Commentaries (some of them cheeky or provocative) on economic topics by Ralph Musgrave. This site is dedicated to Abba Lerner. I disagree with several claims made by Lerner, and made by his intellectual descendants, that is advocates of Modern Monetary Theory (MMT). But I regard MMT on balance as being a breath of fresh air for economics.
Sunday, 28 August 2016
Pedro Da Costa thinks Minsky thought up the “Government as employer of last resort” idea.
That’s in this Reuters article of his which starts “The concept that the government should serve as an employer of last resort in times of economic stress was first floated by the late economist Hyman Minsky."
Well now much the biggest set of employer of last resort (ELR) schemes in the last century in the US came (unsurprisingly) in the 1930s – at which time Minsky was a teenager! I rather doubt he had a decisive influence on the WPA and other ELR schemes in the thirties. And of course in Germany in the thirties there was something similar: autobahn building, etc.
Going back a bit further in history, there were the work houses in Europe and America in the 1700s and 1800s. Those were ELR of a sort.
And going back still further, two and a half thousand years ago: Pericles in Ancient Greece set up an ELR scheme. In reference to Pericles, Plutarch’s book “The Lives of the Nobel Grecians and Romans” (p.192) says “….it being his desire and design that the undisciplined mechanic multitude that stayed at home should not go without their share of public salaries, and yet should not have them given them for sitting still and doing nothing, to that end he thought fit to bring in among them, with the approbation of the people, these vast projects of buildings and designs of work, that would be of some continuance before they were finished, and would give employment to numerous arts, so that the part of the people that stayed at home might, no less than those that were at sea or in garrisons or on expeditions, have a fair and just occasion of receiving the benefit and having their share of the public moneys.”
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Ralph's quote is from North's translation of Plutarch’s book “The Lives of the Noble [not Nobel !!] Grecians and Romans":
ReplyDeletepage 560 of an epub version (best read using Sumatra)
http://book4you.org/book/1713660/d39cd6
page 209 of a pdf version (less reader friendly)
http://book4you.org/book/2530756/bb1778
A different translation is on page 39 of
http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Pericles*.html
Corrected links below
ReplyDeleteRalph,
Proposals for JG were not merely "floated" by Minsky, Pericles and numerous others during the last 2,500 years. Similar ideas evolved during the last 500,000 years and are now are innate within most humans.
The work of some evolutionary psychologists suggests that an instinct for "strong reciprocity" between members of human social groups evolved by the process of "group selection".
Strong reciprocity is a propensity to cooperate with others on a shared social task, even at personal cost, and a willingness to punish those who violate cooperative norms, even when punishing is personally costly.
Tribes with a high proportion of cooperative members tended to be the most successful at surviving wars, predators, resource constraints, climate changes and natural disasters. Groups whose members were less willing to co-operate tended to be become extinct.
Strong reciprocity instincts lead to social security and welfare schemes if the recipients are regarded as ‘deserving’. But egalitarian policies that reward people independent of whether and how much they contribute to society tend to be considered unfair/contrary to cooperative norms.
This analysis helps to explain why in many modern societies JG/ELR/workfare schemes may be socially acceptable whereas mere income guarantee schemes are often seen as unfair to those who work/contribute to society.
A good intro is:
https://newrepublic.com/article/103896/cooperative-species-human-reciprocity-bowles-gintis
The book by Bowles and Gintis can be downloaded for free from:
http://library.uniteddiversity.coop/Money_and_Economics/Cooperatives/A_Cooperative_Species-Human_Reciprocity_and_Its_Evolution.pdf
King Kong,
DeleteYour 500,000 years puts my 2,500 years to shame!! I agree that ELR has the advantage over income guarantee of offering some recopricity. Personally I can't why we can't have BOTH, but obviously with a higher rate of pay of doing ELR work than for doing nothing.