The recent discussions over what is or is not Modern Monetary Theory (MMT) have brought out some differences in perspective on broader questions of where we might want to head as a society. As far as I am concerned, the Modern Monetary Theorists have defined their theory to include both descriptive and prescriptive elements, and that is fine. For non-academics who have taken a strong interest in MMT in the blogosphere, the definition provided by the academics has clarified our position relative to it. There are some on the political right who would not consider themselves to fall within the definition. And, of course, there are some of us on the political left who likewise consider ourselves outside the definition. In this post, I thought it might be interesting to touch on what appear to be some similarities and differences in vision between those on the left and right.
In one of Cullen Roche’s recent posts, there is a passage that can serve as a good basis for discussion:
Modern day economists seek the holy grail of macroeconomics which has come to be price stability and full employment. These two features of modern macro are held up on pedestals as if giving a person a job and a steady wage is all one needs to live a happy and prosperous life. I say these goals entirely miss the point and steal the potential lives that future generations can live. What we should seek is the way in which we maximize our living standards. In doing so we reach the true holy grail of macroeconomics – the thing that every human seeks – the fountain of youth, hence, more TIME. After all, it is only through increased productivity, innovation, creativity and ultimately higher living standards that we are able to attain this.
Parts of this passage resonate quite strongly with me, although the level of generality conceals major differences in perspective. In particular, I can agree that “giving a person a job and a steady wage” is not “all one needs to live a happy and prosperous life”. I can also agree that we should “maximize our living standards”, if broadly defined to mean quality of life, and that “only through increased productivity, innovation, creativity and ultimately higher living standards” can we free up more “TIME”. I will consider these points in turn.
A Job Does Not Ensure a Happy and Prosperous Life
In my view, a precondition for living a full and happy life is income security. Until that basic requirement is met, a person will be too preoccupied with gaining access to the means of bare subsistence to have much time or energy to lead a free and creatively fulfilling life. Insecurity brings stress and narrows focus to the most basic aspects of existence. For that reason alone, income security is a necessary though not sufficient condition for living a happy and prosperous life.
Ideally, all people would have income security, but they would also be free to determine for themselves what made them happy, provided only that their actions did not impinge on the liberty of others, and how they could best contribute to the social good. They would be free to act individually or in voluntary combination with others as they saw fit.
The position of some on both the left and right seems to be that nobody is entitled to income security unless they in some sense “earn” it. Some on the right seem to go further and suggest that there should not even be an assurance that people will be able to “earn” a secure income if it is not profitable for somebody that they do so.
This is clearly an area of ideological difference and it is not clear that it can be resolved through logical debate. My own view is that it is difficult to square the macroeconomic understanding that unemployment is a government policy choice with the denial of access to income security either through the provision of guaranteed employment or a guaranteed income. If neither is to be provided, I see no reason why the propertyless should respect property rights, nor why the physically strong or well armed could be expected not to resort to forcible alterations of the prevailing distribution of resources.
But even if it is granted that everybody should be enabled to obtain income security, this still leaves the question of how this will be done. To propose a Job Guarantee either in isolation or in combination with conditional welfare payments is to make a judgment that people without independent means should have to sell their labor power to an employer in exchange for a wage or salary if they wish to have income security.
This, of course, is where disagreements with MMT can come into play from the left of the political spectrum. A Job Guarantee reinforces the commodification of labor power. It reinforces the work ethic and the tying of income to the wage labor relation.
From this perspective, the Job Guarantee is a backward step. It appeases and reinforces bigoted, small-minded attitudes regarding, for example, the “deserving poor” and related forms of middle-class self-righteousness, and narrows the vision of life to one in which most productive activity must be conducted on terms dictated by capitalists and capitalist governments.
For some, though certainly not all, Modern Monetary Theorists, the key selling point of the Job Guarantee seems to be its functionality to capitalists. It keeps workers who would otherwise be unemployed “job ready”, ensuring the reserve army of labor remains a credible threat to employed workers, keeping them docile and pliant. It keeps productive activity and the mindset of workers geared towards the profit requirements of capitalists. It keeps society, in general, focused on serving the narrow sectional interests of what has become a backward-thinking, regressive class of owners and rentiers.
