Full employment under capitalism?

[Die Neue Zeit]

Hyman Minsky, full employment, and politico-economic demands



From the Boston Globe article "Why Capitalism Fails":

http://www.boston.com/bostonglobe/ideas/articles/2009/09/13/why_capitalism_fails/?page=2


But Minsky was cut from different cloth than many of the other big names. The descendent of immigrants from Minsk, in modern-day Belarus, Minsky was a red-diaper baby, the son of Menshevik socialists. While most economists spent the 1950s and 1960s toiling over mathematical models, Minsky pursued research on poverty, hardly the hottest subfield of economics. With long, wild, white hair, Minsky was closer to the counterculture than to mainstream economics.

[...]

In his writings, Minsky looked to his intellectual hero, Keynes, arguably the greatest economist of the 20th century. But where most economists drew a single, simplistic lesson from Keynes - that government could step in and micromanage the economy, smooth out the business cycle, and keep things on an even keel - Minsky had no interest in what he and a handful of other dissident economists came to call “bastard Keynesianism.”

http://www.boston.com/bostonglobe/ideas/articles/2009/09/13/why_capitalism_fails/?page=5


Minsky’s other solution, however, was considerably more radical and less palatable politically. The preferred mainstream tactic for pulling the economy out of a crisis was - and is - based on the Keynesian notion of “priming the pump” by sending money that will employ lots of high-skilled, unionized labor - by building a new high-speed train line, for example.

Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government - or what he liked to call “Big Government” - should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

While economists may be acknowledging some of Minsky’s points on financial instability, it’s safe to say that even liberal policymakers are still a long way from thinking about such an expanded role for the American government. If nothing else, an expensive full-employment program would veer far too close to socialism for the comfort of politicians.


I was informed by a US comrade that, had it not been for Tenth Amendment issues, two such employment programs would have been been followed through by FDR.

Notwithstanding this history trivia, what are your general thoughts on this full employment measure?

[JJM 777]

what are your general thoughts on this full employment measure?
If you ask from a Socialist viewpoint, full employment is the goal to go for -- only not for "minimum wage" but rather for "standard wage".

But the thread title asks from a Capitalist viewpoint -- the answer is NO WAY. The prevailing theories of "free market economy" estimate that unemployment must be at least around 5% to keep the economy stable. If unemployment falls too low, then many companies will have shortage of workers with exactly their desired education, and any such shortage would set workers in a position to bargain for higher wages. This is the reason why a "free market economy" must maintain sufficiently high unemployment in the society.

This information I learned when I once considered enrolling to a university to read economy. I read some of the required course books, and found this explanation in the introduction to the economical politics of Western world.

[KC]

I was informed by a US comrade that, had it not been for Tenth Amendment issues, two such employment programs would have been been followed through by FDR.

I don't know who told you that but they are either incredibly ignorant or batshit insane. Why on earth would they think that?

[Luís Henrique]

Full employment is bad for capitalism, because it reduces competition among workers and consequently makes wages rise.

Luís Henrique

[Demogorgon]

Full employment is bad for capitalism, because it reduces competition among workers and consequently makes wages rise.

Luís Henrique
Quite so, indeed as much is explicitly stated in a lot of economic theory (under the pretext that inflation should always be avoided regardless of consequences). It is why for example the Thatcher Government claimed that rising unemployment was "a price worth paying" for lowering inflation.

Capitalism can obviously go through brief periods with close to full employment-it occasionally does after all-but as a rule, full employment is toxic to it and it has built in defence mechanisms to stop it from happening.

[Die Neue Zeit]

I have read intro economics textbooks promoting unemployment, but Minsky's proposal doesn't delve into quantitative or qualitative underemployment issues, though. Is "full employment" (defined not to take into account qualitative underemployment where educated folks have to perform unskilled labour) really toxic?

[Demogorgon]

I have read intro economics textbooks promoting unemployment, but Minsky's proposal doesn't delve into quantitative or qualitative underemployment issues, though. Is "full employment" (defined not to take into account qualitative underemployment where educated folks have to perform unskilled labour) really toxic?
Yes, because without the threat of becoming unemployed, firms lose their biggest stick to keep workers in check and have to resort to carrots instead (better pay and conditions) and they hate having to do that in the long run.

