Sunday, January 15, 2012

Quote of the Week

...from A JOB GUARANTEE IS NOT A “PRICE ANCHOR”, IT’S A “PRICE BUOY” by Cullen Roche, of Pragmatic Capitalism:

“Modern day economists seek the holy grail of macroeconomics which has come to be price stability and full employment.  These two features of modern macro are held up on pedestals as if giving a person a job and a steady wage is all one needs to live a happy and prosperous life.  I say these goals entirely miss the point and steal the potential lives that future generations can live.  What we should seek is the way in which we maximize our living standards.  In doing so we reach the true holy grail of macroeconomics – the thing that every human seeks – the fountain of youth, hence, more TIME.  After all, it is only through increased productivity, innovation, creativity and ultimately higher living standards that we are able to attain this (see here for more).”

Over the past few weeks, a heated debate has been raging among individuals either subscribing to or interested in MMT (Modern Monetary Theory) economics. The discussion is related to the notion of a federal Job Guarantee (JG) to promote full employment, and in theory, price stability. As Cullen points out, while these are noble goals, full employment and price stability alone do not guarantee any sort of prosperity. Democratic and Socialist governments at different points in history have attempted and, for short-periods, even achieved full employment with generally disappointing results in economic growth and public support.

Peter Cooper at expands on Cullen’s view in Opposing Visions of the Future. Apart from the JG, Peter considers a Basic Income Guarantee as a means “to undermine capitalism, particularly the wage labor relation.”

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