Proposal for an Interim Society Prior to Utopia

Patience may be a virtue, but frankly I have waited long enough for others – whether the International Working Class, Wall Street Occupiers, the Tea Party, or some other Subset Of Society – to prepare a viable proposal for a better world and put it into action. It seems mother was right. If you want something done in this world, you have to do it yourself. So, I have taken it upon myself to announce the next step in our evolution as a species. If what follows seems too easy to be true, it is only because it still falls far short of where we should be heading. It is, at best, a humble beginning, or perhaps a stepping stone on our way toward liberty, equality, fraternity. The modest proposal is in five parts: 1) The Clean Slate; 2) Temporary Reorganization of Labor; 3) New Currency, Tax Obligation, Basic Income; 4) Free Stuff; 5) Democratic Determination of Priorities, Environmental Standards. I consider it a blight on my character that initially I thought it safer to file this post under ‘Humor’, solely on account of its audacity in stating what is rarely spoken but both simple and obvious. It has now been moved to the more appropriate category of ‘Future Society’. My only consolation is that the enemies of liberty, equality, fraternity will find very little to laugh about in what follows.

 
1) The Clean Slate

At the moment, there is a lot of private debt, an unequal distribution of wealth, and plenty of jobs and management positions that would be unnecessary in a more rationally organized economy. This is to end immediately. Here are the details:

The current monetary system is finished.

Private debt – and public debt for that matter – is over. Never to repeat.

Financial wealth and private ownership of capital and property, including intellectual property, are forever forgotten.

Whatever house or apartment you happen to be living in right now, it is under your stewardship, at no charge, at least for the time being. If you had additional houses or apartments, you can forget those for the moment. The homeless will be provided with housing pronto, at no charge, out of the existing housing stock. (Excess housing will come back into play later in the proposal.)

Workers and managers in the following obsolete industries are to be liberated from their current employment immediately: finance and private banking, real estate, private insurance, the military, secret service, advertising and marketing, as well as any middleman corporations not needed in the age of the internet, such as publishing houses and record labels (we have YouTube now).

 
2) Temporary Reorganization of Labor

The obsolete industries currently employ w% of workers and managers yet add zero, in most cases, and sometimes negative amounts, to general living standards. Their disappearance will have no impact on the availability of the necessities and luxury items of life. Food, clothing, shelter, entertainment, and so on, can all be supplied in the same amount even though w% of workers have been freed from the daily grind.

At the same time, as much as possible, existing production should be mechanized. Anything tedious and repetitive – and therefore easy to mechanize – should be mechanized. This will free up another x% of workers.

Currently, there are also y% of workers who are unemployed, even before the elimination of the obsolete sectors and mechanization.

So there will be w + x + y = t% of workers temporarily freed from employment.

This means that, temporarily, only (100 – t)% of workers will be employed. These workers will no longer be paid by their employers. They will, however, receive an income, to be explained in the next part of the proposal.

Of these workers who are currently employed, some of them might prefer to work less, especially now that they will not be receiving pay from their employers. Any who fit this category can register their desire. In total this will result in u% of labor hours being registered unwanted.

The unwanted hours will then be evenly distributed among the (t + u)% of workers who have been temporarily freed from employment or are unhappily employed.

Numerical Example: In country A, w = 50% of workers are employed in unnecessary or obsolete jobs, x = 10% are in roles that can be readily mechanized, and y = 10% are unemployed. So, under the proposal, t = 70% of workers would be temporarily freed from employment. Of the 30% of workers who are fruitfully employed, half of them enjoy their jobs and half would prefer not to do them. That leaves 15% of current potential labor time to distribute evenly among the t + u = 85% of workers currently not happily, fruitfully employed. Easy.

Since the (t + u)% of workers will have very few compulsory working hours, which we can think of as the minimum labor-time commitment, they will be free to pursue other activities, including productive activities of their own choosing, the rest of the time.

Note that the right to employment is guaranteed. If anyone not currently in the workforce wishes to enter it, they can do so and share in the unwanted jobs. Otherwise, they can remain outside the workforce. Either way, they will receive an income, as is about to be explained.

 
3) New Currency, Tax Obligation, Basic Income

The government will introduce a new currency, tax obligation, and basic income payment to be administered through Special Accounts from which direct consumption expenditures can be made.

Each citizen’s Special Account will be topped up each fortnight to a level calculated as follows:

Average Payment to Special Account = Aggregate Sales Revenue / Population

Each citizen shall be free to make purchases directly out of his or her Special Account. Enterprises producing goods and services will adjust supply to demand. The level of demand will indicate the appropriate level of investment in capital equipment by each enterprise and government will issue funds accordingly. This will work as follows:

Payments made by citizens out of their Special Accounts will go into Receiving Accounts that the government will set up for the enterprises selling the goods and services. All amounts in the Receiving Accounts will be unavailable to enterprises but help the government determine the appropriate issuance of investment funds for the enterprises. In the case of investment, government will credit the Receiving Accounts of the enterprises producing the investment goods. In effect, the amounts in the Receiving Accounts represent the tax obligation.

