So, this is just a post to discuss summarizing the issues with the economy as I understand it.
Reliance on jobs
In modern capitalism, work is a way of life, for better or for worse (and for me, it's for worse). We expect everyone to get a job under capitalism. Sure, some people who are too young, or too old, or too disabled may be exempt, but otherwise, we try to force as many people into the workforce as possible in order to maximize productivity. We frame this as "opportunities", and employers as "job creators", and we basically trained our populations to beg for more jobs.
However, despite this, the job creation paradigm does not work. This is because we tend to have a dichotomy between the theory and reality. In theory, everyone works, and everyone makes money, and the way out of poverty is to work. We want as many people working as possible, we want them paid well, and we want poverty to be stamped out by capitalism. But...employers tend to operate not as charities, but as cut throat entities that want as much work done for as little money as possible. So in practice, businesses try to work as few workers as long as possible, for as little money as possible.
This leads to a society where a lot of jobs simply don't pay a living wage. People are expected to work, but they are subjected to exploitative labor conditions and poor pay. Liberal regulations have attempted to resolve this, but they still fall short in many areas. Quite frankly, I don't think regulations solve the core issue. They are band aids that fix the symptoms, but the core problem is work itself.
As I stated the other day, the economy is a numbers game. It's a game of musical chairs. The federal reserve is effectively the pacemaker of the economy. It tries to incentivize the creation of the proper amount of jobs while keeping inflation in check. It generally aims to keep unemployment around 4%, and inflation around 2%. 4% unemployment generally means 4 out of every 100 people looking for work can't find it. It's considered structural unemployment and is expected to resolve itself rather quickly. However, in practice, this ignores that many people are discouraged, many people find work, but it doesn't pay adequately (see: underemployment), or that the work isn't fulfilling, etc. In practice, the system fails much larger portions of people in some ways. But, despite these flaws, the federal reserve doesn't want unemployment to get lower, because of it does, that causes inflation. If there are too many jobs relative to the number of workers, workers will have bargaining power to demand wages the economy cannot sustain, leading to a wage price spiral in which they ask for more pay, the costs to produce things go up, which leads prices going up, which leads to workers asking for even more pay to keep up with the cost of living and so on and so forth. Yet, despite this being the "peak" economy, poverty and unemployment still remain some some segments of the population. It's as if capitalism and work cannot provide a solid living standard for everyone.
Also consider the debate between unemployment and the minimum wage. According to economic models, raising the minimum wage increases unemployment, because businesses cannot afford such wages. I would argue in practice inflation is a larger concern, but conservatives often point out that either we have a system where more people are employed but the jobs don't pay well, or we have a system where the jobs pay better but there aren't enough of them. It's as if the system can't provide prosperity for all.
Also consider that some areas are impacted harder than others. Richer areas tend to be better off. I know this sounds reflexive, but let me explain. Money attracts money. If people have money to spend, businesses want to open in that area. That creates new jobs, which leads to people having more money to spend. So because people have money to spend, more jobs are created, leading to more money to spend.
But take a poorer area instead. If people don't have money to spend, then who is going to create jobs? Why would they create jobs, if there is no prospect to make money? So a lot of poorer communities have a problem where there aren't enough jobs to go around, and those that exist pay poorly, and because the area is poor, no one wants to open new businesses in the area.
People who suffer from job loss from living in a bad area are often told to "just move" to areas with jobs. But moving is difficult, involves moving away from family, friends, and other social connections. In addition, areas with good jobs are often major cities with oversaturated job markets. If you want to know why rent is so expensive in cities like New York City, Washington DC, and San Francisco, consider that these are major cities with jobs no other area has. Also consider that perhaps there are more people who want to live there than housing available. What happens when there's high demand and low supply? High prices. Moving is not the solution. It just breaks capitalism in another way.
Then we have to consider things like automation and outsourcing. Maybe, just maybe, there isn't enough work that actually needs to be done in the first place. Maybe we no longer need to work as hard to achieve high amounts of productivity. In some ways, a lot of jobs that paid well in America were sent overseas in order to produce stuff more cheaply elsewhere, and if Andrew Yang is to be believed, automation is an even bigger threat, and threatens to eliminate millions of jobs, and arguably has eliminated millions, destroying entire communities and throwing many locations into a state of turmoil.
Why jobs aren't great
I think that we should admit that our economy relying on jobs for sustenance is a failed paradigm that is guaranteed to create poverty. There will never be enough jobs, that are of high enough quality, that exist in the areas people live in. And rather than make a society in which we need to contort ourselves to the whims of the market, maybe the market should exist to serve us.
