When Richard Nixon Met Karl Polanyi

“Reiterating claims made by Marx and Engels, Polanyi wrote that Speenhamland allowed, even encouraged, employers to hire workers at below-subsistence wages (the poor were guaranteed an income regardless of whether they worked). Because workers would start losing their income supports once they earned more than a subsistence wage, and because employers were more than happy to have local parishes supplement or subsidize wages, Speenhamland effectively put a cap on wages. Productivity went down, and with it, poor rates and income supports. The long-term result, said Polanyi, was increased immiseration among the poor.”

I have heard similar criticisms leveled at the EITC: it’s a subsidy for low-wage employers. There is certainly some basis to these claims, but the solution isn’t to give up on social insurance. Rather, the solution is to do what most of northern Europe has done, and remove means testing. Programs for the poor are poor programs – universal social benefits are the way to go.

“Because workers would start losing their income supports once they earned more than a subsistence wage,”

The obvious answer being to make the income support unconditional. A citizens’ basic income or universal basic income.

That solves that problem.

@Tim Worstall

That might have been tricky in late 18th century England, but it certainly would be possible today. The lead link and article from New York Times Books mentions that Nixon didn’t care about the work requirement going with his Family Assistance Plan guaranteed income set-up, didn’t seriously think that part would work, and saw it only as a political sop to get his basic $1600 stipend plus food stamps through.

Maybe if you paired a Basic Guaranteed Income with some type of hiring support set-up, you could eventually sell it in the US (not in the present political climate, but down the line). Even if the latter part didn’t really work out and was eventually defunct.

I don’t understand this at all:
“like Nixon’s plan, it would have guaranteed an annual income to poor families, regardless of whether they worked or not”

It seems that this scheme can not reduce wages, it can only raise them.

I think the Swiss BGI proposal is probably too high to pass, since that would be a combined income around $67,000 just from the stipend for a two adult household. Switzerland would be looking at spend north of $200 billion just on the BGI alone, and that would mean much higher taxes.

A smaller BGI that still serves the purpose of boosting incomes and preventing starvation and homelessness for people out of the labor force might pass, though. I’m thinking the best range would be around $10,000-20,000/adult.

technology leads to inexorably increasing unemployment.

Technology doesn’t inexorable lead to anything. The thought that it does is connected to a too high a value on efficiency.

Societies and politics create the jobs, always, ever since Pharoah ordered up some pyramids.

The first sentence in 12 wasn’t a very Marxist thing to say. I can qualify it, “except under capitalism” if you like.

And questions about the inevitability of an increasing organic composition of capital and whether the tendency of the rate of profit to decline is also inevitable is too OT, but neither process is “natural” or “apolitical.”

And would rather have a job guarantee than a UBI. UBI shrinks the commons.

… and that would mean much higher taxes.

Well, the folk will have extra income with which to pay the higher taxes, isn’t it. Suppose we have a GMI of $1 million, and a progressive tax code that rises to 95% or so. That would have a nicely leveling effect. A very good thing, if you ask me. Ah Richard, we hardly knew ye.

@17 – http://www.aeonmagazine.com/living-together/john-quiggin-keynesian-utopiav1/

“technology leads to inexorably increasing unemployment.”

In modern experience (say since 1900), what technology has led to is shorter hours of labor over a lifetime. It used to be, and still is in many parts of the world, that most children began productive work (either wage labor or home or farm work) at age five or so, and were expected to do the work of an adult as soon as they were strong enough: maybe 12 (girls) or 14 (boys).

Now schooling is compulsory, child labor is universally condemned and many children don’t do large amounts of productive work until their late teens, if then. That’s the result of technology: internal combustion engines doing away with stable boys, street sweepers, and child porters; electricity replacing lamp lighters, child mine workers, and messengers; coal and oil furnaces supplanting chimney sweeps; wire fences taking the place of children’s herding of domestic animals; home appliances in place of child labor in laundries and kitchens; and on and on. And the general reduction in farm employment due to mechanization has greatly reduced child agricultural employment.

So technology has effectively reduced the lifetime workload of an ordinary person by ten years or so – maybe 12%. And this is not even considering the effects of the weekend, the 8 hour day, the paid vacation, and the invention of retirement.

You can say if you want that children who would have worked 72 hours a week in the Victorian era are now “unemployed” but that wouldn’t be the way we usually use the word.

Josh G @2: “Rather, the solution is to do what most of northern Europe has done, and remove means testing. Programs for the poor are poor programs – universal social benefits are the way to go.”

Incorrect. The nordic welfare states all have means testing and activation policies for their basic needs economic support programs.

