keynesianism. It was an attempt to marry it to Neoclassical economics, which was antithetical to Keynesianism in the first place.
>It was Keynes himself who formulated simultaneous-equations IS-LM in lectures from 1933-1934.
No it wasn't. It was Hicks and Meade trying to apply some sort of equilibirium fetishism to the theory of interest, employment and money.
Distinction without a difference. Of course there will always be some unemployment for disability or other reasons.
As far as I can see, only industrialists who profit from lower wages and a more docile workforce would be against this.
Job guarantee proposals are minimum wage. Even if they were not, the idea that industrialists benefit from a "docile workforce" is couching things in a questionable Marxian reserve army of labor analysis. It's not as if state-administered job guarantees are going to be tools of empowering the working class. It's going to be administered as a neutral tool for economic efficiency. Even then, the industrialists absolutely benefit from easy access to a minimum wage workforce.
It was an attempt to marry it to Neoclassical economics, which was antithetical to Keynesianism in the first place.
Nonsense. Keynes came from the neoclassical Marshallian tradition.
No it wasn't. It was Hicks and Meade trying to apply some sort of equilibirium fetishism to the theory of interest, employment and money.
Yes, it was. Hicks and Meade only developed one particularly influential variant, and they were inspired by notes from Keynes' lecture attendees who were taught a four-equation model with almost no major difference other than having an exogenous variable for "state of the news" (expectations). Ultimately this was not a major difference, since neo-Keynesians like James Tobin did focus on such areas, and on financial instability as well.
> the idea that industrialists benefit from a "docile workforce" is couching things in a questionable Marxian reserve army of labor analysis.
Maybe. But that doesn't mean it's incorrect.
What's your explanation for the much-observed fact that most of the productivity gains of the last thirty years haven't trickled down to most of the workforce?
>Keynes came from the neoclassical Marshallian tradition.
No one in modern economic theory belieces the Marshallian tradition is identical to modern neoclassicism - never mind neoliberalism.
What's your explanation for the much-observed fact that most of the productivity gains of the last thirty years haven't trickled down to most of the workforce?
Monetary policy is one of the main reasons. Instead of letting a secular deflation emerge with growths in total factor productivity, central banks still do price level stabilization instead. The monetary disequilibrium economists have written much on this. George Selgin has a great and relatively accessible essay called Less Than Zero that discusses this.
No one in modern economic theory belieces the Marshallian tradition is identical to modern neoclassicism - never mind neoliberalism.
But there is no single "modern neoclassicism," that's the point. Yet to somehow deny that Marshall was a neoclassical is to make the term meaningless. The approaches of Marshall, Menger, Walras and others all had important differences despite being ultimately lumped as "neoclassical".
Neoliberalism isn't even an economic idea. It's a political term used by people opposed to it to describe what they perceive as a shift into corporate rule since the 1970s. Yet this narrative is full of holes, not least of which is the history of mercantilism, imperialism and later corporation-state cooperation. I'll be writing a book on this subject at some point.
>Monetary policy is one of the main reasons. Instead of letting a secular deflation emerge
Yeah, that's what happened in the 19th century. It didn't help improve poverty at all - exactly the opposite, in fact. The series of financial crises and subsequent misery is partly what led to the creation of the federal reserve.
>Neoliberalism isn't even an economic idea.
It's strongly linked to neoclassicism. Plenty of neoliberal dogma has its underpinnings in neoclassical ideas (e.g. theory of the firm).
Deflation is not an issue if accompanied by growth in TFP. It's acknowledged that the period from 1874-1896 was one such event. As for banking panics, they were always particularly bad in the United States because of geographic limitations, specific bondholding requirements and other restrictions.
Theory of the firm has many variants. Coasian, Alchian, evolutionary, etc. Again, what type of neoclassicism? What is neoliberalism, anyway? [1] It's used as a snarl term rather than a particular set of ideological convictions. I've seen it used to describe various forms of economic liberalism, but also more esoteric Foucaltian analyses.