It should be noted that notwithstanding that, this proposal would achieve its desired ends. The Keynesian policy of combating recession by keeping aggregate demand up does work after all and this would be an effective way to do it, but corporations would hate it in the long run (they may tolerate it temporarily to get out of a bad period) and use an investment strike to stop it.

So while it is a theoretically sound plan, it would only work in a society that had already taken control of investment out of private hands.

Come to think of it, it might have worked in Japan in the sixties and seventies because the Government had control of investment then and the workers were kept in check by Government provided carrots saving the need for corporations to either threaten or appease them, but even then they might not have liked it. At any rate moving to that kind of economic model would still be a big change for Western style capitalism.

A final thought though is that this kind of policy could be a good way for a leftist Government to undermine capitalism. Given that full employment is toxic, feeding capitalism something that it can't stomach would, on the face of it, be a pretty good idea. It all depends on whether people accepted the subsequent investment strike and dismantled the policy or moved to stop it.

[Chuck Stone]

It occurs to me that a capital strike would, in theory, be subject to the same weakness as a workers strike. Namely, any strike would only be effective as long as no investors were prepared to "scab". Now, in this Keynesian vision, the government is competing with private enterprise for the workers' labour, so if the forces of private enterprise were to coalesce, and combat these unfavourable policies with a capital strike, then the government should simply fill the void with its own investment as and when it becomes neccessary. At this point, there are two possible outcomes, the private sector will be forced to offer favourable terms to its employees, thus making the labour market a "sellers market" so to speak, or the private sector continues its investment boycott, allowing the state to gain a significant foothold within any industrial sector it pleases. Eventually forcing each individual to adapt or perish. Of course, it would only take one competitor within any sector to capitulate in order to gain the advantage.

As long as the worker has the freedom to choose his or her employer, then offering favourable working conditions would be a much greater factor in a business' success than it is today. This is already the case in any job requiring a specific education. (Have you ever heard of an out of work doctor?), as there are usually less qualified workers than there are positions to fill, but by giving all workers an alternative, then this would force private industry to compete for workers, rather than workers competing for jobs.


...offering a job to anyone who wanted one at a set minimum wage...

Of course, whatever that wage is set to, you can guarantee that private industry would, as long as is possible offer that rate or higher. So this would allow the government to impose a reasonable minimum wage without the need to resort to legislation. I think its important here to differentiate between Minsky's hypothetical "set minimum wage" and the Minimum Wage as we know it today. There is no reason why the set minimum wage could not be for instance, the European Decency Threshold of £7.50.

[JJM 777]

if the forces of private enterprise (...) combat these unfavourable policies with a capital strike, then the government should simply fill the void with its own investment as and when it becomes neccessary.
This is not so simple in a world where governments are in a cash crisis, funding much of their current activity with loans from IMF -- whose loan conditions are designed to restrict governmental ownership of industry.

A government anywhere in the world that would attempt to overtake industrial sectors, be it a response to "capital strike" or not, would get no loans from IMF or private investors. The government wouldn't have money to overtake much of any industrial sectors, by any other means than nationalization without immediate compensation.

[Demogorgon]

It occurs to me that a capital strike would, in theory, be subject to the same weakness as a workers strike. Namely, any strike would only be effective as long as no investors were prepared to "scab".
A worker's strike can survive a few scabs and a capital strike can do the same.

The thing is though, we are not speaking theoretically here, capital strikes have proven very effective over the years and are the reason why right wing policies tend to be imposed in most nations irrespective of the wishes of the electorate.

Clearly capitalists will tolerate some degree of policies intended to help the worst off. Indeed to an extent they even support it because it keeps the workforce healthy and educated, but when it comes to the point where it fundamentally threatens them and could cause the political environment to reach a "tipping point" where the balance of power shifts to the people, you can bet that they will act to prevent it. A good example of it happening is the second Wilson Government in Britain in the early seventies. For the first couple of years it was pretty left wing and clearly sympathetic to Worker's needs, but it only took a couple of years for the investment strike to force it very much to the right (under Callaghan).

