Guaranteed work or guaranteed income?

As an alternative to a basic income scheme a commentator on Medium is proposing universal guaranteed work.  This writer has put a lot of thought into his proposal and deserves to have it given some consideration.  I have a strong commitment to a guaranteed income scheme and I have some heavy-duty concerns about his work plan.

My first concern is a belief that we do not have enough energy and mineral resources to provide employment for all the people who inhabit this planet.  There are still lots of resources but we have cherry picked the most accessible and those which are left will require lots of inexpensive energy to extract.  Even if the cost of solar energy continues to drop there may not be enough other resources to maintain the economic growth required to provide work for everyone. Topsoil is a major resource which may deteriorate and restrict growth.

The proposal for guaranteed work is probably based on a belief in economic growth and a long tradition that people must “do their share” and work to support themselves.  It may be that some people see a basic income scheme as a way of distributing goods and services rather than as an economic necessity.

Technology has been changing our economy at least since an ancient farmer discovered he could increase his production by using a horse with a collar instead of an ox with harnesses.  This development and all those that  followed allowed fewer people to work the land and more people to do other things such as fight and prey.  (In medieval times there were three classes of people – those who prayed, those who fought and those who worked to support the first two.)  My professor of European economic history spent a lot of time talking about agricultural developments which increased productivity.

Modern technology is an extension of this trend releasing more people to do things other than work to provide food and shelter.  A major question is what is this free time going to be used for.  There are many choices beyond preying and fighting including making more electronic gadgets and performing or listening to music.  Another question is who is going to make the decision about what to do with this time.  I believe individuals should be able to make the decisions for themselves.

My third concern is that a guaranteed work scheme is a continuation of the work ethic which allows a few people to tell the rest of us what to do.  We should consider the agricultural surplus and the benefits of technology an inheritance for all of us rather than a right which can be expropriated by a few.  We should be able to decide for ourselves what we want to do with the free time we have inherited from our ancestors.  That could be drinking beer or creating great works of art.  Who is to say one activity is better than another? We need a leisure ethic rather than a work ethic.

Sadly there are some people who feel they should be able to tell others how to live their lives.  A universal guaranteed work scheme is an open invitation to these people to practice this dark business.

Our civilization has to deal with some serious economic problems.  I fear the work program as proposed would make a lot of those problems even worse.  A guaranteed income program would not be enough to solve all the problems but it would be a start and needs a lot more thought.

 

 

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Poverty, economic growth and unconventional thinking

With the economic crisis there has been increasing inequality and increasing poverty.  Poverty is something we should be addressing.   I believe we should have a collective responsibility to ensure everyone has the opportunity to have a reasonably comfortable life – the same level as most other people.

Conventional thinking says we need economic growth to provide jobs and relieve poverty. This article is an example.

It may be poverty is now being caused by a situation we have not experienced in our collective memory and that unconventional thinking is required.

johnny_automatic_startled_bearsThe probable cause of the economic crisis is that we have used up most of the easily accessible energy, mineral and topsoil resources.  As it takes more work and energy to harvest the remaining resources further economic growth is difficult if not impossible.  We may even have to cope with negative growth.   Trying to force economic growth will only consume more resources and make things even worse.

Even if the resources for growth are available we have so much technology there really is not the need for everyone to be producing more.  Back in the Middle Ages there were three classes of people – those who prayed, those who fought and those who worked to support the first two.  These days it only takes a few people to produce the food to support those who fight and those who consume.

Therefore demanding that governments provide more jobs is not reasonable.  We have to find some other way of ensuring that everyone  has a comfortable life.  One proposal for doing this is in the essay “LETS go to market:: Dealing with the economic crisis” on this weblog.

Economic salvation from shale gas?

A lot of people believe economic salvation depends upon economic growth and some people believe that salvation will come as a result of shale gas.

It could be true.

However, in a previous reincarnation I was a charter member of the skeptics club.  A more likely scenario is that shale gas may give us a temporary reprieve.  There are environmental and economic concerns.

The environmental concerns relate to global warming and earthquakes.  Also the current availability of cheap shale gas is interfering with the development or renewable energies such as wind and solar.