But, there still remains a moral philosophy that grips most industrialized countries, but especially the United States, that seems to valorize jobs not just as a means to an end, but as a way of life. We Americans pride ourselves on jobs and work, but to me, the whole thing seems dystopian. I mean, when you really think about what the economy is, it's systemically depriving people of natural resources, in order to coerce them to work. And then we celebrate the glorious "job creators" for "creating opportunities" for people to do work in. As if we're supposed to be grateful for the "opportunity" to work. I think, we, the lower classes, should tell the "job creators" to shove their "opportunities" where the sun doesn't shine.
Let's face it. This is slavery with extra steps. But we've so propagandized ourselves into believing that jobs are great that we just see this as the way society has to run. We need to keep creating jobs. We need to keep creating work for people to justify their existence doing, and then we need to pay them.
In a lot of ways, this comes down to valuing the property rights system over people. Property is seen as a natural right. While the declaration of independence discussed the "inalienable rights" of "life, liberty, and the pursuit of happiness", John Locke, the source of the original philosophy behind those ideas, had "pursuit of happiness" as "property." Property is, to Locke, a natural right. And we seem to value the rich's right to property, over the well being, and ability to actually pursue happiness outside of a strictly economic sphere. So because people need to acquire property through so called voluntary exchange that isn't that voluntary, and do work for those with property, we insist on creating more work and jobs, valorizing those with high concentrations of property way more than they deserve credit.
Rather, I think we should have a system in which we value people over property. I support "human centered" capitalism. This isn't socialism, although I'm not opposed to the aims of some forms of socialism such as "market socialism." I support markets, and I support some levels of private property. but, I don't believe private property is an inalienable right. I believe it's a social construct we found useful to determine who gets what, but that that a rigid adherence to it leads to results that lead to...exactly the kind of society we have. One in which a small proportion of people seem to own most of the property, and within which we need people to work in order to meet their needs.
We should think about the utility of things like "property" and "work" in thinking about systems. I'm not saying these things are categorically bad. But these kinds of social structures should exist to serve us. Is the economy made for us, or are we made for the economy? Do we exist simply to serve rich people and the propertied class? or does society exist to serve us? Property isn't bad. I'm not a marxist type calling for communism and the abolishment of private property. But, property should be distributed where it benefits everyone. Redistribution and taxation should be commonplace.
And as far as work goes, work should exist as a means to an end, not an end in itself. We should create jobs for the sake of employing people to give them a paycheck. JUST GIVE THEM THE PAYCHECK! Cut out the middle man. Don't let work get between a person and their means to subsistence. The only justifiable reason to force people to work is if society would collapse otherwise. As long as we can change the system to both free people from work and solve poverty, while maintaining enough of the capitalist incentive structure to work through financial rewards for voluntary participation, we should be able to create a society where the necessary work gets done, yet poverty doesn't exist.
But, some people will say, work builds character, or it gives people purpose, without work, we are nothing. This is protestant work ethic nonsense, and a result of a lifetime of indoctrination. We taught people their whole lives that work is everything, then we created a system where work fails millions of people, and then we point to the victims of such a system, point out how wretched their condition is, both physically in terms of poverty, and psychologically in terms of anomie (the mismatch between the ideal and the reality), and then we point out how these people need work. people need work, because we created a system where people are both physically and psychologically dependent on it in order so survive. We literally created a society in which people beg for their own enslavement, and then we point out that when people lose social status, and social acceptance, and self esteem due to lacking work, we claim that the solution is that we need to give these people work. But in reality, we basically inflicted psychological violence on them as a society, and then point to the disease we created in order to sell them the cure.We should create a society where peoples' sense of self and purpose and social acceptance don't depend on work.
This is not to say that we should take away work from those who seek it, or are psychologically dependent on it. I want a system where people are free to live as they want. I dont want to stop people from working, but I also don't want to force people to work. ideally, society should accommodate both groups. After all, to some extent work is socially useful, and to some extent, there is still much we need to be done. While it doesn't make sense to me to try to employ every single available person and to subject them to a system that dehumanizes them and reduces them to a quasi willing slave, I do admit some work needs to be done. Why not allow those who value work and are "true believers" in the concept to take on the role of doing the socially necessary work to keep society going? They can even be paid handsomely for it. And while they would be subjected to higher taxes than they are now, as long as they are still willing to engage in work by their own volition, then why is that bad?
So, instead of valorizing work and acting like work is so great, maybe we should seek to move in the direction of doing away with coerced work. We should remember that the economy and its corresponding social structures exist for us, we don't exist for them, lest we want to admit that our society is just slavery with extra steps. And we should recognize that work is a means to an end, not an end in itself.
At the end of the day, I am a believer in capitalism, capitalism meaning markets in this sense. But, that capitalism must exist to serve people. If the system does not serve people, then what is the point? Property should be distributed where everyone has enough regardless of work effort, and the market system should remain in order to incentivize producing the goods and services that need to be done. This isn't communism, this isn't central planning, this isn't what the Soviet Union did. This is simply a different way of viewing capitalism as we know it. It's human centered capitalism, as Andrew Yang would say.