So, everybody gets a basic income through the Special Account, whether a worker, a manager, a housewife/husband, a volunteer worker, a politician, a retiree, a student, a small child, an infant, or whoever. Production responds to demand but is not for profit. Investment costs are footed by the government, but in the case of enterprises producing consumption items, reflect demand.

It is impossible for citizens to accumulate private savings because their Special Accounts are merely topped up each fortnight. This is okay, because private saving is unnecessary, as will be explained later in the proposal.

Numerical Example: Country A has a population of 10 million. Citizens receive a maximum of $1000 each fortnight in their Special Accounts. In a particular fortnight, it so happens that citizens on average spend $800 and have $200 remaining in their Special Accounts. The average payment for the next fortnight would be $800 to top up the accounts. As already mentioned, this can also be calculated as:

Average Payment = Sales Revenue / Population = $8 billion / 10 million = $800

The $8 billion sales revenue goes into the untouchable Receiving Accounts of the enterprises supplying the goods and services. As already mentioned, it constitutes the tax obligation as well as guiding the government’s issuance of necessary investment funds.

 
4) Free Stuff

Since it is impossible to save or accumulate financial wealth, it may seem that there is no way for anybody to acquire more expensive items. Not so!

These things are provided free of charge as they become possible to provide, and represent real income over and above the goods and services purchased out of Special Accounts.

As already mentioned in part 1, housing is free. New housing, if and when it is deemed necessary through the democratic process, will be commissioned by the government. Construction workers are part of the employed workforce and will undertake a succession of projects according to social objectives. Investment will be handled in the same way as for all other enterprise.

Consumer durables, such as washing machines, dishwashers, televisions, computers, etc., will be provided free of charge, with the amount provided increasing over time in line with the level of economic development and the political will.

All levels of education and training are free for all.

Health care is free for all.

There is free public transport.

There is free internet access, including open access to all known books, journals, newspapers, musical recordings, and anything else that can be published online.

Each citizen is entitled to a certain number of free vacations to holiday destinations each year.

Eventually, the tyranny of being confined largely to one geographical location will be removed. A large surplus of free accommodation in major cities, regional centers, coastal resorts, country retreats, and so on, will be kept fully furnished and serviced so that anybody, on a whim, can relocate for a time to another location for the sake of it.

Resources necessary for the pursuit of creative, productive or leisure pursuits will be made freely available on an increasing scale as economic progress continues. Access to some resources may be limited in accordance with proficiency or need, but the degree of any such selectivity will reflect democratic priorities and environmental considerations and, as far as possible, diminish over time as economic progress continues.

Plus, any other free stuff that has slipped my mind will be made available to all as it becomes feasible to do so.

 
5) Democratic Determination of Priorities, Environmental Standards.

Investment priorities are to be determined democratically in a dual sense. On one level, there is democratic determination of priorities over public infrastructure, education, and accommodation. On another level, the investment of individual enterprises is determined according to the spending decisions of citizens who possess equal purchasing power, courtesy of the basic income provided in the form of Special Accounts.

Environmental standards and other regulatory mechanisms are also to be determined through the democratic process, informed by the best available scientific evidence.

 
Conclusion

It must be reiterated that this proposal represents merely a first, small step in the right direction. Thanks to a minimum labor-time commitment that is small compared to current average working hours, the proposal gives individuals more free time, which they can use both for productive and leisure pursuits of their own choosing. This, over time, will increasingly separate income from labor time, a process already underway with the introduction of the basic income provided through the Special Accounts.

Income equality is also achieved, including for those not currently in the workforce, such as individuals performing unpaid housework, child care and aged care, as well as individuals undertaking volunteer work. The introduction of the basic income puts these individuals on the same footing as those currently in the workforce. It also eradicates the gross injustice of school children and university students laboring over their studies without pay, and soothes the oppressed infant on the verge of a dummy spit.

TwitterFacebookGoogle+PinterestTumblrStumbleUponRedditLinkedInEmailShare

40 thoughts on “Proposal for an Interim Society Prior to Utopia

  1. This was great. It should become a cartoon, I’ve been thinking that we need The Jetsons to inspire a more positive vision of the future :)

  2. (Shaking my head)

    Peter, your proposal will create an environment in which the economy will be operating well outside its production possibilities curve. And we’re not just talking “outside”, we’re talking in the stratosphere here. (Rolls eyes and makes circular motions near the side of my head using my index finger. But not at the same time, of course, only because of the law of increasing opportunity costs and not because I lack the necessary dexterity.)

    For the sake of argument, assume a U.S. closed economy in which only two types of goods can be produced: pez dispensers and gummy bears. Further, producing more of one good requires giving up some of the other. It should be noted here that it is the agents in an economy that cannot multi-task and not the economic model itself. This theory is so close to becoming law it hardly even bears mentioning. Don’t believe me? Yeah, well I have a note from my mom to prove otherwise.

    Now if we factor in the rest of the world, it can be demonstrated (using the absolute value of the slope of the production possibilities curve) that Austria and Germany clearly have a comparative advantage of international specialization in the production of pez dispensers and gummy bears respectively. Why this disequilibrium one wonders? And what can be done given that the U.S. can only produce two goods?

