Beware of basic income

Wouldn’t it be great to get a cheque every month just for being you? This is the sweet, fuzzy vision the Ontario and federal Liberals, are counting on to sell their latest idea, a basic income. Just this year, the Ontario government laid the groundwork for a pilot project to test the idea. Any actual large-scale program is far off into the future, however, and that’s a good thing. We need to take a hard look at the idea, especially in Liberal clothing.

Pie-in-the-sky or slap-in-the-face?

A basic income is exactly what it sounds like: a monthly cheque provided to every person by the government with no strings attached. A recent Ontario poll suggests the idea has broad support: 41% of Ontarians support it compared with 33% who oppose. Yet when people are asked whether they think a basic income is a good idea, they are never asked what they would be prepared to lose to get it. The point isn’t that basic income is pie-in-the-sky. It’s just that it could be implemented as a slap-in-the-face.

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Defending Bernie-nomics and debunking the housing market

This week, I interview two guests on fairly different topics linked by the fact that they both give very effective debunkings of some mainstream economic thinking. First, I speak with JW Mason, economics professor at John Jay College in New York City, about the debate that has erupted around Bernie Sanders’ economic program. JW argues convincingly that the criticism of Sanders from mainstream liberal economists is about managing and keeping a lid on regular people’s expectations for the economy. The critics are effectively saying “this is the best we can do” even when millions are condemnded to poverty and shitty jobs. Be sure to check out his posts (1, 2 and 3), which are among the best on this debate.

Second, I speak with Nathan Tankus, a writer also based in New York City, on why housing is so unaffordable in large cities even amidst massive condo building booms. Nathan goes through the history of his Chelsea neighbourhood in NYC and its long process of gentrification as a way of drawing some conclusions about why the housing market is so screwed up. It turns out this market doesn’t work like the model described in Economics 101 textbooks. For further reading on the topic, Nathan suggests Bob Fitch (especially The Assassination of New York), Doug Henwood and Michael Hudson.

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The economics of the possible and beyond

Last week, I wrote a short piece for Ricochet on the kind of simple but serious economic thinking missing from the Canadian election debate so far.  Here, I want to expand on the reasons why we might have trouble talking honestly about the barriers to significant economic reform without a real popular upsurge. If you want the short, populist argument, just read the Ricochet piece. If you want more, read on.

Here’s the main problem as articulated in the short piece:

As the gap between rich and poor has widened over the past few decades, the economic elite has grown in stature. Deficits and government spending sounds fine to them if it gets the economy going — even childcare will allow more women to go back to work and some may fill all those low-wage service jobs sitting empty because employers aren’t willing to pay more — but anything that genuinely threatens the slow upward trickle of wealth and strengthen workers too much in the workplace won’t be so happily tolerated.

This is the old tension between how much a left or centre-left economic program does to reboot economic growth and how much it also increases the expectations, capacity to organize and, ultimately, bargaining power of working people. A robust and sustained program of deficit spending, even if it is economically possible, is practically difficult in a small, open economy like Canada’s, not because our economy couldn’t benefit from it, but because businesses and money can, among other things, threaten to leave.

In other words, it is not enough to simply ask whether a program would be good “for society”. Expanding on the example above, a national childcare program can be a big help to regular, working people who have trouble otherwise affording care. At the same time, however, accessible childcare releases more women into the labour force, giving them more choice, but also providing employers with a new pool of workers. With all the crying about “labour shortages” across large chunks of the service sector (otherwise known as unwillingness to pay sufficiently high wages), this could be a boon for many industries, in particular low-wage services. In addition, if the childcare program is largely carried out through private providers, it creates a new source of government-sponsored demand for companies in the care services sector.

Depoliticizing economic questions ignores the implicit tension between the interests of growth and higher profits versus the interests of keeping a lid on the power of regular people to see their incomes and income share grow. (more…)

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This election, let’s really talk about the economy

The word ‘austerity’ is finally in the mix, but all parties stuck in the right-wing’s frame

Austerity is on the agenda of the Canadian election, as the word was finally uttered — by Justin Trudeau. Bizarrely, this came the same day as the Liberal leader rolled out his economic agenda flanked by Paul Martin, the former finance minister and prime minister who engineered deep austerity measures in the 1990s.

The way austerity has finally made it into the discussion highlights the absurdly limited nature of the economic debate so far. It’s time for a grown-up conversation about the economy in this campaign.

Right-wing frame

Politicians have been falling over each other to make economic promises they cannot keep, all the while firmly stuck in the muck of a right-wing frame. The debate has mostly been limited to whether there will be a deficit and how big, rather than the real questions of who the economy works for and why. (more…)

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The challenge of Sanders and Corbyn to the extreme centre

Over the past year, unlikely challengers have emerged to the dominant politics of the center-left in both the US and the UK. Jeremy Corbyn is looking increasingly poised to win the leadership of the UK Labour Party next month. Meanwhile, on this side of the Atlantic, Bernie Sanders keeps rising in the polls, drawing large crowds and making Hillary Clinton’s coronation as Democratic presidential candidate a bit uncertain. Both Sanders and Corbyn are silver-haired, decades-long parliamentarians identified with a marginalized left and would have been at home in pre-1970s social democracy. After years of rightward drift from both Labour and the Democrats towards the “extreme centre”, social democracy is making one more stand. Both Sanders and Corbyn have set their sights on economic inequality and economic stagnation for the majority as defining issues. Sanders, in particular, has also made talked widely about reclaiming the political system from under the influence of big money.

