Australian economist Bill Mitchell is a known critic of basic income guarantee (BIG) programs and a support of a job guarantee (JG) programs. In this post on his blog, Mitchell presents the following argument against BIG:
Capital-labour conflict remains a central dynamic in our societies and only naivety would lead one to conclude it will go away, or rather, be ‘outside’ this dynamic by giving the unemployed a bare minimum BIG.
Once those who were formerly workers – in direct opposition to capital – become meagre consumption units, then the balance of power is tilted further towards capital.
Despite being a BIG proponent, I will argue that Mitchell has a point here and a BIG program on its own would not be sufficient to create an equitable society. However, I am critical of the JG program as devised by him.
My problem is that neither a job guarantee nor a basic income guarantee will solve the capital-labour conflict. In my opinion only worker cooperatives can in the long run end the exploitation of workers by capitalists and by extension put an end to corporatocracy.
The main problem with a JG program is that it does not create economic democracy. Actually it perpetuates the current system of wage labor by reinforcing hierarchical employer-employee relations as the social norm. The resulting mentality of servility is detrimental to the republican ideal of self-government.
Worker-cooperatives, on the other hand, will promote democratic values as they are owned and run by their own “employees”. Also cooperatives have little incentives to lay down on personnel.
A real progressive government should implement policies to promote worker-cooperatives. Because the current economic system is unfavorable to cooperative, government intervention is necessary to enable the transition to a cooperative market economy with a fair distribution of capital.
Fiscal policy is an essential feature of such a policy and will include, among other measures:
- preferential treatment of worker cooperatives in public procurement;
- interest-free loans for setting up a worker cooperative;
- the establishment of a public lease company to lease capital goods to worker cooperatives.
I will conclude this post by recommending the video below, which explains why the current system is biased against cooperatives: