A CONSERVATIVE DEFENSE OF A JOBS GUARANTEE PROGRAM

By John Henry

John Locke is the “father” of property rights theory, and continues to be referenced in defense of private property. In the second volume of his Two Treatises of Government, Locke specified the conditions that must be satisfied in order for property to be deemed legitimate. Initially, any property taken from “the commons” (public or collective property) had to be based on one’s labor that was expended to improve that property. (While Locke focused on landed property, his argument applies more generally.)

But, there were two further conditions that had to be met, labeled the “prejudice” and the “spoilage” constraints—and these were seen as moral constraints. Essentially, the prejudice constraint means that no one can be disadvantaged by another’s appropriation of property; all must benefit, though some may benefit more than others. The spoilage constraint connotes that none can seize property beyond that which can be used by one’s own labor. If either constraint is not satisfied, two options are proposed: the disadvantaged have the right to revolt and overturn a private property regime, or government has the obligation to step in to rectify the situation in the interests of the community at large.

Now, it is clear that any large property holdings—giant farms, the modern corporation, etc.—violate the spoilage constraint. Locke himself was aware that there was a problem in his formulation in that, if adhered to, the capitalist accumulation process could not proceed. (He tried to wiggle out of his self-imposed dilemma by arguing that the accumulation of money—gold for him—was morally permissible as it didn’t violate either the prejudice or the spoilage constraints; anyone could accumulate money, and money (gold) didn’t spoil. For a critical evaluation of Locke’s proposed solution, see Bell, Henry, and Wray 2004.) The main issue addressed here is whether unemployment violates the prejudice constraint, thus calling the continued adherence to a private property regime into question. If so, from a purely Lockean standard, then government must undertake a program to guarantee full employment in the interests of society as a whole—and this is a moral obligation.

It must be noted that Locke was arguing from what is now a politically conservative position. In his day, Locke was considered something of a radical, but with the passage of time, private property has become ingrained in our institutions and our habits of thought that it might be said to have become sanctified as a necessary condition for our very existence—the essence of “freedom.” So, from a modern conservative position, what follows should be seen as consistent with Locke’s defense of property, and, again, Locke continues to be called on as a seminal reference point in current debates.

It is clear that in a modern capitalist society, most of the non-propertied segment of society—overwhelmingly the majority of the population—is dependent on the private (propertied) sector for employment, thus income, thus well-being. There is, however, nothing in the arrangements of a modern economy to guarantee that the private sector will offer enough jobs to satisfy the needs of the non-propertied for work. (Nor, for that matter, that the wages offered will satisfy the needs associated with well-being.) Indeed, the normal case is that there is always some amount of unemployment; “full” employment (however determined) is exceptional and conventionally attendant to large-scale wars—when a goodly part of the labor force is sent out to kill and be killed.  As the non-propertied (workers) are dependent on the propertied to provide them with employment, and if that employment is not forthcoming, then workers are “prejudiced” by the existence of private property: the “social contract” between the propertied and non-propertied has been violated; not all are advantaged by the arrangement.

This also calls into question the issues surrounding the spoilage constraint. Should some acquire property that is more than they can use in exerting their own labor, if he “. . . took more than his share, and robb’d others” (Locke, p. 318), others were denied the use of the spoiled output resulting from privatization and were thus “prejudiced.” Spoilage offends “. . . the common Law of nature,” and the property owner “was liable to be punished” for “he had no Right, farther than his Use called for . . .” (Ibid, 313; emphasis in original). Locke, if consistent, would oppose large-scale holdings. A Lockean solution to this issue would be the imposition of a Jeffersonian-style democracy where all would be independent small farmers, artisans, etc. But this is not capitalism, in which a class of property owners hires a class of non-propertied workers. (Indeed, we seem to be moving in a direction quite the opposite of that which Locke would find legitimate. Recent rulings which permit private oil and gas companies to use eminent domain in their own interests and cause great “prejudice” to be heaped on the non-propertied as well as those with small property holdings—the environmental, health, and other forms of damage inflicted by “fracking,” the construction of pipelines, etc.—represent an abrogation of the moral responsibility of government. See http://readersupportednews.org/news-section2/328-121/13067-oil-and-gas-companies-can-take-your-land.)