    Well, disequilibrium occurs because of U.S. price distortions caused by PBS and Planned Parenthood. As a result, there are only two ways to return markets to their desired (and natural) state of equilibrium based on a cost-benefit analysis of highly advanced economic calculation: 1.) Move all production of pez dispensers and gummy bears to Iran and then blow up all three. As John McClane would say: Yippee-ki-yay, motherfuckers! or B.) Eliminate Big Bird and birth control.

    Those are your only options. Choose wisely, grasshopper.

    Conclusion: Your normative statements, unlike my simplified positive statements, cannot be tested with regard to the complexity of the real world and economy. All of this, Peter, is why you are a Nazi. Ceteris paribus.

    cc: Donald Trump; Joe Hockey; Bundesbank; Zsa Zsa Gabor; Bruce Willis

    Source: Principles of Macroeconomics, v. 2.0 (Chapters 1 – halfway through Chapter 3)

  3. Thanks for the positive comments, everyone (minus Trixie, who I will get to next). I was uncertain about posting. It was very late / early morning when I composed the post, though I had been thinking about it for a while. The recent robot discussions in the economic blogosphere spurred me to do so. However, I hedged somewhat by filing it under “Humor”, even though the only possible humor is in the audacity to suggest what, in most respects, seems simple and obvious. Maybe I will move it to “Future Society” [edit: now done], but I’ll see how the thread develops, if at all, since objectors may have held fire given its “Humor” status.

    Obviously some of the ideas need a lot of fleshing out. For example, I haven’t worked out the detail with the Receiving Accounts. Maybe the enterprises selling consumption items could make enterprise-to-enterprise purchases out of their Receiving Accounts, for instance to purchase raw materials. The treatment of longer-term investment needs more consideration, too, but I think it is sortable. And there are other factors concerning prices and the dreaded incentive issue.

    Two things I tried to address are concerns that have been raised in previous discussions concerning : (i) a BIG or JIG ; and (ii) the appropriateness of fiscal policy that might end up just enabling the saving desires of the wealthy (domestic or foreign).

    A majority, or at least a significant number of commentators, seem to have doubts about the lack of a minimum labor-time requirement in the ‘basic income guarantee’ or ‘job and income guarantee’ (i.e. BIG or JIG). Dan Kervick’s well considered comments particularly come to mind, but it has been quite a common objection. My view, in the case of the JIG, was that everyone is able to make the same choice, so it shouldn’t matter. But I can’t ignore the weight of opinion on the other side. With the “proposal” presented here, the unpopular / unpleasant work is distributed among workers who are not currently happily employed. The labor-time commitment, however, would be much less than a full-time commitment, as explained in the post. This gives individuals, especially in a context of free access to an expanded commons, the opportunity to start new ventures, either producing free items or, over time, gaining ground against existing enterprises, enabling them to attract positive prices to their goods and services and, potentially, investment funding down the line.

    The concern that fiscal policy might largely just funnel savings to the wealthy is circumvented in the proposal, since there is no private saving, and no need for it.

    If this or a similar proposal were followed, there would still be much social evolution to occur, since much inequality would remain ; for example, in housing or the attractiveness of jobs performed to meet the minimum labor-time requirement. Also, the proposal does not do anything directly to democratize the workplace, although hopefully a dynamic would be set in place that encouraged more worker-friendly enterprises.

    I do like that there would be relatively little disruption in people’s immediate living conditions in making the transition ; e.g. they would keep their current accommodation and furnishings ; remain in their local neighborhoods among family and friends if they wished ; keep their current jobs if they are not obsolete and they enjoy them. There is of course a big jolting effect in a financial sense — debt and financial wealth disappear overnight — but the impact on real living conditions would be much less for the vast, vast majority of people. There is also a big jolt in employment experience for workers in the obsolete industries and sectors, who would suddenly find themselves with much more free time (a positive) but lose their previous daily routines and the context of much of their social interaction (a negative).

    There need not, however, be a big change in the type of generic activity (logical thinking, scientific inquiry, strategic exploration, creativity, etc.) undertaken by workers exiting obsolete roles. For example, workers currently in finance have developed analytical capacities that would carry over to other endeavors, either in their free time or alternative employment. The scientific knowledge currently utilized for military or intelligence operations would likewise carry over to more socially productive enterprise or research.

    Additional free time for these workers also means more opportunity for play, and there would be enormous scope for historically inspired computer or virtual-reality games that involved speculating on stock markets, military strategy, and so forth, for those attracted to those scenarios. A great aspect of games is that they make it possible to imagine any reality we like, even those that in real life would be socially harmful, and in this way gain access to vicarious experiences that broaden our understanding of life.

    My list of obsolete sectors is obviously not complete or precise. But the basic point remains. There is plenty of work being carried out — by, in many cases, extremely talented and hardworking people — that would be redundant in a more rationally organized society, freeing up much time for individuals to undertake more satisfying and socially beneficial pursuits.

  4. Trixie, LOL! You had me going there for a paragraph or two. Then something in the back of my mind whispered, “Magpie’s reading project” and then, “Magpie has been a bad influence on Trixie’s reading habits.”