This is why it is very difficult to achieve much in the way of progress without taking control of investment out of the hands of the capitalists (or to use Marxist jargon: taking control of the means of production). That really does need to be one of the first things to be done.

None of this means of course that we shouldn't call for these reforms, they help us clearly present to the public the sort of thing we stand for in concrete terms, we just have to recognise that they are the sort of thing that can only be done as we move to socialism.

[Green Dragon]

[QUOTE]If you ask from a Socialist viewpoint, full employment is the goal to go for -- only not for "minimum wage" but rather for "standard wage".

Probably. But then the question becomes is it deasble even in a socialist system.


If unemployment falls too low, then many companies will have shortage of workers

One would think that even ina socialist community workers will, from time to time, freely leave their jobs. One would also think that even in a socialist community, workers may not be suitable for the job they are performing, and need to removed to replace with people who might just be. One would also think that in a socialist system advances in technology may make the work completed by some workers unneccessary, and thus their labor unneccessary.


with exactly their desired education, and any such shortage would set workers in a position to bargain for higher wages.

And why would a socialist community NOT face this same problem? A more highly trained, experienced worker in a given profession ought to be considered more valuable to a firm than the lesser trained, lesser experienced worker.

[JJM 777]

workers will, from time to time, freely leave their jobs. (...)
workers may not be suitable for the job (...)
advances in technology may make the work completed by some workers unneccessary, and thus their labor unneccessary.
It is true that all persons are unqualified for most jobs in the world: we have the potential to learn a job that we want to learn, but we cannot learn everything at the same time, so we must make a choice what to learn.

Some anarchistic versions of Socialism dream of some kind of a heavenly paradise, where everyone is smiling and doing whatever he wants in life, choose whatever work you want, and study whatever you want. Nobody will say no to your dreams. Such unplanned and unproductive hippie lifestyle would lead to a hippie standard of living. Some people would actually enjoy that, but most people not. So I talk from a non-anarchistic viewpoint now, which some Leftists agree with, some not.

An effective central government can plan the current and future need of education, how many new hairdressers or school teachers or medical doctors will be needed in the next 5 or 10 years. A surplus of qualified workers is necessary if we want to guarantee continuous service, to immediately have a replacement if some person suddenly stops doing work (dies, gets injured, becomes pregnant, moves abroad, etc.).

The biggest difference in Capitalism vs. Socialism is that when the government plans a necessary surplus of educated workers to each profession, in Capitalism the left-overs don't get paid for their necessary and government-planned role in the society, as unemployed reserve workers. In Socialism the right to full payment is unrelated to the question, who gets employment and who is the necessary reserve for emergencies.

In Socialism there is also willigness to share the work to the unemployed by reducing working hours, a thing that Capitalist workers are unwilling to do. So the "necessary reserve of surplus labour force" can be arranged by working less than 100% full time, so in case of sudden need for 1% new workers in the profession, the existing workers can simply increase their working time by 1%, until the temporary need for extra work ends, or the education system produces more qualified workers to the profession.


A more highly trained, experienced worker in a given profession ought to be considered more valuable to a firm than the lesser trained, lesser experienced worker.
This is one of the favourite points of debate between Capitalists and Socialists. "What is the value of a person's work"?

First of all, there are some professions that only a few persons are able to do successfully. The most complex mathematical works, like a rocket scientist, are jobs that only few individuals are willing and able to learn. Most people are either not mathematically talented enough, or would be bored to death by such study subjects.

In a multipolar world, which includes both Socialist and Capitalist countries, a Socialist society might be in a weak bargaining position in the salary negotiations of some most specialized jobs, which require rare talent and a rare attitude to stay motivated to study everything what is necessary for the work. But such jobs are very few and not all of them are essential, for example rocket science is a hobby rather than a necessity for any government.

In some very few cases of this kind, it might be beneficial for the Socialist state to pay high salary to an individual whose skills are very rare and very necessary, and difficult to produce with the national schooling system from the mainstream population. In such rare cases, I would say that the person receiving a preferential work contract cannot be citizen of the Socialist country (he must revoke his citizenship before the work contract can take effect), and the state will constantly make efforts to produce similar skills from the mainstream population, and as soon as a citizen learns the skill without wishing to trade his citizenship to a higher salary, the foreign worker will be fired and kicked out of the country.

