Now there are bound to be several objections to this idea. An entire rebuttal would take a piece of book length, but in the interests of brevity, I will respond a few of the more notable objections. I’m sure there will still be objections, but I cannot reply to all of them.
1.) Work provides dignity to the poor. This is so ridiculous I’m not even going to give much of a response. Work is the major source of humiliation, not dignity, for the poor. How much dignity does that McDonalds worker have, really? See, for example, Working conditions at an Amazon Warehouse, or this story to see the kind of jobs the poor are forced to do:
For about five years, Ms. Farley, 45, stood alongside about a dozen other workers, spray gun in hand, gluing together foam cushions for chairs and couches sold under brand names like Broyhill, Ralph Lauren and Thomasville. Fumes from the glue formed a yellowish fog inside the plant, and Ms. Farley’s doctors say that breathing them in eventually ate away at her nerve endings, resulting in what she and her co-workers call “dead foot.”
A chemical she handled — known as n-propyl bromide, or nPB — is also used by tens of thousands of workers in auto body shops, dry cleaners and high-tech electronics manufacturing plants across the nation. Medical researchers, government officials and even chemical companies that once manufactured nPB have warned for over a decade that it causes neurological damage and infertility when inhaled at low levels over long periods, but its use has grown 15-fold in the past six years.
Hopefully these types of jobs will be automated out of existence. The only people who actually believe this canard are wealthy upper-middle class workaholics with substantial control over their working environments.
Are we really to believe that people have no other way to derive meaning in their lives. Really? Do they have no families? Do they have no hobbies? Do they like to garden? To sew? To do woodworking? To hunt? To teach children? To cook? Are we to believe that the ball they are given to balance on the tip of their nose for a mackerel is the only thing that allows them to participate in society as a fully functional human being? How sad is that?
2.) It is morally objectionable. . People will not lift even a finger to help themselves without the whip and the lash of utter destitution. Everyone must work of they do not eat! There is a problem with this – when you actually talk to people, you find that many of them want to work, but are given no outlet under the current system. Those factory workers laid off? They would have been happy just keeping their factory job, but we decided that it was not economically valuable anymore, or that other workers or robots could do it cheaper. Is that bad? After all, foreign workers need jobs too. And despite pronouncements from politicians and economists, you cannot simply retrain workers after years spent in other professions and expect employers to hire them. It simply doesn’t work that way.
Plus the jobs market is extremely selective and fickle. Employers are wary of hiring and seek to find the right fit. Again, that’s not a bad thing, it’s how it should be. We do not want to force people into jobs they don’t fit into, which seems to be the logical outcome of the “jobs for everyone” crowd. People do want to work, but they want to do work they feel is valuable, and they want to have a modicum of control over their circumstances. Plenty of people have talents to give, but because of the constraints of the system, they cannot deploy them under the way we’ve structured the labor market. Maybe they can work part-time or maybe they can work intermittently, but we don’t give people that opportunity because we’ve set everything up to require a regular paycheck (rent, mortgage, other expenses).
And as for the lazy moochers? Well there’s no evidence that people naturally want to be unemployed or unproductive. Here are some relevant portions of the NPR piece. You’ll notice not one of these people conforms the lazy, greedy “Chedda gets cheddar” stereotype of modern conservative imaginations:
Scott’s dad had a heart attack and went back to work in the mill. If there’d been a mill for Scott to go back to work in, he says, he’d have done that too. But there wasn’t a mill, so he went on disability. It wasn’t just Scott. I talked to a bunch of mill guys who took this path — one who shattered the bones in his ankle and leg, one with diabetes, another with a heart attack. When the mill shut down, they all went on disability.
JOFFE-WALT: Taliyah McFadden is 27 years old. She’s been on the disability program most of her life. She suffers from anxiety and depression. When she was 17, she tried to kill herself. The one time Taliyah had a very part-time job tutoring, Social Security saw she was making some income and they reduced her check. Taliyah freaked out when this happened. She quit her job. She says her symptoms come and go. She’s not confident she could hold down a full-time job.