The Golden Age of Capitalism was still a time of imperialism (Truman Doctrine in effect), one of seven times less regulation than today (as measured by size of the Federal Register) and all sorts of other statuses that are nowadays attributed as being unique to neoliberalism. There was no sudden "jump" in the 1970s, it's been an ongoing process since mercantilism.
>Deflation is not an issue if accompanied by growth
Which it isn't, because it acts as a choke on spending.
>It's acknowledged that the period from 1874-1896 was one such event.
Acknowledged by historical revisionists.
>As for banking panics, they were always particularly bad in the United States because of geographic limitations, specific bondholding requirements and other restrictions.
Or rather, lack of counter-cyclical spending.
>Theory of the firm has many variants. Coasian, Alchian, evolutionary, etc. Again, what type of neoclassicism? What is neoliberalism, anyway?
A political ideology that champions unconstrained markets, privatization, fiscal austerity and zero constraints on the movement of goods and capital. This isn't a controversial definition even if people do use it with a snarly tone of voice.
>There was no sudden "jump" in the 1970s,
If you take a look at the share of labor's income as a % of GDP there absolutely was. The trigger point was likely Reagan firing the air traffic controllers (that marked government support for open season on all unions).
> What's your explanation for the much-observed fact that most of the productivity gains of the last thirty years haven't trickled down to most of the workforce?
Because much of the productivity gains of the last 30 years have less to do with extra labor done by workers, and more to do with the fact that we've had personal computing advances, industry-specialized software, etc., etc.
It used to take our accounts payable team two weeks to process an expense reimbursement, because I had to give them the paper receipts, mail it in, they would record the data by hand into a ledger, validate it by phone, and then cut me a paper check. Now, I can take a photo of the receipt, submit it digitally, and it's automatically recorded and validated by TriNet expense software, and the payment is programmatically added to our accounting software. All someone has to do is click "Approve" or "Disapprove".
It used to take me a couple hours to write a pen-pal, and a few days worth of travel time in the mail before they would receive the letter. Now I can send them an email, a Facebook message, an SMS, a tweet, etc., etc.
>Job guarantee proposals are minimum wage. Even if they were not, the idea that industrialists benefit from a "docile workforce" is couching things in a questionable Marxian reserve army of labor analysis.
Guilt by association with Marx? Seriously? That's what passes for a rebuttal?
>It's not as if state-administered job guarantees are going to be tools of empowering the working class.
They were in the 30s. If you can drop your McJob and get a guaranteed job with decent benefits and pay with the Public Works Administration you can tell your boss where to shove it. That's called "empowering".
>Nonsense. Keynes came from the neoclassical Marshallian tradition.
"Reaction against" would be more accurate. Keynes never had an equilibrium fetish (the kind that is used to pretend that unemployment isn't a problem because "a reversion to the mean is just around the corner").
Well, the Marxian theory is the growing reserve army of labor increasing the organic composition of capital leading to a fall in the rate of profit and breakdown of capital accumulation. A major assumption was that automation would lower productivity and profit, which did not play out. So, industrialists definitely would benefit from a minimum wage JG force.
The purpose of the New Deal was not empowerment, but emergency restructuring. Some of the initial programs (AAA, NRA) were deemed unconstitutional and it was built into a corporatist model for maximum expediency. There weren't any McJobs in the 30s, and the New Deal was certainly not about "decent benefits and pay". Nor would a contemporary minimum wage JG be.
Marshallian analysis was not a purely comparative static approach. It did allow for dynamism and fluctuations as actors converged between states. That Keynes spoke of homogeneous investment functions and "marginal efficiency of capital" shows that he was still rooted in that tradition.
You're moving the goalposts, though. IS-LM is still his.
>So, industrialists definitely would benefit from a minimum wage JG force.
That must be why they throw a torrent of lobbying dollars at think tanks that say that raising the minimum wage will cause the sky to fall.