In the long run, the Socialist state might get rid of all such preferential work contracts, if the population is large enough to produce enough rare talents, some of whom will love their citizenship more than the chance to temporarily earn some extra cash, before being kicked out of country as soon as the next new person learns the skill.

---

But in most cases, highly-paid jobs in Capitalism don't actually require rare talents. Medical doctors are highly-paid, but half of the population are talented enough to learn the skill, so a Socialist state will not have much problems bargaining with doctors about the salary. If someone wants a higher salary, and his work seems to be necessary and unreplaceable at the moment, OK pay some extra cash to him, and revoke his citizenship and put him on waiting list to be fired and deported from the country immediately when the next student learns to do his work. Most people will love their country and citizenship more than a few extra bucks.

So the type of work, the profession, does not crucially define the value of work in Socialism, as it does in Capitalism. Half of the population are talented enough to learn the work of a bank manager, so we don't need to pay bank managers a single cent more salary than we pay to nurses or mailmen. The state pays all education, and a salary to those who are being educated.

It is true, however, that a person can do his work more or less productively or lazily. One digs the ditch with sweat on his brow, while another worker just sits under the shadow of a tree, and watches as others do the work. It is necessary to set some standard requirements for diligence in work: a person who evidently and intentionally fails to meet the standard requirements of productivity in his work, would receive less working hour credits for his work, or none at all.

Socialists generally agree that every person should receive at least a minimum standard of living, no matter if he does any work or not. Somewhere a bed to sleep the night, some water to drink and porridge to eat. A lazy worker would receive less or no working hour credits, which would be the key to a higher standard of living, a spacious apartment, tasty restaurant food, etc.

Also total working hours have an effect on the total productivity of workers. A person willing to work longer hours could be rewarded with more labour credits, and the right to a higher standard of living, than a person who greatly values free time, and wants to work minimum hours.

[Green Dragon]

[QUOTE=JJM 777;1556692]It is true that all persons are unqualified for most jobs in the world: we have the potential to learn a job that we want to learn, but we cannot learn everything at the same time, so we must make a choice what to learn.


Yes. Choices must be made.



Some anarchistic versions of Socialism dream of some kind of a heavenly paradise, where everyone is smiling and doing whatever he wants in life, choose whatever work you want, and study whatever you want. Nobody will say no to your dreams. Such unplanned and unproductive hippie lifestyle would lead to a hippie standard of living. Some people would actually enjoy that, but most people not. So I talk from a non-anarchistic viewpoint now, which some Leftists agree with, some not.


There are definitely folks hereabouts whom this would describe.



An effective central government can plan the current and future need of education, how many new hairdressers or school teachers or medical doctors will be needed in the next 5 or 10 years. A surplus of qualified workers is necessary if we want to guarantee continuous service, to immediately have a replacement if some person suddenly stops doing work (dies, gets injured, becomes pregnant, moves abroad, etc.).


I would dissagree that a central government can be effectve in making such determinations, but ok.



The biggest difference in Capitalism vs. Socialism is that when the government plans a necessary surplus of educated workers to each profession, in Capitalism the left-overs don't get paid for their necessary and government-planned role in the society, as unemployed reserve workers. In Socialism the right to full payment is unrelated to the question, who gets employment and who is the necessary reserve for emergencies.


There are a number of objections to this: for example, the notion that people are mere cogs in the system.

It would seem though that in this system the unemployed hairdesser (ie the reserve hairdresser) is being paid at the same rate to not work, as is the hairdresser who is working. I do not see how the community benefits from paying productive labor the same as unproductive labor.


In Socialism there is also willigness to share the work to the unemployed by reducing working hours,

Since it will not matter to the hairdresser whether he works or not, its probably true. But why would the unemployed (ie reserve hairdresser) want to work since it has no bearing his standard of living?

But then the problem the socialist system faces, is having a situation of using two hairdressers to do the work of one. This means, somewhere, there is a shortage of needed labor. This does not seem to be beneficial to the community.






First of all, there are some professions that only a few persons are able to do successfully. The most complex mathematical works, like a rocket scientist, are jobs that only few individuals are willing and able to learn. Most people are either not mathematically talented enough, or would be bored to death by such study subjects.