So she doesn’t want to do anything that can threaten a dependable, secure monthly check. That’s incredibly valuable to her, although when she talks about her experience working as a tutor, it sounds like that was pretty valuable too.
MCFADDEN: Most of my students said I trust you. And, you know, and I felt like – I felt appreciated, you know? Sometimes the parents just say that the kid wouldn’t stop talking about me, you know, so…
JOFFE-WALT: So that must have been hard to give that up.
MCFADDEN: Yeah, because it kind of gave me a sense of wanting to be and wanting to live.
JOFFE-WALT: It gave you a sense of wanting to be and wanting to live?
MCFADDEN: Yeah, because, like, I just feel like I don’t belong, like I’m not helping to make things better.
3. We cannot afford it. Really, why is that? We are affording it now. Besides, this implies that we are not a wealthy enough society to provide a basic standard of living to every person, regardless of whether they can find work in this paradigm or not. That we do not have the resources. But is there evidence for this. After all, we just conjured up 700 billion dollars out of thin air to make the bankers whole and billions for war, didn’t we?
This is bound to be the major objection. Indeed, there is an entire industry paid for by wealthy oligarchs to advance this view, and they are doing a brilliant job exploiting the “crabs in a bucket” mentality of lower and middle class Americans. But the objection is always a) the debt! and b) you cannot have ‘x’ number of Americans not working supported by ‘y’ number of people working. Upon closer scrutiny, neither of these makes sense.
Part of this is a misunderstanding of debt and resources. First off, debt is an artificial creation. It is a side effect of how we create money that it must be issued as a debt. That is a choice. And debt is totally separate from the resources we have on hand. As many have pointed out, because debt is designed to grow exponentially, it will always overwhelm the resources of the real world. Always. The question is, do we want to plunge the actual, real world into poverty and let resources lay idle and have people without work because of this artificial creation of debt? As David Graeber among others have pointed out, debt has always been a tool used by the rich to oppress the poor. As Paul Erlich put it:
“We just finished a presidential election I which no serious issue was ever debated. In the United States, we’re seeing all this stuff about fiscal cliffs and debt limits and so on. All these things are trivia that are easily settled by negotiation among human beings. For example, nobody ever mentions that for every nickel of debt, there is somewhere a nickel of credit; that you could rearrange things, it would involve some transfers of wealth, but nonetheless people could solve that with paper and pencil, or at least with computers. What people don’t seem to understand is, you can’t negotiate with Nature.”
So are we not a wealthy enough society to support x number of people not working? I don’t think the numbers justify it. The issue is not resources. We have thousands of empty houses. We throw away vast quantities of food. We have more than enough stuff. The issue is money – a human creation that we have decided to make artificially scarce. The idea that we cannot “afford” this is preposterous.
Forty years from now we will be, on average, twice as well-off as we are today.
The key words in that sentence are “on average.” As a society, we will produce far more than enough goods and services to preserve Social Security and Medicare in their current form without making younger people worse off. But these programs will consume a growing share of total societal resources, and since they are administered by the federal government, that requires higher taxes.
So the real point isn’t that we can’t afford Social Security and Medicare. It’s that some people don’t want to pay the higher taxes necessary to maintain Social Security and Medicare. This is a question of distribution, pure and simple.
At first blush, it may appear that young people don’t want to pay for retirement benefits and health care for old people. But most of us will be both young and old at different points in our lives, so we’re on both sides of the transfer. The real issue is that Social Security and Medicare are risk-spreading programs, which means that rich people end up subsidizing poor people.
When people say that we can’t afford our entitlement programs, they’re really saying that rich people won’t pay the taxes necessary to sustain our entitlement programs. To be fair, many rich people probably would be willing to pay higher taxes if they knew the facts. But a small number of extremely rich people have successfully spread the myth that we can’t afford our entitlement programs.