    I am impressed with the orthodox progress you’ve already made. Comparative advantage is a concept going back to Ricardo, so at least the orthodoxy came by that idea honestly. Your comment, therefore, is steeped in tradition.

    I wonder if Magpie has hit chapter 3 yet? He seems to have got himself sidetracked thinking about Mandel, Marx, Kalecki and Kaldor. I’m not sure he would have had time to hit chapter 3.

  5. @Trixie and Pete

    Well, as it happens, it’s not just Trixie who’s been reading…

    She has Bruce Willis in her references list? Big deal!

    I have Bruce L. Losis…

  6. @Pete and Trixie,

    Actually, I’ve made progress in my challenge (I am not reading the same book Trixie is reading)

    I’ve been going through limits and derivatives of functions of a single independent variable (finished two weeks ago) and I am about to go into multiple variable calculus. And yes, I am doing the exercises, even if no answers are provided (which I check with wxMaxima, a free user-friendly computer algebra system: this way I kill two birds with a stone, so to speak).

    My main effort currently is on macro. I found the treatment given to SNA in Blanchard and Sheen (2004) and Dornbusch and Fischer (1994) too superficial, in comparison to the treatment given to it in one of my prehistoric books, Thomas F. Dernburgh and Duncan M. McDougall’s “Macroeconomía” (1975, Editorial Diana; Spanish translation of “Macroeconomics”, McGraw-Hill, 1972).

    Dernburgh and McDougall take great pains (3 chapters!) to explain the accounts.

    They explain very clearly the relationship between individual firm’s profit and losses statement and GDP; they also explain with details the differences between similarly termed elements in the profits and losses statement and GDP (rent, for instance). The only thing I found them missing is an exposition about balance sheets (which I have more or less covered with BEA material).

    I’ve also surfed the ABS website, but I’ve found it very difficult and frankly, unhelpful for casual users: too many variables, and the nomenclature is not fully coincident.

    By the way, John Smith published recently an article at Monthly Review on “The GDP Illusion: Value Added versus Value Captured”. Well, some (as opposed to all) of the things Smith says already appear in Dernburgh and McDougall’s book.

    I’ve been perusing superficially the micro books. But, just out of curiosity, I decided to check with the marketing teaching literature on consumer behaviour and I’ve got deeply chocked by the differences I found, which had given me pause to think why the differences? I guess, a bit of a sidetrack.

    And, yes, I am also reading Mandel (as I said I was going to do) and additional bits of Marx, as suggested by the reading of Mandel. I wish Mandel had included exercises, that would have made things easier.

    Like I said, for me it’s “the whole enchilada and then some”.

    You gave an idea: I might start posting about my actual progress in this matter.

  7. The George Lakoff quotes in Randy Wray’s final musing on $framing must surely be indicative of one piece of the puzzle: Alternative Framing of Money: Coda

    I think it’s really part of the human blueprint: ‘progressive’ ~ conservative’ although I would frame it something like ‘intelligence ~ mind’. Mind you could define as the grasping persona; Intelligence as those active qualities of the heart (soul – sensitivity) that leaven mind with love-wisdom; inclusiveness. It’s nature is peace.

    There the great divide ….. genius is nothing without sensitivity.

    All depends upon which way you face; direction is important, knowing where you are on the map you create for yourself and who you are too. Like seeks out like and the issues reach crises. I think everybody agrees the progressives missed the last opportunity with the GFC.

  8. I have to read it some more times, but this question comes in my mind right away:

    What will be the drive for the private enterprises to organize and execute their production? Fame?

  9. Peter,

    I’m glad that you conclude that the economy of abundance will be different to the economy of scarcity. I’m glad that needs are taken out of economic exchange because if needs are met directly then they don’t need to be met by exchange and this removes a lot of the compulsion to work. I’m also quite glad you’ve kept the social contract (in line with Rousseau and Popper) because this is important in the context of violence.

    I think the least clear aspect is what’s likely to occur outside of essential production. It’s not possible to eradicate intellectual property without extreme state violence and that’s very undesirable. A historical view suggests that without some kind of alternate motive, people will resort to secrets which are handed down. This was what happened before property law (enforced by the social contract and state monopoly of violence etc). In caste systems, secrets were handed down family lines (e.g. Japan). In the west, guild secrets were exchanged in secret societies with a threat of violence if disclosed. The concept of secrets was so strong in the ancient world that believers in the Gnostic gospels thought that Jesus must have been given a secret by God (because this was what fathers did). I also think it’s possible that there was a system of mathematics that was lost when the Romans wiped out the druids because there are some mathematically curious remnants that stayed in use. However, I’m not suggesting that property rights are the only solution to the problem of secret knowledge.

    It’s likely that any single-model model would prohibit exploration of other social solutions (this is a problem with current society as well though). It’s possible to incorporate your model into a multi-model perspective as long as your system allows enough freedom for communities to explore ways of self organising. I blame Plato’s Republic for the history of single-model utopias.

    I agree with others that your post is a very good first stab at writing up key components of a more social society and it incorporates several important principles. I’m on holiday for a week but I’ll read all posts when I get back.

