The JIG Promotes Freedom

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.

Tschäff Reisberg made a pertinent comment that touches on some of these considerations. His comment provides a useful context for illustrating some of the differences in motivation people may have for supporting the alternative policy options. I suspect many hold a position closer to Tschäff’s than my own.

He starts by asking:

Why would anyone pick the BIG over the JG?

Judging by the rest of Tschäff’s comment, I am guessing that he means this question the other way round. That is, why would anyone choose to participate in the JG if they could just opt for a BIG instead?

The idea of the JIG is that people can choose the BIG if they prefer more free time to shape their own activities, but can instead opt for the JG if they prefer the external motivation of the wage labor relation and/or they feel participation in the JG will better serve them in finding higher paid work back in the regular economy.

Tschäff continues:

Wouldn’t the JG people resent the BIG people? … Why should some have to pick up trash every day when they could be Facebooking at home and making the same?

It is not obvious to me that people on the BIG would choose to Facebook all day at the expense of other productive or leisure activities they might prefer to undertake.

But, in any case, there would be nothing preventing people in the JG from making the same choice and opting for the BIG, so there is not really much basis for their resentment. If they chose the JG, presumably it would be because they preferred it to the BIG.

Even so, many people (including JG workers) undoubtedly would continue to resent others after the introduction of a JIG, just as they resent others now. These are the kinds of attitudes that will need to change over time if, thanks to continuing mechanization and productivity improvements, we are ever going to make the transition to a society in which people can increasingly opt for free time.

It may be that people don’t want to make this transition. Perhaps they prefer to keep income tied to the wage labor relation no matter how dramatically material living standards rise or how great the potential for freer lives becomes. I considered how this would be possible in Implications of a Purely Mechanized Economy. There is nothing inevitable about a transition to a freer society. In the worst case, the reverse development could occur, in which we descend into some kind of surveillance state wage-slave hell. That is a social choice and ultimately up to all of us, though some more than others unless we act collectively to bring about progressive changes beneficial to everyone, not just a small elite. Clearly, if no widespread support develops for a JIG, it won’t happen.

Tschäff then raises another potential political obstacle:

Also you’ll lose conservative support for the JG if you say it’s optional. They like the idea of people contributing to society in order to get something from society, not handouts.

Needless to say, if this view dominates, there will be no JIG.

If by conservatives Tschäff is referring to reactionaries – the kind of people who objected to the abolition of child labor or slavery in the past – I don’t consider their views to be a significant consideration in determining where we should be heading as a society. Reactionaries of this type have opposed most social progress that has ever occurred in the history of humanity. This issue will be no different. If a JIG or something similar ends up being adopted some time in the future, it will be in spite of the concerted efforts of reactionaries to stand in its way.

But if by conservatives Tschäff has in mind people taking more socially concerned positions, it is not clear to me that they would be opposed to a JIG once it is understood that unemployment is a government policy choice. Some conservatives might object on the basis Tschäff suggests, but conservatives who value freedom might find the individual choice offered by a JIG appealing. For religious conservatives, there might be some attraction as well. Matt Franko has drawn some interesting connections in this regard. It’s hard for me to say how conservatives would react considering they are not a homogeneous group.

JG most work isn’t going to be fun, and it certainly will come with a social stigma associated with govt support.

Dismissing work as “not fun” does not really reflect the motivations of most people who want to feel they are contributing in a positive way to society. At the moment, many don’t feel they are contributing meaningfully to social well-being unless they have employment in the formal economy. This is clear from the vast evidence in psychology, sociology and other disciplines of the human costs of unemployment. Currently, there is not enough appreciation of all the socially productive activity that occurs on a non-monetary basis outside the market economy. There is also a lack of appreciation of the potential for much more socially productive activity to occur in this way.

In any case, from my perspective, if a JIG was introduced and most people did happen to opt for the BIG, that would actually be a good thing, not a cause for concern. It would mean that more people had reached a stage where they felt able to make use of their own time, both productively and in leisure, without submitting to the external motivation of the wage labor relation.

The motive for including the JG as an option in the JIG was not because I considered that a preferable option for people to take. If anything, the opposite is the case, since the aim is to enable a transition to a freer society. Rather, the JG was included as an option to ensure that no one was compelled, against their will, to take free time when they still desired the external motivation of the wage labor relation.

Hopefully it is clear that I am not questioning the relevance of Tschäff’s arguments. I think they may very well reflect the current social mood and level of consciousness. But since my motive is to break down those objections to freedom over time, I prefer a policy such as the JIG that would work in that direction, as opposed to the JG in isolation, which on this point (but not on most other points) is actually a backward step from the inhumane policies we have at the moment.

