Full Employment as the New Progressive Paradigm

By Dan Kervick

Part One of a four-part essay

Progressives might have been permitted a short respite from anxiety after the election of November 7th, 2012.  They could find a measure of solace from the result: at least the country hadn’t fallen into the hands of an expert practitioner of one of the more barbarous styles of American capitalism, a man who had expressed open contempt for the 47% of Americans who receive assistance from the government he was seeking to head.   Of course, Mitt Romney’s disdain for government assistance extends only so far, since he has no objection to the sturdy fortress of legislative, judicial and police protections erected to both institute and protect private property.   He knows as well as anybody that without these government-funded protections many members of the propertied classes would not remain propertied.  But let us not dwell on the past.   We can move on knowing that at least there will be no Mitt Romney era.   Romney can now go back to his former occupation of buying, selling, dismantling, dismembering, repackaging and reselling the enterprises built by other people, throwing many of the people who work in those enterprises out on the street, and stashing the proceeds in island banks, far away from the greedy hands of the democratic rabble whose votes he recently begged.

Alas, the desired respite has been all but non-existent, because Washington has moved on immediately to renew the flagellation of the American people.   Right now, Democrats and Republicans in Washington are arguing over which forms and degrees of austerity to impose on us as the penalty we must pay to avoid the even larger smack we will be given if the terms of the Budget Control Act of 2011 – the “fiscal cliff” act – take effect at the end of the year.  This act was the bi-partisan gift of fiscal pain passed last summer when Congress and the White House could not agree on the appropriate form of torture to inflict on Americans as our punishment for daring to run large countercyclical deficits in our federal budget during an economic collapse.  Their solution was to agree on a joint homicide pact full of doubled-down, double torture – with an agreement to renew the negotiation later after the election.

As the argument goes forward, progressives are reminded that we now live in a two-party country that possesses only a conservative party and a reactionary party, and that the defeat of the reactionary party is not so much a cause for celebration as the renewal of the demolition contract for the less brawny of two wrecking crews.  The fact is that the progressive movement in America, at least so far as electoral politics goes, was bumped over the political cliff long ago and is barely hanging on by its fingernails at the edge of the precipice.   Ambitious progressive dreams of social transformation have now been replaced almost entirely by scrambling, draining efforts just to slow down the pace at which the plutocracy takes the gains of the past away from us.

We have a Democratic administration that now openly pursues and endorses policies that just a generation ago Republicans would not have dared to propose in public.  We are asked to feel grateful for a health care reform plan that entrenches the corporate power of Big Health and is an adaptation of the plan put forward by Republicans in the 80’s.  And if Barack Obama – who actually won the election – manages to limit the cuts in Medicare to just $100 billion or so, he’ll count it as a victory.  Any plans to expand the role of social insurance programs or the role of democratic government in the equitable provision of public goods and services?  Out of the question!   Under our new resolutely conservative system of bipartisan bean-counting, any reduction in public spending is considered a good in itself, even if that reduction causes offsetting private spending on the same goods and services to mount even higher than the amount cut from the public outlay.

Moving into 2013, the United States faces profound economic stagnation, mass unemployment and underemployment, an ever-growing gap between the rich and the rest, pressing economic insecurity, a crumbling infrastructure and a failing education system – and, oh yes, we have a whole planet under environmental assault.  The country needs vigorous, aggressive government action more than at any time since the Great Depression.  In the past, we might have gotten that kind of action from a sturdier generation of leaders.   But here’s what we are getting instead: following an inadequate package of stimulus spending passed at the beginning of his term in 2009, President Obama immediately pivoted away from jobs, growth and economic recovery toward deficit fear-mongering and the politics of austerity.  He pushed and passed a Republican-style health care plan based on mandated participation in private sector health insurance programs; appointed the Simpson-Bowles commission to hawk Pete Peterson’s budget hysteria; attempted to negotiate a “grand bargain” to slash the federal deficit in the midst of an enduring recession calling for larger deficits; signed the Budget Control Act which now hangs like a Sword of Damocles over a sick economy; and is now once again back at the table with Republicans haggling over how to shrink the government.  He has, it is true, proposed a jobs act filled with a lot of supply side sops to business.  That might have helped, and Republicans are primarily to blame for killing it.  But even that middle-of-the-road that act went missing in action during Obama’s campaign, because it doesn’t fit in with his favored narrative of responsible, conservative penny-pinching.