  10. Good discussion, everybody. John, thanks for the positive feedback. Ryan (RVMarkov) and Hacky, good points. I’ll address them in turn in this and my next comment.

    Hacky: I’m glad you see potential for the model I presented – and, yes, it is just a preliminary stab – to be part of a multi-model society. I consider it a high priority to give communities freedom to explore ways of self organizing. I have no doubt been influenced by your previous contributions in that respect. Actually, I’ve taken the points of numerous commentators – especially in the JIG discussions – on board. Personally, I still very much like the JIG, and could see a role for it in the kind of model I have suggested here, but understand the objections others have to the possibility of non-contribution, and so have tried to accommodate those concerns.

    The way I see the issue of intellectual property rights is that we should not try to prevent people from keeping secrets. Those who want to do that can do so. It is just their knowledge would not be protected legally as intellectual property in the event that the secrets leaked out or others who prefer to disseminate their ideas freely develop similar knowledge with benefits for all.

    Similarly, I think there could be considerable scope for alternative private currencies outside of the essential production sphere. In organizing their activities, some individuals might opt to provide free goods. Some might hope to build a demand over time that enables positive pricing in the government’s unit of account and attracts government investment funding on the strength of that consumer demand. Others might choose to introduce private currencies that circulate within particular spheres of non-essential activity and charge positive prices in those currencies. Such currencies would lack a tax underpinning and so rely on the trust of the members of the circuit. Any property rights, including debts issued in those currencies, would not be legally enforceable or recognized by the government.

  11. Ryan: It took until the twelfth comment – your comment – for what I called in my earlier comment “the dreaded incentive issue” to surface. I’d expected it to come much sooner. I think your own experiences on this question would be invaluable, but I’ll give you my initial thoughts on the matter.

    Basically, you asked what would motivate workers to do good work and innovators to innovate, and it is an important question. I may need to consult the third and fourth volumes of Kalecki’s collected works to see what issues surfaced in his time.

    Off the bat, I would say this:

    Profit, in my opinion, is not a motivator for workers, so in their case your comment primarily concerns the lack of pay differentials. It is certainly true that the existence of pay differentials is one form of incentive, but so too is the relative attractiveness of different jobs, and in a better world (in which people were in a position to choose) this would be the main – even sole – motivator. More pleasurable or satisfying roles will be more highly sought after than less pleasant ones.

    Of the workers who are currently employed in sectors or industries not deemed obsolete, some like their jobs, some do not. Those who like their jobs will find satisfaction in it even though they no longer have mortgages or due rent or are paid the same as others. Take academia for example. Many academics have opted for lower paying but more interesting and satisfying work. They will want to do the things that enable them to progress because greater seniority brings more research funding and more specialized teaching opportunities. Many scientists, engineers and computer programmers – major sources of innovation – are committed to their work, and will seek to increase knowledge even though their material needs and everybody else’s are comfortably met. A high proportion of currently employed doctors, lawyers, teachers, carers, nurturers, musicians, actors, artists, athletes, and others, have an abiding interest in their roles. Some of these workers – for example, those in caring roles – will be far better recompensed under the proposed model than at present. And that goes for a lot of other workers, too. The vast majority of people would be much better off under the proposal. So any incentive concerns must relate to the near absence of a stick, not so much a scarcity of carrots.

    The main issue concerns workers who are obliged to share in the unwanted or less desirable jobs. They will be working relatively few hours and possess much more free time than at present. Nevertheless, will they be motivated to do a good job during those hours of unpleasant employment?

    Here are some ways out of an unpleasant job:

    A. Compete for a better job by performing well in the current role.

    B. Create a better role during free time with individual initiative and in combination with the expanded commons.

    C. Hope that the role is eliminated through mechanization.

    Possibility A provides an incentive to perform the current unpleasant role well. Possibility B encourages productive contributions during free time. Possibility C is outside the control of the individual, but it is significant, in my opinion, that repetitive, menial or physically trying tasks are the ones most amenable to mechanization. So, many of the least pleasant roles are likely to disappear in time.

    Even so, at the moment, some of these roles remain. If some of them are so unpleasant that workers are not motivated by A, there may be a role for higher Special Payments (though still non-savable) to workers performing these roles. The extra payments would have at least a couple of effects. First, extra payments might induce some workers to accept the roles voluntarily, eliminating the need for others to perform them. The available evidence suggests that pay differentials have their strongest motivating effect in the case of menial, repetitive tasks, and have very little effect (in fact, sometimes a negative effect) in the case of autonomous, creative roles. Second, the need to make extra payments to these workers tips the balance more in favor of mechanizing the role, since mechanization will become cheaper relative to retaining workers in the role.

    In other words, in cases where pay differentials were necessary to maintain essential production, the operative factor would be the unpleasantness of the job. It would also be a priority to mechanize such roles over time, eliminating both the role and the pay differentials.

    And, yes, fame, along with many other motivating factors might come into play with different individuals. Personal interest, satisfaction, a desire to contribute, idealism, fun, challenge, along with fame and many factors might motivate an individual to perform his or her role with diligence.

