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MMT's policy solution of a Job Guarantee will serve - unless accompanied by a shift in the fiscal base - mainly to enrich rent-seeking owners
It seems to me that argument is conflating the job guarantee with the broader guaranteed living income.

The job guarantee by increases the amount of goods and services on offer, whereas a generic living income is not guaranteed to do so.

Finance is the brain [tumour] of the economy

by Carrie (migeru at eurotrib dot com) on Mon Jul 22nd, 2013 at 04:34:49 AM EST
[ Parent ]
Has a living income been tried anywhere? The usual arguments - that it's inflationary and destabilises market signals (i.e. rich people can't exploit it) - may not apply in practice.

The more I think about these arguments, the more it seems the bottom line is whether collective wealth and intelligence are hoarded by a tiny minority or distributed more evenly.

There's plenty of evidence that distribution increases general wealth and prosperity, and also creates more innovation.

The hoarders are only interested in relative wealth- which is something else entirely.

It's astonishing - not at all - that most economics is about pin-level fairy stories of the 'If you do this, something else happens' type.

But there's been almost no interest in causal relationships between inequality, political instability, and the destruction of social intelligence - which in practice means limited ability to invent and innovate.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jul 23rd, 2013 at 05:55:17 AM EST
[ Parent ]
Ahmadinejad has just implemented transfers that seem to be on the level of the minimum wage, called "economic jihad" by The Economist.
The government cleverly doled out two months' worth of family cash transfers, amounting to some $90 per person, before unleashing its shock. When the first tranche of price rises hit, quadrupling the cost of some kinds of bread and shooting diesel prices up by 2,000%, among other things, there was barely a peep from the public. Iranians have rapidly got used both to paying a lot more for some things and to having more money to spend as they wish. A family of five now pockets monthly sums close to Iran's minimum wage, enough to pull a big proportion of the 10% of Iranians who live on less than $2 a day above that bar. Yet tight controls on the money supply have kept inflationary pressure lower than feared. By some counts it has already fallen from an annualised 20% in March to 14% in May. With government finances now in better shape, that may drop still further, and quickly.
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Jul 23rd, 2013 at 06:11:54 AM EST
[ Parent ]
The usual arguments - that it's inflationary and destabilises market signals

Mild inflation and controlled prices are financially stabilising...

Finance is the brain [tumour] of the economy

by Carrie (migeru at eurotrib dot com) on Tue Jul 23rd, 2013 at 06:20:17 AM EST
[ Parent ]
But in neolib world, inflation is always world-ending ZOMGWTFBBQ hyper-inflation.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jul 23rd, 2013 at 07:28:42 AM EST
[ Parent ]
What about Alaska? The oil-dividend thing is quite substantial, isn't it?

And the social ethos seems quite socialist, whatever party badges they choose to put on it.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Tue Jul 23rd, 2013 at 07:48:59 AM EST
[ Parent ]
$878 last year, according to Wikipedia. Hardly a living wage.
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Jul 23rd, 2013 at 08:00:55 AM EST
[ Parent ]
Has a living income been tried anywhere?

2008-2010, in Otjivero in Namibia there was a pilot project where every adult gets 100 namibian dollars a month (50 for kids, payed to the mother) for two years. Resulting in more economic activity, less poverty, crime and malnourishment. The pilot project came about as a result of the claims that the 2002 Namtax proposal of universal living income faced.

Similar project in Ghodhakurd in Madhya Pradesh in India in 2012. They got 300 rupees a month, half for kids.

Both were intended primarily as poverty relief (hence the low sums) and as such appears more efficient then other projects. Neither has been continued or led to national projects. According to Guy Standing at University of London this is primarily because of pressure from IMF and the World Bank.

This info is courtesy of Grus&Guld, JAK Sweden's dead tree paper. JAK is a bank for interest-free saving and loans.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jul 23rd, 2013 at 11:40:55 AM EST
[ Parent ]
Let's do some numbers.