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15 thoughts on “The JIG Promotes Freedom

  1. Wow, I feel very honored to have one of my favorite economists write my name in a blog post. Thank you, it made my day!

    I share your principles re where we should be headed. Principles are easy to formulate, implementing them is a lot harder. It’s easy for economists to say, “Mandate a 20 hr work week!” and “More G, less T!” and “mint a trillion dollar coin!” but in practice change is hard. It requires masterful strategy and some luck.

    Lets face it, if we’re rapidly going to create jobs for everyone, they mostly won’t be fun jobs, there won’t be too many “brain jobs,” you won’t have hardly any autonomy, by and large going to be a few days of training tops and very repetitive. Anyone who’s spent time as a real blue collar worker knows what I’m talking about. Think first scene of Metropolis then add in the horseplay a modern less conforming/disciplined workforce generates. I’m imagining the life described in this article from the 1930’s of one white collared man’s three year experience in the WPA: http://www.scribd.com/doc/54918351/White-Collar-Chokes

    I didn’t mean people will use Facebook all day literally, I was trying to make a silly metaphor for leisure. We have a compassionate society which won’t turn its back on those who can’t support themselves due to no fault of their own, which is why I believe the JG has a political chance for success. I concede your point JG’ers might not resent the notorious BIG’ers because they too have the option to opt-out. However the rest of wage earners will see them as parasites (despite their option of taking a pay-cut and joining them). I can see the headlines already, “Freeloaders grow in size, 16% receive their check from the government for doing… NOTHING.” Simultaneously, wage earners upon examination of their pay stubs will feel increasingly bitter with whatever amount of taxes were deducted. These BIG’ers aren’t the truly needy they are the freeloaders. It strikes just about everyone as unfair that they should have to work (especially unhappy toilers) to support themselves while others chose take a pay-cut and opt-out. If indeed the income guarantee is unpopular, the BIG tax will be seen as freedom stifling.

    Some day we might break this spell that more consumption=more happiness, that if you buy X, Y, or Z you’ll be happier. We’re not anywhere close to that yet, jumping the gun ensures catastrophic backlash.

  2. Peter, another thing that does not get covered in the JG/JIG/BIG discussions. That is the question of the level of compensation. Minimum wage, a living wage, or the median wage.

    In the US WPA era, the workers on the WPA were paid the median wage for the type of work being performed, with the provisio, that no one could work over 60% of the work week. That left them free for other pursuits in the private, or the uncompensated economy.

    Another issue that often crops up is the whole issue of a market clearing wage. I wrote the following at Mike Norman’s, that has some bearing on this topic. In the US, the statutory minimum wage is much below a “living” wage.

    Let me add one thing to the discussion. Make of it what you will.

    Slave owners, by definition had to pay a living wage to their slaves. So anybody paying below a living wage is being subsidized. So who should subsidize the capitalist with a bad business model, who cannot afford to give a living wage to his/her employees — relatives who earn a higher wage, or somebody else?

  3. Clonal, I believe the idea behind the JG is that the government would offer a job to anyone who wants it at the announced wage. Therefore the JG immediately becomes the minimum wage, and the regulation of the minimum simply transforms into the regulation of the JG wage. Companies that don’t offer a wage above the JG would lose all of their workers to the government, so there is no way the JG wage can be a median.

  4. 1. The question as to whether we should have BIG is a bit meaningless in the case of European countries with generous welfare provision, in that BIG is effectively already in operation in such countries. That is, virtually everyone gets some sort of income: if you are not in work you are almost bound to be entitled to some form of social security. But it could well be an idea to formally recognise that BIG has already arrived, and formally implement it.

    2. I don’t agree that the case for JG is bolstered if one wants to preserve capitalism. The communist labour market of Russia prior to the collapse of communism had many of the same problems as capitalist labour markets. E.g. they claimed to have no unemployment, but that claim on close examination was obvious nonsense.

    The latter point potentially bolsters the case for JG. That is, if JG brings benefits to a system where the means of production are communally owned rather than privately own, that makes JG an idea which is of more general application.

    3. “Wouldn’t the JG people resent the BIG people?” That already happens. In the UK for at least the last two or three decades is has been possible, with a little ingenuity to live on social security even though you are perfectly capable of work. I personally know people who have done this. And yes, these “social security” scroungers are “resented” a bit. But my experience is that the resentment isn’t all that viscous. As long as these people do something moderately useful and play a part in the local community, they tend to be accepted, I’ve found.

