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> "There was room for improvement, he argued, for what he called “job-centric” economics and politics. In a job-centric system, job creation would be the nation

> "There was room for improvement, he argued, for what he called “job-centric” economics and politics. In a job-centric system, job creation would be the nation’s No. 1 objective, with the government setting priorities and arraying the forces necessary to achieve the goal, and with businesses operating not only in their immediate profit interest but also in the interests of “employees, and employees yet to be hired.”" Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly. In the most reductive analogy it creates incentive for the government to create "hole diggers" and "hole fillers" type of jobs that, in aggregate, generate very few useful work while fulfilling this basic goal of job creation. I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one. As an example of its dangers it suffices to see the kafkaesque process of fund allocation (and sourcing) for the public funded aerospace industry, both the military procurement (fighter jets, bombers) and the civilian NASA one.

zanny 11y ago
I think there is a significant confluence among those who find prosperity and purpose through jobs to conflate the concepts of employment and purpose. That to not have a job is to not have a purpose, and vice versa. If we had a planned economy built around peak employment, we would have many fewer entrepreneurs and many more, as you say, hole diggers. Socially we already do that. We have created a gargantuan advertising industry that has zero net material gain for society, whose sole purpose is to redirect dollars already in circulation to their employers. We have dramatically expanded bureaucracy in almost every industry to micromanage risk at the cost of tremendous overhead in the time of human beings spent on it. We maintain many institutions in the service industry more-so because the marginal cost of having all the participants unemployed (and thus hungry, destitute, and dangerous) is worse than just paying them do to work nobody practically would need done if not for the negative impacts of simply dropping people out of the workforce. But this is entirely the wrong way to approach economics. It is absolutely antithetical to the human condition to start from the presumption that people need to do something for someone else for their life to have meaning. That is where entrepreneurism comes from, and we need more of it going forward, not less, as we systemically eliminate the repetitious work in our lives through technological advancement. To aspire for peak employment is to aspire for the death of aspiration. Rather than seeing a "problem" of unemployment, when the practical cause is derived from the lack of anyone willing to pay people for their time considering the skills that they have, see it as an opportunity. If we have unemployment it means everything worth doing is being done, and we should be trying to enable those who are not needed to keep society running to improve that society through innovation than to fabricate busywork for them to do to keep all the cogs in the machine in tune with one another, even if a large segment of said cogs are redundant. And probably the best example is how I imagine most people would read that previous sentence - but there is a ton of things I want done! But practically, capitalism does not care what you want, it cares about only what those with the dollars to make their voices heard want. The unemployed should be those free to listen to the wants of people rather than money, rather than those who society condemns to poverty.
- smaddox 11y ago
  Indeed. I think this is a strong argument in favor of basic income. If the risk of an enterprise failing were separated from the risk of not being able to eat next week, then we would have far more entrepreneurs.
  - zmmmmm 11y ago
    The paradox is that in many societies where something approximating basic income does exist, there is not a particularly great wealth of entrepreneurship. If anything I think there's a negative correlation.
    - zanny 11y ago
      The central consideration needs to be approximation. People like to compare US unemployment and welfare to UBI, or other social safety net programs, but in almost all these cases maintaining the income requires diligent screenings from state officials combined with proving a lack of income on your part. The temporary nature of all of them, and the cultural stigma of using them, also causes people to withdraw rather than participate in society. To be on welfare is to be wrong, and it is hard to operate from that mindset and be productive in your thoughts and endeavors. We need to see if these Canadian or Finnish proposals show fruit. Because one of the fundamental tenants of basic income - unconditionality, perpetuity - is the keystone of seeing economic growth through its deployment. It is also the halmark of decrying existent forms of welfare in how they incentivize docility and non-participation.
- ArkyBeagle 11y ago
  I'm not sure it's an ... axiomatic ( meaning just made up out of whole cloth ) assumption that doing meaningful things for other people is part of a path to happiness. It may have the advantage of being true. It does not mean that it's the only condition for happiness ( it is necessary but not sufficient ) , but I know of no good assault on this idea. Adam Smith's "to be loved and to be lovely" exists, and is deeply imbedded. The advertising/media industrial complex problem is much more profound. But in order to propagate criticisms of it you'd sort of need the advertising/media industrial complex to get those ideas out. Still, Adam Curtis documentaries exist, the work of Marshall MacLuhan and Vance Packard and others exist. Of these, Adam Curtis seems to have taken the thing on most directly. And it was very funny watching "Mad Men" pull its punches.
Umn44 11y ago
"Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly." Except you're wrong, the corporate world is always on the governments tit. Protectionism for the rich and big business by state intervention, radical market interference. https://www.youtube.com/watch?v=WHj2GaPuEhY#t=349 https://www.youtube.com/watch?v=WHj2GaPuEhY#t=349
bubbleRefuge 11y ago
It can also be spectacularly successful . Although it wasn't a jobs program, WWII and its aftermath, driven by the state and centrally planned, resulted in great economic prosperity -perhaps unprecedented prosperity. Why can't we have a WWII on infrastructure, green energy, science funding, pollution cleanup, transportation, hyper-loops ?
- smaddox 11y ago
  Those are phrased too positively. Politicians need to phrase objectives in the negative in order to scare up support. "The War on Infrastructure Decay" doesn't have quite the same ring to it as "The War on Drugs" or "The War on Terror".
- twoodfin 11y ago
  Prosperity for whom? Certainly not Western Europe. And yeah, when you're the only major industrialized power not to be horrifically bombed, you may enjoy "unprecedented" economic activity in the following decades.
  - jordanb 11y ago
    > Certainly not Western Europe Certainly not? These years were known as the "Trente Glorieuses" (glorious thirty) in France. [0] https://en.wikipedia.org/wiki/Trente_Glorieuses https://en.wikipedia.org/wiki/Trente_Glorieuses