It doesn't matter. It has to be accounted for.



In a multipolar world, which includes both Socialist and Capitalist countries, a Socialist society might be in a weak bargaining position in the salary negotiations of some most specialized jobs, which require rare talent and a rare attitude to stay motivated to study everything what is necessary for the work. But such jobs are very few and not all of them are essential, for example rocket science is a hobby rather than a necessity for any government.


So a socialist solution is to the problem is to simply decide that certain labor (such as rocket science) is not needed?



In some very few cases of this kind, it might be beneficial for the Socialist state to pay high salary to an individual whose skills are very rare and very necessary, and difficult to produce with the national schooling system from the mainstream population. In such rare cases, I would say that the person receiving a preferential work contract cannot be citizen of the Socialist country (he must revoke his citizenship before the work contract can take effect), and the state will constantly make efforts to produce similar skills from the mainstream population, and as soon as a citizen learns the skill without wishing to trade his citizenship to a higher salary, the foreign worker will be fired and kicked out of the country.


Aside from the nascent nationalism in the above, why is the value to the community of that trained domestic worker, any less than the value of the work to the community of that expelled foreigner?





But in most cases, highly-paid jobs in Capitalism don't actually require rare talents. Medical doctors are highly-paid, but half of the population are talented enough to learn the skill, so a Socialist state will not have much problems bargaining with doctors about the salary. If someone wants a higher salary, and his work seems to be necessary and unreplaceable at the moment, OK pay some extra cash to him, and revoke his citizenship and put him on waiting list to be fired and deported from the country immediately when the next student learns to do his work. Most people will love their country and citizenship more than a few extra bucks.


So lets look at this way. The workers can only demand ex-amount of pay. If they demand more, the socialist state reserves the right to exile 'em.
In other words, the workers demand to work at a certain rate. The socialist state can either accept their demands, or refuse. If the demands of pay are to great, and the state refuses, the state will simply rely upon younger workers who might be more willing to accept the lower rate of pay.

So how does that situation differ from a capitalist-employee relationship? The capitalists offers a salary; the worker can accept it or reject it. Perhaps there are counter-offers. The capitalists seeks to hire the person at the lowest rate possible; the worker seeks to be hired at the highest rate possible.
Not only is no different, but it would seem the capitalist suggestion is far more benign, as it does not seek to exile the worker who demands "more, please" from his home, as does the socialist state.


So the type of work, the profession, does not crucially define the value of work in Socialism, as it does in Capitalism. Half of the population are talented enough to learn the work of a bank manager,

Half the population CANNOT be bank managers, regardless as to whether they have the talent to do so. So it seems there has to way to evaluate the value to the community, of bank managers.




It is true, however, that a person can do his work more or less productively or lazily. One digs the ditch with sweat on his brow, while another worker just sits under the shadow of a tree, and watches as others do the work. It is necessary to set some standard requirements for diligence in work: a person who evidently and intentionally fails to meet the standard requirements of productivity in his work, would receive less working hour credits for his work, or none at all.


So the lousy worker gets paid less than the industrious one.
OK.



Socialists generally agree that every person should receive at least a minimum standard of living, no matter if he does any work or not. Somewhere a bed to sleep the night, some water to drink and porridge to eat. A lazy worker would receive less or no working hour credits, which would be the key to a higher standard of living, a spacious apartment, tasty restaurant food, etc.


But since you have statd there is no way to value the work done across professions, it seems to me the only way to get ahead is through hard work. Yet it is of vital importance to the system that their be "reserve labor" who do not have that opportunity. Is this unfair to them?


Also total working hours have an effect on the total productivity of workers.

Only if the community does not evaluate the value of the work being done.

[JJM 777]

I would dissagree that a central government can be effectve in making such determinations, but ok.
In places like Scandinavia, this has been happening for half a century already. The ministry of education owns, plans and funds practically all education. They decide how many student places need to be opened next autumn for medical or mathematical studies, or any studies whatsoever. They decide what education is available (freely for no cost), and what is its content. Seems to function perfectly OK.


people are mere cogs in the system.
Not more than people are mere cogs in a Capitalist free market economy. (Only some rare individuals are more than mere cogs in Capitalism: for example the lucky ones who inherited a big fortune from their parents.)

