Brenner on competition

Max Sawicky sawicky at epinet.org
Thu Sep 17 08:47:48 PDT 1998



> Max it seems to me naively that while economically
> I agree with you, socially creating new demand
> is a big problem. Logically during the great depression
> in the US if you simply had the government print
> money and hand it out to people without jobs who
> have clearly unmet needs you have created the demand you needed.
> Ditto this would be welcome in any deflating economy.


> Furthermore, you end up undermining all the class distinctions
> based on money status, important motivators in the current world
> for sure.

Not really. You're not making people rich by providing them money for necessities they had in the former, more-than-destitute station. You're precluding business failures. Stabilizing the economy might actually do more to preserve class distinctions. It should not be confused with deliberate redistributive policy that aims for permanent changes in class relations.


>
> Furthermore, if you do this on a regular basis the need
> to work at anything but the most enjoyable job becomes
> unnecessary. You remove the major incentive for labor at
> unpleasant jobs which will be necessary for the forseeable
> future in any industrialized economy.

These policies apply to downturns in the business cycle. They would not be permanent and ongoing.

You raise the incentive issue. Obviously the incentive to work depends in part on where the guaranteed income floor is, if there is one. If it's near the minimum wage, someone who aspires to more than that still has to go to work. Another factor is social stigma. Those who are able to work and accept aid are subject to the disapproval of their peers, and rightfully so, since their peers are paying taxes to support their indolence. (Before somebody blows their top, let me note that any such judgement depends on the availability of jobs.)

Critics of welfare tend to overstate the prevalence of the 'slacker' mentality, in my view. I would hazard the guess that most people want to be 'normal,' in the sense that they want to work and earn their way and reach a standard of living beyond the poverty line.

It is not true that the elimination of low wage jobs, if that is what is effected by government policy, prevents an economy from functioning. Some European social- democracies have been doing this as deliberate policy for years. They may suffer a high unemployment rate as a result, but their economies survive nevertheless. The jobs are either not done or are exported to other countries. An example: in Germany there are relatively high standards of training and pay for retail clerks. When you walk into a store, you get a professor of whatever is being sold. Low-wage jobs of this sort are curtailed. Of course, stuff costs more too.


> . . .
> Interesting in this regard was Nixon's guaranteed national
> income proposal. Nixon proposed this a long time ago
> on the grounds that it was the most "efficient" way to get
> people off welfare. Neglecting the details, I thought the
> idea was a terriffic one. The welfare beaurocracy opposed the
> program for obvious reasons and it had no popular support
> for reasons outlined above.

This bill was killed by a coalition of left and right. The right opposed it for the usual, obvious reasons. The Nat'l Welfare Rights Org and allied liberals also opposed it ("Zap FAP!") because, while raising national average benefits, they feared it would have reduced benefits in states with above-average levels. How well it might have worked is another story, though it looks like paradise compared to subsequent proposals from Carter, Reagan, and Clinton.

MBS



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