Episode 122 – The Case Against a Universal Basic Income with Bill Mitchell
Professor Bill Mitchell was our very first guest on Macro N Cheese, and now here he is, 122 weeks later. Episode #1 was Putting the T in MMT. This week Steve asks him to discuss the single policy prescription at the core of MMT – the Federal Job Guarantee. The discussion goes into the parameters and nuance of the FJG and the pitfalls of a Universal Basic Income as a competing possibility.
Bill asserts that implementing a UBI to deal with unemployment and poverty would be capitulating to the neoliberal claim that government is helpless in the face of unemployment – as if it’s a natural phenomenon. MMT shows us the federal government can buy and utilize the excess unemployed labor force the same way it guarantees a stable price floor to agricultural surpluses. In each case these are resources the private market didn’t need.
Steve and Bill delve into some details of the FJG advocated by leading MMT experts. This is not some ‘dig a hole, fill a hole’ make-work charade, but a federally funded, locally administered program that aims to fill in crucial resource gaps in communities the private sector neglects for a reason. These jobs don’t generate profit, but they are some of the most valuable services, such as the arts and education, or care for children, the elderly, and the environment. The job guarantee directly addresses unemployment and poverty, unlike the UBI.
Steve brings up the automation bogeyman. “The robots are coming for our jobs!” Bill reminds us we are still in charge.
Well, this comes down to this sort of myth that has evolved in this neoliberal era, that the market is supreme. And somehow the economy is beyond us now. And that we have to serve the economy, not the economy serve us, and that we have to pull our belts in and sacrifice and whatever in the name of advancing the economy and the market. Now, I mean, it’s an absurd proposition when you think about it. All of these constructs are our constructs, our legal and conceptual constructs. The economy is our concept. And the idea that we’ve just got to lie down and be whipped by the market is just nonsensical.
Bill further elaborates the FJG is multi-dimensional. In the short run it solves poverty and income insecurity, but in the long term, it will help evolve the concept of ‘meaningful work.’ Jobs don’t need to be soul-crushing, but can actually be personally fulfilling and beneficial to society at the same time. We are only limited by our imagination.
Professor Bill Mitchell holds the Chair in Economics and is the Director of the Centre of Full Employment and Equity (CofFEE), an official research centre at the University of Newcastle. He also is a Visiting Professor at Maastricht University, The Netherlands, and is on the management board of CofFEE-Europe, a sister centre located at that university.
Macro N Cheese – Episode 122
The Case Against a Universal Basic Income with Bill Mitchell
May 29, 2021
[00:00:04.280] – Bill Mitchell [intro/music]
I find it humorous that we get this moral outrage that capitalist firms are pursuing profit. Well, that’s their logic. That’s, of course, what they should be doing within the logic of capitalism. And if we don’t like that, then we should be advocating to abandon capitalism.
[00:00:24.320] – Bill Mitchell [intro/music]
All they want to do is dollop out a bit of basic income to them and tell them to piss off. They’re not to demand work. They’re not to demand skill development. They’re just to be able to consume. And I find that is deeply offensive characterization of my fellow society members.
[00:01:35.210] – Geoff Ginter [intro/music]
Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.
[00:01:43.100] – Steve Grumbine
All right, this is Steve with Macro N Cheese. Folks, I’ve got my friend Bill Mitchell joining us. Bill, excuse me, Professor Bill Mitchell holds the chair in economics and is the director of the Center of Full Employment and Equity, CofFEE, an official research center at the University of Newcastle. He is also the Docent Professor of Global Political Economy at the University of Helsinki, Finland. He is one of the co-founders of Modern Monetary Theory MMT and I’m also proud to call him my friend. Welcome to the show, sir.
[00:02:21.070] – Bill Mitchell
Thanks, Steve. Glad to be here.
[00:02:24.510] – Grumbine
So one of the things that everybody used to point me to when I was just getting into Modern Monetary Theory was that Bill Mitchell is the godfather of the job guarantee. He comes from the Michal Kalecki school. He’s got a full employment mind. And we’ve talked about this many times in the past.
But it’s become almost vital that we discuss the differences and the purpose of not just the job guarantee, but the universal basic income, in fact, I think most of today will be spent trying to help those out there who think we’re just big meanies when we say no universal basic income. A lot of them really don’t understand that we’re not just telling them that we want them to dig a hole, fill a hole, that that’s not the intent at all.
So it’s obvious that the basic income clan has done a very good job of marketing and unfortunately people haven’t really taken the time to understand the impact of a universal basic income scheme. And so I guess let me throw it to you. Can you describe what a universal basic income is and just lay out at a high level why it’s not the answer?