Universal basic income
The biggest solution I advocate for is a universal basic income. I believe that this would solve the poverty issue, shifting the responsibility to provide a decent life for people from employers to the government. This is not to say that we won't still have some reliance on employers. Quite frankly, we need some incentives to work, and capitalism/markets provides an incentive structure to get stuff done relatively efficiently. We just need to make it where people aren't absolutely coerced into the work force and reduced to wage slaves any more than necessary.
UBI also provides freedom as the power to say no. It gives workers the freedom to say no to employers and bad jobs. And since people would point out that if labor force participation drops as a response to UBI, well, the federal reserve can just raise interest rates until some sane balance reappears. Even if there remain more workers than jobs, simply giving people an opt out gives people greater freedom and flexibility than they would otherwise have.
UBI would end poverty, it would reduce income inequality, and it would liberate people from coercive institutions. it is the perfect safety net.
Universal healthcare
However, not, all basic needs can be effectively provided through the market, and UBI would not solve all problems. Some industries simply suffer severe enough market failures to require additional government intervention to solve the problem.
Healthcare is the biggest one. It is expensive, and people need it so they can't say no. We spend like 18-20% of our GDP on healthcare while the average OECD country only spends like 9-12% last I checked. We've tried reform via capitalist means. We tried regulation via the ACA. We tried insurance mandates. The most effective aspects of the ACA involved directly expanding coverage, such as through the medicaid expansion, or automatically enrolling people under 26 under their parents' plans. But it didn't go far enough. There were still holes on coverage. On the state level, many states refused to expand medicaid to cover more people. The process to sign up for coverage is intrusive and convoluted. The expansion had strict cutoffs, with those above the cutoffs simply opting out of the insurance mandate, because they can't afford health insurance anyway. And honestly, even if you have insurance, between massive premiums, and extremely high out of pocket costs you're still at risk of being driven deep into debt over getting sick. Private healthcare DOES NOT WORK for millions of americans.
And, as Yang stated in his war on normal people, people often can't quit jobs because their insurance is tied to their job. We shouldnt want this. if we support the freedom to say no, we should seek universal coverage.
Medicare for all would simply shift a lot of existing costs from the private sector to the healthcare sector. Most taxes just replace existing private costs paid by employers and the people buying the insurance themselves. Going medicare for all would get rid of massive insurance bureaucracies that drive costs up in the first place, and would give the government leverage to bargain with medical providers to bring costs down. Medicare for all would be the ideal model for healthcare in America.
If we want to go a different route because we cannot afford it on top of my aforementioned UBI plan, a compromise would be a public option like medicare extra for all or the medicare for america act of 2019. The goal of this plan would be to have a public option that would automatically enroll every uninsured person in the country, and set premiums and out of pocket costs on a sliding scale in line with their income. It would also consolidate and strengthen a lot of existing programs like medicare and medicaid. While it lacks the simplicity and elegance of medicare for all, it does allow people to continue to seek private insurance if they desire, but in the long term, it would be expected that this may very well expand to become a de facto single payer system over time.
Either way, people are insured, they're not charged more than they can afford, and costs come down. Which is what we need.
Reduce working hours
In the long term, we should also seek to reduce working hours. If a machine comes along and replaces millions of jobs, rather than creating millions more jobs at 40 hours a week, we should celebrate the march of progress in working less. While GDP growth is fine and dandy, it isn't the end all be all of the economy. After UBI is implemented, and people have freedom as the power to say no, as we continue to automate more jobs, perhaps we should pass on those savings to customers in terms of higher UBIs and/or reduced work weeks. We should seek to wean ourselves off of work. While these tradeoffs would, to some extent, come at the expense of higher GDP, what good is GDP if people are overworked and struggling to get by? I don't see an economy of the future with more jobs and work for its own sake. I seek a future in which work is more voluntary, and we can all choose to work less. While some workaholics will continue to have their lives revolve around work, there's no reason why the rest of us shouldn't be allowed to work less while living better if we so choose. Perhaps we should, in the long term, try to normalize shorter work weeks. First 30-32 hours, then 24-25 hours, then 20 hours, and maybe eventually 10-15. I don't know. Perhaps below 20, with work being voluntary to begin with, people won't even want lower work weeks, as those who work like doing something with their lives. But, at the very least, this stuff should be an option, and work shouldnt be mandated. Again, we can pay for all of this simply by trading off with future growth. Why shouldn't we? Literally the only incentive i see to pump our GDP as high as humanly possible if we wanted to is if we were to transition to a state of total war with a country like China, in which we would need to use our full productive capacities to make weapons like we did in WW2. But, given we can do much of that with automation, and given that we are currently in peace time, i dont know why we must always work as if our lives depend on it even when there is no enemy to face. Keep our capabilities open to go into overdrive if we NEED to, but otherwise, just keep stuff on standby and choose to work a lot less as we are allowed to by future automation and technological improvements.
