The Moral Hazard of a Job Guarantee
I’ve been thinking about the Job Guarantee — I think it’s an important idea. The NAIRU system is obviously flawed. Human immiseration is used as a raw material to buffer demand. The Job Guarantee solves for this, and would, all things considered be better than an unemployment based system.
However, I have concerns. These concerns stem in part from my being influenced by the Anarchist philosopher David Graeber (who actually knew about MMT and produced a book with deep relevance to this topic, his magnum opus *Debt*). Graeber was deeply skeptical of bureaucratic structures and entrenched cultural assumptions. His book *Bullshit Jobs* is essentially a wholesale critique of the institution of employment itself.
Private companies are very capable of creating wasteful employment; jobs where you must be present for 8 hours but only really work 4. Jobs that exist to keep some badly designed systems running, instead of just fixing the system. Entire industries (advertising, tax compliance) that either produce very limited social value, or are perversely self justifying (you need a tax specialist or tax software because the tax code is designed to support this cottage industry). In many workplaces perverse incentives can become crippling. People slow down their work to fill the time. Efficient or creative workers are rewarded with additional work. It can create a bad incentive structure, and a crushing sense of hopelessness or pointlessness.
Automation is also coming quick. I work in an automation exposed field. Huge amounts of time in the economy today are spent on things like data entry in excel, which can be automated easily. Huge amounts of business processes and administrative activity are in principle capable of being automated. In China factories are being built that use a fraction of the labor of traditional factories. The premise that the economy always needs more workers in organized employment is worth questioning.
With all this in mind, I want to hear how the best defenders of the JG respond.
How do we determine the shape of work? Should people continue to work 40 hour weeks? Are there systems in place to return time to workers if the need for work diminishes? Are jobs task oriented (do X and get paid) or time oriented (work 8 hours, get paid)?
Who decides what tasks are needed? How do we prevent powerful people or even institutionalist insiders from manipulating this? If my job is to supervise JG workers who dig holes and fill them back in again, I might have an incentive to say “man we’ve got a lot more holes to dig, work never ends!”.
How would such a system cope with very high unemployment, or with a private sector that had a diminished capacity to absorb workers?
How do we evaluate the social benefit of work? Similar jobs could have divergent outcomes. A team that practices sustainable landscaping with native plants versus a team of leaf blower and lawnmower crews — one is creating more beautiful spaces, providing habitat for wildlife, improving the environment, the other is causing noise and air pollution and degrading the environment. Depending on your values and esthetics we might think “I like my parks looking neat and tidy” — how do we ensure a robust ongoing debate around what is being done?
How do we treat non formalized care roles (caring for children or the elderly in your family)?
Finally, how do we value human freedom in a JG system? Are efficient or creative workers rewarded or punished with more work? Is there some system in place to reward creative work, art, philosophy, writing? Or are we locking the next DaVinci into an 8 hour shift doing some drudgery?
My preferred base case solution is a UBI with property / sales taxes becoming the dominant tax most people pay. UBI removes the regressive nature of consumption tax, since basic consumption is supported. Taxes could be paid through the payment system (calculated at point of sale) with minimal compliance and administrative costs. The system could be made progressive, with luxury purchases being taxed more than food. This could serve a macro stabilization function, as consumption heats up, tax revenues grow.
Anyway, I actually think there’s a lot of good in the JG idea. There are many things we could be doing to improve society. I remember my late grandfather saying “we could have our roads lined with roses tended to by government employees, with the government serving as the employer of last resort” — it’s a sentiment I agree with. But I think there is moral hazard in work. Work can be productive, rewarding, and beneficial, but it can also be a power structure mandating that you spend your time doing something you wouldn’t otherwise want to do, Somthing with limited social benefit. Work can be useless and wasteful. Work can be degrading. Make work isn’t, in my opinion, an acceptable solution to economics — make work is a tragic waste of limited human life. A JG would need to be thoughtful about these issues, in my opinion, for it to be a *good* system.
I’d like to hear the MMT community reaction to this. What are your thoughts?