    - forgetsusername 11y ago
      Yeah, it was great for the survivors. Not so much for the 10's of millions of dead. In retrospect, WW2 had positive economic consequences. But let's not pretend it was a "good" thing.
- krrrh 11y ago
  It has been argued by many that WWII was not an economic high point in the lived experiences of most citizens. Even in America which faced almost no destruction of its territory and infrastructure there was severe rationing of basic commodities, durables, and food. For a large number of people, the war years were a downgrade in lifestyle from even late depression standards. The economy did do well after the war, but you could also attribute that to delayed purchases as spending money on new homes, automobiles, and all sorts of goods was finally possible. This combined with a much larger labour pool as some women remained in the workforce, while many families who had delayed child-rearing started families and needed to earn and spend to support that. The post-war boom years were marked by a huge reduction of central planning and government spending. Most Keynesians at the time were actually predicting a return to deep recession because of this, and the opposite happened.
bedhead 11y ago
Well put. Job creation as a goal is sort of like when public company CEO's have revenue as a goal. Look, if all you want is revenue, that's easy - we can buy companies, underprice business, do all sorts of uneconomic stuff, etc. Same goes for jobs...if all you want is someone working, we can do that pretty easily. While I understand the noble impulse to target job creation, unfortunately it leads to a lot of incentive misalignment. The real goal is creating value, or wealth.
- zmmmmm 11y ago
  > The real goal is creating value, or wealth By itself that isn't sufficient though. The distribution of wealth is important. If you create more wealth by allocating it all to one individual and none to anybody else then that is not superior to creating a bit less total but having the median wealth across individuals be higher.
roymurdock 11y ago
You are invoking the famous, often-misunderstood fiscal policy outlined by Keynes. Here is the often-paraphrased text from The General Theory of Employment, Interest, and Money Book 3 Ch.10 Section VI [1]: "Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better...If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing." Keynes was specifically referring to a community in which the aggregate propensity to consume (spend) is much closer to 1 (spend 100% of wages) than 0 (save 100% of wages): In actual fact the marginal propensity to consume seems to lie somewhere between these two extremes, though much nearer to unity than to zero; with the result that we have, in a sense, the worst of both worlds, fluctuations in employment being considerable and, at the same time, the increment in investment required to produce full employment being too great to be easily handled. If Keynes were observing the situation today in the US, he would probably posit that the marginal propensity to consume is closer to 0 for the US as a whole, as "the increase of employment will tend, owing to the effect of diminishing-returns in the short period, to increase the proportion of aggregate income which accrues to the entrepreneurs, whose individual marginal propensity to consume is probably less than the average for the community as a whole." I.e. the rich have a much lower marginal propensity to consume than the poor, so when wealth accretes at the top, the velocity of money slows, and the economy slows. He would also argue that because we are at the "natural rate of unemployment" of 5%, that government public works "may become a more doubtful proposition as a state of full employment is approached. Furthermore, if our assumption is correct that the marginal propensity to consume falls off steadily as we approach full employment, it follows that it will become more and more troublesome to secure a further given increase of employment by further increasing investment." The point? We shouldn't be afraid to take a "job creation" stance when necessary - in times of widespread unemployment, when wealth is distributed more equally and the average propensity to consume is closer to parity. But it should be viewed as a tool that needs to be properly used WRT fluctuating economic and political circumstances. [1] https://www.marxists.org/reference/subject/economics/keynes/general-theory/ch10.htm https://www.marxists.org/reference/subject/economics/keynes/...
ThomPete 11y ago
The problem with a job-centric economy is that it's based on the need of humans rather than the needs of the economy. In reality technology makes it possible for less and less people to increase their output and span of what they can control via technology. Some day a few people will be running large systems that requires only drones, AI's and access to resources to create what today takes millions. By insisting on keeping humans where technology is much better suited for the job we are damaging our own economy because we are creating an artificial reliance on human capital where it's not needed and thus increasing the price for everyone. This is obviously a huge problem as more and more people will be making less and less income. The only way to mitigate this is by products being increasingly cheaper something that a job-centric economy is hindering. We should be honest and admit that the Uber economy is a mirror into this reality where the competition heats up, driving prices down and incomes down until self-driving cars is completely removing incomes for working people. And if you claim like many do that technology creates more jobs than it produces then you are not only wrong you also need to show what new areas you are expecting the millions of people who are already made obsolete to the job market because of technology.
- Spooky23 11y ago
  > The problem with a job-centric economy is that it's based on the need of humans rather than the needs of the economy. Society is made up of humans. The economy in your case is the tail wagging the dog. The problem with your train of thought is that it isn't sustainable. When people get fed up and start burning ubers, the folks betting against people will be the ones finding their backs on he wall.
  - thisislame 11y ago
    Are you familiar with the term "force multiplier?" How many people has the US military killed over the last 10 years? How many US military personnel have been killed? The ratio is on the order of 100:1. (I'm not making any kind of moral judgement about the US military here, just pointing out it's raw effectiveness at a core competency, which is killing without being killed.) People are not a great bet in the present technological era.
vram22 11y ago
>Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly. >In the most reductive analogy it creates incentive for the government to create "hole diggers" and "hole fillers" type of jobs that, in aggregate, generate very few useful work while fulfilling this basic goal of job creation. >I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one. There may be another way, that is not mutually exclusive with the other approaches. It may take longer to have an effect but could be also more permanent or effective: supporting and encouraging much more local and small self-employment and small business. (And by encouraging I mean by concrete methods, not just hand waving and "moral support" kind of stuff). It has the effect of giving the dignity and money you get from work, without the artificial hole-digging-and-filling provided by the government (which method doesn't have the dignity if you know the work is made up just for you). Gandhi and E. F. Schumacher (Small is Beautiful) were talking about and doing this decades ago. There are many ways in which it can be done.
alanwatts 11y ago
>In principle the war effort is always so planned as to eat up any surplus that might exist after meeting the bare needs of the population. In practice the needs of the population are always underestimated, with the result being that there is a chronic shortage of half the necessities of life; but this is looked upon as an advantage. It is deliberate policy to keep even the favored groups somewhere near the brink of hardship, because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another. War, it will be seen, not only accomplishes the necessary destruction, but accomplishes it in a psychologically acceptable way. In principle it would be quite simple to waste the surplus labour of the world by building temples and pyramids, by digging holes and filling them up again, or even by producing vast quantities of goods and then setting fire to them. But this would provide only the economic and not the emotional basis for a hierarchical society. -G. Orwell
tw04 11y ago
Given the absolutely embarrassing state of our country, hole diggers are exactly what we need. Legitimately go pay someone to dig holes all day and lay single-mode fiber to every home. Pay them to turn a wrench replacing support brackets on a bridge. The Works program was the single most successful employer in this country's history and we replaced it with welfare because "unemployment is low and we don't need it anymore". Stupidity. The US is a prime example of exactly how a government focused on job creation can be a raving success!
- atom-morgan 11y ago
  And when they're done? What about the jobs!
  - digi_owl 11y ago
    Who knows. More jobs, more wages, more actual money in the economy to displace credit cards and pay down household debt, and improved infrastructure may well see new business opportunities come into existence.
  - jcoffland 11y ago
    What makes you think they will ever be done?
  - amorphid 11y ago
    It's a big country! When you get towards completing a single project, I bet there will always be something else that needs doing.
    - refurb 11y ago
      Like an airport in a town of 2,000 that nobody uses, but ensure the Congressman will get reelected? I could only imagine the abuse with a gov't directed jobs program!
      - georgemcbay 11y ago
billions 11y ago
Hong Kong is a prime example of the government improving quality of life by staying out of the way of business. http://triblive.com/mobile/6727056-96/hong-kong-free http://triblive.com/mobile/6727056-96/hong-kong-free
- hhw 11y ago
  Hong Kong's prosperity in the 80's and 90's had more to do with being the gateway between China and the West as trade started to open up, and less to do with policy or entrepreneurship, as much as some people would like to take credit for such.
  - tim333 11y ago
    HK GDP/capita also grew 1320% between 1960 and 1980 when China trade wasn't really rocking. N Korea also borders and trades mostly with China and it didn't do them much good. Though if you want a counter example Singapore has had more state involvement in the economy and has done even better than HK. One interesting area where HK has been very non laissez faire is in land ownership. Much of the prime real estate belongs to the government and they can raise money by reclaiming some land and selling it off or renting it out. Also works for Monaco where there is no tax but government controls the real estate. You could argue you could use the same model in the Bay Area to an extent - the government grabs some land, licences fancy blocks for tech workers, auctions off the land with planning permission to builders with the money going to the tax pool. Lower taxes and less accom shortage - win win overall apart from some neighbours complaining about their views.
    - hhw 11y ago
      It's not trading with China that's resulted in Hong Kong's success, but that they were the exclusive intermediary for trade with China for a very long time. North Korea doesn't trade with the West so there's no point in comparing them. There was also a large influx of fortune and human capital that came out of China after the war. Singapore is more a gateway with Southeast Asia, which certainly has provided it with a great deal of opportunity also, but not nearly to the same extent. I think it would be fair to say to that much of their success is owing to their policy, on a number of fronts. I also do not mean to say anything about whether Hong Kong has good policy or not. I'm just saying that they would have still been successful regardless, so long as it didn't preclude their role as a trade intermediary. So, even if you were to perfectly recreate all of Hong Kong's policy, you should not expect to get anywhere near the same results. What's generally attributed to the 'genius' of Hong Kong would be much more aptly attributed to dumb luck.
WalterBright 11y ago
But what can be done is to re-examine tax policy and regulation that discourages hiring people.
id 11y ago
You know that the "laissez-faire" capitalist alternative in this situation would mean that people starve?
- tim333 11y ago
  I'm not sure there's been perfect laissez-fair but if you define it thus: "an economic system in which transactions between private parties are free from government interference such as regulations, privileges, tariffs, and subsidies. " Then the best implementation I've seen was probably Hong Kong under UK governance. They had pretty much zero tariffs, light regulation, no industrial subsidy. The result was one of the fastest growing countries in the world with zero starvation. (16% of US GDP/capita in 1960, 76% in 2016 "According to Index of Economic Freedom, Hong Kong has had the highest degree of economic freedom in the world since the inception of the Index in 1995.")
jernfrost 11y ago
Not sure if those are fair analogies, nor an accurate representation of the choices. I live in a social democratic country and low unemployment has always been the cornerstone of social democratic policy. I associate basic income more with liberal politicians. There are a lot ways in which a job centric approach would affect economic policy which doesn't necessarily mean hole diggers. E.g. in my home country Norway it was seen by the social democrats that maintain an industrial base and the jobs that came with that was crucial. That is why strict rules on usage of oil money in budgets were devised to hinder deindustrialization due to inflation and loss of industrial jobs. When the oil was found, the conservatives in Norway were ready to hand all the work over to foreign companies. Norway had no expertise at all on oil drilling at the time. But the social democratic government decided that we should have our own oil industry and companies. They established schools, research and a state oil company to reach those goals. Some of the rules had similarities to what China has done to build up their industry with e.g. partnership rules. In fact the Chinese came to Norway decades ago to learn about our policies on this area (undoubtedly they went many other places as well). The previous Chinese experience was that foreign companies owned all the industry, knowledge and took all the profits. The free market reforms in China has undoubtedly produced much prosperity. But it also seem clear to me that China including every other successful country has had some form of industrial policy. None of the successful asian tigers really follow a laissez-faire system. Pundits will argue they could have been more successful if they did, but I am not convinced.
