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May 18, 2018


Professor Kennedy in her blog today tells us of the components of Senator Booker’s bill that provides for an experimental federal funding of a chosen local area’s economy which provides for a job for everyone in such area at prevailing wages with health insurance to see if such a design can work, all with a view toward federal enactment if it works. She asked for commentary, and the following, slightly edited, was mine.

I have blogged dozens of times that I still cling (if fleetingly) to the idea that capitalism can work – but not as currently practiced. The problem is not that such a system cannot provide income and wealth to society but that (as practiced) it provides a grossly undeserved and unequal share of such income and wealth to only one of its participants – the rich and corporate class. Capitalism in my view can work if, for instance, present wages paid to corporate workers were doubled or more, and without undue burden on corporate profits (since the huge increase in aggregate demand – with government restrictions on rates of inflation – would keep their profit position excellent to better than before). So is this likely to become policy? Fat chance. Is Booker’s plan likely to become policy? Fatter chance. The currently favored class likes their position on the economic map and are buying the political class to keep their good times rolling, whatever the state of exploding automation.

Let’s not forget that Nixon tried “to get rid of welfare” with a proposal for a GAW (guaranteed annual wage) but that it was quickly shot down as an affront to the Puritan Principle of “no work – no eat,” a principle, by the way, that is necessarily due for extinction with ever more sophisticated means of production via AI. Unfortunately, I think that the rich and corporate class will not decide to share the bounty (my idea) or Booker’s idea (a halfway proposal that tries to retain the Puritan Proposal for political purposes). Expect civil commotion.

Something has to happen as this economy moves into new and unknown territory, but what? I don’t know; I’m not that smart. I just hope that the solution (if any) comes from experts and not politicians fronting for this or that interest group and tomorrow’s economy is not once again captured by propaganda and yesterday’s thinking.      GERALD      E

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