[00:03:50.340] – Mitchell
OK, I mean, it goes back to Milton Friedman. In the late 1940s with his negative income tax proposal. And I think that’s interesting, the provenance is interesting in itself, given how enthusiastic people who would normally say they would be anti-Milton Friedman type ideology embrace basic income. So many universal basic income is quite clearly a payment from government.
Universal means that it’s not means tested, which means it goes to everybody, including, in your context, the wealthiest Wall Street bankers and industrialists, Koch brothers, those type of characters. And it’s paid to everybody at the same rate, irrespective of any contribution back to society. And that’s deemed to be a right. Now, where do you start on criticizing it?
At a very high level, the way I would start would be to consider what it really means where this modern impetus for basic income came from, and it came from the rising unemployment at the beginning of the neoliberal period in the 80s and the 90s. And the poverty that that unemployment obviously generates and in the academy, the preponderance of basic income accepted almost without criticism the idea that the state couldn’t do anything about the unemployment.
This rise in unemployment was a natural consequence and this, of course, was the success of the monetarist narrative that to control inflation, we had to accept a rising natural rate of unemployment. And there was nothing the government could do about it, and if it tried to do something about it, it would cause inflation. And so the basic income academics then took that as given. And said, “Okay, well, it’s a poverty problem we’ve got to deal with.
If we can’t do anything about jobs, then we can do something about the poverty by giving everybody a basic income.” Now, my fundamental objection at that level is that that’s sort of surrendering to the neoliberal idea that the government can’t do anything about employment and of course they can.
The government can always create employment and a currency-issuing government like the United States government, can always bring productive resources, including labor, that are currently not in productive use, can always bring them back into productive use. And so just rolling over and saying, “Well, we can’t do anything about this unemployment,” is, to me, just surrendering to the neoliberal idea that the unemployment is the natural given.
And really then obviating the focus of a debate on what’s the function in a neoliberal society of maintaining elevated levels of unemployment and, of course, its wide suppression and maintaining a threat to workers that if you don’t tow the line with your boss, you end up like the others on the unemployment tape, that there’s plenty to choose from because we’ve now got an expanded pool of workers who are unemployed.
And I think surrendering and endorsing and having policies that accept that particular state is not a progressive position to have. And I think that’s the position that a lot of the academics who started in the 70s and 80s to talk about basic income quite significantly do hold. So that’s the first point and then the second point is that, OK, we know that unemployment is being used to discipline the inflationary process.
It suppresses the ability of workers to push for wage increases. And it also puts pressure on business firms not to push up prices significantly because the unemployment is typically associated with more subdued product markets, the sales environment. If unemployment rises, the sales environment becomes more subdued. And so I find it an offensive and very wasteful. Offensive is a moral term, but wasteful is an economic term.
It’s a very offensive and wasteful policy position to use an unemployment buffer stock, a pool of unemployed, to address structural issues that generate inflation. Now basic income proposals, essentially, retain that method of inflation control because effectively what the government is doing is through their agents, the basic income recipients, spending at market prices.
And so if you have a pressure in the economy that spending in the economy is starting to push up against productive capacity, then that in many instances will create inflation or inflationary pressures. And that’s because everybody’s competing for less resource available at market prices. And so a basic income is just part of that story. And as a consequence, it has to accept the fact that using unemployment as an inflationary discipline is retained as the principle way of keeping inflation stable and not accelerating.
Now I find that is an incredibly bad way of dealing with these structural tensions in income distribution between workers and bosses fighting over the pie, the available pie. And I think a much better way of dealing with that is through employment guarantees. Now, then, we can broaden the debate even further into moral territory, and my view of society is that everybody who can’t work for whatever reason, age or infirmity or whatever is entitled to a guaranteed material standard of living by society.
And anybody who can work should be given the opportunity to work for the government in one way or another, either in jobs that they can secure themselves through the private sector or the mainstream public sector, or if that’s not possible, given the circumstances for that individual, they should have always a guaranteed job in the public sector.
And that that’s the way in which we can resolve poverty rather than allowing or buying into a position where people who are able to work don’t work and don’t contribute to society and rely on the productive enterprises of others for material goods and services. So there’s a whole range of criticisms. And that’s just a start of it.
[00:11:39.100] – Grumbine
Let me just add this to what you just said. So from my position, I think of the public sector in a very favorable way. I see the public sector being our sector. It’s our voice. It’s our way of modeling society. And I don’t have a lot of good things to say about the private sector in terms of the for profit sector or the motivations that they have for the means of how they measure their success and for the way they discipline workers by necessity, because their ability to thrive and prosper is dependent largely on keeping wages down while driving profits up.
So when I think of the public and the job guarantee, which is an alternative, it’s not necessarily in competition, but it’s an alternative serving the public and providing the right and a guarantee to a job. Most people I talk to often think that we’re talking about just putting them into private sector work. And one of the key factors there to me is the very redefinition of what it means to work, what work is for the public purpose, and this is often just skipped, missed, ignored, sometimes in bad faith.