- ElysianEagle 11y ago
  > None of the successful asian tigers really follow a laissez-faire system. Pundits will argue they could have been more successful if they did, but I am not convinced. Great post. I'm reminded of the book "Bad Samaritans" by Ha-Joon Chang.
- knight17 11y ago
  Congrats to the Norwegian people for making better use of their oil money. I read this article about how an Iraqi engineer named Farouk al Kasim helped them get their priorities straight [1] : > After growing up watching the benefits of Iraqi oil elude the Iraqi people, a young executive insisted that Norway do things differently. For initial expansion of industry, I always felt that command and control economy works to an extend. Even the early soviet union was an example of rapid modernisation of an agrarian country to an industrialised one [2]. There are also examples of South Korea and how its government helped make them one of the best in the ship building [3]. To kickstart an industry government involvement is good to keep the pace and for the introduction of interlinked systems necessary for production where none had existed earlier, but there is no question the human cost soviet people had to pay and there is no justification to it. To keep people and companies from becoming complacent, the accountability and the skin-in-the—game feeling that capitalism brings is equally good. Little bit of both is what is good for developing economies and developing industrial sectors but we are still learning on where to draw the line on how much is too much but there is a lot to be learned yet. [1] : http://www.psmag.com/nature-and-technology/iraqi-vikings-farouk-al-kasim-norway-oil-72715 http://www.psmag.com/nature-and-technology/iraqi-vikings-far... [2] : http://www.voxeu.org/article/stalin-and-soviet-industrialisation http://www.voxeu.org/article/stalin-and-soviet-industrialisa... [3] : http://english.hani.co.kr/arti/english_edition/e_business/724425.html http://english.hani.co.kr/arti/english_edition/e_business/72...
knieveltech 11y ago
"I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one." Maybe. My grandfather has a 6th grade education, worked semi-skilled trade labor jobs his entire life, and was able to amass a multi-million dollar fortune through nothing more complicated than buying unused land and occasionally parking cash in certificates of deposit. Admittedly something of an outlier. I mention it only to highlight what was reasonably possible for a working man 50 years ago. This being the case I question the need for new, untried solutions to problems we, as a nation, did not have 50 years ago and that we already know the cause of. Occam's Razor would have me believe the correct course of action would be to incentivize rebooting the manufacturing sector in this country while reinstating the trade tariffs that protected our industries up until the early 90's.
maxxxxx 11y ago
Why do we always have only extreme choices? All these approaches can work if you continue improving on things that don't work. It's like having only C++, PHP or JavaScript as choices for your system. They all can work but you have to do them right. They also can be a complete mess if you do them wrong.
mathattack 11y ago
I saw this a lot in Japan. Construction just to keep people employed. Large event centers that would never be filled. Roads torn up and then repaved in March just to use up budget and keep the money flowing. The US can be just as bad - it was just easier to see as an outsider abroad.
tmptmp 11y ago
>I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one. How exactly is "basic income" superior to "hole" digging/filling type of jobs? I believe they are one and the same as far as their fundamentals are concerned, i.e. both do not create/add any value on their own to the society/economy. Actually, I think "hole" digging/filling is superior to "basic income" as it, at least, keeps the person occupied and thus takes care of problems due to "empty mind is devil's workshop". Please correct me if I am wrong.
- newjersey 11y ago
  Basic income is not a complete solution. It is a start. We'd still need ways to motivate people. I think basic income would be great. We could have smaller class sizes in our elementary schools. I'd like to imagine some people volunteering to take care of kids for a few hours after school because they don't have to worry about starving for not making any money. In short, I think people will do useful work if we just give them the ability to do so. We'd still need schools and such (preferably at no cost to the students) but I think not having to worry about starving would be great for humanity as a whole.
  - tmptmp 11y ago
    I am still confused. You said, >We'd still need ways to motivate people. I think basic income would be great. ... >I think not having to worry about starving would be great for humanity as a whole. Motivating a person who is not starving and has no worry about starving in future is a damn difficult job. But maybe I will grant this thing for the sake of argument, because, there may be other things that may still motivate people. e.g. yearning for better lifestyle. So, I guess, the basic income should be very minimum, in fact, should be minimum possible to keep the person barely alive. Anything more will potentially have "spoiling" effect (failed communism and the British welfare system comes to mind here). No more than minimum required shelter (without any kind of "luxury", including TV, more rooms etc as are given in UK), minimum required raw food with minimum required equipment for preparing the food (no pre cooked fancier food of any kind) and minimum clothes to sustain life (no fancier clothes). Of course, I am aware that terms like "luxury", "minimum" need more precise definitions. I will make a try - Minimum required shelter/food/clothes for survival - to find the minimum amount of shelter/food/clothes required for survival one must look at the quantities the people/peasants in African/Asian/European poor countries (e.g. Liberia, India, or Russia) survive. In fact, the basic income should be just sufficient to survive, if required err on the side of less but not an iota more; if we can guarantee this, then I guess the basic income scheme will not corrupt the people, else it will be a recipe for economic/societal disaster and ruin. Luxury - anything beyond/more the minimum is luxury as far as basic income is concerned. Edit - added definition of luxury.