Now, while this raises the specter of revolt, let me focus on the more “reasonable” alternative—a jobs guarantee program. For Locke, should the two constraints be violated, government has the moral obligation to oversee the correction to the problem. One solution would be a very generous unemployment benefit that would at least equal the wage one could earn if employed. In addition to this payment, though, the benefit would have to include a sum that would compensate for the psychological costs of being unemployed, loss in skills as a consequence of not working, perhaps an additional amount to compensate for the social stigma usually attached to the inability to secure a job. All this would be necessary to override the Lockean “prejudice” caused by those with property who possess the ability to hire workers who do not do so in a sufficient amount. Clearly, this is unworkable as the compensation package would be considerably larger that the wages paid to the employed and many would find this a more satisfactory alternative to working. Wages would probably be driven up, causing costs in the private sector to rise and the propertied segment of the population would resist—mightily.

The other approach, and the only one that is feasible, is a jobs guarantee program. Governments have the ability to operate employment programs that do not compete with—indeed, may well complement—jobs in the private sector. Given their ability to spend without facing a profit constraint (one important aspect of so-called Modern Money Theory), governments can organize programs to employ all those who want a job, and, if properly structured, provide useful output for society. The rebuilding of infrastructure in the U.S. and elsewhere comes readily to mind. And such a program would clearly benefit the private sector. That is, it would not conflict with extant property rights. The list of projects is extensive: schools, hospitals, and so forth. And, one should not forget various service-sector possibilities including public arts projects. A short check of Works Progress Administration ventures of the 1930’s will confirm that government can undertake and has undertaken useful activities that enhance personal and societal well-being. And it can to this efficiently (though efficiency in the cost-minimizing or revenue-enhancing sense should not be the objective).

Would John Locke approve? If one takes him at his word, the answer is an unequivocal “yes.” When unemployment is seen as a “prejudice” resulting from the normal behavior of a propertied regime, government has the moral  obligation to rectify the problem. And this is a politically conservative position.

 

References:

Bell, S., Henry, J, and Wray L. “A Chartalist Critique of John Locke’s Theory of Property, Accumulation, and Money: Or, is it Moral to Trade Your Nuts for Gold?” Review of Social Economy, LXII, No. 1, March 2004.

Locke, John. Two Treatises of Government, edited by Peter Laslett. Cambridge: Cambridge University Press, 1967.

 

17 responses to “A CONSERVATIVE DEFENSE OF A JOBS GUARANTEE PROGRAM

  1. The answer to Locke’s thesis that unused landed property was an offence to those who have no opportunity to work due to their being landless, was provided by Henry George in 1879. His seminal book “Progress and Poverty” included not only the rural land but was flexible enough in its economic theory and postulizing to include the most valuable unused sites in town too. George proposed to tax land values and that at the same time other kinds of taxation would be reduced and eliminated. All productive land that was not being used would be included by this measure and the result would be to eliminate the problems of property ownership which Locke was so able to determine and explain.

    Georges claim went a lot further than this too, because his proposal was able on an ethical basis too, to provide for better government. It aimed to cease the exploitation of city development and land value growth by the speculators in land values. This increase was due to town development after tax payers had provided the government with the means for development of the infra-structure. The national investment would thus provide a yield that returns for government use.

  2. “The spoilage constraint connotes that none can seize property beyond that which can be used by one’s own labor”

    I’m not sure I understand this. First, I think most property is already owned by someone, and cannot be “seized” except by government. I would object to government seizing property by eminent domain for the benefit of an individual or company, as opposed to doing it for the public benefit. I know there have been court cases about this recently, and I think that was the court’s position, too.

    So, on to the idea of a large corporation owning a “giant” farm. Should the corporation hold some land out of production, for its own nefarious purposes, maybe spoilage would apply. But simply being large would not seem to violate the spoilage constraint. Virtually all farmers, however small, produce more than they can use themselves, and they sell the remainder. Does farming as an industry violate the spoilage constraint per se? And likewise, would any business, however small, which sells part of its output rather than using it all for itself also violate the spoilage constraint? If not, why does a “giant” farm violate it while a family farm would not?

  3. **Quote***”When unemployment is seen as a “prejudice” resulting from the normal behavior of a propertied regime, government has the moral obligation to rectify the problem.”
    Perhaps a foolish question, in hope of a profound answer. Could that government use other means to rectify that “prejudice” other than via “jobs”. Perhaps the “prejudice” is that of inhibiting one from acquiring their right to a living standard or “inalienable right to life, liberty and the pursuit of happiness”. Perhaps employment could mean more than “jobs”.