Obama seems convinced that if only he can persuade a conservative business community that he too is a conservative guy who believes in shrinking government and running a tight budget based on abstemious principles of sound finance, they will finally recover their lost confidence, deign to tap those mountains of corporate savings they are hoarding, and release the riches into the economy to create new enterprises and new jobs.    Sucking up to the “job creators” by dismantling more of the legacy institutions of a vanished progressive era is Obama’s real Jobs Act.  Of course, Obama himself is responsible for helping to engineer the climate of economic fear and pessimism.  He did that when he told the country that we were “out of money” and bought into the deficit hawks’ ignorant fears about debt-to-GDP ratios and budget deficits.

The triumph of conservative, Hooverite economic policies is not just an American problem.  In Europe also, plutocratic contempt and haughty moralism rule the scene.   Much of the continent has regressed under the pressure of economic failure into a punitive mentality of governmental irrationality and self-destructive hate, administered along the jealous national fractures that run through the marble ideals of the European community.   Despite the manifest evidence of the failure of austerity economics, the chief architects of austerity are committed to redoubling their sniffy efforts at inflicting pain on their despised neighbors – and even their own beleaguered populations, especially immigrant populations.   The only conclusion that can be drawn from this behavior is that generating economic prosperity is not the real goal of these leaders, but that they are instead motivated by the urge to inflict punitive social discipline, and to demonstrate in no uncertain terms the ruling prerogatives of economically dominant groups.   It’s hard to avoid noticing that the battle lines have broken down along some traditional ethnic and religious frontiers, with northern Protestant countries laying into the traditionally Catholic and Orthodox countries on the Mediterranean periphery.   (Northern Europeans seem to take special delight in the role reversal: the descendants of the great European ancestors who lived along the sea whose name means “center of the world” are now relegated to “peripheral” status by the descendants of the formerly subject and backward peoples of the cold barbarian hinterlands.)

So how have we ended up here?  What is left of the progressive movement in the developed world?  What is responsible for four decades of progressive failure amidst the rise of a neoliberal order that has delivered a society that is more insecure, unequal, brutal, uncivil and degrading – and is now failing even on its own limited terms?  Why have progressives been unable so far, in the midst of the worst economic experience since the Great Depression, to articulate and spread a riveting and powerful vision of social and economic transformation, to reverse the trend toward neo-feudal social and economic hierarchy, and to build a politically powerful coalition to advance the causes of equality, solidarity, democracy and progress?

I won’t pretend to have all the answers to this deep historical and social question.  But I would like to propose one specific and almost forgotten cause around which to organize a resurgent progressive movement.   Progressives must rediscover and reassert the ideal of a full employment economy, with an activist government permanently mobilized and organized to provide a productive job for every person who is both willing and able to work, but whom the private sector has not employed.   Public enterprise guaranteeing full employment must take its rightful place alongside private enterprise to achieve the important public purposes that the private sector cannot achieve on its own, and to restore the balance of social and economic power and status which is essential to a viable democratic society.   Let me explain why the pursuit of a full employment economy is politically, economically and morally necessary, and why progressives must take up this cause as a foundation for political revival.

End of Part One

19 Responses to Full Employment as the New Progressive Paradigm

  1. “Of course, Mitt Romney’s disdain for government assistance extends only so far, since he has no objection to the sturdy fortress of legislative, judicial and police protections erected to both institute and protect private property.”

    This what they mean when they say “we need limited government”.

    ” The only conclusion that can be drawn from this behavior is that generating economic prosperity is not the real goal of these leaders, but that they are instead motivated by the urge to inflict punitive social discipline, and to demonstrate in no uncertain terms the ruling prerogatives of economically dominant groups.”

    Fiscal spending has effectively been privatized.

  2. WHY NOT ?
    “QE 4 Full Employment”
    As Einstein said,”Make it simple”
    Raise revenue so that it is greater the spending (even if increased) and for insurance lower current debt.
    And we all know how to do that: Raise the taxation revenue !
    Where we go wrong is in thinking that “federal income taxes is a viable source to do this.
    Taxation is, that is not based on income. Taxation is, that is not based on purchases.
    Taxation that is fair and equatable is the solution.
    Ben Bernanke (Should be a Noble Prize candidate) has proven there is a way.
    It is called Quantitative Easing (QE). We can raise $11 trillion a year for the next 36 years while at the same time reduce federal income taxes to zero, increase jobs and prosperity. Also at the same time have price stability and inflation control, while lowering capital cost which would increase profits while allowing greater take home pay. Imagine no federal income tax, no FICA !
    “QE 4 The People” $200 trillion.Make $100 trillion available via loans (an asset) for residential and commercial real estate,and $100 trillion available for “private for Profit banks” (PFPB) via loans
    so they can be on 100% margin. $200 trillion in assets with an interest rate of 2% for 36 years .
    How could that be possible? “Simple”, take away from the PFPB the profits they are allowed to make and give back to the people what is rightfully theirs.
    Google “justaluckyfool”

  3. Why have we lost the narrative war? Keynesianism’s inability to respond to stagflation and the resulting rise of Friedman and neoliberalism, whose narratives are simply more palatable to the elite and more intuitive (belt-tightening, running out of money) to the majority.