This week’s guests joined me to talk about what the Sanders and Corbyn campaigns: where they’re coming from, what they mean and what we an expect from them. First, I speak with Bhaskar Sunkara about Bernie Sanders and his qualified support for Bernie’s campaign. Bhaskar is the editor of the excellent Jacobin Magazine from the New York, which has quickly become an important venue on the US left. My second guest is James Meadway, an economist and activist from the UK. James recently signed a letter in support of Corbyn and has been following his campaign closely.

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Calling the business bluff in Alberta

The votes had barely been counted in Alberta when stories purporting to herald capital flight, particularly from the oil sands, were already appearing in venues like the Financial Post. As if on cue, the TSX fell 2%,the day after the Alberta election. What are we to make of this? Is Notley’s Alberta in the position of Rae’s Ontario 25 years ago, already being undermined?

An assessment of the NDP’s victory in Alberta grounded in reality has to account for the fact that the place of the oil industry in the province is, for the moment, being left largely unchallenged. This is no value judgment: support for the industry is the default position of most Albertans, not just elites. Given the economic importance of the oil industry and relative lack of economic diversification combined with the absence of a mass movement pushing against oil extraction and dependency, this should not be surprising.

The Alberta NDP’s program seeks to redistribute the gains from a resource economy largely left untouched. This general tendency is moderated by commitments to greater consultation with First Nations and an end to active lobbying for the Keystone XL and Northern Gateway pipelines. The latter, however, is a practical decision based on the small likelihood of these being built. All the while, for example, oil by rail continues to gather pace. The flip side of greater spending on social welfare are policies to recapture more of the proceeds of the oil boom while leaving its fundamentals intact: moderate tax increases and a planned royalty review.

For now, it seems the warnings of capital flight are thus a first salvo with a blank round. The dire words from parts of the business press and business elites are mostly bluster. Many business figures are actually taking a conciliatory tone; even the infamous “five CEOs” have taken it back. Fear-mongering is mixed with courting favour. (more…)

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Beyond social democracy: new institutions, new subjects

So many of the debates on the contemporary left come back to the legacy of social democracy. The Swedish experience came closest to fulfilling social democratic ideals in the post-war era and so speaks to these debates in a unique way. Earlier this year, I talked to Petter Nilsson of Sweden’s Left Party about the legacy of social democracy in his country and its broader meaning. This was one of my favourite interviews of the year and one that stuck with me for a long time. I’ve transcribed it here for it to be shared more widely. It’s been edited for length and clarity.

Michal Rozworski: Sweden is still seen by many around the world as a model for the welfare state but it has changed dramatically over the past couple decades. Can you give a quick summary of what it means to look at Sweden, as you’ve put it, “without illusions”?

Petter Nilsson: There’s this joke on the Swedish left that everyone would want the Swedish model and the Swedes would want it perhaps more than anyone. What’s considered to be the Swedish model peaked in maybe the late 70s, early 80s and has since gone through quite the same developments as the rest of Europe with the neoliberal wave. Because Sweden started at a high level of wage compression and equality terms of gender, it is still very equal compared to other European countries. Yet, at the same time, we have the fastest growth in class differences within the OECD.

When the Social Democrats turned rightwards in 1986 or so, a lot of the developments that had taken place in other European countries came to Sweden in a few swift blows. In just a few years we had huge increases in class differences and this affected our universal welfare system. This system was always based on the high wage compression, which included the middle class in same welfare system as the rest. Its members felt that since the quality of welfare programs was so high, they were prepared to pay taxes to finance them. But as soon as financing for the welfare sector is cut, then quality drops and the middle class opts out for private solutions. (more…)

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Doug Henwood on US economics and politics

 

This week, it’s my great pleasure to present a feature interview with Doug Henwood — economic analyst, author of books including Wall Street and host of the wonderful Behind the News radio show and podcast that inspired this show. Doug always introduces his show by saying his guests will be “taking a look at worlds of economics and politics.” Today, I’ve turned the tables and asked him to take up this very task for the present-day US. The result is a wide-ranging interview on everything from the sluggish economic recovery to Obamacare, the changing character of elites, why Hillary Clinton shouldn’t be president all the way to prospects for a renewed American left.

Remember that you can now subscribe to the podcast on iTunes, just follow this link.

And finally, I’ve started to standardize my segments into roughly 30-minute lengths, so if you’re interested in syndicating the show on local, community or campus radio, get in touch.

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Looking towards childcare in Canada, with lessons from Sweden

 

This week, the federal NDP reignited a national debate over childcare by proposing a universal $15 per day childcare program. This is the focus of today’s episode, which features two guests. First up, Angela MacEwen. Angella is an economist with the Canadian Labour Congress and has long been a strong advocate for public childcare in Canada. I spoke with her about the economics of universal childcare.

My second guest is Petter Nilssen, who is the press secretary for the Left Party in the Stockholm municipality and is a board member of the Institute for Marxist Social Studies, also in Stockholm. I spoke with him about the recent history of the Swedish model of the welfare state, something he wrote about recently in Jacobin Magazine under the title, “Sweden Without Illusions“.

Remember, you can now also subscribe to the podcast on iTunes, directly via this link.

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