|This is not rocket science, Brian (see also).|
A recent exchange I had with online MMTer Brian Romanchuk -- from Canada -- about one of Chris Dillow’s posts turned out to be full of unsuspected revelations. Readers may find it as enlightening as I did.
Dillow, following Michal Kalecki’s famous 1943 essay “The Political Aspects of Full Employment”, argued that full employment (therefore a Job Guarantee) is unlikely in democratic capitalism.
(Arguably, the priority for so-called Keynesian economics should go to Kalecki and not to Keynes, at least if one believes Joan Robinson – probably the second name in the pantheon of “Keynesian” economists and contemporary of both men – and Prof. Bill Mitchell, one of MMT’s founders.)
Bear with me.
This was part of my comment:
“Dillow’s point, which is Kalecki’s point, is that full employment is unlikely under capitalism, MMT or no MMT.”Romanchuk’ succinct reply:
“I read Kalecki’s essay. From my perspective, Kalecki’s opposition is just him talking his book. Marxists have an innate reason to hate the Job Guarantee because it shows that we don’t need Socialism.
“Saying that a policy is impossible to implement has to be literally the worst strategy for campaigning for it. MMTers have read Kalecki, we can understand why some free marketers won’t like it, but that doesn’t matter if you win elections.”Even the least perceptive reader can see that if Romanchuk read Kalecki’s essay, he didn’t understand it at all. Neither did he understand Dillow’s post and certainly not my comment.
But there are other things in his reply deserving comment, if scarcely more.
The first is his poor opinion of Kalecki: a (or even the) pioneering promoter of full employment through “Keynesian” policies must have been a rather dumb ideologue, for not seeing what’s evident to Romanchuk.
Let’s accept that, however, for argument’s sake. We are left with a question: if people are so susceptible to ideological biases, can we be as sure as Romanchuk seems to be of his own allegedly unbiased opinion?
To compensate for his underestimation of Kalecki, Romanchuk overestimates the powers of a benevolent MMT-inspired Government in a liberal democracy. This, I suppose, is how things are to pan out. Against Snidely Whiplash’s
Romanchuk, no doubt, knows a lot more about Canada than I. Surely that’s how things happen over there. Somehow I doubt it would work like that in Australia.
But what really astonished me was the revelation that Marxists have an innate reason to hate the Job Guarantee, for I was not aware I hated it.
I actually used to think I much preferred the Job Guarantee to its alternatives (say, precarious employment at one hand, and the Universal Basic Income at the other). It took Romanchuk’s insightful reply for me to realise how mistaken I was!
And although I understand the reasons MMTers adduce to advance the JG[*], my preference wasn’t based on them. It was based on what I thought was a very good Marxist reason: under JG, workers remain, well, workers, with all the bad and good things being workers entails (MMTers may have read something different or understood what they read differently, but at least in my time, the working class was indispensable for Socialism).
UBI does not offer that.
In fact, mistaken as I might be, I suspect I’m in good company. I didn’t know it then, but I suspect Prof. Bill Mitchell (yes, the guy who invented the Job Guarantee and apparently the only MMT founder who has actually read Marxist literature) could feel devastated. At least in my delirium he seemed to write that the creation of jobs is important “so that workers would be aligned more strongly against capital”.
An everyday example that should speak to trade unionists: JG workers will need unions; UBI recipients will not. As a matter of fact, maybe I just dreamt the whole thing, but I thought I made that argument two years ago, almost to the day (But, do also see my exchange with one Kingsley Lewis: his question, my answer).
That coin has another side, however. Nothing of this is to say I’m totally immune to the allure of the UBI. When I take off my Marxist and union man cap, what remains is a bloke approaching 60. The only two things I have to show for some 45 years of labour are meagre savings for retirement (a situation more common than the Grattan Institute folks want to admit) and arthritic legs that make physical labour that extra bit more taxing.
A sufficiently generous UBI (in my case it doesn’t have to be particularly generous) would be a godsend to me and to those who otherwise will have to work until they drop dead, if they are lucky enough to find work. And, frankly, I don’t see MMTers – certainly not Romanchuk – taking that into account.
And, considering all that, I still prefer the JG. I take that red cap seriously.
One last thing about the JG. Things may have changed, but MMTers’ love for JG, implicitly unanimous in Romanchuk’s view, was far from universal a few years back. I even seem to remember this passage by one Cullen Roche (remember him?):
“Well, this [unemployment] is where we differ. You guys [MMT founders] see no need for unemployment. I do. I think it serves an incredibly important psychological component to any healthy economy. I’ve feared for my job and been unemployed. Those moments shaped who I am and what I’ve become. They were invaluable in retrospect. If I’d been able to apply for a JG job I might not be half the man I am today. Maybe it’s just personal entrepreneurial experience speaking here, but I know what it means to hunt and kill for ones [sic] dinner.”
MMTers invariably reproach those who criticise MMT without grasping its ideas. It’s a fair point, which would carry more authority if MMTers set the right example.
My advice? Don’t shoot from the hip. The likely outcome is to shoot your own foot.
And, really, you guys do need to read more and better.
[*] A JG should appeal to those worried sick with inflation, for it’s meant to provide a measure of counter-cyclical fiscal spending; it should also appeal to those complaining about wage stagnation. People like, say, Philip Lowe, the RBA Governor.
This is how it works: during an economic downturn, Joe Sixpack losses his job. Instead of becoming unemployed and receiving the incredibly shrinking dole designed to harass him until he finds any job paying him peanuts, Joe takes on a job for the JG. Joe’s pay increases fiscal spending, no need for special laws. Unemployment does not increase.
During the recovery, Joe finds a better job and quits JG. No need for
There is something in JG, however, that may not appeal to Phil Lowe: monetary policy – the part of the RBA triple legal mandate the RBA really cares about – becomes superfluous.