And for me, when I think about what does society need and a lot of the things that we need may not be very profitable, they may not be something that would profit a corporation. And so when I think about the job guarantee, I see a lot of the things that many of the folks that are championing a basic income scheme often saying things that I would, quite frankly, put into a job guarantee, a locally administered, federally funded job guarantee.
But I guess my question to you is a lot of the jobs that the private sector hires for, it’s just pushing paper from one side of the desk to the other. I wouldn’t really call that contributing to society. A lot of these jobs are a waste and they actually have a very deleterious effect on the environment. So what is fundamentally wrong with hiring people into the public sector to do public good as opposed to just meaningless work? But we often don’t even think about what we can do with the government providing jobs. What is so good about private sector employment?
[00:14:08.150] – Mitchell
Well, look, it’s interesting, really, because you’re having grown up in America and I’ve grown up in Australia, our understandings of the public sector are quite different. So we have a much larger historical experience with public enterprise and public activity, whereas the most that Americans interest in the public sector is probably through your postal service, whereas we’ve got broad interactions of that public sector. So that’s a difference.
And that might condition what I say. In a capitalist system, and we should be clear on what a capitalist system is, but in a capitalist system, we shouldn’t be surprised that the private sector pursues profit. And at the basis of the capitalist system is conflict between workers and bosses, between the owners of capital and the owners of labor.
Because workers want to do as little as possible and get as much back in the form of wage and salary payments and of course, bosses want them to do as much as possible and pay them as little. Now, that’s simplifying and obviously more enlightened workplaces, et cetera, and different professional workplaces, the workers have more broader concepts of work than other workers, and bosses have broader concepts of their responsibilities.
But by and large, the dynamic of capitalism is one of conflict between the classes, labor and capital. And we shouldn’t be surprised. I find it humorous that we get this moral outrage that capitalist firms are pursuing profit. Well, that’s their logic. That’s, of course, what they should be doing within the logic of capitalism. And if we don’t like that, then we should be advocating to abandon capitalism.
A lot of left-wing people think that way, including myself. But that then opens up well, what’s our perception of the non-private sector, the government sector, the public sector? And we should always think of the government, the public sector as us, it’s our agent. There are things that we can’t do individually that we want done for each other that require the scale and the organizational capacity of a much larger institution, and that’s what our governments are for.
And so the way we measure what a government does should be fundamentally different to the way we measure what a private sector firm does. And one of the elements of neoliberal period of our history and the privatization and the key performance indicators and the user pays and all of these elements that go into that system of thinking and practice has been to try to render the government like a corporation.
And all of our attitudes about the efficiency of government programs and this is what user pays is about. We’ve got to pay for it. It’s got to return a monetary return. Now, all of those things are applicable and concepts are applicable to a private firm in a capitalist system, but not to a government. And the way we conceive of productivity, that is output per unit of input has to be different when we think of government activity relative to private activity.
Now, the last thing we want in any activity is wasted resources because that’s environmentally damaging. But the way we think of what’s sensible for a public sector to be doing should be different and should reflect the goals of what we want our agent, the government to be doing, and we want it to be advancing generalized well-being, however you want to define that in terms of access to resources, access to work, access to health, education and upward mobility and security and all of those things, a good retirement when you’re too old to work, safety nets, when you’re too sick to work and protection of children and all of those things.
And so once we start thinking like that, then what we should expect from government employment is quite different to what we might expect from private employment. And so one of the things that we can get away from in terms of thinking about job guarantee employment is that it’s going to be a narrow reflection of what low-skilled work in the private sector might look like. And so I always think of the job guarantee as being a multidimensional thing.
In the short run, it solves poverty and gives workers job security and income security. But over time, as we evolve social attitudes, through education, that’s what education does, makes us more sophisticated in our thinking, then we can evolve the concept of meaningful work, that it’s not just about working for a private boss to make profit. It’s about generating social returns and generating happiness and generating inclusion. And so I use the example of surfers on the East Coast of Australia.
Now, I would offer them jobs in a job guarantee in an evolutionary way of pushing the limits on what we mean by productivity. Now, what would they do in the job guarantee? We’ll let them go surfing and enjoy themselves. But what else might they do? All this summer that’s just gone, we’ve had almost record level of drownings on the East Coast, on the beaches, and that’s a perennial problem in summer. And who best knows the water and the dangers of water?
The surfers, of course. And so I would have the surfers by way of reciprocal contribution back to society as part of their responsibilities as a government employee to be taking water safety lessons for schoolchildren during the winter periods and training people on water safety and water awareness. Now, that’s not going to make money. It’s not going to make profit. And that’s why no private sector employer will do it.