  4. Perhaps the answer lies in how you redistribute the wealth of a nation; as well as how you acquire it.

  5. If so, from a purely Lockean standard, then government must undertake a program to guarantee full employment in the interests of society as a whole—and this is a moral obligation. John Henry

    Baloney. If a man can’t work because he doesn’t have land then instead of being given a job on Pharaoh’s pyramids, he should be given land.

    The banks have used our own stolen purchasing power (“loans create deposits”) to disposses us and concentrate wealth and power. Now consolidation of capital for economies of scale is good but the proper means to do that is with common stock as money, not stolen purchasing power via “credit creation” for the so-called “credit worthy.”

    • You’re not making any sense, F. Beard. Or you didn’t understand what John Henry was writing.

      • I do understand what he is saying and I’m offended by it: the victims of theft must work for their restitution!

        And why kiss the arses of conservatives whose only criteria is “What I’m familiar with is good; the old ways are best.”?

        The problem with many in the MMT crowd is they have not yet recognized that if “bank loans create deposits” then banking is a form of counterfeiting that loots those who are less so-called “creditworthy” for the sake of the more so-called “creditworthy” and especially for the sake of the banks.

        The solution then is not pyramid building but radical redistribuition of large land holdings and the ownership of large businesses.

        • “The solution then is not pyramid building but radical redistribuition of large land holdings and the ownership of large businesses.”
          The solution to quote Einstein,” Make it simple.” is quote Justaluckyfool,“Give Back To The People The Money Magic The Banks Took Away From The People”
          We must take back the right to be the only issuer of the currency.
          Buy all real estate loans at full value, modify them so as they become a source of revenue.
          (google: Justaluckyfool- “Answer lies in redistribution of the wealth of a nation…”
          Lend all financial institutions what they ned to be “made whole” at 2% for 36 years.
          All transactions by banks must be at 100% margin-100% liquid-hope they need to borrow
          $100 trillion or more.

      • But the present need is a universal bailout*, including non-debtors, till all credit debt is paid off. The least we can do for the population is abolish their debt to the counterfeiting cartel. To be dispossessed is one thing; to be be dispossessed and in debt to the thieves is far worse.

        * similiar to Steve Keen’s “A Modern Debt Jubilee”

        • “abolish their debt to the counterfeiting cartel. ”
          But in such a manner that would not become the “prick in the bubble”
          We must take back the right to be the only issuer of the currency.
          Buy all real estate loans at full value, modify them so as they become a source of revenue.
          (google: Justaluckyfool- “Answer lies in redistribution of the wealth of a nation…”
          Lend all financial institutions what they ned to be “made whole” at 2% for 36 years.
          All transactions by banks must be at 100% margin-100% liquid-hope they need to borrow
          $100 trillion or more.
          “Give Back To The People The Money Magic The Banks Took Away From The People”

        • Makes sense to me.

    • “If a man can’t work because he doesn’t have land then instead of being given a job on Pharaoh’s pyramids, he should be given land.”

      Bingo!

  6. Pingback: John Henry: A Conservative Defense of a Jobs Guarantee Program « naked capitalism

  7. Paolo Barnard

    Excellent piece by J.F. Henry, much appreciated. Although I intellectually symphatize with the more radical views on wealth redistribution, one must recognize that realism is a constraint in proposing solutions to social injustice. I say, let’s begin with realistic solutions like the one Henry and the MMt camp advocate, then and only after we are all at least decently employed, cared for and educated, we can start discussion on how to do it even better. This is why I now work full time to propagate MMT in Italy. PB

    • Thank you Paolo for all your efforts in Italy. (Although i believe you don’t like to be thanked!)

      I look these things from “georgist” point of view and i’m very skeptical MMT’s ability, as such, create significant social changes outside Job Guarantee – program. I don’t see why would public money allocate itself, in the end, anyway differently in private sector compared to private money.

      IMO Henry George is still valid. First give land to landless so that they have access to labour market, if there is problems left after that, deal with them later. What’s the point working hard and see your purchase power in housing market continuously escaping?

  8. Well, now I understand why people keep asking me about that John Locke article I didn’t write…

  9. @John Henry: the John Locke article you didn’t write? Can u please clarify? Thx P.