Radical Dollar image

Two Radical Ideas: The Good and the Bad.

Similarities and Differences

Both proposals are proactive and counter-cyclical. That is, they automatically tend to prevent economic downturns rather than waiting for congress or the central bank to react to recession, which is often too little and too late. They provide money to those most likely to spend it, thus helping to maintain effective demand. They both could do away with most other forms of welfare (exceptions would be programs for the disabled and programs such as unemployment insurance and Social Security, which are both essentially forms of insurance.)

Advantages. The two principal advantages of the free-money-for-all proposal are its simplicity and universality: since almost everyone would benefit (some proposals suggest limiting it to families with incomes of less than, say, $100,000). That would tend to make it highly popular once in place. Unlike the jobs-for-all idea, it does not assure an end to poverty or unemployment. It also does not put all or the bulk of the money where it is most needed (do families with incomes of $90,000 really need an additional $15,000?) The advantage of ELR is that it guarantees a living wage to anyone who wants it. It would probably also eliminate the need for a minimum wage, since employers would find it difficult to hire for less than the ELR provides.

Is Free Money Best? Which brings us to the question we raised earlier: Why is attention (albeit minimal) being paid to the free money idea and none at all to ELR? After all, given conservative rhetoric, should not ELR be a perfect answer to the welfare problem? If, as conservatives claim to believe, welfare consists of give-away programs for irresponsible people too lazy to work, ELR should be the answer to their prayers. It will benefit only those willing to work (apart from the truly disabled who would still require assistance). Loafers get nothing. Why aren't conservatives the very first to demand ELR?

Follow the Money. Whenever one is confronted with such apparent inconsistencies in conservative thinking (e.g., why are conservatives opposed to conservation?) it pays to follow the money. The first priority of every conservative is an absolute commitment to Authority—i.e., to maintaining the power and privileges of the powerful and privileged. Their devotion to the wishes of the plutocracy come before all else: before their suspicion and hatred of people different from themselves, before their obsession with sexual purity, before their love of punishment and retribution, and, indeed, even before their absolute conviction that suffering is necessary for the moral rectitude—of other people.

Best for the Rich, or the Rest? Now why would the plutocrats be slowly warming up to the radical notion of free money for all while being utterly opposed to ELR? Capitalists may be short-sighted (capitalism demands an obsession with short-term profits) but they are not necessarily stupid. Capitalists do all they can to hire as few workers as possible and pay them as little as they can. But workers are also consumers. As automation allows industry to hire fewer and fewer and pay less and less, those worker/consumers have increasing less money to spend. Even a short-sighted capitalist might see a problem developing. Free money for all means that those at the bottom will continue to be able to spend money, money that will find its way into the pockets of the rich. And that can happen without the capitalists having to spend a nickel more in wages or benefits. Indeed, such a program not only assists the poor; it subsidizes stingy employers like Walmart who can thus continue to pay their workers less than a living wage, just as SNAP (Food Stamps) does at present. It provides the Walmarts of the world a guarantee of both high sales and low wages, which together mean high profits.

ELR by contrast will force all employers to raise wages at the bottom of the scale all across the economy. That of course will mean lower profits. The rich will hate it, but the economy will thrive. ELR will end poverty and reduce inequality while money-for-all will do neither. So despite the superficial attractiveness of the one proposal, the real choice is very clear.

In Brief: A Sane and Equitable Economic System in One Sentence. What this all means is simple: Everyone has a right to a productive job at a living wage, and no one has a right to a free ride. Society has an obligation to provide such jobs if they are not otherwise available and should do all it can to discourage those attempting to get a free ride. At present we do the opposite: we provide incentives to the parasites and punish the workers. But we are fed a steady stream of lies designed to convince us that the workers are the parasites and the free-loaders are the truly productive ones. So it will be useful to review the facts.

[Next: A Just Economic Society Summed Up.]