Decades ago, Congress decided that anyone who worked for ten years, and his or her spouse, deserved a basic level of health insurance. If they deserved it then, there’s no reason they won’t deserve it in the future. And as a society, we can easily pay for it. The reason we’re talking about cuts to Social Security and Medicare is that some very influential people don’t want to pay for it–and they’ve convinced everyone else that we can’t pay for it.
A large part of this is what and who we decide to tax. Another has to do with extreme and skewered maldistibution of wealth. And yet another has to do with runaway health care costs which are borne by taxpayers but subsidize the private sector. A massive amount of charts follow this article that I think demonstrates that the “debt crisis” is an artificial creation, and we are plenty wealthy to afford a post-work society. The underlying problems of money as debt and how we settle our accounts is what must be dealt with. Basing our system around usury is the problem. Under the current system, we need to borrow to spend. That is the problem. If you are obsessed with “the debt” why don’t you fix that first?
“The present value of the unfunded liability is ‘only’ $9 trillion.”
Are you scared yet? After all, it’s “only” $9 trillion. Didn’t you love that sarcasm? Yes, $9 trillion is a lot of money… But if we are having a serious discussion, we would talk about this as a share of future income. It’s about 0.7 percent of future GDP. Does that scare you?
That’s a bit less than half of the cost of the wars in Afghanistan and Iraq over the last decade, that’s hardly trivial, but that expense would not impoverish our kids. Medicare and Medicaid are projected to cost more but that has nothing to do with the old stealing from the young, their higher costs are the result of doctors, drug companies, medical supply companies and other providers in the industry charging us two to three times as much as their counterparts in other wealthy countries. If we paid the same amount per person for our health care as people in other wealthy countries then we would be looking at long-term budget surpluses rather than deficits.
As this article describes, Social Security can remain solvent simply by minting a trillion-dollar platinum coin. This may feel like some sort of “cheat” but that is how the money system works – it’s all cheating! It’s all a game, subject to whatever rules we wish to apply, rules right now written by the rich for their own benefit at our expense (consider the Erlich quote, above). Money is just a hallucination. The sooner we stop thinking of money and debt as real things, allowing us to deal with the actual real things in the economy (such as unemployment and resource scarcity), the better off we will be. We can no more run out of money than a builder can run out of inches or the New York Yankees can run out of points. And no, we’re not ‘stealing from our children.’ Our children are also the creditors! It’s money we mostly owe to ourselves, thus “we” can theoretically forgive it at any time. And if you think issuing our own money will cause the Chinese to own us, you may want to ask exactly why that is (hint: Americans aren’t paid enough to save).
Debt is a number on a piece of paper. But people not being able to work or eat or get an education or being kicked out of their home because they cannot pay rent or mortgage is a real thing. Do not confuse the two. And all the fretting about there being nothing by IOU’s in the Social Security “vault” is ridiculous; all our money is IOUs. Any bond is an IOU. Half of corporate America would be insolvent if there were no IOUs. All of this talk is just the wealthy insiders using their knowledge of the system to bamboozle the poor into thinking there is a crisis. The wealthy, I can assure you, deal in debt for a living; they are not worried in the slightest.
Now, suppose this surplus had been invested in corporate bonds. What exactly would that mean? It means that workers would be giving money to corporations, who would turn around and spend it. In return, the Social Security trust fund would receive bonds that represent promises to repay the money later out of the company’s cash flow. In effect, it gives workers a claim on the cash flows of the company at a later date in time. When that time comes, the company would have to pay up, which would make it less profitable. If the company was already unprofitable, it would make their deficit even worse. If that’s what had happened, there would be no confusion about the trust fund. Everyone agrees that corporate bonds are real things, and that the corporations who sell them have an obligation to pay them back, even though it means less money for shareholder dividends.