zanny 11y ago

I think there is a significant confluence among those who find prosperity and purpose through jobs to conflate the concepts of employment and purpose. That to not have a job is to not have a purpose, and vice versa. If we had a planned economy built around peak employment, we would have many fewer entrepreneurs and many more, as you say, hole diggers. Socially we already do that. We have created a gargantuan advertising industry that has zero net material gain for society, whose sole purpose is to redirect dollars already in circulation to their employers. We have dramatically expanded bureaucracy in almost every industry to micromanage risk at the cost of tremendous overhead in the time of human beings spent on it. We maintain many institutions in the service industry more-so because the marginal cost of having all the participants unemployed (and thus hungry, destitute, and dangerous) is worse than just paying them do to work nobody practically would need done if not for the negative impacts of simply dropping people out of the workforce. But this is entirely the wrong way to approach economics. It is absolutely antithetical to the human condition to start from the presumption that people need to do something for someone else for their life to have meaning. That is where entrepreneurism comes from, and we need more of it going forward, not less, as we systemically eliminate the repetitious work in our lives through technological advancement. To aspire for peak employment is to aspire for the death of aspiration. Rather than seeing a "problem" of unemployment, when the practical cause is derived from the lack of anyone willing to pay people for their time considering the skills that they have, see it as an opportunity. If we have unemployment it means everything worth doing is being done, and we should be trying to enable those who are not needed to keep society running to improve that society through innovation than to fabricate busywork for them to do to keep all the cogs in the machine in tune with one another, even if a large segment of said cogs are redundant. And probably the best example is how I imagine most people would read that previous sentence - but there is a ton of things I want done! But practically, capitalism does not care what you want, it cares about only what those with the dollars to make their voices heard want. The unemployed should be those free to listen to the wants of people rather than money, rather than those who society condemns to poverty.

smaddox 11y ago
Indeed. I think this is a strong argument in favor of basic income. If the risk of an enterprise failing were separated from the risk of not being able to eat next week, then we would have far more entrepreneurs.
- zmmmmm 11y ago
  The paradox is that in many societies where something approximating basic income does exist, there is not a particularly great wealth of entrepreneurship. If anything I think there's a negative correlation.
  - zanny 11y ago
    The central consideration needs to be approximation. People like to compare US unemployment and welfare to UBI, or other social safety net programs, but in almost all these cases maintaining the income requires diligent screenings from state officials combined with proving a lack of income on your part. The temporary nature of all of them, and the cultural stigma of using them, also causes people to withdraw rather than participate in society. To be on welfare is to be wrong, and it is hard to operate from that mindset and be productive in your thoughts and endeavors. We need to see if these Canadian or Finnish proposals show fruit. Because one of the fundamental tenants of basic income - unconditionality, perpetuity - is the keystone of seeing economic growth through its deployment. It is also the halmark of decrying existent forms of welfare in how they incentivize docility and non-participation.
ArkyBeagle 11y ago
I'm not sure it's an ... axiomatic ( meaning just made up out of whole cloth ) assumption that doing meaningful things for other people is part of a path to happiness. It may have the advantage of being true. It does not mean that it's the only condition for happiness ( it is necessary but not sufficient ) , but I know of no good assault on this idea. Adam Smith's "to be loved and to be lovely" exists, and is deeply imbedded. The advertising/media industrial complex problem is much more profound. But in order to propagate criticisms of it you'd sort of need the advertising/media industrial complex to get those ideas out. Still, Adam Curtis documentaries exist, the work of Marshall MacLuhan and Vance Packard and others exist. Of these, Adam Curtis seems to have taken the thing on most directly. And it was very funny watching "Mad Men" pull its punches.

Umn44 11y ago

"Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly." Except you're wrong, the corporate world is always on the governments tit. Protectionism for the rich and big business by state intervention, radical market interference. https://www.youtube.com/watch?v=WHj2GaPuEhY#t=349 https://www.youtube.com/watch?v=WHj2GaPuEhY#t=349

bubbleRefuge 11y ago

It can also be spectacularly successful . Although it wasn't a jobs program, WWII and its aftermath, driven by the state and centrally planned, resulted in great economic prosperity -perhaps unprecedented prosperity. Why can't we have a WWII on infrastructure, green energy, science funding, pollution cleanup, transportation, hyper-loops ?

smaddox 11y ago
Those are phrased too positively. Politicians need to phrase objectives in the negative in order to scare up support. "The War on Infrastructure Decay" doesn't have quite the same ring to it as "The War on Drugs" or "The War on Terror".
twoodfin 11y ago
Prosperity for whom? Certainly not Western Europe. And yeah, when you're the only major industrialized power not to be horrifically bombed, you may enjoy "unprecedented" economic activity in the following decades.
- jordanb 11y ago
  > Certainly not Western Europe Certainly not? These years were known as the "Trente Glorieuses" (glorious thirty) in France. [0] https://en.wikipedia.org/wiki/Trente_Glorieuses https://en.wikipedia.org/wiki/Trente_Glorieuses
  - forgetsusername 11y ago
    Yeah, it was great for the survivors. Not so much for the 10's of millions of dead. In retrospect, WW2 had positive economic consequences. But let's not pretend it was a "good" thing.
krrrh 11y ago
It has been argued by many that WWII was not an economic high point in the lived experiences of most citizens. Even in America which faced almost no destruction of its territory and infrastructure there was severe rationing of basic commodities, durables, and food. For a large number of people, the war years were a downgrade in lifestyle from even late depression standards. The economy did do well after the war, but you could also attribute that to delayed purchases as spending money on new homes, automobiles, and all sorts of goods was finally possible. This combined with a much larger labour pool as some women remained in the workforce, while many families who had delayed child-rearing started families and needed to earn and spend to support that. The post-war boom years were marked by a huge reduction of central planning and government spending. Most Keynesians at the time were actually predicting a return to deep recession because of this, and the opposite happened.

