In much of Europe there has been high unemployment for a long time, since well before the onset of the present crisis. People are increasingly accustomed to its existence. That means they are also accustomed to a sizable proportion of society receiving an income disconnected from labor time. In many other countries there has been high unemployment at one time or another during the neo-liberal period. In upcoming decades, waves of mechanization are going to make it increasingly unnecessary for people to work full time or for everybody to participate in the labor force. In thinking about a progressive way forward, why try to swim against the tide with a Job Guarantee when the tide brings with it the necessary preconditions for a Basic Income Guarantee?
One type of objection to the Job or Income Guarantee (JIG) that has been expressed concerns its potential effects on the level of productive activity. In particular, there has been some concern that without a requirement of reciprocity, the JIG would enable some people to obtain an income without doing anything for society in return, and this would be unfair or at least perceived by many as unfair. My view is that the net effect of a JIG would be to promote socially productive activity, and that the extent of true free riding – in the sense of contributing nothing to society – is not likely to be significant.
There have been many interesting responses to my series of posts on the Job or Income Guarantee (JIG). It is clear to me that some of the objections reflect the different motives people might have for supporting a Job Guarantee (JG), a Basic Income Guarantee (BIG) or a JIG. If the aim is to preserve capitalism – particularly, the wage labor relation – there is no doubt that a JG would be the preferred policy option, since it ties income to labor time even more closely than under the current system of unemployment benefits or insurance. If, instead, the aim is to move beyond the wage labor relation to an increasing separation of income and labor time, and an increasing freedom for individuals to pursue their own productive and leisure activities individually or in voluntary combination with others, a BIG or JIG will be preferred. The BIG would achieve the most sudden (though still minor) break from the wage labor relation, whereas a JIG would enable the separation of income and labor time to occur at the pace that most closely reflected individual choice.
I have received a barrage of correspondence (a short Email) asking where I stand in the debate over the Job Guarantee (JG). Although the answer may be clear to those who have taken the time to read all my posts on the topic, it is becoming almost a full-time job just keeping up with the various MMT blogs. I thought I would provide a brief summary of my position.
Recently, a lot of my posts seem to have been about either Kalecki, the job guarantee (and related proposals) or the possibility of transition over time to a post-capitalist society. In this post, I thought I would highlight a connection between these topics that I have not discussed other than in passing. I was reminded of the connection when I noticed that Tom Hickey had provided a link to an old paper by Peter Kriesler and Joseph Halevi which draws on Kalecki’s 1943 essay, “Political Aspects of Full Employment”, to critique the JG proposal.
The job guarantee continues to draw lively discussion on the various MMT-related blogs. Most of the criticism seems to be motivated by a particular conception of the efficacy of private markets and supposed deficiencies of government. Although in recent posts I have expressed a preference for a combined ‘job or income guarantee’ rather than a job guarantee on its own, it is hopefully clear that my reasoning has been along completely different lines. I won’t revisit that reasoning here other than to reiterate that my focus has been on how, as a society, we can enable a transition to a freer society. In this post, I instead want to remark briefly on the more common type of criticism being leveled at the job guarantee proposal.
The discussion in recent threads of the job guarantee (JG), basic income guarantee (BIG) and ‘job or income guarantee’ (JIG) continue to motivate me to explore the topic further. The comments, perhaps mainly negative but some positive (at time of writing this post), have been of a high quality. I once again would like to register my appreciation. I am learning things even if no one else is! In this post, I will mainly refer to a couple of Dan Kervick’s comments and a point raised in several places by Philip Pilkington, although considerations relating to most other comments will arise implicitly in discussing the various points. The contributions by Dan just happen to provide a good context in which I can elaborate a little more on my reasons for suggesting a JIG rather than a JG.
The job guarantee has been getting a lot of attention in the blogosphere lately. As Bill Mitchell notes in his latest post, some of this has involved questioning whether the job guarantee should be considered integral to MMT. Other discussion has been about the merits of the job guarantee itself. As far as I am concerned, the first question has been answered in the affirmative by the leading MMTers. In this post, I am not concerned with that issue. I am taking as given that the job guarantee is not only consistent with MMT but part and parcel of it. My concern, following on from my previous post, is with the merits of a job guarantee compared with other policy options.
One issue that has come up in recent threads is the challenge of adjusting to a future in which there may be far less compulsion to work in the formal economy and an increasing separation of income and employment. This is not inevitable, but is one possible response to the widespread mechanization of production that is likely to occur in coming decades. A dramatic rise in productivity can open the way for people largely to be freed from formal employment to pursue their preferred vocations either individually or in voluntary association with like-minded individuals. But since the experiences of many have not necessarily prepared them for this transition, it raises challenges. I thought it might be worth discussing this issue in relation to the main policy options that seem to present themselves; namely, a basic income guarantee or a job guarantee.