>The purpose of the New Deal was not empowerment, but emergency restructuring.
You must have a different definition of "relief for the poor" than the rest of us.
>There weren't any McJobs in the 30s
Believe it or not, cooking was actually a thing in the 30s too, and it was, likewise, one of the lowest wage jobs out there (~35 cents an hour avg wage).
Well, ex ante, a minimum wage increase might be opposed. Ex post, the minimum wage becomes the default reservation wage for the entire jurisdiction, and as such the industrialists will have to accept it and adjust output, production, capital stock and labor capacity accordingly. From that point on, the minimum wage JG force would certainly be a benefit in offering an easily accessible venue for sellers of labor who will be compensated at a price no higher than what the law sets as the minimum floor to begin with.
Again, I don't see how the New Deal can be couched in such heroic terms. The principal influences for the New Deal were Foster and Catchings, who looked it at from the lens of economic output.
>Well, ex ante, a minimum wage increase might be opposed. Ex post, the minimum wage becomes the default reservation wage for the entire jurisdiction, and as such the industrialists will have to accept it and adjust output, production, capital stock and labor capacity accordingly.
Fight it, accept it and then whinge about it and subsequently post lower profits seems to be the default modus operandi.
>From that point on, the minimum wage JG force would certainly be a benefit in offering an easily accessible venue for sellers of labor who will be compensated at a price no higher than what the law sets as the minimum floor to begin with.
Putting a floor on wages lowers wages to that level huh? Brave hypothesis. Too bad about the evidence.
>Again, I don't see how the New Deal can be couched in such heroic terms
I'm a big fan of animalistic reductionism, for personal reasons. And that perspective tells me, from looking at the way well trained and motivated dogs perform tasks, that socialized sentient beings do appreciate being helpful and useful. Also, being an arm chair evolutionary psychologist, I can easily speculate that a species with this trait would continue better than a similar species without that trait. A bit like the aesop fable of the ants and the grasshopper.
And also personally I get a good old dopamine kick out of solving problems in a group. It may be that I'm socialized to behave that way. But then again a culture that ingrains that kind of behaviour... (see above).
Very true. And there in lies the problem of socialism / communism / guaranteed income. What do you do with the freeloaders? If the basics of life are free, why do anything extra? It creates an economic drag, like physical drag on a wing. Then again Whales have bumpy features on their fins that actually help them reduce drag, kinda like dimples on a golf ball.
And then again I'm of the firm belief that parasitism is a basic feature of complex reproducing systems. So, the solution is more of a process, an arms race, than a destination or closed end solution.
I have spent time on the dole (social security payments) in the UK after graduating in the dot com crash of 2001. I choose to work as I have a better quality of life because of it. I can live in a nicer apartment and afford to do more things because I have the money to so. I am assuming basic income would cover the basics and not too much more.
There are plenty of people in the UK who do seem to live a "benefits lifestyle" - i.e. they (seem to) choose not to work. I guess most of them are looking at lower paid jobs where the difference in earnings from a 40 hour a week don't make it sufficiently worthwhile for them to start working, when they can get the majority of it for not working.
Then what do you call able bodied people who choose not to contribute, but instead choose to live at the most basic means? That's the very definition of freeloading to me.
freeload - intransitive verb:
to impose upon another's generosity or hospitality without sharing in the cost or responsibility involved
I know a few people over 30 with ridiculously accommodating parents who still live at home and play MMOs for 12+ hours a day. I feel sometimes the solution for many people is to simply force people to do what's best for them.
There's a really banal reason for this. The vast majority of people want jobs.
In Argentina when they implemented an incredibly popular "right to a job" scheme (Plan Jefes) and then replaced it with basic income (i.e. get the same money but you don't have to turn up to work), a majority continued to do their jobs.
It helped that the jobs that the state were paying them to do were, by and large, necessary and rewarding - looking after the elderly, etc. I doubt if the work they were doing were debt collection or cold calling to sell insurance they'd have wanted to continue working.