But it’s incredibly socially productive and useful to society, and it gives people inclusion and income. So I think you’re correct that this idea that the job guarantee is just workfare in disguise is just a putdown that’s based upon no information at all. We can dream big on what these jobs might look like and what expanding people’s opportunities and ability to contribute, and that’s why I say job guarantee is being an incredibly evolutionary concept to radicalize our notion of what productive work is.
[00:21:20.910] – Grumbine
I love it. One of the things that you just said, that I want our friends that feel the UBI is their friend and will come to me and say, “I’m an artist,” or “I like music,” or “I’m a writer,” or any number of these things. And I say, “Great, we can compensate that in a job guarantee.” If, why not do something you both enjoy that fulfills you and benefits society and they never think of it that way?
The robots are coming and automation is going to wipe out anything that resembles employment. So therefore there is no alternative. We must provide a neoliberal, excuse me, a basic income like that, that neoliberal in there. But the truth is that the very things that they say that they would like to do, they could do in a job guarantee scheme, and I want you to tell me if I’m right or wrong on this.
If I take 40 hours a week and I’m doing something, it’s 40 hours a week, that a job, if I have a basic income, cannot subsidize their poor wage with my basic income. If I am working a job guarantee job, whatever that is, that puts me in a position where they can no longer use that income as a means of fattening their wallets. Is that a fair way of looking at it also, if the basic income doesn’t cover all my needs, then I would need to get a job and they would just subsidize that with crap wages? Do you agree with that?
[00:23:01.270] – Mitchell
Well, there’s two points to think of. First of all is the context. Now, I get this raised to me in public presentations, “I just want to do my art,” I’m told. I just want to be left alone to do my art. And that’s a fundamental sort of justification for basic income.
But what I would say is that so in that context, you’re considering yourself to be an individual with just your own needs and you’re going to go off and try to satisfy those needs with a bit of basic income to make sure you don’t starve and you’re treating everybody else in the workforce as being a provider for your needs. And to me, that’s sort of a neoliberal idea, an individualism, that you’re just the center of the universe.
Now, I’m not saying that I’m not, but in my view, we get a self-esteem. We get feelings of goodness about ourselves if we’re seen to be contributing and helping other people as well as them helping us back. So the context then shifts. If you’re employing artists and musicians under a job guarantee, they’re doing their art and playing their music.
But they might also be required as part of their working week to go into schools and teach them about putting together bands and how to write music and what sort of guitars to have, and different tunings and all the things that go with being a musician or an artist with different types of contributions and rising musical appreciation and appreciation of art and sculpture and dramatic performance and all of these things that we could fund under a job guarantee that the person would be doing their own art, but they would be doing it in a different context of contribution.
They would be seeing themselves as advancing art appreciation for students and whatever else they were required to do. And I think that’s a fundamental shift in perception away from individual to society. The person is still doing their art, they’re still being paid a decent wage, but they’re contributing. Now, the other point I’d make is that and this has always been the vexed issue of basic income.
And even the academics in the beginning who were really pushing the idea acknowledged that if the basic income is set too high, well, then there’s a fundamental problem that it’s probably going to be inflationary. Because it would be too much expenditure at market prices, probably. It has that bias and also in their context, not my context, but their context, the tax would have to be too high to pay for it.
Now, I don’t think in those terms, but that’s the way they used to think. And so, therefore, the only way it could be viable and for them, they used to argue that if it was too high, too many people would take it and the productive side of society would fall. In other words, there’d be less workers producing things and that would be inflationary relative to the number of people demanding the product.
So to resolve all of those problems, some of which I accept, some of which I don’t, the taxpaying for it, I don’t accept. They have always come out with a small basic income. Now, then, the problem is that that doesn’t satisfy a socially inclusive income. If it’s very small, you’re still really living in poverty. And so the question then is, well, what happens next?
Do those workers then get forced back into the workforce in some way into low-skilled jobs because they wouldn’t be able to display the continuity of work and work history or all of those things that matter to getting well-paid employment? And so you’ve got all these dilemmas then. And for me, it’s much better just to pay a socially inclusive minimum wage. People work, contribute, and we resolve all of those problems in that way.
[00:27:19.510] – Grumbine
Let me ask you another question that I think you’ve triggered in me here. When we’re talking about people as activists in particular in the United States, people are wondering if we wanted to bring about socialism, some other more balance of power between capital and labor and public ownership by giving a basic income, it frees people up to organize and do these things.
And so this is a very real thing on the left, those who have leftist ideals, those who are trying to see the inevitability of revolution and other such things, a basic income allows them the time to work together to organize. And most certainly the government’s not going to subsidize them as they work to, quote-unquote, “overthrow them.” So I guess my question to you is this.