    Having said all that, personally I am not opposed to people being given the freedom not to contribute if that is the way they feel. I doubt very much that this would be true of many people, especially in the long run. This is partly why I would be happy to see a JIG, and I believe it could be included in the present “proposal” and work quite nicely. There is also leeway, within the model, for greater inequality of remuneration if that is the social will. Personally, I think the absence of private saving in the government’s unit of account is important, and I would prefer no pay differentials except in rare instances where unpleasant work cannot be mechanized.

    Motivating innovators is far less problematic, in my opinion. Scientists want to do science. Inventors want to invent. Creators want to create. Innovators want to innovate. Whether they rely on profit-seeking capitalists, as now, or the democratic process for their funding does little to alter that, and in fact shifts motivation toward socially beneficial innovation rather than what is currently in some cases antisocial innovation (e.g. planned obsolescence).

    This brings me to another point in closing. A big motivator is to reduce labor time associated with essential production through mechanization and better product design so that more time is freed up for inessential production and leisure. For some products, durability with adaptability would become the key. In many instances it is not desirable – either environmentally or in terms of effort – to produce products with intentionally short lives.

  12. Thank you for the thorough reply, Peter. I’ve always liked the JIG and your last post goes even further in explanation of future society. Step by step we’ll get there. Good job you took the post out of the humor section!

  13. When time comes (I am still trying to introduce the very first steps to Bulgarian readers with my MMT blog) I would like to translate the post in Bulgarian and put it there, if you wouldn’t mind?

  14. Ryan, I would be honored. Thank you very much.

    In general, you should feel free to translate any of my posts for your readers.

  15. Good job you took the post out of the humor section!

    Peter is Lucy with a football. And I fall for it every time. I at least try to stay away from the “serious” posts, although admittedly I am not always successful.

    (Fixes hair)

  16. Probably worth repeating that money is not a motivator – its a hygiene factor. You just need enough to get by.

    My rule of thumb has always been that once I start thinking I’m not getting paid enough to do a particular job then it is time to move jobs.

    And even for high earners it is not the money that is motivating. It is the relative ‘score’ in the salary/bonus game with their peers. In other words its becomes more like a football match as to who wins. You get the same with the telephone numbers paid to actors in Hollywood.

    Paying somebody more will not get them to do more other than in very low level jobs that require next to no thinking. Once you get any thinking or creativity involved softer factors determine the level of output.

  17. Trixie: I’m sorry you inadvertently ran into something more serious than you bargained for, but your hair needed fixing anyway. “Seriously”, though, I will make amends at some point in the future when a serious post turns out to be accidentally funny.

    I googled “Lucy with a football” and came across an amusing FAQ:

    Lucy’s Football: Frequently Asked Questions (WARNING: no economics content)

  18. I googled “Lucy with a football” and came across an amusing FAQ

    Well, well, well. Lookie what the cat just dragged in. And I just made myself a new internet friend, so thanks for that.

    The MNE brand and community could learn a thing or two from that blog. If you want to talk smack, you actually have to be able to prove you can. Patting each other on the ass, telling yourselves otherwise doesn’t count. And neither does that note from your mom. See reference above.

    You jerks! And bimbos and greaseballs! Also known as, MMT “warriors” stuck in the 80s. When the embarrassment levels are so high, even I back away? That’s saying something.

    …but your hair needed fixing anyway.

    See? THAT is what I’m talkin’ about. I internet-love you so much.

  19. I know nothing about economics. NOTHING. Beyond nothing. But I’m always jazzed about being called entertaining. So, hi! Thanks! I’ll try to do something economical for you all in the future. But mostly it’ll just go off on some sort of tangent. That’s what most of my posts do. There’s very little content in my content. (Luckily, my readers seem to dig that, so I’m a lucky blogger.)

  20. Hi Amy. Thanks for stopping by.

    I’ll try to do something economical for you all in the future. But mostly it’ll just go off on some sort of tangent.

    People around here like tangents.

    Besides, you discuss Kevin Smith movies in your latest post. I’m hooked.

  21. I talk about Kevin Smith more than is probably prudent. If you do a search, you’ll get a LOT of Kevin-Smith-related stuff. (I even MET him once. And promptly acted like a weirdo.)

    Totally have a post brewing for you guys. Not even kidding. *grin*

  22. Totally have a post brewing for you guys. Not even kidding.

    Sigh. Do I have to do my hair, AGAIN?

    See, this is what happens when you don’t lock your doors at night Peter. And when you incorrectly categorize your posts. I hope you’ve learned a valuable lesson in all this.

  23. I was wondering if a holiday post was in order. But how to cater to the diverse personalities? It would need to encompass the wisdom of a jrbarch, the antisocial, though occasionally regretful, sensibility of Trixie’s sock puppet, and the dark torture of a Magpie. It seems impossible, but I will ruminate for a time and see if anything manifests.

  24. You already encompass all of us peterc; and “wisdom doesn’t fall from the sky”. The wisdom in you recognises the wisdom in others and on it goes. Of course I am just a student and everybody should know that! I know that because sometimes I say really dumb things!!!