bedhead 11y ago

Well put. Job creation as a goal is sort of like when public company CEO's have revenue as a goal. Look, if all you want is revenue, that's easy - we can buy companies, underprice business, do all sorts of uneconomic stuff, etc. Same goes for jobs...if all you want is someone working, we can do that pretty easily. While I understand the noble impulse to target job creation, unfortunately it leads to a lot of incentive misalignment. The real goal is creating value, or wealth.

zmmmmm 11y ago
> The real goal is creating value, or wealth By itself that isn't sufficient though. The distribution of wealth is important. If you create more wealth by allocating it all to one individual and none to anybody else then that is not superior to creating a bit less total but having the median wealth across individuals be higher.

roymurdock 11y ago

You are invoking the famous, often-misunderstood fiscal policy outlined by Keynes. Here is the often-paraphrased text from The General Theory of Employment, Interest, and Money Book 3 Ch.10 Section VI [1]: "Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better...If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing." Keynes was specifically referring to a community in which the aggregate propensity to consume (spend) is much closer to 1 (spend 100% of wages) than 0 (save 100% of wages): In actual fact the marginal propensity to consume seems to lie somewhere between these two extremes, though much nearer to unity than to zero; with the result that we have, in a sense, the worst of both worlds, fluctuations in employment being considerable and, at the same time, the increment in investment required to produce full employment being too great to be easily handled. If Keynes were observing the situation today in the US, he would probably posit that the marginal propensity to consume is closer to 0 for the US as a whole, as "the increase of employment will tend, owing to the effect of diminishing-returns in the short period, to increase the proportion of aggregate income which accrues to the entrepreneurs, whose individual marginal propensity to consume is probably less than the average for the community as a whole." I.e. the rich have a much lower marginal propensity to consume than the poor, so when wealth accretes at the top, the velocity of money slows, and the economy slows. He would also argue that because we are at the "natural rate of unemployment" of 5%, that government public works "may become a more doubtful proposition as a state of full employment is approached. Furthermore, if our assumption is correct that the marginal propensity to consume falls off steadily as we approach full employment, it follows that it will become more and more troublesome to secure a further given increase of employment by further increasing investment." The point? We shouldn't be afraid to take a "job creation" stance when necessary - in times of widespread unemployment, when wealth is distributed more equally and the average propensity to consume is closer to parity. But it should be viewed as a tool that needs to be properly used WRT fluctuating economic and political circumstances. [1] https://www.marxists.org/reference/subject/economics/keynes/general-theory/ch10.htm https://www.marxists.org/reference/subject/economics/keynes/...

ThomPete 11y ago

The problem with a job-centric economy is that it's based on the need of humans rather than the needs of the economy. In reality technology makes it possible for less and less people to increase their output and span of what they can control via technology. Some day a few people will be running large systems that requires only drones, AI's and access to resources to create what today takes millions. By insisting on keeping humans where technology is much better suited for the job we are damaging our own economy because we are creating an artificial reliance on human capital where it's not needed and thus increasing the price for everyone. This is obviously a huge problem as more and more people will be making less and less income. The only way to mitigate this is by products being increasingly cheaper something that a job-centric economy is hindering. We should be honest and admit that the Uber economy is a mirror into this reality where the competition heats up, driving prices down and incomes down until self-driving cars is completely removing incomes for working people. And if you claim like many do that technology creates more jobs than it produces then you are not only wrong you also need to show what new areas you are expecting the millions of people who are already made obsolete to the job market because of technology.

Spooky23 11y ago
> The problem with a job-centric economy is that it's based on the need of humans rather than the needs of the economy. Society is made up of humans. The economy in your case is the tail wagging the dog. The problem with your train of thought is that it isn't sustainable. When people get fed up and start burning ubers, the folks betting against people will be the ones finding their backs on he wall.
- thisislame 11y ago
  Are you familiar with the term "force multiplier?" How many people has the US military killed over the last 10 years? How many US military personnel have been killed? The ratio is on the order of 100:1. (I'm not making any kind of moral judgement about the US military here, just pointing out it's raw effectiveness at a core competency, which is killing without being killed.) People are not a great bet in the present technological era.

vram22 11y ago

>Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly. >In the most reductive analogy it creates incentive for the government to create "hole diggers" and "hole fillers" type of jobs that, in aggregate, generate very few useful work while fulfilling this basic goal of job creation. >I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one. There may be another way, that is not mutually exclusive with the other approaches. It may take longer to have an effect but could be also more permanent or effective: supporting and encouraging much more local and small self-employment and small business. (And by encouraging I mean by concrete methods, not just hand waving and "moral support" kind of stuff). It has the effect of giving the dignity and money you get from work, without the artificial hole-digging-and-filling provided by the government (which method doesn't have the dignity if you know the work is made up just for you). Gandhi and E. F. Schumacher (Small is Beautiful) were talking about and doing this decades ago. There are many ways in which it can be done.