A lot of people see this as just a capitulation to capital. On one level, they don’t think the universal basic income is. However, in America, anyway, a lot of the Silicon Valley billionaires would like to see a basic income instituted because they see it as an opportunity to gig-ify the economy, among other reasons. I’m just curious on your feedback on that. I know this is a little afield from our normal talks, but just curiosity. I know that you being a follower of Michael Kalecki and also one of your influences being Marx, where you would fall in that realm?
[00:28:51.980] – Mitchell
Well, we can start with social psychology. We don’t have to delve into political philosophy at all here. And what we know in modern societies and these results are pretty much universal across all the societies that sociologists and anthropologists study is that your ability to organize is a function of the breadth of your social networks.
And the breadth of our social networks vary, but they’re fairly rich when social psychologists do networking analysis they find quite broad social networks in the way in which we interact with other individuals in society. And what they also know is that a lot of that network construction is done through workplace interactions and being employed, meeting people for work and all of those things.
What they also then know is that when a person becomes unemployed in this current societal cultures, which sort of called advanced Western cultures – America, Australia, Japan, all of these countries, Europe, Britain – is when a person becomes unemployed, the social networks start to shrink. And the longer they’re unemployed, the greater the shrinkage and in the end, their social networks become extremely narrow.
Now, there’s various reasons for this as just practical reasons that you’re not interacting with as many people on a daily basis. But there’s also psychological reasons that you start to lose self-esteem, confidence, you start to have feelings of failure and those type of emotions. And in the end, your social network becomes very narrow.
And so I think people who have this idea that “Oh, we’ll just have everyone not working, not interact in a conventional sense, and they’ll suddenly become broad aggregators of social action,” that’s pie in the sky. It’s highly likely that given the cultures, if you’re a basic income recipient, you’ll be considered similarly to a dole recipient and considered to be a taker and unproductive and a loafer and all of these things.
And I think that while those slurs are unfortunate and incorrect, they have resonance. And as a consequence, I can’t see that a person who’s consigned to a basic income in a society that doesn’t produce enough jobs will suddenly become networked and active. I think it’s probably the other way. Now, then the question relates, we can then think about the motivations for the top end of town, the Amazon-type owners, and that, who advocate basic income.
Well, what they want, of course, is to maintain consumption. Because that’s how they realized profit. So they’ve identified that unemployment and technological change, et cetera, may well increase unemployment, and so the last thing they want is people not being able to continue to consume in one way or another. And so for them, their motivation is quite clear to me. It’s quite transparent that they are conceiving of workers who have been cast off as unemployed because society is not creating enough jobs because we’ve been convinced government can’t create work.
They are conceiving these human beings with all of the capacity to be socially rich, et cetera, not rich in material, rich in social network terms, they’re conceiving of these individuals as being consumption units that all they want to do is dollop out a bit of basic income to them and tell them to piss off that they’re not to demand work, they’re not to demand skill development. They’re just to be able to consume. And I find that is deeply offensive characterization of my fellow society members.
[00:33:36.440] – Intermission
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[00:34:25.630] – Grumbine
It’s interesting, as I think about this, one of the things that jumps out at me is ultimately, if we don’t have a way of attacking things like climate change and basic human needs, that it doesn’t really much matter how much cash you have on hand anyway. To me, I find myself drawn to the concept of universal basic needs, whether that’s a real thing or not, but I do know and we talked offline a little bit about this, that inflationary pressures come a lot of times.
I know there’s multiple ways this can happen, but when production doesn’t meet demand and you have a scarcity of key services or materials such as petrol or medical care, and you have a large number of people that are demanding it and have means of accessing it. And by driving the price up with scarcity and such, if you only got a thousand dollars, and health care costs a thousand and one, well, you’re shit out of luck.
And to me, the idea of providing the necessities of life so everyone has dignity and that no one is left without shelter, food, medical care, education. And then once you take care of those basic necessities, then you start asking, “What is it exactly that we would want a basic income for? Why would we want that if we took care of the needs of the people?” Because otherwise, you’re saying, “Hey, I’m going to give you this tiny amount of money.
You better figure out a way to get your basic needs met or you’re screwed.” And if prices go up, that UBI better keep going up with it unless we’ve instituted some sort of capital and price controls. I don’t know how you would in any way be able to guarantee anyone could even eat with a basic income scheme. I know that seems far-fetched for some folks to understand, but to me, that seems like a very important point.
You’re not guaranteeing anything. You’re giving them cash and you’re leaving it to the private sector to fulfill their needs who has a profit motive to fulfill those needs. Tell me where I got it wrong?
[00:36:43.500] – Mitchell
Don’t be so defensive.