  5. Dan,

    In the WPA, the worker could not work over 60% time, and was free to work over and above the WPA work. So effectively, could work below the median wage in the private sector, or the informal sector. Therefore, I would argue that it did not have a great effect on the ability of the private economy to hire workers at a lower than median wage. This form of hiring by the WPA, kept worker skills, and set wage standards for different levels and types of skills.

    This price setting function of the government is no different than when it purchases goods and services from the private economy. In the MMT paradigm, Government spending sets prices, and government taxation crates a demand for money.

    Yes, a JG would set labor prices – in other words, it (the market) cannot create a race to the bottom for wages.

  6. “And yes, these “social security” scroungers are “resented” a bit.”

    The problem with them is that they are used politically as examples of why the unemployed need to be whipped a little more.

    There are always people who can work a system. The more complex a system the easier it can be worked as it develops ’emergent behaviour’.

    One possible downside to any ‘guaranteed work’ idea is that it does sort the ‘unfortunate’ from the ‘feckless’ (good unemployed and bad unemployed for Brass Eye fans).

    And that makes it much easier to politically target the ‘feckless’. To which the only answer is compulsory Idler lessons.

    http://idler.co.uk/about/

  7. Peter, it seems to me that the necessary connection between income and work isn’t just a feature of capitalism; it’s a feature of any realistic system for organizing a society, including a socialistic one. Indeed, it has usually been thought to be one of the arguments in favor of socialism that it would strengthen the connection between income and work, and reduce or eliminate the amount of exploitation of the labor of others.

    Whether one calls it a contract or a deal or an arrangement or a custom or an understanding, the social bond is based on an accepted institutionalized pattern in which each person is receiving various goods and benefits that can only be produced through the social organization of work; and in return, each person is contributing something to the social effort that produces those goods.

    Some of the goods we enjoy in life are benefits that come directly from nature, and require no additional human effort. But a large number of them are produced by applying human effort to some of the goods that already exist.

    Some kinds of work are rewarding and engrossing, and people will often do that work because they find it enjoyable. But most kinds of work have a disutility in the sense that they are positively painful or unpleasant, or they are at least fall far short of what that person would prefer to do. We perform these kinds of work, though, because we have to. Human preferences and dreams float high about the material conditions of their lives. These wishes help push us on to make our lives better than what we have now, but our preferences can never be fully satisfied. Living a balanced life as an individual, and organizing a balanced social life, means accepting the reality principle.

    Most of what we designate as “freedom” are positive freedoms that are made possible by the products of human industry. They aren’t the condition of some Garden of Eden that would exist if only it weren’t for all of that capitalist oppression. There is no freedom to read a book at night in a warm room and safety until people produce housing, paper, languages, literature, machines for printing, and heating and lighting systems. Even when I am just sitting and reading, I am drawing on the efforts of my fellow human beings. So the question should arise whether I have myself contributed my fair share to the things others are enjoying.

    What people regard as unjust about capitalism is that people receive incomes that are determined by the size of their preexisting ownership stake in the inputs, and but their bargaining power, rather than by their work effort. They are to that extent getting a free lunch. So I don’t see how the BIG doesn’t perpetuate the same problem. I don’t think we can sustain a society based on asymmetrical voluntarist principle of “Each person gives only so much as they personally prefer, but is entitled to a share of the output no matter what.”

    Every realistic economic system, even a very egalitarian one, has to begin with the understanding that hardly anything we want in life is free. I don’t mean that it all requires money. Money is only a system for organizing the measure and exchange of value. I mean that most of the things we want come into existence from expenditures. You have to destroy something of value in the process of creating something of value, and invest your finite time and energies. So I don’t see why anyone should have a bare unconditional entitlement to what is produced by others.

    We all want freedom. And it is certainly worth thinking about how we might achieve a society in which the more onerous forms of work effort are gradually diminished, and our time is spent much more pleasantly. But since that kind of freedom has to be produced, and in a society of equals no one should have a greater claim on it than anyone else.

  8. In order to exist, society must produce goods and services. The basic requirement for our physical survival is to produce enough food and shelter to allow us to continue living, as well as our children. In a civilized society, enough must be produced for everyone – including people who are unable or unwilling to contribute. In a civilized society, there will always be a segment of the population living upon the labour of others. There will always be a segment receiving a ‘free lunch’.

