Re: Full Employment is what?

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

Mat,
      I do understand that most of the time in most
countries, raising the possibility of the dissolution
of the state is not very useful for policy discussions
of almost any sort. It was just this use of the term
"infinite life unit," that got to be a bit too much for me.
Within the last century there are quite a lot more
"juridical nations" that have ceased to exist than just
the Soviet Union.  And, of course, for several decades
it was considered to be the second most powerful
nation in the world, hardly a candidate for likely near
term dissolution.  Despite current triumphalism and
breast beating, there is no reason that the United
States might not dissolve within our lifetimes too.
      Again, my problems are less with the policies
and more with the pure theory.  I think that there
can be money that is not created by a state or that
is not being paid to a state for taxes.  Rather than
drag through all of that again (can if you want, but I
would rather not), I suggest you check out the pkt
archives from somewhere in 1994 or 1995 when
Randy Wray and I had quite a go around about such
things as the cowrie shell money and so forth.  Unfortunately
I do not know what those files are called, but the debate/
discussion was quite extensive and went to the core of
the theoretical issues.
       I do not have any big problems with functional finance,
per se. Deficits only become problems when they
involve borrowing from abroad in foreign currencies,
a point that I made to Bill Vickrey himself once at a session
at the EEAs as a discussant on a paper of his (now a
working paper from your shop, I believe), which led him to
raise an eyebrow very high, but brought forth no verbal
response... .  .   .     .      .       .        .         .          .
.            .
Barkley Rosser
James Madison University
Incoming JEBO editor
rosserjb@xxxxxxx
----- 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 4:18 PM
Subject: RE: Full Employment is what?


> Barkley! Obviously, the collapse of a government (in the way the Soviet
Union
> collapsed, as opposed to the way government's 'collapse' in Italy), can
result
> in the collapse of policies and agreements that were made previously. But
you
> would have to admit that if we are to take that logic out, then we can't
have
> any long or even medium term policies. I'm glad you weren't around when we
> started social security!
>
> Obviously there are serious and multiple kinds of political challenges to
major
> policy initiatives like a national elr or significant environmental
policy. But
> as you know the ecological economics crowd all already feel pretty major
> environmental policy is necessary.  Ditto the ELR crowd on economic
policy. So
> my task here is not so great--bring the two sides together in a sense.
>
> Now what is your problem with chartalism, I don't remember your
objections?  And
> I'm not talking about economic history--under state money systems, do you
have a
> problem with functional finance?  Or do you think we are financially
constrained
> to run deficits, run up the debt, etc.?
>
> Mat
>
>
>
> -----Original Message-----
> From: J. Barkley Rosser, Jr. [mailto:rosserjb@xxxxxxx]
> Sent: Thursday, May 31, 2001 3:00 PM
> To: Forstater, Mathew
> Cc: Post Keynesian Thought
> Subject: Re: Full Employment is what?
>
>
> 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?
> > >
> >
>