[00:36:46.260] – Grumbine
Just being silly.
[00:36:48.190] – Mitchell
I know, look, these questions are the big questions of what we think are human rights. And I think a sophisticated society in 2021 with the sort of technology we’ve now got and the engineering capacity and the agricultural capacity and all of those things, our concept of human rights should have evolved and should be very broad as to what we expect as the basic satisfaction of human rights.
Now, this is tricky because we’ve also got to then talk about absolute and relative poverty and the sort of things that have tortured development economists over the years. The right wing often say in Australia, “Oh, you talk about poverty in Australia, but nobody’s like they are in India.” Well, in most cases that’s true or in Africa or something that’s true.
But Amartya Sen gave us wonderful insights into relative concerns that poverty is also a relative term in terms of the standards of the society that we’re talking about. And so it’s not for me to say that a poor person in India who’s basically starving is equally unhappy as a person in Australia who’s extremely poor but isn’t starving. But a person who is extremely poor and not starving in Australia is still miserable by the standards of the society I live in.
So these are vexed issues and I understand them and our concept of human rights and evolving that concept has to take into account those issues. My view is that the things that you articulated like access to education, clean water, power, hospitals, public transport, communications, which we used to think about telephones, now we think about the Internet, all of these things, they’re just basic rights, in my view, in terms of any society that aspires to be sophisticated and advancing human capacity and dignity.
Now, the private sector isn’t going to provide those things and we shouldn’t be surprised about that. I go back to my earlier comment. The private sector in a capitalist system is there to make profits and a lot of these things they can’t make profits on. And that’s why they’ll always undersupply them if they’re relied on to supply them. And that’s why we want governments, because governments become our agent as I said before.
We measure their performance in a totally different way, and we measure them in terms of how they do satisfy the human rights needs of society. So I’ve got no issue about the idea of guaranteed basic services, and that means health and education and all of that. But we still need income because income gives us choice, gives us the ability to risk manage and to build a life to aspire to be more than the basic services.
And so then the question is, does basic income become the human right that health and education access and information access and communication access is in my view? And my view on that is that it’s not that what the human right relating to income is, is the right to a job. That a right to be able to use your capacity to work and earn an income, to allow you to risk manage and have a material standard of living that is above that basic level.
Now, anybody who can’t work, as I said before, for whatever reason, should be given a socially inclusive income to live on. But I find it quite impossible to accept a view that if you can work and contribute to the well-being of society in material terms through your labor and expand the capacity of all of us to enjoy our material side of our lives, then I think if you can do that, you should do that.
And I think the government should give you the opportunity to do that. That’s their responsibility. And that if you choose not to do that, then that’s fine. But then you’ve got to sort out what you want to do about the income. Now, I know the left are critical of that view, but at the same time they’re critical of capitalists and capitalists do exactly that.
They don’t do anything for their income. Capitalism gives an unpaid income via the extraction of surplus value from workers to capitalists. They do nothing yet the left criticize that dramatically and make it the cornerstone of their critique of capitalism, which I share. But I also then extend that and say, “Boy, if you can work, you should work and you should contribute,” and that expands the material space for all of us.
[00:42:00.430] – Grumbine
I like this. In primitive cultures, primitive societies, whether there was money going on or not, whether it was even that advanced, you had people hunting, you had people gathering, you had people tending to the children. And the communities work together to ensure everyone had what they needed. And I find the concept of us not contributing to be really almost a misnomer because I think the word job gets in the way.
I think the word work gets in the way, because when you think about the moral stance of this stuff, it misses the point of in a real productive economy, in a productive society where you’re not in a rentier class, where you’re just soaking up surplus and basically stealing from labor, it makes sense that people should contribute, not in the sense of working for the man.
Redefining what work even is and the ability for people to contribute to their local community to provide value, social value., doing things in your community to serve your community, not to serve capital, there’s an ingrained resentment against the capital class that makes the concept of work in that way not so much laziness, but in defiance of capital.
And there’s a part of me that understands that thinking because I resent capital as well in that sense. But we’re not talking about that. And I think it’s very important to make that distinction. Do you agree with my position there or do you have a different perspective?
[00:43:49.240] – Mitchell
No, I think that goes back to our earlier part of this discussion that the type of jobs that we can create that are accessible to the most disadvantaged workers, the ones who are always made unemployed first when there’s a downturn. So the type of jobs that we can design and provide to those workers have got to be accessible to those workers.
But they’re limited by our imagination, and the primary criterion is that they are delivering well-being and that the education that should support that evolution of thinking in terms of what’s productive endeavor helps us understand that these jobs are not, in your terminology, working for the man, they’re working for everyone, they’re working to expand the opportunities for all of us.