  25. The main problem I have at the moment on the issue of property is structural capital. A bureaucratic hierarchy is an oppressive form of structural capital. The form of ownership is irrelevant because the important factor is the oppressive form of control (Max Weber’s iron cage). Alternative forms of structural capital need to be invented. In terms of social hierarchies throughout history, corporations bear the most resemblance to dictatorial states and empires. Corporations are like private sector empires. Many of the problems of the state have been resolved by democracy but the same problems have resurfaced in the form of the corporation. An example that’s familiar to readers of Marx is the bourgeois revolution. Marx lamented the continuation of concepts of property and correctly identified financialisation as a major factor in the rise of Napoleon but failed to understand the separation of ownership and control. The difference between Weber’s analysis and Marx’s analysis of the same period of history is important in understanding the parallels in the history of corporations. To spell out my metaphor, Napoleon is the CEO and the bourgeoisie are the shareholders.

    In terms of a structural social theory, I don’t think we’ve advanced much in the last 5000 years. In the UK Marx and Weber are the foundation of structural analysis in social theory. I think this is a regional bias of the UK but the majority of hard copy publications that I read are UK books. To take a sideways tangent into dialectical materialism, Marx needed the concept of class in order to adapt Hegel’s theory of history but classes are an innate aspect of thought and have no physical existence. This can be understood by considering the broader concept of class. To avoid confusion I’ll refer to this as categorisation. Thinking animals use categories to understand the world (a feat that AIs still have difficulty with). This has been a subject of debate since at least ancient Greece, and Marx would know of this because he was a scholar of philosophy. The reality of categories vs. the reality of individuals is one of the many differences between Plato and Aristotle. Combining the Platonic belief that categories are real with Hegel’s view of history caused Marx to believe that classes are real, to view bureaucracy as primarily a class and miss the importance of the obviously real oppression of imperial bureaucratic control. I put Marx’s failure to see this down to his platonic essentialism. I think he must have used the word essence more than any other writer but an automated word count would certainly illustrate this point. I side with Aristotle in saying that essences are not real; they are concepts.
    http://en.wikipedia.org/wiki/Principle_of_individuation

    Back to the main topic.. Bureaucratic control needs to be replaced with forms of structural capital that allow individual freedom. Current understanding comes from prior action. New understanding requires new action which must be new social action.

  26. Nice analysis, Hacky. I would argue a philosophical point here, though. As you say, the “problem of universals” is central to philosophy and it is one of the key issues. But Plato and Aristotle were not as far apart on this as supposed.

    Plato posited the ancient name-form doctrine which is also found in Eastern philosophy (e.g., Sanskrit nama-rupa), that is, the basic “stuff” is consciousness, the subjective aspect of which is “name” and the objective aspect is “form.” So what we know is actually the eternal and unchanging structure of mind. This is the basis of idealism.

    Aristotle adhered to a realist interpretation of this. According to Aristotle, the active intellect apprehends the essences inherent in material things and impresses these forms on the passive intellect. Thus, again what we actually know is not things themselves but their intelligible essences, which are eternal and unchanging, hence, capable to conveying truth, which ever-changing matter is not. Aristotle posited “formal causation” to account for this, in a way quite similar to Plato’s transcendental ideas. Plato and Aristotle agreed that matter is unknowable, and that form is not material. Neither thought that form was merely nominal either, since that would undermine the reality underlying truthful knowledge. Much of subsequent philosophy has been about dealing with issues involved in both approaches.

    Later, Hume would deduce the implication of empiricism based on sense data as involving phenomenalism and merely belief rather than true knowledge about the world. Kant sought to elude this implication by positing transcendental categories of understanding but ended in subjective idealism. Hegel found this unsatisfying and returned to Plato, as Hacky right observes.

    “[In] the Encyclopedia of the Philosophical Sciences (1817, further editions in Hegel’s lifetime in 1827 and 1830), Hegel defined absolute idealism by contrast to what he called the “subjective idealism ” of Kant, which he described thus: ‘Objectivity of thought, in Kant’s sense, is again to a certain sense subjective. Thoughts, according to Kant, although universal and necessary categories, are only our thoughts – separated by an impassable gulf from the thing, as it exists apart from our knowledge. But the true objectivity of thinking means that the thoughts, far from being merely ours, must at the same time be the real essence of the things, and of whatever is an object to us.'”
    http://cco.cambridge.org/extract?id=ccol0521651786_CCOL0521651786A004

    Naive realism, which most people hold intuitively based on unexamined common sense, asserts that we actually do know material things, but there are tremendously difficult issues involved in defending this. For example, if matter and mind are separate, how does matter get into mind unless there is something higher uniting them or they are essentially the same. John Locke attempted a realist account based on representation, but the upshot of it is that we know representations of things in the mind not the actual things. Locke’s view is similar to Aristotle’s updated in light of the discoveries of his time, such as optics. Once scientific knowledge is taken into account it is difficult to show how the mind knows things and not sense data that the organizes based on neurology.

    The nominalist answer was that the types in question are categories or classes defined by a common characteristic, or as we would not say, “sets.” That is they are nominal rather than real.