    The basic requirement for ‘free lunches’ is that we have sufficient resources (energy, materials, labour, technology) to produce a surplus. Most of the nation states on Earth are able to maintain such a surplus. Those who cannot face deprivation, and risk decline and depopulation.

    The other ‘requirement’ is philosophical, ideological or political in nature. The resource requirement addresses whether we can afford free lunches; this one asks whether we ought to provide them.

    Most nation states recognize that it is necessary to provide some semblance of a safety net, if only to maintain civil order. Societies that offer no safety net by choice are a minority. I can’t think of any.

    There is disagreement as to how many free lunches can be provided without undermining productivity to the point where it would no longer be sustainable. Part of this disagreement is based upon an honest inquiry regarding possible consequences; part of it is based on resentment.

    In the capitalist mode of production, those who produce goods and services (the workers) do not decide how those goods and services are distributed. Nor do they have any say in how the surplus (profit) is distributed. Instead, they are given wages in exchange for their time and effort. Those wages are then reduced by taxes to support government policies, including the social safety net.

    Under this situation, there are several possible targets for resentment:
    a) the successful owner, who profits off the labour of workers
    b) the unemployed, willing or unwilling, who consume part of the surplus without having contributed to it
    c) the idle rich, who consume without having to work
    d) organized crime and individual criminals
    e) illegal immigrants, the disabled, etc.

    Most people are selective in their resentments.

    To eliminate control of surplus as a resentment, a worker can either be self-employed or work for a business that is communist (worker owned). Or live in a society where the surplus is distributed democratically.

    To eliminate unemployment as a cause for resentment is to eliminate unemployment, or to redefine what is considered to be a contribution to society.

    JG and work sharing are civilized mechanisms to eliminate unemployment. The BIG would be a recognition that there are other ways to contribute to society, and that we can afford a higher standard of living for everyone than we do now. These policies can be voted on and they can be tested.

    If all else fails, we can resort to the tried and true methods of crisis management, savagery and repression. The 1% would like nothing better than to have us believe we live in a world of scarcity, all the while enjoying their enormous free lunch.

    I’m hungry. Bye!

  9. TR: Lets face it, if we’re rapidly going to create jobs for everyone, they mostly won’t be fun jobs, there won’t be too many “brain jobs,” you won’t have hardly any autonomy, by and large going to be a few days of training tops and very repetitive.

    Not necessarily. During the New Deal, WPA programs included artistic work. There is no reason that basic jobs cannot also be creative other than that the people designing the program are either uncreative or think explicitly of implicitly that the basic work to be perfermed should not be fun.

  10. Clonal: another thing that does not get covered in the JG/JIG/BIG discussions. That is the question of the level of compensation. Minimum wage, a living wage, or the median wage.

    As the floor wage used as a price anchor the wage should be a wage and benefits package that is just about subsistence level for the area. There is wide divergence of living and wage standards in the US, for example.

    The idea is that firms should have to pay more than a subsistence income that includes benefits that would otherwise be socialized. The floor wage as price anchor insures that firms do not socialize part of the wage by paying less then the poverty rate. There should be no “working poor,” i.e., people who are work and also collecting public assistance because of their income level.

  11. The floor wage as price anchor is not the minimum wage. Minimum wage is the lowest wage that firms are allowed to pay. It would not be necessary to set a minimum wage since workers would opt for the floor wage if it were higher. Firms will have to offer at least the floor wage, this will be a market-driven constraint once the floor wage is set.

  12. As we get deeper into the digital age this will all seem like ancient history, and people will find it difficult to believe that a distribution system based on price rationing through markets was thought to be necessary.

  13. Just saw this link at Warren Mosler’s Center of the Universe:

    UK Work for the Dole Proposed

    I think we may be playing with fire proposing a JG in isolation. It seems to me that TPTB will just jump straight to draconian workfare.

    Maybe the order needs to be reversed. Get the BIG established first. (Easier said than done, I know.) Then introduce a voluntary JG for those who want it.

    There may be some right-wing MMTers for whom the current approach of pushing the JG could get them basically where they want to be, but for anyone on the left, I worry that this could be a dangerous road.

  14. How about big first so those just unemplyed could find a job similar to one just lost? Then after a period, jg kicks in with job training benefits so that while they earn survival wage, they learn somthing that will help them get a decent job they like.

    One argument for this welfare program would be reducing the opportunity cost for the society somebody’s unemployment means. A productive member is a tax paying member, not a cost.

    Further, jig could be implemented via voucher program where unemplyed are matched with small and medium size firms where they pay 50% to support competition…

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