And I think you can dovetail this evolution of thinking into what we’re going to have to do anyway with respect to climate change, for example, things are going to have to become more local. Agricultural production is going to have to become more localized. So you can think of community gardens as major employers if you want to, and lots of personal care services that are green in resource usage, but fundamentally expansive to human potential and capacity and opportunity.
And all of this way of thinking is not remotely like the sort of things that some on the left accuse me of regularly. I’m characterized as a right winger these days. I mean, the extraordinary meaninglessness of English language and terminology. But the things that I think of the job guarantee could usefully embrace are light years away from sweatshop labor for the man.
I would think for an appropriate education program where we would have people enthusiastic about working for each other and for the most disadvantaged workers that are always at the bottom end of the wage distribution and that are always the first out when the unemployment rises, they would be wallowing in the income security and the job security that this would provide them and light-years away from the insecurity and precariousness that the capitalists provide them increasingly for the gig economy.
[00:46:23.040] – Grumbine
I love Tolkien and was watching Lord of the Rings the other day, and I remember as Gandalf rode into the town and he’s got the fireworks on the back and the Gleeman comes through and they’re going to have Bilbo Baggins’ eleventieth birthday, you just see everybody that contributed. And you think about what are some of the simple joys of life?
What are some of the ways that family mattered more and that you had more time to be with family? And I think these are real democracy and community enhancers. I think that considering a well-targeted, well-designed job guarantee that also provides transition from these bad sectors like coal mining and forms of employment that are toxic to society and harm us, the idea of providing them a just transition into other forms of employment, another way of seeing this, another aspect of moving to a more inclusive and just society. What are your thoughts on that?
[00:47:32.130] – Mitchell
Sure. Way back when I first started writing about this in the late 1970s, believe it or not, gosh, one of the things that I noted was that in the 1960s when we had very low unemployment, like below two percent, and a federal government would lose an election in Australia if unemployment crept above two percent, we had a sort of dynamically efficient economy.
And what did I mean by that is that job vacancies were always running ahead of the unemployed pool. And what that did was force the bosses to not only offer job positions, slots, work opportunities, but they were also forced then to take whoever they could find and mold them into the specific needs of the job through job-specific training.
And so there was never skill shortages or difficulty in finding workers. There was always difficulty finding workers. Firms had to work overtime to make sure that they extracted workers, paid them decently, had good working conditions so that they were attractive workplaces to come to and because of the shortage of workers available. And that was very efficient and dynamic.
And my view is that if we go back to an economy where we really push unemployment right down to its irreducible minimum through a job guarantee, now I’ll come back to that point I was about to make. But let me finish this point. And we make the “worst,” in inverted commas, jobs in society, decent. So the job guarantee work becomes decent work where there’s secure conditions, opportunities for training and upskilling and upward mobility, income security, not pernicious workplaces, oppressive workplaces.
Well, then that becomes attractive to workers in the gig economy who are increasingly exploited in low-income, precarious work. It’s just obvious that the private sector then has to change its modus that was relevant when there was a big pool of unemployed and underemployed labor where they could get away with various work practices and nefarious type of dealings with their workers and not offer them training, etc.
Once you alter that context and eliminate the unemployment, well, then the firms have to change their behavior radically. So that’s a win-win. But the point I stopped at and was going to make and then I decided not to logically in order is this – that a lot of people who criticize MMT economists think that the job guarantee is the end of the story. And for me, the government should aim at all times to make the job guarantee a smaller pool of people as possible, it should be the last resort, not the first resort.
And in general, the public sector should be creating well-paid, secure, career-oriented, high skilled work. That really pushes the boundaries of society into high technology, high skill, high pay, and not see the job guarantee as the end of the story. The job guarantee is the essential basic necessity, but it’s not what we should aspire to as the solution.
[00:51:04.720] – Grumbine
Let’s talk finally about automation and the sharing of automation. Patents seem to be abused to almost tyrannical levels and the ability for all of society to receive and reap the rewards of automation should, in my opinion, be a mandate. If you think about this, if I buy a tractor, that tractor may depreciate in value to zero over five years, but that doesn’t mean it’ll stop being useful after five years. I might get 20 years out of it.
Why should we not, as a society, benefit from automation and allow us to serve greater purposes through self-fulfilling work? Why should automation not serve society? Why should it only serve the wealthy? One of the largest pushbacks on the job guarantee is the concept of automation coming. We know that that’s not really true. The numbers don’t bear that out and that work is always been redefined. The wagon wheel maker still hates the steel radial. The abacus maker the calculator.
[00:52:23.340] – Mitchell
[00:52:23.690] – Grumbine
But that said, it is a lie that has been sold with great efficacy. It’s been sold in a great way as people buy it. What is your take? First off, I guess let’s take a crack at sharing in the benefits of automation. And then secondly, let’s take a look at whether or not automation is really, in fact, making work a relic of the past.