As in the Scandinavian model, the government would decide how many starting places are necessary for each professional studies. Then people strive for their favourite studies. Some people dream of a profession for which they have no talent: they will fail in the exams, and need to start studying something else. Nothing mystical there.


It would seem though that in this system the unemployed hairdesser (ie the reserve hairdresser) is being paid at the same rate to not work, as is the hairdresser who is working. I do not see how the community benefits from paying productive labor the same as unproductive labor.

The "reserve" model is not good, except maybe as a temporary solution in some situations. The "less than 100% working time" is a better way to keep people equally employed, and quickly available to step in if some workers are suddenly lost from the work force.


So a socialist solution is to the problem is to simply decide that certain labor (such as rocket science) is not needed?
In these "ultimate expert" cases, when the only persons who can do a job try to distort an extravagant salary from the state, the state might be more eager than normally to leave the job vacancy unfilled, if the work does not seem absolutely necessary.

Everyone can do whatever work he wants, as a hobby. To get paid for your work, in Capitalism you must convince the investors or the customers or the government of the value of your project. In Socialism you must convince the government or potential customers. Would be stupid not to invest in a project for which the potential and willing customers have been detected already. But stupid leaders are found abundantly in the world, not only in Socialism.


why is the value to the community of that trained domestic worker, any less than the value of the work to the community of that expelled foreigner?
All expert work is more valuable to the society than simple work, because it is a scarce resource, and creating new experts can be a long and expensive process. The work of medical doctors is more valuable, more expensive for the state, than the work of grave-diggers, because grave-diggers can be picked from the street without any education, but to create a medical doctor you need 6 years of high-tech education.

The starting point in Socialism is that all humans should receive equal social and economical status in the society. Some people were born smart and productive, others were born to be unproductive retards or invalids. In Capitalism people born smart think that they have "earned" to have a higher economical status than people who were born less smart or physically less capable. How did they "earn" their smartness, did they do something good in their previous life or what?


So how does that situation differ from a capitalist-employee relationship? The capitalists offers a salary; the worker can accept it or reject it.
Not necessarily in any other way than the fact that in Capitalism the salaries vary from below-poverty-line to extravagant, but in Socialism salaries are designed to be equal. A person who demands to receive a higher salary than is possible for the average population (by other means than starting to work longer hours), is a Capitalist and not a Socialist.

[Skooma Addict]

In places like Scandinavia, this has been happening for half a century already. The ministry of education owns, plans and funds practically all education. They decide how many student places need to be opened next autumn for medical or mathematical studies, or any studies whatsoever. They decide what education is available (freely for no cost), and what is its content. Seems to function perfectly OK.


Not more than people are mere cogs in a Capitalist free market economy. (Only some rare individuals are more than mere cogs in Capitalism: for example the lucky ones who inherited a big fortune from their parents.)

As in the Scandinavian model, the government would decide how many starting places are necessary for each professional studies. Then people strive for their favourite studies. Some people dream of a profession for which they have no talent: they will fail in the exams, and need to start studying something else. Nothing mystical there.


The "reserve" model is not good, except maybe as a temporary solution in some situations. The "less than 100% working time" is a better way to keep people equally employed, and quickly available to step in if some workers are suddenly lost from the work force.


In these "ultimate expert" cases, when the only persons who can do a job try to distort an extravagant salary from the state, the state might be more eager than normally to leave the job vacancy unfilled, if the work does not seem absolutely necessary.

Everyone can do whatever work he wants, as a hobby. To get paid for your work, in Capitalism you must convince the investors or the customers or the government of the value of your project. In Socialism you must convince the government or potential customers. Would be stupid not to invest in a project for which the potential and willing customers have been detected already. But stupid leaders are found abundantly in the world, not only in Socialism.


All expert work is more valuable to the society than simple work, because it is a scarce resource, and creating new experts can be a long and expensive process. The work of medical doctors is more valuable, more expensive for the state, than the work of grave-diggers, because grave-diggers can be picked from the street without any education, but to create a medical doctor you need 6 years of high-tech education.