According to recent estimates, in Spain there are 1.4m households where nobody is working, and half a million households with no income.

The relative poverty level (60% of median household income) is about €15k a year.

So, if you decided to pay €15k per household to the 500,000 households with no income, it would cost €7,5bn per year. Since Spain's GDP is roughly one trillion per year, it would cost less than 1% of GDP to "artificially" bring all the households with no income above poverty level.

€15k per year for 2m households would come to €30bn per year, or 3% of GDP.

If you believe in the quantity theory of money, this could accelerate inflation by 3%. But it you make this into a job guarantee programme there would be additional goods (but mostly services) provided by the programme participants and inflation would be reduced.

What, we can end poverty and unemployment for 3% of GDP? Why are we not doing it?

Finance is the brain [tumour] of the economy

by Carrie (migeru at eurotrib dot com) on Tue Jul 23rd, 2013 at 11:53:22 AM EST
[ Parent ]
Because banksters would rather sit on their little piles of shit than be forced to share it with peasants.

No, really. That is the reason.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jul 23rd, 2013 at 12:08:28 PM EST
[ Parent ]
You can become the richest person in the country by accumulating the most wealth and claims on wealth and by destroying the wealth of others. That is why the very rich are fond of depressions. All they have to do is lock up their wealth until they can use it to buy up on the cheap the assets of the newly bankrupt.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 23rd, 2013 at 12:58:19 PM EST
[ Parent ]
You've just described the game of 'Monopoly'.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Wed Jul 24th, 2013 at 05:53:45 AM EST
[ Parent ]
Yes, but the game of Monopoly comes to an end when that happens. I'm not sure that's what the real life winners want.....
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Jul 24th, 2013 at 05:56:56 AM EST
[ Parent ]
No, no, then land value tax is introduced :)

History of the board game Monopoly

The history of the board game Monopoly can be traced back to the early 20th century. The earliest known design was by an American, Elizabeth Magie, patented in 1904 but existing as early as 1902.[1] Magie's original intent was to publish a board game to illustrate an economic principle, namely the Georgist concept of a single land value tax.[2]


Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Jul 24th, 2013 at 07:02:26 AM EST
[ Parent ]
Fascinating! Too bad it would be such a legal hassle to sell an updated version that included Magie's second stage land tax and, possibly, other alternative rules. That would be subversive. Perhaps call it Monopoly Satire, as satire has some status as protected speech in the USA.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 24th, 2013 at 10:16:17 AM EST
[ Parent ]
was a Georgist teaching tool about the land tax...

Finance is the brain [tumour] of the economy
by Carrie (migeru at eurotrib dot com) on Thu Jul 25th, 2013 at 04:52:24 AM EST
[ Parent ]
Though it would be less than €30b/yr given multiplier effects.

Indeed, whether or not it is a job guarantee program, the Spanish economy is sufficiently depressed that there will be no appreciable inflation from a 3% boost to national income.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jul 23rd, 2013 at 01:17:34 PM EST
[ Parent ]
An interesting conclusion in the Namibian pilot project was that employment went up, not down.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Tue Jul 23rd, 2013 at 02:01:13 PM EST
[ Parent ]
Also, the empirical evidence appears to be that minimum wage legislation does not increase unemployment.

Finance is the brain [tumour] of the economy
by Carrie (migeru at eurotrib dot com) on Tue Jul 23rd, 2013 at 02:17:09 PM EST
[ Parent ]
A Town Without Poverty?: Canada's only experiment in guaranteed income finally gets reckoning | The Dominion
But this experiment happened much closer to home. For a four-year period in the '70s, the poorest families in Dauphin, Manitoba, were granted a guaranteed minimum income by the federal and provincial governments. Thirty-five years later all that remains of the experiment are 2,000 boxes of documents that have gathered dust in the Canadian archives building in Winnipeg.
by generic on Fri Aug 16th, 2013 at 06:33:20 AM EST
[ Parent ]

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