Free college
Much like healthcare, the education system is broken. We have free K-12, but that isn't enough to guarantee one a good life in America these days. People need a college degree, or trade school if they want a shot at a decent life. I am aware that college is far from a guaranteed success for life these days. However, if college is not guaranteed to be free, then it becomes a privilege to the rich.
Many young people went to college in hopes it would lead to a good life, only for it to fail to open up doors for them. Many are stuck with tens of thousands of dollars in debt, if not more. While Biden's proposed student loan forgiveness plan provides some relief, it does not solve the problem for those who are worst off.
If we want a just society in which everyone has a fair shot, then we need free college AND student debt forgiveness for those who are already in debt. Wipe the slate free, and make college free for all. A more educated populace carries many benefits in and of itself. People would be more informed on issues, and less likely to fall for whackjob conspiracy theories and crazy ideas like those proposed by the modern GOP for instance. How can we have a society in which people can make good decisions, if their worldview is not rooted in reality? We need college education to make that a reality for people.
Housing
Housing is the third major market failure in our society. While there is no easy fix to the housing crisis, there are ideas that would help. First of all, if UBI breaks the link between work and income, people won't be as incentivized to crowd into already overcrowded cities. Living in smaller cities and rural areas will become more feasible. UBI would also revitalize those poor communities by creating demand and jobs in them. Honestly, I think it's better for society if people spread out rather than crowd into overcrowded areas, and it would resolve the housing crisis somewhat.
Second, we need to consider a land value tax. While I don't think normal homeowners should have to pay such a tax, anyone who uses land for profit, including landlords and investors in housing should. Everyone should have a right to a home. But when people take more than their fair share in order to extort others for profit, well, that shouldn't be accepted. At the very least, people should pay for the privilege of owning excess property, if we don't just stop people and companies from being able to buy up homes in order to extract profit from people. Homes should not be an investment. They should be places for people to live.
Third, we take the revenue from that land value tax and put it into a housing program to create even more housing. This will further alleviate bottlenecks in the housing supply. We can debate what form this will take, whether it be dense apartment buildings, housing projects, or even microhomes and mobile homes, but more homes needs to be built for people until supply bottlenecks are alleviated.
These three things should resolve most of the issues. There are ideas that can be considered, such as banning foreign nationals from buying up property, deregulating zoning codes somewhat, etc., but yeah. Unlike the others, this solution needs a more complex approach.
Infrastructure/"green new deal"
Let's face it, despite my heavy dislike of "jobs programs", our infrastructure is old and falling apart. And, we need to transition away from fossil fuels if we wish to stave off the worst of climate change. We should strive to meet the IPCC's goals of halving carbon emissions by 2030 and being carbon neutral by 2050. Now, I don't think this is going to require a full on "green new deal" as envisioned by the left. They seem to disingenuously try to throw enormous sums of money at the problem in hopes of accomplishing the 2050 goal by 2030. After all, they largely support the green new deal for the new deal part, rather than UBI, they envision massive jobs programs employing people for their own sake. As I said, jobs are a means to an end, so I support a leaner climate bill akin to Biden's build back better or Andrew Yang's 2020 plan.
Conclusion
And yeah, that's how I view the economy's core problems, and how I would solve those problems. I know this is largely a summary, but I have provided various other articles stating how I would pay for these proposals before. In a few cases I've created my own plans, but mostly, I've just adopted and sometimes modified the plans of others, such as Bernie Sanders' 2020 campaign plans, medicare extra for all, etc. However, despite supporting ideas similar to candidates like Joe Biden, Elizabeth Warren, bernie Sanders, and Andrew Yang, i've clearly taken my own approach in my own direction, to attempt to fix the economy in my own way. Andrew Yang, for example, did not really support ideas like free college. Bernie did not support basic income. Warren had her own weird alternatives to bernie's plans which were sometimes about as good, and other times not as good. Biden, I don't really favor his approaches at all except for his climate plan. I'm my own person, I support my own ideas, and yeah.
I call this, the new new deal. Bernie sanders and the left loves running on the green new deal, but they have a 20th century understanding of the problems and want to push the same old solutions. I believe that we need a NEW new deal for the 21st century. We need an entirely different approach to politics that shifts us away from work, and attempts to shift us to a leisure economy, rather than the same old work oriented economy. The future should not be never ending job creation like we are doomed to live a sisyphusian existence. Work is a means to an end, not an end in itself, and it shouldn't be valorized more than it is. It isn't the solution to our problems, it never was, and we've known this since around 1970, we just lack the political courage to want to solve the problems. Well, this is the path forward.
No comments:
Post a Comment