You likely mix up the above with e.g. family allowance programs that unconditionally pay all parents, poor and wealthy alike, a significant sum (around 100 euros in some countries) per month per child.

An universal basic income on the other hand would, as mentioned by others already, remove certain income traps. Any european in favor should sign the petition @ http://basicincome2013.eu/

No amount of lexical acrobatics around the word “job” will alter the fact that, for example, driverless cars and trucks will render huge numbers of paid drivers unemployed.

This is your argument? Really? If the only thing that further technological advances bring is driverless cars and truck I will you give a 100% guarauntee that it will have no net impact on employment. There are plenty of other things that people in those professions can do for paid employment besides writing software. There is certainly an argument to be made for a Tyler Cowen like “Average is Over” thesis assuming no policy interventions but the argument is a whole lot more complicated.

The less utopian partial solution would be a high minimum wage.

Sorry, forgot to add the coda for the “*”

* The blog post I cited to references the Teller info to impartial sources, so just ignore the stupidity in the rest of it.

eg, Charles Dickens: Monseigneur could swallow a great many things with ease, and was by some few sullen minds supposed to be rather rapidly swallowing France; but his morning’s chocolate could not so much as get into the throat of Monseigneur without the aid of four strong men besides the cook. … One lacquey carried the chocolate-pot into the sacred presence; a second milled and frothed the chocolate with the little instrument he bore for that function; a third presented the favoured napkin; a fourth (he of the two gold watches) poured the chocolate out. It was impossible for Monseigneur to dispense with one of these attendants on the chocolate and hold his high place under the admiring heavens.

mud man @ 30

Echoes of Veblen there also, no?

I love it when Tim Worstall gets things exactly right (because, though I know we disagree about a lot of political issues, I know he is really smart, and think I would really like him in real life — maybe a test is: I have this suspicion, from years of reading his comments here that while we’d always vote against each other in political elections, we’d always vote with each other in meetings).

Re Bloix @ 20 – over the longer run, hours of work have increased. Medieval peasant and hunter-gatherers both worked less than most modern wage-slaves. There does seem to be a very long-run tendency for employment to max out at any given stable technological level. We just haven’t been all that stable these last 200 years.

And while Speenhamland may have allowed employers to lower wages, a free market will not necessarily guarantee even a living wage. Various studies of nutrition on C19 England suggest that around 20% of the population was effectively slowly starving (adaptations included lower body size, very low work rates and foraging for wild foods).

bloix-
“And the general reduction in farm employment due to mechanization has greatly reduced child agricultural employment.”
Well yeah. There have been a few ancillary adjustments as well. Mono-culture, reliance on mass applications of poisons, dependence on petroleum-based fertilizers, degradation of adjacent lands and water supplies, loss of topsoil.
Leading, seemingly inexorably, to Monsanto’s GMO corn being pimped, by whoever pimps that stuff, to striving agriculturists in the less automated world; and leading to its being outlawed here and there by less enthusiastic members of the world’s food-providing community. Also, just as inexorably, seemingly, to odd victuals like pink slime, and chicken parts nuggets.
Mountain-top removal, fracking, a lengthy obscene list of other technological innovations, none of which require the stunted bodies of malnourished and overworked children to accomplish their accomplishments.
The argument seems to go to a classic Pied Piper tale.
Or it’s like the interesting solution to what to do about the continuing presence of bad people in society – just get rid of everyone.
Viola! No more bad people.
Of course no more good people either, but c’mon, think of all the crime that got stopped.
Crime is bad, no crime is good. So, good, right?

This is the first time I have seen the argument that Speenhamland actually reduced laborers’ incomes, after including welfare payments, and I don’t believe it. I don’t see any evidence in the post or the links to support it. Logically, if the market could support above-subsistence wages–based on existing laws, supply of workers, land availability, etc.–then farmers would pay that wage and the Speenhamland subsidies would become irrelevant. I think it’s much more likely that market conditions which would support high wages and low grain prices never existed–that’s the reason Speenhamland was started in the first place, people were starving and rioting!–that Speenhamland helped or made little difference in poverty, and that whatever poverty and productivity problems occurred were the result of terrible economic conditions and not Speenhamland.

But most likely of all, I suspect that many of these alleged problems never existed–at least not more than had historically–and were simply made up or cherrypicked to support political propaganda. The Wikipedia article says that Speenhamland system was not actually very widespread, and that towns had a wide variety of similar systems or no system or just temporary relief. And it says that the Speenhamland system was only picked out and made famous because of a propaganda piece some guy wrote to promote a new law, and that the supposed problems with the system are mainly documented (or made up) by that same guy. I’m not an expert on any of this but that rings a lot truer than this perversity thesis bullshit.