[00:52:46.620] – Mitchell
Well, this comes down to this sort of myth that has evolved in this neoliberal era, that the market is supreme. And somehow the economy is beyond us now. And that we have to serve the economy, not the economy serve us, and that we have to pull our belts in and sacrifice and whatever in the name of advancing the economy and the market.
Now, I mean, it’s an absurd proposition when you think about it, that all of these constructs are our construct, our legal and conceptual constructs. The economy is our concept. And the idea that we’ve just got to lie down and be whipped by the market is just nonsensical. All my life I’ve wanted to have a fast motorbike and I get frustrated because I’ve got to stop at red lights and I’ve got to drive at 60 kilometers an hour in built-up areas and on highways, I can only go 110.
Now, sporting competitions are constrained by salary caps and draft procedures and all sorts of regulative constraints on the technology, if you like, and so in all walks of life, we accept the fact that we control the show and we form objectives and regulations and controls that are what we perceive as being in our best interests.
We don’t want people speeding through a red light, so we put a restriction, a constraint on their cars. We don’t want people speeding along our highways too much because it’s dangerous and they’ll kill us all. And so why, when we come to technology that is related to work, do we think that that’s not controllable? And of course it is.
We can put constraints on anything we choose as a society, and we should only conceive of technology as being to help us work less, work more easily, work more safely and generate more material prosperity within the envelope of environmental sustainability. And we restrict lots of technologies now. We don’t let medical scientists clone human beings.
I’m sure they’ve got the technology to do it. So that’s my view that we are in control if we want to be yet, we’ve been sold this story that somehow there’s this Armageddon out there of technological change is going to wipe us off the prosperity map. Well, that’s just ridiculous. And we will fight against that and we will win that battle. And in that sense, we will evolve, I think, to a situation where we do use technology to our advantage and we discipline it when it’s not to our advantage.
[00:55:38.940] – Grumbine
Very good. So, Bill, I want to thank you so much for this. I value your opinion tremendously and it’s dicey waters out there. We are up against an incredibly efficient, well-funded machine in the basic income community. And it’s a veneer-level, thin-based ploy, in my opinion, that grabs desperate people, instead of taking the moment to step back and consider what, in fact they’re signing up for.
And so you’ve been very eloquent in your presentation today, and I really appreciate that, because I know people feel differently here. They have a perspective that makes them question whether or not a job guarantee is a good thing.
I struggle with how they could come to that conclusion, but I recognize that, in fact, there are people out there that have been convinced otherwise. And they really haven’t considered what this public option for employment really would be, and you’ve done a great job of painting that. And I want to thank you so much for that.
[00:56:49.340] – Mitchell
Thanks very much for that.
[00:56:51.190] – Grumbine
You’ve been doing some teaching. You’ve done some classes with your MMT Ed. You’ve been giving lectures. Tell me a little bit about what you’ve got going on, Bill, and how people can find you.
[00:57:04.730] – Mitchell
Well, MMTed is evolving. We’re financially constrained as a private organization and getting funding has been slow. But we’ve already now run what’s called a MOOC, a massively online open course that had about 3,600 students. We got great feedback from that course.
That was an introductory course that was run through ADEX, which is one of these MOOC open source providers that’s given us great capacity. Now, we’ve learned a lot in terms of constructing virtual educational environments and we’re busily filming and doing our second course and reconstructing the first course so that it can be offered again. So MMTed is a goer.
It takes about four to six months to build a course, a four-week course, believe it or not. They’re incredibly time intensive and resource-intensive, just the editing processes of the media and putting all the written material together. So I’m expecting the second course, the intermediate course, to float in October and the rerun of the first introductory course to be before then, probably around August.
That’s sort of feasible given our capacity within our little organization and the funding that we’ve currently got. So I’m always seeking funding, but I know with Covid, etc., it’s made it very difficult to raise funds for these type of nonprofit activities. And I understand that. And we’re just doing our best within our resource base.
[00:58:41.610] – Grumbine
Very good. Well, I know for a fact that a lot of people really enjoyed it and I signed up for it, had the best of intentions.
[00:58:49.380] – Mitchell
Yeah. So it’ll be run again. No worries.
[00:58:52.650] – Grumbine
I look forward to it. Well, look, Bill, thank you so much for this. I look forward to talking to you again. Please pass on my love to Louisa and hope to have you back on soon.
[00:59:01.900] – Mitchell
Yeah, all the best. Thanks a lot, Steve. Take care. Well done.
[00:59:05.100] – Grumbine
You got it. This is Steve Grumbine and Bill Mitchell with Macro N Cheese. We’re out of here.
[00:59:16.310] – Ending credits
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