Re: Money, debt, real products, real jobs

Title: Message

My original message starting this thread was to lead to a plea that we think positively  about producing what we need for democracy to promote economic security as well as political freedom.

In a nutshell, it was to see  freedom from want   as a realizable goal for activists by way of the internet.

Kathy presents an anecdote that reminds us of an often chronic shortage of good jobs because there is not enough money (or there is too much debt) for investments to be made in anticipation of decent financial returns that will employ all people looking for rewarding work.

The specific problem of investors wanting to  minimize wages  and maximize price and profit  is seen today as the root of rivalry between workers of many nations planning to sell into the US market.

 

We activists, experts, and kibitzers, are called on to invent a response to outsourcing  of both blue collar and white collar jobs.

• It is known for sure that people whose jobs run offshore are asked to solve this problem one person at a time — by getting a job or starting or joining a business (perhaps a business that knows you and wants you.)

• A high number of people will fail to solve the problem this way. For them there will be very little economic security — no reliable  freedom from want.

• My solution is government spending  on essential projects that would be necessary even in the absence of unemployment.

Such spending should be expected in nations determined to make their system work— and it should be high enough to cause unemployment to disappear.

 

This would be possible if such essential projects were speeded and scaled up more than if there were no unemployment.

• We would all agree on this solution if we were promised it would not cause higher unwanted  inflation  or higher  taxes.

• Accordingly, my solution applies COLA's, as needed, to savings,  incomes, and wherever else they are justified.

• In addition, essential skills are protected by prohibiting  imports that might put them in jeopardy.

How would a nation pay for such a solution to the problems beneath Kathy's anecdote?  With debt-free money (greenbacks) or debt-based money (greenback unsold bonds) — to maintain lowest effective interest rates.

 

Can a nation just create money for investment ahead of private investment seeking attractive financial returns?  If a nation were to do this would it not be encouraging scoundrels to game the system, run off with the loot, and leave the nation without a sound currency ?

Yes, the solution might be worse than the problem at hand.  But this should not be the case.  In promising freedom from want, America and Great Britain knew they could afford whatever they could produce.

 

If we suffer unemployment that we consciously aim to avoid it will be because we could not  produce  enough to keep money attractive.  It will  not  be because we spent money without first assuming a debt or digging up gold.

The anecdote and its related solution are old hat to money reform activists. Their critics have a powerful argument against them: "Show me," they say, "any nation on earth in time of peace where such full employment was ever achieved by producing all that was promised."

 

My rejoinder is even better: "Why specify  in time of peace  when today we're already at war?  And after the war we will be obliged to end the race to the bottom — a challenge nearly as big as war."

 

John Gelles

---

----- Original Message -----

From: Kathy in the Rocky Mountains

To: 'John Gelles' ; 'Significant International Issues' ; 'Debt at CSF' ; 'Cyberspace Society' ; 'Federal Debt at Topica' ; 'Post Keynesian Thought'

Sent: Thursday, March 25, 2004 7:39 PM

Subject: RE: Money, debt, real products, real jobs

On an anecdotal level, but true -- I have a friend who has taken some ideas of mine a step further and now distributes two resumes.  He is a white anglo Saxon male with an excellent skill set and personality working in the computer field in USA.  Responses to his resumes sent out with the exact same skill sets and content show a marked difference which underscores the strength of the trend to export jobs to other cultures.  His fictionalized resume (in name only) with a strange and unusual somewhat Indian name beats out his real name by a ratio of 13:1.

 

Cheers from she who left the beautiful Rockies to quickly get one of the remaining musical chairs for a while.

 

Kathy

---

 

-----Original Message-----
From: debt-owner@csf.colorado.edu  On Behalf Of John Gelles
Sent: Thursday, March 25, 2004 1:27 PM
To: Significant International Issues; Debt at CSF; Cyberspace Society; Federal Debt at Topica; Post Keynesian Thought
Subject: Money, debt, real products, real jobs

Dear Subscribers,

 

Although we are frequently concerned with the nuts and bolts of finance, beneath that concern is our desire for political and economic security and full employment for people — those fortunate enough to live in democracies — and those whom we hope will live as well or better under systems of whatever name that they prefer over ours.

(In our culture we use shorthand to say "your are what you do" — to emphasize that earnings are not enough: most people need work or a calling to nourish their self-respect. Even if some do not, all have a right to a job (as we know it) — if they want it. And, in addition, all have a right to more income — if earnings on the job pragmatically require a national subsidy.)

All of the above being taken as fundamental, (admittedly many of our subscribers will have none of it — they are into these discussions as realists pursuing real interests with scant faith in the possibility of radical reform), my point in making it explicit is to press the idea that we owe it to ourselves to look beyond the nominal or indexed value of money and debt toward the products and services needed for political and economic security.

We should imagine such material economic output being produced under a powerful information system that could establish price as it would be, if everything were perfect — that is imagine a system equivalent to perfect barter.

 

If we would only do this, all negative talk about future pain would have to be predicated on future shortages of people, skills, materials, productive capacity, obedience to green imperatives, etc., and not on financial measures of money deposits or outstanding debt that are desperately in need of re-calibrating.

 

If enough of us could get our heads around this principle — that it is future production versus unmet need that counts — we might ask ourselves to take into account robotics.

 

What remains — if we have moved from finance to production — and from production (by poor people) to robotics — our final hurdle is simplification.

 

OK. We have reached the end of this message and nothing in the real world has changed !  Does that imply I'm wrong — that our time should be spent discussing how to game the system for individual advantage allowing the devil to take the hindmost and the earth to dry up of all hope ? 

Does it imply that government and markets work best when people read Adam Smith and Margaret Thatcher and assume there is no alternative ?

Hell no. The alternative is strategic production for need — calling for some market based production for profit — and some cost-plus pricing to protect wages and income and the quality of life within reach. We must get away from literalism in the law and dogmatism in economics.

 

With America and Great Britain and allies fighting the war against fascism, the time is right for addressing significant international issues — as we did in 1942 when  freedom from want  was first added to our unwritten constitutions and fascism of that era was defeated.

 

John Gelles