There is the more typical argument that there is a natural minimum wage–enough to buy food– and Speenhamland allowed farmers to pay workers below that wage and have the taxpayers (landowners in this case) top it up. So it’s a transfer from landowners to farmers (aren’t these basically the same people?). I guess landowners would be upset about that but I don’t see why anyone else should really care; people treat it as an argument ending bombshell and I disagree with that. This logic also depends on the assumption that employers must ensure their laborers stay alive. I am not entirely convinced of that. Maybe as Peter T says workers were generally malnourished but not outright dying, or only dying slowly, and still able to work. And the workers could supplement their incomes with foraging, theft, odd jobs, etc. They only have to pay enough to get workers to show up; if 10% die of starvation there’s still the other 90% who aren’t dead yet. They could keep on dying until a labor shortage emerges and pushes up wages. Seems to me the minimum wage level is actually that which keeps peasants from abandoning the land and moving to the towns, to brigandry, or what have you. Starvation would be a good inducement to do that but if the townspeople are starving too, maybe you’ll stay on the farm and work for half a day’s food per day, just to survive as long as you can?

Just to be clear – what research I have read shows that farm labourers and the urban poor who were wholly dependent on wage income (many farm labourers were not – they had a small garden, common rights and so on) were undernourished to the point of slow starvation. Part of the reason they could not find better-paying work was that they were physically incapable of much more than a little light begging. The food was there – it just overfed the rich.

@42
From memory I think this was dependent on various events, natural and political. For instance, plague reduced the supply of labour (apologies for the awful way of putting it) and free rather than liege workers could charge higher prices, and change jobs more easily. I think various laws were then put into place to reduce these options.
On the other hand, Lords often enclosed common land especially when they worked out they could make more money by turning the land to pasture for sheep (rather than grains – this assisted in famine too), which they could trade for high prices with the continent.
One of the kings tried to put a stop to this, but found it hard to control the Lords.

I’m with Wray on this one.

1. GMIs are horrible politics. They’re loathed by the public, even the poor. By contrast, a job guarantee has polled well in the U.S even during the conservative 50s and 80s, because reciprocal social policies are generally intuitive within the context of American politics.

2. A GMI does not and cannot deal with the social and cultural isolation that comes with unemployment. A rich society can afford to fob off the unemployed with enough money to prevent them from rioting, but that does nothing to make people feel needed and wanted by their community.

3. A GMI ignores the inherent value of the labor of the unemployed. Output per worker in the U.S is a bit north of $100k a year; even assuming unemployed workers have lower productivity than normal, allowing people to remain unemployed still costs the U.S economy as much as a trillion dollars a year at current U3. That value, which is desperately needed in a whole host of areas across the public commons, would be completely lost in a GMI system.

We had an interesting discussion of this last year

https://crookedtimber.org/2012/08/05/universal-basic-income-how-much-would-it-cost/

with more earlier this year

https://crookedtimber.org/2013/03/26/ubi-vs-gmi-utopia-vs-realism-or-just-different-packaging/

The last quote was dated 29/10/2013

Medieval peasant and hunter-gatherers both worked less than most modern wage-slaves.

I would be curious to see how these figures look when you include household work (aka “not really work”, “unpaid work”, “women’s work”) and also how they look when you do the calculations at a family level. Modern wage slaves may work 35 hours a week (or whatever) but their children do virtually nothing. That might not have been the case in the Middle Ages.

Everyone quotes the “only had to work 15 hours a week” headline figure. I haven’t read the study itself, but good old Wikipedia notes that “When total time spent on food acquisition, processing, and cooking was added together, the estimate per week was 44.5 hours for men and 40.1 hours for women”. And that’s just on food. Making tools, making clothing, building shelters… most of the studies are done on tropical peoples so clothing and shelters aren’t a big issue, but if you look at, say, the Inuit you’ll see a people where the women provide virtually no food; not because they’re lazy, but because their responsibility is clothing and equipment, and making and maintaining that is a full-time job.
And, of course, there’s fighting. Pre-state peoples have violent death rates around the same as infantrymen in World War One. Killing that many people really takes up a lot of your day.

” over the longer run, hours of work have increased. Medieval peasant and hunter-gatherers both worked less than most modern wage-slaves.”

Hunter-gatherers maybe but it’s most certainly not true of medieval peasants.

I know, I know, there’s an estimate out there (from Juliet Schor) that villeins had 170 days a year of holidays. This simply cannot be true of animal owning peasants, that they had 170 days a year of leisure. Anyone who tries that rapidly becomes a non-animal owning peasant.