    In his later work, which he published as Philosophical Investigations, Wittgenstein held that the problem of types was a really pseudo-problem in that the study of language-use shows that most classification is not in terms of a defining characteristic shared by members of a set but rather “family resemblance.” Family resemblance is established the basis of a number of shared characteristics, none of which may be common to all members — a child may have the father’s eyes and the mother’s nose, for instance.

    A similar reaction to structuralism as inclusion or exclusion from a set is elaborated in Post Structuralism.
    http://en.wikipedia.org/wiki/Post-structuralism

    There is a great deal of tension around this among scholars. Most thinking of the past as been structuralist, although there has been deep disagreement over the ontological and epistemological character of structural components. That viewpoint is now under attack by post-modernists.

    Why go into this level of detail? Because as Hacky correctly points out, how a problem is attacked determines the forthcoming solution.

  27. Re ‘categories/class': A baby isn’t born with a rolex on its wrist.

    Bureautic control = ‘greed’?

    Consciousness is not consciousness until it knows the ‘Reality’ within? Mind is a mirror reflecting to the understanding (intelligence~consciousness) what is within and what is without (depends upon which way the mirror is pointed). ‘Reality’ is perceived by the heart – only experience can bestow this kind of understanding. The mind is merely a witness.
    Thoughts are modifications in the mind-stuff (Patanjali has a good description). Whether or not you ‘believe’ something like ‘Reality’ exists is irrelevant in that sense.

    As is the experience, so is the understanding and thoughts – hopefully this is a path to a better world. It is human beings who bother each other and everything else on the planet – so we need more sensible human beings!

  28. Happy New Year!

    Universal basic income fails to address:

    1) Structural and cyclical unemployment
    2) Desire to work and avoid the stigma of not doing something
    3) Inevitable downward pressure on wages as a result of implementation
    4) Privatization of the social wage (welfare being substituted)
    5) Class origins of political advocacy and beneficiaries (working-class vs. lumpen)

  29. “Universal basic income fails to address:

    1) Structural and cyclical unemployment
    2) Desire to work and avoid the stigma of not doing something
    3) Inevitable downward pressure on wages as a result of implementation
    4) Privatization of the social wage (welfare being substituted)
    5) Class origins of political advocacy and beneficiaries (working-class vs. lumpen)”
    1. It isn’t meant to address it, it’s meant to provide for a worker when their job has become obsolete.
    2. Agreed.
    3. I believe that’s backwards. It would cause upward pressure because a worker could more easily say no.
    4. I don’t know what you mean.
    5. It would even the playing field, at least.

  30. 4. I don’t know what you mean.

    No one has any idea what anyone else is talking about here. Like ever. That’s the whole point of this website. You’ll get used to it. :)

  31. Darris, thanks for your thoughts. Your responses were similar to mine in a later thread. Yes, somehow the discussion got spread over different threads. Typical …

    I have copy and pasted additional comments by myself and Jacob below to put the discussion all in one place. That way, any further responses can be placed here:

    peterc 17 February 2013 wrote:

    Thanks for your thoughts, Jacob. To give my reaction to each point in turn:

    1) It’s true that a basic income would not address structural or cyclical unemployment, although it does maintain a floor under aggregate demand during economic downturns.

    2) The way I see it, the choice is not between work and leisure, but between selling labor power to a capitalist or capitalist government versus pursuing productive and leisure activities individually or in voluntary combination with others. The stigma associated with non-engagement with the capitalist wage-labor relation needs to be undermined, in my opinion.

    3) I think a basic income would be more likely to tilt the balance a little back towards workers in bargaining over wages and working conditions. The cost of losing a job is reduced when income is guaranteed, and this gives workers a bit more leverage.

    4) There should be a real-income component to a basic income as well as the monetary component, in the form of free, publicly provided education, healthcare, housing, expanded commons, etc.

    5) As far as I’m concerned, the most marginalized members of the community should have a greater voice. A basic income would help in this respect. But I don’t think this need come at the expense of workers, if, as suggested above, their bargaining power is enhanced by the basic income. Hopefully there would be a shift in power from the 1% to the rest of us.

    Jacob Richter 8 March 2013 wrote:

    Peter, the key word there, though, is “productive.” There needs to be incentives to engage in productive labour, and that involves selling one’s labour power, whether it’s to a private capitalist, to one’s cooperative, to a commonly defined capitalist government, or to a intermediate public order beyond. I agree that the stigma needs to be undermined, but it needs to be done the right way, like stressing shorter working week hours for greater civic participation (without loss of pay or benefits, of course), not the wrong way.

    Leverage is achieved not through BI, but through the ELR (which I’m fully supportive of), especially when there are pay differentials in the program. Here I’m very much to the left of Wray and co, since those pay differentials should indeed compete with the private-sector job market for skilled labour. The opposite occurs with BI, in effect what Paul Cockshott recently called “a subsidy to low wage employers and a subsidy that other workers pay out of their taxes”

    The privatization component I referred to is Friedman’s support for BI. Every right-winger who supports BI supports it because of this, at the very least.

    At best, I see BI as a top-up program to be implemented after ELR has been around for quite a while.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>