The economic concern relates to marginal cost.  (Marginal cost is the cost of extracting the last unit sold.)  If shale gas is going to be our salvation, then the marginal cost of extracting it will have to decrease as more gas is taken.  If the marginal cost increases, then it will only slow down the rate of economic decline.

The exploitation of shale gas is the result of high oil prices and the development of new and expensive technology.  It takes a lot of energy to get it out of the ground.  Certainly the gas currently being extracted is the easiest and cheapest.  There is some probability that future extractions will be more difficult and expensive.

Another concern about the potential for a return to economic growth is what is happening to the marginal cost of other minerals and resources such as topsoil and copper.

Rather than seeking a return to economic growth we might be better off to adapt our lives and our economy to zero or negative growth.  For some ideas about how to do that please see my essay: LETS go to market: Dealing with the economic crisis.

Here are links to three articles on shale gas. One, two, three.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Topsoil and civilization

A book review in last week’s The Economist reminded me of the book Topsoil and Civilization by Tom Dale and Vernon Gill Carter and published in 1955.  These guys attempted to analyze the entire field of world history from the point of view of man’s relation to productive soil.

Their conclusion was that all previous civilizations have risen on virgin topsoil and have declined when the topsoil was depleted.  Their book was a plea for soil conservation in the United States because they feared to same was happening in North America.

This is a very  interesting book with what is probably a serious warning which we should heed.  It also points out a fundamental of economics that  to have civilization we need a surplus from primary producers..

You can get an electronic copy for free from The Soil and Health Library based in Australia.

This book was published 57 years ago and it appears history has proven them wrong.  It could also be “not yet.”

We have lived through the golden years of prosperity during which we put huge amounts of oil energy and technology into the topsoil.  Have these permanently restored the topsoil to its prime condition?  Also some parts of the world that depleted the topsoil have been able to exploit other energy and mineral resources untouched by earlier civilizations.

I urge you to read this book and then ask: Are we exempt?  Are things different this time?

Following are some quotes from Chapter one.

Civilized man was nearly always able to become master of his environment temporarily. His chief troubles came from his delusions
that his temporary mastership was permanent. He thought of himself as “master
of the world,” while failing to understand fully the laws of nature.

Let us put it this way: civilization is a condition
of mankind coacting with an environment in such a way that progress results. Regardless
of the forces that stimulate cultural progress, both civilization and the enjoyment
of civilization rest on a surplus production by those who supply the necessities
of life. By surplus production, we mean a surplus above the actual needs of the primary
producers. A surplus production of food, clothing, shelter, and other necessities
by farmers, herders, fishers, loggers, miners, hunters, trappers, and other primary
producers is necessary before civilization can start. Furthermore, such surplus production
must continue on a relatively stable basis if civilization is to keep advancing.
The primary producers must supply a surplus before artisans, designers, engineers,
scientists, philosophers, writers, artists, and other civilizers can exist and function.
Few people ever advanced civilization while they had to produce their own food, clothing,
and shelter directly from the earth.

A common error has been to consider these resources
as static. The proponents of the standard formula, “capital plus labor plus
raw materials plus management multiplied by technology equals production,” have
nearly always considered raw materials as a constant. But they are not constant.
Soil fertility, usable water, forests, grasslands, beneficial wildlife, and other
resources have not remained a fixed item in any region. They have decreased in most
areas occupied by civilized man. In many of the older countries they have almost
disappeared. And with their decrease has nearly always come a decline in civilization.

Why emerging economies are doing well

There’s a theory that civilizations rise with the exploitation of their topsoil and fall with its depletion.   Countries that are poor are poor because their ancestors have depleted the topsoil.  An article in The Economist about how well emerging economies are currently doing  appears to show this theory is wrong.      See the 1955 book Topsoil and Civilization by Vernon Gill Carter and Tom Dale.  Here us a review of that book.

Since the Industrial revolution civilizations have been based on minerals as well as agriculture.  Minerals in the form of energy and fertilizers have allowed us to increase agricultural productivity in our own and in the emerging econmies.  But what has all this done to the topsoil?  When we drive into town (or out of town) we see the farms and as  they look nice we take them for granted.

As the developed countries have industrialized we have used up a lot of our mineral resources so that it is now easier and cheaper to get them from  other places.  Thus the emerging economies are doing well.

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