alanwatts 11y ago

>In principle the war effort is always so planned as to eat up any surplus that might exist after meeting the bare needs of the population. In practice the needs of the population are always underestimated, with the result being that there is a chronic shortage of half the necessities of life; but this is looked upon as an advantage. It is deliberate policy to keep even the favored groups somewhere near the brink of hardship, because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another. War, it will be seen, not only accomplishes the necessary destruction, but accomplishes it in a psychologically acceptable way. In principle it would be quite simple to waste the surplus labour of the world by building temples and pyramids, by digging holes and filling them up again, or even by producing vast quantities of goods and then setting fire to them. But this would provide only the economic and not the emotional basis for a hierarchical society. -G. Orwell

tw04 11y ago

Given the absolutely embarrassing state of our country, hole diggers are exactly what we need. Legitimately go pay someone to dig holes all day and lay single-mode fiber to every home. Pay them to turn a wrench replacing support brackets on a bridge. The Works program was the single most successful employer in this country's history and we replaced it with welfare because "unemployment is low and we don't need it anymore". Stupidity. The US is a prime example of exactly how a government focused on job creation can be a raving success!

atom-morgan 11y ago
And when they're done? What about the jobs!
- digi_owl 11y ago
  Who knows. More jobs, more wages, more actual money in the economy to displace credit cards and pay down household debt, and improved infrastructure may well see new business opportunities come into existence.
- jcoffland 11y ago
  What makes you think they will ever be done?
- amorphid 11y ago
  It's a big country! When you get towards completing a single project, I bet there will always be something else that needs doing.
  - refurb 11y ago
    Like an airport in a town of 2,000 that nobody uses, but ensure the Congressman will get reelected? I could only imagine the abuse with a gov't directed jobs program!
    - georgemcbay 11y ago

billions 11y ago

Hong Kong is a prime example of the government improving quality of life by staying out of the way of business. http://triblive.com/mobile/6727056-96/hong-kong-free http://triblive.com/mobile/6727056-96/hong-kong-free

hhw 11y ago
Hong Kong's prosperity in the 80's and 90's had more to do with being the gateway between China and the West as trade started to open up, and less to do with policy or entrepreneurship, as much as some people would like to take credit for such.
- tim333 11y ago
  HK GDP/capita also grew 1320% between 1960 and 1980 when China trade wasn't really rocking. N Korea also borders and trades mostly with China and it didn't do them much good. Though if you want a counter example Singapore has had more state involvement in the economy and has done even better than HK. One interesting area where HK has been very non laissez faire is in land ownership. Much of the prime real estate belongs to the government and they can raise money by reclaiming some land and selling it off or renting it out. Also works for Monaco where there is no tax but government controls the real estate. You could argue you could use the same model in the Bay Area to an extent - the government grabs some land, licences fancy blocks for tech workers, auctions off the land with planning permission to builders with the money going to the tax pool. Lower taxes and less accom shortage - win win overall apart from some neighbours complaining about their views.
  - hhw 11y ago
    It's not trading with China that's resulted in Hong Kong's success, but that they were the exclusive intermediary for trade with China for a very long time. North Korea doesn't trade with the West so there's no point in comparing them. There was also a large influx of fortune and human capital that came out of China after the war. Singapore is more a gateway with Southeast Asia, which certainly has provided it with a great deal of opportunity also, but not nearly to the same extent. I think it would be fair to say to that much of their success is owing to their policy, on a number of fronts. I also do not mean to say anything about whether Hong Kong has good policy or not. I'm just saying that they would have still been successful regardless, so long as it didn't preclude their role as a trade intermediary. So, even if you were to perfectly recreate all of Hong Kong's policy, you should not expect to get anywhere near the same results. What's generally attributed to the 'genius' of Hong Kong would be much more aptly attributed to dumb luck.

WalterBright 11y ago

But what can be done is to re-examine tax policy and regulation that discourages hiring people.

id 11y ago

You know that the "laissez-faire" capitalist alternative in this situation would mean that people starve?

tim333 11y ago
I'm not sure there's been perfect laissez-fair but if you define it thus: "an economic system in which transactions between private parties are free from government interference such as regulations, privileges, tariffs, and subsidies. " Then the best implementation I've seen was probably Hong Kong under UK governance. They had pretty much zero tariffs, light regulation, no industrial subsidy. The result was one of the fastest growing countries in the world with zero starvation. (16% of US GDP/capita in 1960, 76% in 2016 "According to Index of Economic Freedom, Hong Kong has had the highest degree of economic freedom in the world since the inception of the Index in 1995.")

jernfrost 11y ago

Not sure if those are fair analogies, nor an accurate representation of the choices. I live in a social democratic country and low unemployment has always been the cornerstone of social democratic policy. I associate basic income more with liberal politicians. There are a lot ways in which a job centric approach would affect economic policy which doesn't necessarily mean hole diggers. E.g. in my home country Norway it was seen by the social democrats that maintain an industrial base and the jobs that came with that was crucial. That is why strict rules on usage of oil money in budgets were devised to hinder deindustrialization due to inflation and loss of industrial jobs. When the oil was found, the conservatives in Norway were ready to hand all the work over to foreign companies. Norway had no expertise at all on oil drilling at the time. But the social democratic government decided that we should have our own oil industry and companies. They established schools, research and a state oil company to reach those goals. Some of the rules had similarities to what China has done to build up their industry with e.g. partnership rules. In fact the Chinese came to Norway decades ago to learn about our policies on this area (undoubtedly they went many other places as well). The previous Chinese experience was that foreign companies owned all the industry, knowledge and took all the profits. The free market reforms in China has undoubtedly produced much prosperity. But it also seem clear to me that China including every other successful country has had some form of industrial policy. None of the successful asian tigers really follow a laissez-faire system. Pundits will argue they could have been more successful if they did, but I am not convinced.

