Le Baron
Unbiased advice at reasonable rates
Well you actually did say that when you said:Again, I did not claim that Job Guarantee was like Workfare - my comment contrasted the two. I said that I could not see how any system of automatic government employment that was not Workfare could bring down prices.
The beginning assumption is the obsession with inflation like the neo-liberals. And I answered it by showing that it (1) increases output and (2) increases participation; and that artificially keeping wages down, on the assumption this is the best way to control inflation, is addressing a problem that doesn't exist and addressing the fear of it by destroying people's lives. We should first acknowledge that the government tax levy to drive currency also creates initial unemployment, so that leaving people unemployed when the private sector can't/won't take on that capacity is a structural (and moral) failure. It's also stupid to release resources like that, then not employ them.I also don’t see how guaranteeing employment can prevent inflation in any way that doesn’t boil down to the bad old neo-liberal “Workfare” idea
Increasing of output while artificially suppressing wages (workfare) is not a useful inflationary control it is just nonsensical. They'd be better off just getting benefits.
Why do you so desperately want to reduce prices? The prices are what they are given two factors: the wage floor and the prices government pays. The offsetting of market prices to protect profits (inducing price-wage spirals) is a political problem, not strictly an economic one.The Government paying people normal wages to do normal work is fine, but I do not see the mechanism by which this would reduce prices in an economy.
The principles of 'classical' economics are naive. This thing where price level and money wage level are determined by the stock of money (fixed money supply as assumed) controlled by the bank is just erroneous. It assumed the larger the money stock relative to output equals a higher price level. It also assumes no unemployment, even says it is impossible due to wage flexibility and claims any unemployment is due to 'regulation rigidity'. They failed to understand simple things like the separation between sale and purchase as motivations; that producing output and having the means to buy them doesn't mean they will automatically be purchased (since they live in a crazy world of equilibriums and instantly clearing markets).
It's absurd that this system still holds sway since Keynes had already swept it away it theoretically; in fact Marx had already formulated the theory of effective demand before Keynes and destroyed Say's Law by showing it was simplistic and flawed (and that it only even applied to the principles of a barter economy, of which there is no evidence throughout history anyway). It has been resurrected as a smoke screen of 'theory' by monetarists.
Neither do I and that is precisely the aim of a JG. To set a wage floor the private sector can't fall under if it wants to attract labour.In such an environment, private-sector employers would have to offer more money than the Government does in order to attract employees (I have no problem with this),
Who says there is no penalty? That's a problem to be dealt with as in any case of employment. What are most employment penalties given for in real life? How many people working for a fair wage + benefits and training are likely to screw that up? This criticism is looking for tiny details and inflating them as though they comprise the greater part.but given that there’s no penalty for leaving a job, there can only ever be upward movement of wages.
No they don't. There's no reason for that to even occur as some sort of permanent ongoing process. You still think 'the market' drives this, they don't, they are an effect, not a cause. Plus you must factor in taxation or other cooling mechanisms.As wages in general rise, the Government needs to up its “normal wage” too, and we have more money flowing around, and the same amount of stuff to buy, which leads to... ?
I don't follow?Do you, by any chance, contribute to EU-funded academic and scientific research programmes?