Maximizing Living Standards and Time
Presumably most people would agree with the vague goal of maximizing living standards, but would disagree widely on what they mean by living standards.
I take living standards in a broad sense to mean not only material well-being but the amount of free time and resources people have to pursue activities that enrich lives in the fullest sense, spiritually, creatively, intellectually, physically, as well as materially. To the fullest extent possible, unrewarding or unpleasant labor should be replaced by machines. Mechanized production methods can be producing material outputs while humans are freed to produce life in the fullest and richest sense.
Here, again, by attempting to tie productive activity to the narrow interests of capitalists, the Job Guarantee would serve to limit human development. Capitalism requires not just a surplus in material terms but surplus value, and the basis of surplus value is surplus labor. To preserve capitalism, labor power needs to remain commodified. (I explain how this is technically possible even in a highly advanced economy in Implications of a Purely Mechanized Economy.) Technological advance and mechanization create the potential for material abundance without the existence of the wage labor relation and surplus value. To confine much of human activity only to forms acceptable to capitalists becomes increasingly preposterous the further productivity advances.
I think we should be preparing now to make the transition to greater free time, not standing in the way of this transition. I appreciate the argument made by some leading MMTers (those whose views I am most sympathetic to) that we could broaden the scope of what is considered productive through a liberal implementation of the Job Guarantee. Surfers and musicians, for example, might be able to undertake their activities of choice within the program, combined with a minimal social service element. Taken to the extreme, this would seem to serve a similar purpose to a Basic Income Guarantee, in that people could ultimately choose to do as they please and never intend to obtain wage or salary employment in the regular economy. This would have the potential to undermine capitalism, particularly the wage labor relation, in a similar way to the Basic Income Guarantee, and to that extent I would applaud it.
But if that is the Job Guarantee to be implemented, why not just drop the pretense of determining which activities qualify for the Job Guarantee and call it a Basic Income Guarantee? This would have the added advantage of encouraging a conceptual break between income and the wage labor relation. A person’s activities would be acknowledged as a matter of free choice without need of justification.
The most legitimate answer MMTers give to this question, in my view, is that the Job Guarantee requirements would initially need to be more stringent, for political reasons, but that they would nonetheless be susceptible to broadening over time. The problem I have with this is that it seems to concede the small gains in collective consciousness that have already been made in undermining the wage labor relation through the provision of unemployment benefits.
However, I sense that many in the blogosphere would not actually give this answer in any case, but rather would object to such a liberal application of the Job Guarantee. Some appear to favor workfare and hold to particular notions of “mutual obligation” and the “deserving poor”, or otherwise intend for capitalism to be preserved and want the Job Guarantee to serve that end.
Visions of the Future
It seems to me that there are basically two different visions of where we should be going as a society. For many, not just those on the right, the intention is to preserve capitalist social relations, above all property rights and a class of people who do not possess independent means and so are compelled to sell their labor power to capitalists in exchange for a wage or salary. As technological improvements and mechanization proceed, the intention is to keep the screws tight on the dependent class; i.e. those dependent on capitalists for access to income security (“wage dependency”) or the state for conditional welfare (“welfare dependency”). Capitalism is a system almost entirely based on dependency, and it seems that many people wish to preserve it.
An alternative is to free all people from dependency. Here, the intention is to end the wage labor relation. As much as possible, technological advance and mechanization can free people from unpleasant activities to pursue more fulfilling productive activities and leisure. During the transition, those who are currently in the dependent class who wish to receive higher incomes than others could do so through participation in wage or salary employment, and those who desired such employment but could not obtain it in the regular economy could opt for the Job Guarantee. Meanwhile, people who were ready to embrace free time could be enabled to do so through a Basic Income Guarantee. Independence for all can only occur to the extent capitalist social relations are put behind us. Undermining those coercive social relations is a small step on the way to freedom and liberation.