The starting point in Socialism is that all humans should receive equal social and economical status in the society. Some people were born smart and productive, others were born to be unproductive retards or invalids. In Capitalism people born smart think that they have "earned" to have a higher economical status than people who were born less smart or physically less capable. How did they "earn" their smartness, did they do something good in their previous life or what?


Not necessarily in any other way than the fact that in Capitalism the salaries vary from below-poverty-line to extravagant, but in Socialism salaries are designed to be equal. A person who demands to receive a higher salary than is possible for the average population (by other means than starting to work longer hours), is a Capitalist and not a Socialist.

Well I see why you call yourself a liberal totalitarianist.

[Green Dragon]

[QUOTE=JJM 777;1557057]In places like Scandinavia, this has been happening for half a century already. The ministry of education owns, plans and funds practically all education. They decide how many student places need to be opened next autumn for medical or mathematical studies, or any studies whatsoever. They decide what education is available (freely for no cost), and what is its content. Seems to function perfectly OK.


I would think it would tend to work the other way around- economic decisions are based upon how many people the state decides to educate.

But in any event, the consensus hereabouts seems to be that the Scandanavia countries are not socialist.




As in the Scandinavian model, the government would decide how many starting places are necessary for each professional studies. Then people strive for their favourite studies.

See above.




The "reserve" model is not good, except maybe as a temporary solution in some situations. The "less than 100% working time" is a better way to keep people equally employed,

No. Because it means that the community is requiring two people to do the work of one. Which means labor is short one worker somewhere else.




In these "ultimate expert" cases, when the only persons who can do a job try to distort an extravagant salary from the state, the state might be more eager than normally to leave the job vacancy unfilled, if the work does not seem absolutely necessary.


Well yes, that is the point- the state will decide that the pay demands are extravagant and either not hire that person, or look to hire somebody else who will work for less. That is no different a circumstance than what a capitalist firm would do- actions which socialists usually condem capitalism for.
But its not merely limited to "ultimate expert." The socialist community will face the same problem with all workers



Everyone can do whatever work he wants, as a hobby. To get paid for your work, in Capitalism you must convince the investors or the customers or the government of the value of your project. In Socialism you must convince the government or potential customers. Would be stupid not to invest in a project for which the potential and willing customers have been detected already. But stupid leaders are found abundantly in the world, not only in Socialism.


Well yes. In a socialist community one would expect that inestments are made in areas where it can expect to receive a return (ie where there is demand, where there are customers), At that point, one needs a system to determine and evaluate whether the investment does indeed bring back a return.
But none of that is different from capitlism.



All expert work is more valuable to the society than simple work, because it is a scarce resource, and creating new experts can be a long and expensive process. The work of medical doctors is more valuable, more expensive for the state, than the work of grave-diggers, because grave-diggers can be picked from the street without any education, but to create a medical doctor you need 6 years of high-tech education.


Yes, the value of the work of the doctor to the community is greater than the value of the work of the gravedigger to the community.



The starting point in Socialism is that all humans should receive equal social and economical status in the society. Some people were born smart and productive, others were born to be unproductive retards or invalids. In Capitalism people born smart think that they have "earned" to have a higher economical status than people who were born less smart or physically less capable. How did they "earn" their smartness, did they do something good in their previous life or what?


But now you are saying that even if the community values the labor of one worker over the other, the community is not obligated to compensate accordingly.
It would seem then, that the community is stealing from that valued worker.


A person who demands to receive a higher salary than is possible for the average population (by other means than starting to work longer hours),

Older technologies require more work to be performed thn newer one. In such a circusmstance, is it not adbvantageous for the worker to be opposed to technological improvements, which will only cut his work day down?

[Die Neue Zeit]

Of course, whatever that wage is set to, you can guarantee that private industry would, as long as is possible offer that rate or higher. So this would allow the government to impose a reasonable minimum wage without the need to resort to legislation. I think its important here to differentiate between Minsky's hypothetical "set minimum wage" and the Minimum Wage as we know it today. There is no reason why the set minimum wage could not be for instance, the European Decency Threshold of £7.50.

In North America it's called the living wage, separate from subsistence wage levels that are today's minimum wage laws.