Re: City of Beijing announces Job Gaurantee

["John O'Donnell" <jackodonnell@xxxxxxx>]

Bruce McFarling wrote:

<<SNIP>>

> If the dole is income support payments received by
> unemployed unable to find work, how can everyone be
> put on the dole, other than by throwing everyone out
> of work?

I used the term "dole" as a reference to payments made by
government to individuals independent of any requirement for
compensatory work and not limited to payments conditioned on
being unemployed.

The reason to provide such a payment is to lower the
settlement point of wage negotiations. Labor negotiations
inevitably take account of the cost of providing labor
[taxes, transportation, meals away from home, etc.] and
alternative sources of income to provide an acceptable
standard of living as well as the residual earnings to be
kept as "wages" of employers for providing employment.

> As to the rest of it, I have argued for a switch in tax
> burden away from employment taxes and toward resources
> taxes (in other fora) on and off for years ... but just
> because I agree with one element of your programme does
> not persuade me that the model you have developed is
> useful.  It still seems like representative firm modelling,
> the pitfalls of which are well established, and there is
> no evidence from what you write on this list that you have
> made any effort to avoid the pitfalls.

It is "representative firm modeling" in that the
demonstration is the effect of macro economic policy on the
behavior of micro economic decisions. The only extent to
which the model is brought forward to represent the economy
as a whole is the simple fact that the total is the sum of
its parts.

Can you provide some specifics of the pitfalls you see? The
fallacy of composition you seem to be asserting is one of
improperly imputing the whole will have the same composition
as a partial sample of the parts. I make no such assertion.

--
			-- jbod

		Tax Privilege, Not People
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