    • Yeah.

      We don’t have “stagflation” now. What we do have is a sufficiently tipping-point ascendant aggregate Idiocracy, who — while they can’t even pronounce “Keynesianism” (nor have the first clue as to its details), nonetheless agree with Newt (or Hannity et al) that it has been dispositively relegated to the ash heap of history. This entire 54W-32L Costco denim Comfort-Fit cohort, can, though, intuitively understand the concept of “belt-tightening” (as they would demand it of others).

      We have lost the narrative because we have not made and adequately pushed the answer to the core question: What is the fundamental moral justification of “markets”?

      I know this tweedy MMT debating society stuff is necessary, but, it is insufficient.

      Time draws short.

      • I understand the frustration with mere debate, but this site is for helping people to work through the intellectual issues. Hopefully people then go on to do some advocacy. I’m going on a local radio show here in Concord, NH to talk full employment and MMT, and what needs to be done. I also try to spread the things I write as far as I can. Stephanie Kelton has also been very active lately in promoting MMT ideas. I hope others are doing similar things. But there still needs to be a place where people can debate and hash the theory out.

        • What is the fundamental moral justification of “markets”?

          Take a stab.

          • Markets and private enterprise have their place. They are useful for the satisfaction of myriad human desires that are too diverse and quirky and conflicting and complex to be satisfied by some centrally planned, organized system. Someone sees a human want, and organizes an enterprise to satisfy it without a lot of governmental hullabaloo. But private enterprise can’t set the strategic direction for the economy; they can’t deliver public goods that are not distributed as a mere sum of individual goods; they cannot preserve the environment and communities that are the foundation for everything else; they can’t keep everyone employed and assure that a society is achieving up to its capacity; they can’t even stabilize the private economy of which they are part and keep it from experiencing bubbles and crashes.

            • You’re getting warmer.

              • Look if you have something to say, just say it and stop playing games.

              • I asked a question. You have not answered it adequately. Don’t get impatient with me. This is just a blog.

                What is the fundamental moral justification of “markets”?

                Keyword “fundamental.”

                Equivalently: What is the fundamental moral justification of “a legal system”?

                Hint: It’s not Written In Stone, it’s something societies decide upon. There’re more than one.

              • That would be: “To meed the complex needs of human beings on the planet.” The Moral justification in specific for markets is that they are an efficient way of meeting these human needs. As history now bears out though markets are only efficient for producing/distributing certain types of goods (predominantly luxury goods and anything related to computing.) and are often terrible at pricing externalities (such as environmental pollution.)

                So we can take the above moral justification as the basis for regulatory and other legal regimes with relation to markets. Namely that when the market is not efficiently able to produce/distribute essential goods that it is the job of the only other entity in this relationship, the government, to somehow fill in the gap to ensure that the core goal is met. That somehow human beings all have their basic needs met, whether through market forces or some combination of government and market forces.

      • I’m not going to dance with you, but will clarify that my point about stagflation was simply that if you have to identify a single event/era that established neoliberal narrative dominance – especially with Krugman’s “very serious people” – it’s stagflation.

  4. A Progressive Global Coalition clearly appears the way to go for those conscious and aware of human social evolution.

    What do I mean by social evolution? I mean that human societies will be in some new situation. New does not only mean another day but also a day where something different happens: behavior change.

    Progressives see social behavior evolution as heading to unexplored spaces of relations among people. Social change is happening fast all over the world. The take of progressives in the changing process they understand is to enhance the likelihood of change becoming evolution. Key global questions concerning people globally and driving human development are:.
    Full responsibility of producers.
    Management of monetized distribution of goods-services and allocation of resources.
    Maximal technology development to take us into the frontiers of the physically possible.

    Just to be clear about what the above definition means for non-progressives is some of the following. Alienation of responsibility for example as in the current employer – employee relationship. Barterization of economy by assuming money being a material. Curtailing scientific and technological development directly or consequentially.

    Considering these questions, the aims of the PGC will be to set as political priority.