ElysianEagle 11y ago
> None of the successful asian tigers really follow a laissez-faire system. Pundits will argue they could have been more successful if they did, but I am not convinced. Great post. I'm reminded of the book "Bad Samaritans" by Ha-Joon Chang.
knight17 11y ago
Congrats to the Norwegian people for making better use of their oil money. I read this article about how an Iraqi engineer named Farouk al Kasim helped them get their priorities straight [1] : > After growing up watching the benefits of Iraqi oil elude the Iraqi people, a young executive insisted that Norway do things differently. For initial expansion of industry, I always felt that command and control economy works to an extend. Even the early soviet union was an example of rapid modernisation of an agrarian country to an industrialised one [2]. There are also examples of South Korea and how its government helped make them one of the best in the ship building [3]. To kickstart an industry government involvement is good to keep the pace and for the introduction of interlinked systems necessary for production where none had existed earlier, but there is no question the human cost soviet people had to pay and there is no justification to it. To keep people and companies from becoming complacent, the accountability and the skin-in-the—game feeling that capitalism brings is equally good. Little bit of both is what is good for developing economies and developing industrial sectors but we are still learning on where to draw the line on how much is too much but there is a lot to be learned yet. [1] : http://www.psmag.com/nature-and-technology/iraqi-vikings-farouk-al-kasim-norway-oil-72715 http://www.psmag.com/nature-and-technology/iraqi-vikings-far... [2] : http://www.voxeu.org/article/stalin-and-soviet-industrialisation http://www.voxeu.org/article/stalin-and-soviet-industrialisa... [3] : http://english.hani.co.kr/arti/english_edition/e_business/724425.html http://english.hani.co.kr/arti/english_edition/e_business/72...

knieveltech 11y ago

"I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one." Maybe. My grandfather has a 6th grade education, worked semi-skilled trade labor jobs his entire life, and was able to amass a multi-million dollar fortune through nothing more complicated than buying unused land and occasionally parking cash in certificates of deposit. Admittedly something of an outlier. I mention it only to highlight what was reasonably possible for a working man 50 years ago. This being the case I question the need for new, untried solutions to problems we, as a nation, did not have 50 years ago and that we already know the cause of. Occam's Razor would have me believe the correct course of action would be to incentivize rebooting the manufacturing sector in this country while reinstating the trade tariffs that protected our industries up until the early 90's.

maxxxxx 11y ago

Why do we always have only extreme choices? All these approaches can work if you continue improving on things that don't work. It's like having only C++, PHP or JavaScript as choices for your system. They all can work but you have to do them right. They also can be a complete mess if you do them wrong.

mathattack 11y ago

I saw this a lot in Japan. Construction just to keep people employed. Large event centers that would never be filled. Roads torn up and then repaved in March just to use up budget and keep the money flowing. The US can be just as bad - it was just easier to see as an outsider abroad.

tmptmp 11y ago

>I believe this "job creation as priority" approach is inferior to both the "laissez-faire" capitalist alternative and the "basic income" social democratic one. How exactly is "basic income" superior to "hole" digging/filling type of jobs? I believe they are one and the same as far as their fundamentals are concerned, i.e. both do not create/add any value on their own to the society/economy. Actually, I think "hole" digging/filling is superior to "basic income" as it, at least, keeps the person occupied and thus takes care of problems due to "empty mind is devil's workshop". Please correct me if I am wrong.

newjersey 11y ago
Basic income is not a complete solution. It is a start. We'd still need ways to motivate people. I think basic income would be great. We could have smaller class sizes in our elementary schools. I'd like to imagine some people volunteering to take care of kids for a few hours after school because they don't have to worry about starving for not making any money. In short, I think people will do useful work if we just give them the ability to do so. We'd still need schools and such (preferably at no cost to the students) but I think not having to worry about starving would be great for humanity as a whole.
- tmptmp 11y ago
  I am still confused. You said, >We'd still need ways to motivate people. I think basic income would be great. ... >I think not having to worry about starving would be great for humanity as a whole. Motivating a person who is not starving and has no worry about starving in future is a damn difficult job. But maybe I will grant this thing for the sake of argument, because, there may be other things that may still motivate people. e.g. yearning for better lifestyle. So, I guess, the basic income should be very minimum, in fact, should be minimum possible to keep the person barely alive. Anything more will potentially have "spoiling" effect (failed communism and the British welfare system comes to mind here). No more than minimum required shelter (without any kind of "luxury", including TV, more rooms etc as are given in UK), minimum required raw food with minimum required equipment for preparing the food (no pre cooked fancier food of any kind) and minimum clothes to sustain life (no fancier clothes). Of course, I am aware that terms like "luxury", "minimum" need more precise definitions. I will make a try - Minimum required shelter/food/clothes for survival - to find the minimum amount of shelter/food/clothes required for survival one must look at the quantities the people/peasants in African/Asian/European poor countries (e.g. Liberia, India, or Russia) survive. In fact, the basic income should be just sufficient to survive, if required err on the side of less but not an iota more; if we can guarantee this, then I guess the basic income scheme will not corrupt the people, else it will be a recipe for economic/societal disaster and ruin. Luxury - anything beyond/more the minimum is luxury as far as basic income is concerned. Edit - added definition of luxury.