An accounting trick could have headed this “crisis” off years ago (Al Gore’s much-derided “lockbox”), but the wealthy made sure this was not implemented specifically to bring about this crisis, and are making sure we believe the crisis is real so that we will accept the suffering and so public assets can be liquidated. As Matt Yglesias put it:
As Mark Schmitt wrote last year regarding a book from Welch and co-author Nick Gillespie this assertion that America is “out of money” has become an all-purpose crutch through which Reason can push an ideological agenda of skepticism about programs without actually making the case in its particulars. But it’s simply not true that we’re out of money. Many states and municipalities are up against hard budget constraints, but the US government has the ability to create US currency in unlimited quantities. It hasn’t run out of money and won’t ever run out of money. It would be nice for people to understand this point separately from controversies over whether public sector programs are wise or just. In principle, the US government could print up or borrow a ton of money, hand it to state governments, and then have all the money used to cut taxes rather than to finance programs. This would not be possible in a world where the US government faced a hard budget constraint but, fortunately, we don’t face any such constraint. The possible downside to a policy of greater reliance on money-finance or debt-finance is that it might make holding dollar-denominated financial assets less attractive to foreigners. That, in turn, would make imported goods more expensive domestically and American-made goods cheaper on foreign markets. If the United States were already at full employment that would be a very bad tradeoff, amount to a decline in average American living standards. But at a time of mass unemployment, it looks like a pretty good tradeoff that should raise per capita output and average incomes.
But whether you think that would be a good idea or not, the important thing is that the question of whether we should be borrowing more is entirely separate from the question of whether the borrowing should finance additional spending or lower taxes.
Joe Weisenthal has an important, if overstated, post along these lines arguing that the Clinton-era budget surpluses hurt the economy. His point is that households and firms, unlike the US government, can’t run a perpetual budget deficit. People and companies are mortal and can’t issue currency. We can borrow money and sometimes should borrow money, but over the long term income and spending need to add up in a way that isn’t true for currency issuing sovereigns. Yet when the federal government runs a budget surplus, this has to be matched by extra borrowing elsewhere. That sets the broader economy up for a debt crisis over time, as borrowing is pushed away from the entity with the greatest capacity for borrowing (the federal government) and onto firms and households who eventually do face hard budget constraints.
We’re Not Out Of Money (Slate)
And as Michael Hudson notes, it is private, not public debt, that is the real problem.
Even without this, as many other commentators have pointed out, phasing out the arbitrary ceiling on collecting Social Security taxes would ensure the long-term solvency of the system. This is doubly required because all of the nation’s income and productivity gains have been accruing to the top. And bringing down medical costs in line with the rest of the world would fix government-run health services permanently, with room for expansion. After all, we printed massive amounts of money to give to the bankers, and no one objected to that. But if we did the same for unemployed people it would be Armageddon? Come on! If you want real people to suffer just so that we can pay off this imaginary quantity called debt, then I think you’re a sociopath.
And as for inflation, generally conditions of rising energy costs, mass unemployment and high debt levels are not conducive to inflation. Inflation overall has been quite low, and costs that have inflated are either due to either underlying resource scarcity and rampant speculation (gasoline, real estate), or merciless, unregulated price gouging (education, health care). Both of these have solutions (e.g. regulation, rationing). As pointed out above, this scheme would actually help conserve resources, by allowing people to say in their homes and consume and drive less, for example.
Again, please see the charts to see just how wealthy we are as a society, and how little of that wealth is possessed by the 99 percent. To cite just one statistic from the articles above, one single family in the U.S. is now worth as much a 40 percent of the American workforce! Here’s another: “Incomes and tax revenues have grown from 2009 to 2011 as the economy recovered, but an astonishing 149 percent of the increased income went to the top 10 percent of earners. If you wonder how that can happen, the answer is simple: Incomes fell for the bottom 90 percent.” That, not debt, is the real problem. And of course we pay as much for “defense” as the rest of the world combined, surrounded by two oceans and having friendly neighbors on both our borders. We can’t afford it? Who is “we”? Come on, get real!
4. People who work will resent those who don’t. This is one I’m particularly sensitive to, and I agree that is a real and valid concern. There are a few workarounds.
