A job guarantee is key to upholding social cohesion and democracy

Minsky based his argument for the job guarantee on his moral foundation. In his opus magnum, Stabilizing an Unstable Economy, he writes that “[e]conomic policy must reflect an ideological vision; it must be inspired by the ideals of a good society” (Minsky 2008b, 9). Minsky believed that something was fundamentally wrong with our capitalist economies. He was not a revolutionary in a Marxist sense, but clearly a leftist in US academia. His main academic influences, aside from John Maynard Keynes, were institutionalist economists at the University of Chicago at a time when economics was taught as “part of the study of society, where economic history, political science, sociology, anthropology and economics were part of an integrated sequence aimed at understanding modern society” (Minsky 1988, 172). In a short paper about May Day in 1986, Minsky provided a good summary of his moral approach: “The essential radical view is that work is a good thing, and that chronic mass unemployment is a flaw of the economic order, not a flaw of the unemployed. Work is a public good, for only if work is available does a human achieve the dignity and self-respect that makes a person a good citizen” (Minsky 1986, 4). On a societal level he believed that “if the economy provides basic security and a sense of personal worth for all—because work is available for all—many social problems will recede to manageable proportions” (Minsky 2008b, 3). Minsky’s moral arguments for the reduction of poverty and inequality revolved around the themes of dignity and self-respect, social justice, civil standards of an open liberal society, democracy, and social cohesion. Minsky was critical of welfare, especially of unemployment benefits for people willing to work, both from the perspective of the recipients and from the perspective of the state. The state, Minsky argued, chooses welfare over other policies because it seems cheaper: “Welfare, in the form of aid to families with dependent children, exists because it is the cheapest way, short of a policy to let them die, of taking care of the population in want. Foster homes, orphanages, and guaranteed work for parents are all more expensive. Full 5 employment is the civilized and humane way of getting rid of welfare as we have known it…” (Minsky 1996, 365). The New Deal’s work programs inspired his alternative approach to full employment policies. In his notes for a workshop held on “Ethics and Capitalism” at the Levy Institute in November 1994, he wrote, “An ethical foundation of the New Deal version of State Capitalism. A: No one will starve in America. B: A dole is anathema: a bad thing. A and B imply WPA, NYA, CCC3 as the foundation stones of macroeconomic policy” (Minsky 1994a). In an article coauthored with Institute President Dimitri B. Papadimitriou in the same year he states both “an abhorrence of the dole and the importance of income from work as supporting the dignity of individuals” as the main motivation for a job program. He claimed that “[t]he first aim of an employing America program should be to assure that every American has a job which pays at least the minimum wage” (Papadimitriou and Minsky 1994, 24). The theme of dignity also appears in his earlier writings when he discusses relative and absolute poverty. Minsky uses a negative frame of the perception of the “dole” to juxtapose it with a positive frame of income derived from work: “Part of the poverty problem in the United States centers around the social and personal reaction to how income is received. The welfare recipient can be poor, even if welfare standards are adequate, if cash income derived from welfare is personally and socially demeaning” (Minsky 2013, 63). Dignity is derived from earning income through productive work, which increases a person’s self-worth and ability to support their family. Minsky did not write much about dignity at the workplace itself (e.g., dignified labor standards). Minsky wrote several contributions relating to job guarantee policies when he was working with labor economists on social policy during the Kennedy/Johnson era in the 1960s. He considered the Kennedy/Johnson administration’s War on Poverty as failing since the policies did not focus on job creation. He believed that “the single most important step toward ending poverty in 3 The Works Progress Administration (WPA), the National Youth Administration (NYA), and the Civilian Conservation Corps (CCC) were public work programs created by the US federal government as part of the second New Deal in the 1930s. 6 America would be the achieving and sustaining of tight full employment. […] [T]here is no better cure for poverty than family income, especially family income earned on a job” (Minsky 2013, 3). During that time, he framed the need for social policy as necessary “to assure domestic peace and tranquility” (Minsky 2013, 28). Minsky claimed that an antipoverty strategy based on unemployment benefits would be socially unsustainable, as those receiving it are dependent on the dole: “[T]he creation of a large class of social remittance men and women is not conducive to either social cohesion or domestic tranquility” (Minsky 2013, 29–30). He returned to this line of thinking in Stabilizing an Unstable Economy: “Compensation for work performed should be the major source of income for all. Permanent dependence on expanding systems of transfer payments that have not been earned is demeaning to the recipient and destructive of the social fabric. Social justice and individual liberty demand interventions to create an economy of opportunity in which everyone, except the severely handicapped, earns his or her way through the exchange of income for work. Full employment is a social as well as an economic good” (Minsky 2008b, 10). He went so far as to state that welfare payment schemes can be a threat to democracy: “A full employment economy is supportive of democracy whereas an economy based on transfer payments supports resentment” (Minsky 1996, 368).