    Full responsibility of producers (FRP). An approximation to FRP is Full employment FE. All that are able and willing will become employed. But one must be aware that FE to be credible must be accompanied by full employer-ability. For to exist an employee it must exist an employer. This condition must be satisfied for satiation of the desire to be employed and paid. Those wanting to become employers so that others can be employed are people definitely necessary if one wants full employment. So both wanting be employers and employees should earn at least universal minimum salary with standard free security, health and education. Actually this minimum salary could be thought universal to all society publicly or privately employed or employing. At current practices of determination, it would constitute a Universal Income to Labor, doubling the Universal Personal Income, if determined as one producer, one descendant.

    Full employment FE then would come as a universal secure income, paid to any citizen being or wanting to be in a productive occupation either as employer or as an employee . People committing to the employer situation would be responsible for getting themselves and the employed assigned to them into productive activity. Some combination of this and the employed taking responsibly their functions is what keeps civilization going. Yet, this is territory known for centuries. Employment is quite better than preceding producing regimes but it does not mean the more conceivable evolved state.

    A conceivable more evolved state, because actually new, is and will be more in the future full partnership FP. Full partnership is full responsibility of producers contractually and legally assumed. It calls for a new type firm, a very rare type of firm as of these days, the democratic firm or the producers cooperative. Approximations to this type of firm exist in greater number as employees participated firms.

    The existing cases demonstrate how it is possible to mass produce global top technological products and services maintaining standards of ethical conduct in distribution of earnings or profits among partners and participants in firms, simultaneously satisfying social responsibilities.

    I do not expect that a very rapid change in the coordination of people goes from the current situation of dominance of employment structured firms to a situation of dominance of democratic firms or transitioning to democratic firms and government organizations. This in itself is not a shortcoming, people have some learning steps to go. Accommodating the actual situation and opening paths for evolution the UPC could propose

    Full Responsibility of Producers, along a pathway of full employment FE, full entrepreneurship FR, full partnership FP, which means that all the three approaches to productive organization would guarantee a minimal income.

    This network of firms and governmental organizations use a monetized economy transaction system for distributing goods and services and allocating resources. This monetized economy of firms and governmental organizations requires adequate macro-policies. These are to be accessed first by impact in human development measured by real income, life expectancy and education. To assess the income item both universal income and total income in real terms are to be used. The universal income is the minimum income times the number of citizens. Increasing universal income and total income in real terms allows for a universal income to be defined for a country. This could be summed up by the UPC proposing

    Political decisions guided by the aim of establishing and steering a mixed, government organizations and private firms, monetized fair economy to increase universal and total income in real terms, life expectation and education.

    As a third global development vector the UPC can propose technological development programs in the areas of infra-structure resilience and development (energy, climate control), distributed decision support, micro and distributed manufacturing, nanomaterials, open knowledge access, space exploration.

    This would make for a global triple aim program, full occupation and full partnership; universal (minimum for all citizens) and total (for all citizens) development – income, life, education; fastest technological development.

    More regional programs could address specific needs as debt deflation for the developed countries, peace for the Middle East supported on an international Peace and Reconstruction program, women conditions wherever extended poverty is present.

    relatio
    If the burden of being the employer falls The generalized ignorance
    before we can set should embrace the space

    • Hi Paulo. Very substantive comment. I would just like to add that social evolution isn’t just something that happens as a result of impersonal forces. It is something we need to be involved in. Lately I’m trying to get people to understand the idea that social and economic stagnation, and mass unemployment, are not the work of the invisible hand, or the unseen gods of the economy, or impersonal and uncontrollable economic forces. They are a choice that the plutocrats that run our economy have made to protect their own assets, and keep us in our place. We can make a different choice if we work together and pool our power.

  5. Hey D.K. I’m remembering hitchhiking over night from Sioux City back to K.C. during the winter of 75-76 and getting a ride from a labor activist. He didn’t have to say anything, his concern was easily expressed and mostly intuitive, he had his work to do. As I stepped out of his camper and continued my trek from an interchange south of Des Moines, the over cast prairie blanketed by wind chilled the banks of snow, how natural and yet how odd and unplaceable a landscape it seemed. I was glad to get any ride and further company, letting the picture ,the whole rest of it be a right of passage. Looking forward to part 2 :)

  6. –debts to GDP ratios and budget deficits –
    Outcomes of overspending and spending for unproductive activities such as on defence which can be avoided. Not only in America but also in other countries defence expenditure to GDP ratio is quite high. In a country like Pakistan this ratio is plus 27 percent of GDP and public debt is now exceeding Rs 12.00 trillion. It looks that capitalism needs to be deeply washed and reformed to meet the needs of the society as a whole and not reserved for a few elite.