Re: Full Employment is what?

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

Mat,
      The remark was not meant as a criticism
of ELR in general, although I think that it is
well known by many that I do not fully agree with
the chartalist view of money that many advocating
ELR espouse.  I am a fan of the policy, but not
necessarily of some of the theory attached to it.
      No, my remark was not merely a smarmy
wisecrack either.  My wife and I have to provide
funds to her mother who lives in Russia partly because
she is a pensioneer.  She was a medical doctor and
fully expected the government of the Soviet Union to
take care of her in her old age.  Well, she has outlived
the goverment of the Soviet Union, although the Russian
government does pay pensions, but not as generously
as those paid by the Soviet government.  So much for
governments as an "infinite life unit," although I agree
that it is an appealing concept in theory.
Barkley Rosser
----- Original Message -----
From: "Forstater, Mathew" <ForstaterM@xxxxxxxx>
To: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
Cc: "Post Keynesian Thought" <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, May 31, 2001 3:30 PM
Subject: RE: Full Employment is what?


> Please Barkley, I expect more from you!
>
> But, on the other hand, perhaps worded differently, it is a fair and
welcome
> question.
>
> As such, it requires a lot more time than I have at this moment to devote
to a
> comprehensive response.  And obviously I can't speak for Bill.
>
> I'm working on my paper now for the Path to Full Employment and Equity
> conference at Newcastle and hopefully this will go some way to answering
your
> question.
>
> Capitalist economies are by themselves unsatisfactory and unsustainable in
a
> number of ways.  One way they are unsatisfactory is that they do not
provide
> full employment.  As you know, I support an ELR/JG program for full
employment,
> run on the principles of functional finance.  You may also know that I and
> others have argued that not only is this the only way that capitalist
economies
> can provide true full employment, but that we see there being a number of
other
> potential benefits as well.  For example, ideally those employed will
provide
> public and community services that will increase quality of life, etc.
> Certainly environmental services of various kinds are among these.
>
> Capitalist economies, I think the evidence shows, are also by themselves
> ecologically unsustainable in a number of ways.  Badly regulated
capitalist
> economies may be even more unsustainable in some ways.  Here I refer to
> subsidies for the wrong kinds of technologies, resource use, etc.  So the
rate
> of resource depletion, pollution, etc., and the basic technological
structure of
> production are not consistent with long-term environmental sustainability.
Of
> course, there are other social costs of market forces that may be
addressable
> through the ELR, but let's focus on the environment.
>
> Perhaps ELR and an environmental policy program can be combined in a way
that
> can make up for the unsatisfactory and unsustainable aspects of
capitalism.  If
> that's the case, and if we view an unsustainable and unsatisfactory
capitalism
> as a kind of "sick patient" then I took Bill's reference to government as
a
> "life unit" as reference to the sets of institutions and policies that
might
> complement and supplement capitalism to make it better.
>
> Now, I think that is very different from the Soviet Union in a number of
ways.
> On the employment side, the Soviet Union did have full employment, but in
the
> basic ELR proposal, the idea is to find the right balance of private and
public.
> On the environmental side, I think that the Soviet Union did not have
> environment as a priority, and some of the logic of the Soviet system even
> worked against the environment.
>
> So, the short answer is that the "life unit" idea sees government as
providing
> essential services, policies without which capitalism would be
unsustainable and
> unsatisfactory.  Surely the reference to "Soviet Union" is a non sequiter,
a red
> herring, and various other terms people use without knowing what they mean
or
> why.
>
>
> -----Original Message-----
> From: J. Barkley Rosser, Jr. [mailto:rosserjb@xxxxxxx]
> Sent: Thursday, May 31, 2001 1:45 PM
> To: Forstater, Mathew
> Cc: Post Keynesian Thought
> Subject: Re: Full Employment is what?
>
>
> Bill and Mat,
>       Was the Soviet government "an infinite life unit"?
> Barkley Rosser
> ----- Original Message -----
> From: "Forstater, Mathew" <ForstaterM@xxxxxxxx>
> To: "Bill Mitchell" <ecwfm@xxxxxxxxxxxxxxxxxxxxxxx>;
<pkt@xxxxxxxxxxxxxxxx>
> Sent: Wednesday, May 30, 2001 6:12 PM
> Subject: Re: Full Employment is what?
>
>
> > Bill Mitchell wrote:
> >
> > >we can also truly see the government as an infinite life unit.
> >
> > If I understand this correctly, this is an extremely important point.
It
> > relates to what Bill wrote in his paper "The Job Guarantee in a Small
Open
> > Economy" in E. Carlson and W. F. Mitchell (eds.): THE PATH TO FULL
> EMPLOYMENT
> > AND EQUITY, The Economic and Labour Relations Review, Vol. 11,
supplement,
> 2000:
> >
> > "Even if it were possible to expand demand enough to promote growth
> sufficient
> > to keep pace with labour force growth and productivity growth and mop up
> the
> > huge stocks of long-term unemployment, how could the natural ecosystems,
> already
> > under great strain, cope? There is a need to change the composition of
> final
> > output toward environmentally sustainable activities.  It is not
increased
> > demand per se that is necessary, but increased demand in certain areas
of
> > activity." (Mitchell, 2000, p. 113 n8)
> >
> > This also relates, if I may say so, to some of what I was trying to get
at
> in my
> > paper in the same volume, "Full Employment and Economic Flexibility" (as
> well as
> > in "Flexible Full Employment" JEI, June 1998, and Levy Public Policy
Brief
> No.
> > 50 and Levy Public Policy Brief Highlight No. 50A at
> http://www.levy.org ):
> >
> > "Since the government is not in business to make a profit, it can base
its
> > decisions about products, production methods, and hiring not on cost
> > minimization, but on broader macroeconomic goals or social values...
> >
> > ...Whereas private firms are compelled by competitive pressures to
choose
> the
> > method of production that will maximize profits, government is not so
> > constrained. For any given activity, choice of technique can be based
not
> on
> > cost minimization but on impact on the system as a whole. For example,
> more
> > labor-intensive methods may be chosen even where more capital-intensive
> methods
> > are available and might be chosen under different conditions, and
> alternative
> > technical means may be utilized to ease pressures on natural resources
or
> the
> > assimilative capacity of the environment."
> >
> > In this sense, activities peopled by the Job Guarantee provide a full
> employment
> > that is more sustainable than a fully employed private sector
capitalism,
> even
> > if the latter were possible, and further, may provide services without
> which the
> > private sector itself would be unsustainable, fully employed or not.
> >
> > Bill: if you read this far, in the "Small Open Economy" paper you refer
to
> a
> > paper where you discuss the job guarantee and environmental
> > sustainability--Watts and Mitchell 2000, on the genuine progress
> indicator. Is
> > that paper available on the web?
> >
>