Re:Basic income doesn't emphasize divisions between poor and...
by dragonwriter on Monday August 29, 2016 @02:25PM
(#12383972)
> Not according to Keynesians
So? This seems to be an argument-to-people-you-don't-even-purport-are-authorities... (Not to mention that it seems to be a hostile caricature of the Keynesian argument, which I'll get to in a second.)
> they believe there was productive work people people could do that wasn't getting done, simply because nominal wages were too high.
"Work isn't getting done because forces outside of market rationality prevent prices from adjusting downward to reflect the reduced demand for good X" isn't a real "scarcity of X", its a surplus of X with non-market forces preventing existing supply and demand from connecting.
(Where it occurs, the solution is obvious, deal with the problem that prevents real prices from adjusting to the natural market clearing price, so if one perceived the problem you claimed Keynesians perceived, then the solution you claimed Keynesians preferred would be sensible.)
OTOH, that's not the problems Keynesians saw, and Keynesian stimulus isn't aimed at "inflating away the value of real wages" (nor did the actual stimulus in the great recession do that; inflation during the period remained unusually low). Keynesian stimulus (whether in the form of fiscal stimulus that Keynesians usually prefer, or monetary stimulus that Keynesians will usually complain is a poor mechanism but -- much like Keynes own example of burying banknotes and letting people dig them up -- better than doing nothing when good solutions are off the table) is aimed at increasing demand -- particularly for labor -- which is a solution directly aimed at surplus of labor, not scarcity of labor.
> I take it you believe stimulus was ill-advised?
More to the point, I disagree with your description of the Keynesian case for stimulus, and like most Keynesians, I believe that the form of stimulus was extraordinarily poorly chosen from the perspective of government-as-a-single-decision-maker, but perhaps reasonable (or at least understandable) on the part of the Fed given that the government isn't a single decisionmaker, and the key body deciding fiscal policy was nearly inert.
> And this narrow range is the place our slack labor force lives.
I suppose that this is a meaningful statement if your concern is merely maximizing the number of people doing some kind of work, rather than maximizing welfare, realization of human potential, etc. And, certainly, that seems to comport well with your preference for a permanent government army of economically-compelled labor as the main (or perhaps only, its not really clear) "social benefit" program.
So? This seems to be an argument-to-people-you-don't-even-purport-are-authorities... (Not to mention that it seems to be a hostile caricature of the Keynesian argument, which I'll get to in a second.)
> they believe there was productive work people people could do that wasn't getting done, simply because nominal wages were too high.
"Work isn't getting done because forces outside of market rationality prevent prices from adjusting downward to reflect the reduced demand for good X" isn't a real "scarcity of X", its a surplus of X with non-market forces preventing existing supply and demand from connecting.
(Where it occurs, the solution is obvious, deal with the problem that prevents real prices from adjusting to the natural market clearing price, so if one perceived the problem you claimed Keynesians perceived, then the solution you claimed Keynesians preferred would be sensible.)
OTOH, that's not the problems Keynesians saw, and Keynesian stimulus isn't aimed at "inflating away the value of real wages" (nor did the actual stimulus in the great recession do that; inflation during the period remained unusually low). Keynesian stimulus (whether in the form of fiscal stimulus that Keynesians usually prefer, or monetary stimulus that Keynesians will usually complain is a poor mechanism but -- much like Keynes own example of burying banknotes and letting people dig them up -- better than doing nothing when good solutions are off the table) is aimed at increasing demand -- particularly for labor -- which is a solution directly aimed at surplus of labor, not scarcity of labor.
> I take it you believe stimulus was ill-advised?
More to the point, I disagree with your description of the Keynesian case for stimulus, and like most Keynesians, I believe that the form of stimulus was extraordinarily poorly chosen from the perspective of government-as-a-single-decision-maker, but perhaps reasonable (or at least understandable) on the part of the Fed given that the government isn't a single decisionmaker, and the key body deciding fiscal policy was nearly inert.
> And this narrow range is the place our slack labor force lives.
I suppose that this is a meaningful statement if your concern is merely maximizing the number of people doing some kind of work, rather than maximizing welfare, realization of human potential, etc. And, certainly, that seems to comport well with your preference for a permanent government army of economically-compelled labor as the main (or perhaps only, its not really clear) "social benefit" program.