One of the reasons I advocate reducing the work week hours and job sharing is because it gets around the “freeloader” problem, even though in many ways it’s not an ideal solution. We all continue to work, just less. Right now we have rampant overwork and unemployment side-by-side. We can do better.
As for structural unemployment, or the “skills mismatch,” government can and should do more to get people skills and hook them up with employers that need those skills. This is what countries like Germany do. Expecting workers’ skills and employers’ needs to automatically align by osmosis is a losing gamble. How is the average person to know what the skills economy will demand in the future? How will people pay for the training they need? Dumping people out into the world after high school with no support and mumbling stuff about collage is not going to lead to a good match between work that needs to be done and workers able to do it. It’s like having postal service where letters are put into bottles and tossed into the ocean to find their intended recipients.
If we must have people work, How about we suit jobs for people, rather than people for jobs? Rather than “from each according to his ability to each according to his needs,” how about we take care of all our needs by letting each contribute according to their ability? We can certainly do this in the context of capitalism.
For example, what if the unemployed couple in the NPR piece in Alabama were required to grow x pounds of food in their garden and give it to a local food pantry in exchange for a check? What if we allowed Talliyah in the excerpt above to work when and where she can, without threatening to cut her off if she makes “too much?” It’s obvious that she will work; the only thing stopping her is the way we’ve structured the system. What if we had a system where we let people work from home on a computer, similar to Amazon’s Mechanical Turk, in exchange for a check? What if had people watch other people’s children in exchange for their check (subject to safeguards, of course)? What if we made a check contingent on x amount of volunteer hours instead of fruitlessly searching for work? Heck, I would rather have people knit shirts in their own home in exchange for a check than have them do it in prison. There are plenty of ways for people to contribute to society and not be” freeloaders”. The problem is the only way have set up to contribute now is to have a “job” provided by the private sector and nothing else. We can we do better.
In other words, here’s your check for $700 a month. We won’t take it away -go do whatever work you feel is valuable and fits your skills. Would some people do nothing? Maybe. But it’s better than committing crimes. I would go so far as to say the formerly working classes would work more if we simply gave them a check with no strings attached. That way they could work around whatever difficulties they may have, instead being limited by them. This view of people as inherently lazy freeloaders will tear us apart, pure and simple. It is counterproductive in the extreme, and might I add, sociopathic. One wonders why the politicians who espouse it aren’t ridiculed and humiliated instead of being elected to Congress.
And yes, this is government job creation. This is what we did before, during the last Great Depression. As professor Richard Wolff described in an interview:
“[…] The last time we had a breakdown of our capitalist system like this, we didn’t have austerity, we didn’t have cutbacks. We had the opposite. Roosevelt, in the middle of the ’30s, created the Social Security system, went to everybody over 65 and said, “I’m going to give you a check for the rest of your life.” He created the unemployment compensation system, giving all the unemployed for the first time checks every week for a year or two. And he created a public employment program and hired millions of workers. It’s the opposite of austerity. So any politician who says, “We must do this, because there’s no option,” has forgotten even the American history of not that long ago…Roosevelt went on the radio to the American people and said, basically, “If the private sector either cannot or will not provide work for the millions of Americans that need and want to work, then it’s my job as president to do it.” And he did it.”
“And I think Mr. Obama could and should overcome whatever has made him hesitate. We in this country not only don’t have a federal employment program, the Republicans and Democrats haven’t even put it on the floor to debate it as an important issue, even though it comes out of our own history. So I would say, put us—put our people to work. They want to work. The Federal Reserve says 20 percent of our tools, equipment, factory and office space is sitting idle, unused. So we have the people who want to work; we have the tools, equipment and raw materials for them to work with. And lord knows we need the wealth they could produce. Put them to work, and make it a national issue that that happen.”
A lot of people sitting idle are blue-collar workers, including construction workers. Why can’t they install insulation or solar panels? Why can’t they build trains or fix roads and bridges? And even if they have a physical handicap they still have knowledge to contribute – maybe they can supervise or train other people. Government jobs can work around people’s disabilities, while still allowing them to contribute. Can you only work a few days a week? Can’t do physical work? Then we’ll make a job for you. If this is what need to do to “justify” giving people money, then I’m willing to live with it. What I’m not willing to live with is just telling people “you’re on your own” to find a job when there are none on offer.
Another idea put forward by the Modern Monetary Theorists is the “Jobs Guarantee.” Here is a brief introduction:
One more point – one more plank in this three-point program to restore fiscal and monetary sanity: let’s give everyone who wants to work and is able to work some *work to do*. A currency-issuing government can purchase anything that is for sale in its own currency, including the labor of every last unemployed person who is still looking for a job. So, a key policy recommendation of Modern Monetary Theory is the idea of a “Job Guarantee”. The federal government should take the initiative and organize a transitional-job program for people who just can’t find work in the private sector – as it currently exists in real-world America today. Because the smug one-liner that starts and ends with: “Government can’t create jobs – only the private sector can create jobs!” is about the un-funniest joke on the planet right now.
The government creates millions of jobs already. Isn’t soldiering a job? Isn’t flying the President around in Air Force One a job? What about all the doctors and nurses down at the V.A. hospital, and the day-care workers on military bases? They certainly all appear to be employed. When you go into a convenience store to buy some – uh – local-and-organic Brussels sprouts, say, how closely does the clerk examine the bills and coins you tender? Did any clerk or cashier ever squint or turn your five-dollar bill sideways and back and ask, “Hmm.. are you sure this money came from work that was performed in the private sector?” No. They didn’t. Because the money governments pay to public employees is exactly the same money everyone else gets paid in.
What Is Modern Monetary Theory, or “MMT”? (New Economic Perspectives)
The government is not “taking over” or “crowding out” the private sector, it is picking up the pieces where the private sector has utterly failed. The fact is, the private sector does not want to employ very many Americans anymore. That’s just a fact. If they ever do again, then fine; if and when there is a shortage workers, then is the time to “shrink” the government, which would be done with my blessing.
The government does not need to “burden” the private sector with taxes for these “unproductive” individuals. It can print the money. Yes, it’s printing money,” where else do you think money comes from? Government spends money into the economy all the time. What we’re currently doing – “printing” money and giving it to private banks to loan into the economy isn’t working, because there’s no demand for good and services because there are no jobs! Besides, there is no evidence whatsoever that higher taxes throttle job growth. The lowest unemployment in America was when taxes were double what they are today.
And if some of these jobs are waste, so what? Does anyone really believe there is no waste in the private sector? I doubt anyone who has worked in the private sector can believe that. I’ve worked in both, and the major source of waste in the public sector has to be the absurd salaries for executives and managers, and useless and counterproductive initiatives put forward by people to justify their jobs and make them look like they are doing something for the next yearly performance review. I would prefer some waste in the public sector rather than having the private sector compelled to hire people they don’t want or need.
Other creative ideas can be forthcoming. Richard Wolff describes one alternative in Italy:
“They have a law there, passed in 1985, called the Marcora Law after the name of the legislator. Here’s what it does. It offers a choice to unemployed workers. You can take a dole every week, an unemployment check, the way we do in this country, or you have an option, an option B that we don’t have. If you get at least nine other workers to make the—unemployed workers, like yourself, to make the following choice, here’s what you can get. As a lump sum, you can get your entire unemployment program of two years of checks in your hands right at the beginning; you have to have nine other workers or more, and you have to use that money as the start-up capital for a cooperative enterprise. The idea of the Italian government was, if we give workers this to set up a job and an enterprise, they will be much more committed to it than they would if they didn’t have that role.”
There are an infinite number of way for people to contribute outside of a “job;” we just have to tap into this human capital. So if you objection is on these grounds, I would suggest you should get behind this idea. Because, really, what is the alternative?