My suspicion (and I’ve not been able to access Schor’s original research to test this and if anyone does have access to it I’d love to see it. Yes I have written to her but had no response….not that she has to respond to such queries out of the blue of course.) is that the estimate is coming from the work that had to be done on the feudal demesne. That obligation to farm the Lord’s land in lieu of rent. On top of that needs to be added the hours farming the villein’s own land, plus any animal care, then of course all the rest of it like firewood and let’s not even get started on the female work, the spinning and the weaving etc.

I’m entirely willing to believe that we moderns do more paid working hours in the market than that villein did. But most certainly not that they had more leisure than we do, the balance being that they did a great deal more unpaid hours in household production than we do.

There is the more typical argument that there is a natural minimum wage–enough to buy food– and Speenhamland allowed farmers to pay workers below that wage and have the taxpayers (landowners in this case) top it up. So it’s a transfer from landowners to farmers (aren’t these basically the same people?)

This is a good point; I don’t know enough about it to answer. What was the tax base of Speenhamland? If the taxes basically came from landowners, i.e. employers, doesn’t much of the whole argument net out? Or was there a transfer from some other group (artisans? the urban population?)

Mud man @29 gives the correct answer to the question posed, but the secondary question is whether there will be sufficient openings for servants in the brave new world to give everybody work. Technological solutions to a shortage of servants have been in the forefront of development since 1914 at least, and they’re already quite sophisticated*. Simple robotic cleaners like Roomba are already out there, and multi-purpose devices are in advanced stages of development, if all the YouTube clips from Japan are to be believed.

Once upon a time the rich aspired to have a chauffeur (soon to be redundant), teams of housemaids (some already redundant, the rest soon to be) and scullery maids (redundant), and a management structure of butler and housekeeper. Will the demand for the servants who can’t be automated (gardeners, butlers, cooks) really sort out everybody who needs a job? Will it hell! The bastards will still have to pay most of us to do nothing comment on blogs.

* Full disclosure: We have a servant. That is, we employ a cleaner because I’m too disabled these days to carry my weight. She comes in once a week for two hours, and we find that’s plenty. We pay her well above minimum wage, but she couldn’t live on it.

@52 & @54 Including unpaid work at home for medieval peasants but not including it for modern wage workers is inconsistent. Further, holidays in ancient societies were commonly part of redistributive feasting. Think Julius Caesar and other candidates catering to thousands of Romans. I suspect any such aspect of medieval holidays to vary widely. But I think there is a possibility that medieval holidays played such a role. If you want to compare compensation for labor, a double check using different metrics like infant mortality, average longevity and average height would be useful. But an enormous amount of labor.

@52, off topic, but the supposed mortality rates for prehistoric man are dubious in the sense that I’ve never seen any explanation of how sampling is done. Since the political benefits for attacking Rousseau (still, in this day and age!) are so enormous, and portraying modern capitalism as the final society equally so, I would suggest caution. Or to put it another way, do you really think Steven Pinker is a sound guide to anything?

So the Original Post indicated that Weir and Block are critics of Polanyi’s pervesity thesis? I don’t have time to read the Weir and Block right now; what I did was indicate that the reading of it in the OP seems different from Gareth Dale’s. Perhaps that leads to a helpful clarification of Weir and Block’s argument; perhaps it does not.

You write: “Few people have attended to Polanyi’s caveat that had the working poor not been prohibited by the Anti-Combination Laws of 1799-1800 from organizing themselves they might have been able to reverse these effects.”

But this suggests that Speenhamland did have perverse effects that could have been reversed. Again I am asking: do Weir and Block argue that Speenhamland did have perverse effects?

60 is not the OP. So 60 is an important clarification of the OP. Thanks.

I’ve read a fair bit of medieval history, and lived in peasant villages. I admit my claim that medieval villagers worked less than modern workers is a bit too simple. It’s partly a matter of hours (as Tim notes, if you have milk animals, then they demand a couple of hours a day at least), partly a matter of work intensity, partly a matter of what counts as work. For instance, many medieval women “worked’ at spinning using a drop-spindle while they eg watched the children or the sheep, or talked with their friends. Was that work? Outside the harvest and planting seasons, timetables can be fairly relaxed, and work and enjoyment often mingled. Then again, attendance at community events was pretty much compulsory – maybe going to mass should count, much as work meetings do with us.

Overall, the sense one gets from the sources is that, absent lordly pressure, life was fairly relaxed. That last is a major caveat – the pressure could be really intense at times (an astonishing 80% of the crop in pre-modern Gujarat, according to one source).

many medieval women “worked’ at spinning using a drop-spindle while they eg watched the children or the sheep, or talked with their friends. Was that work?

It’s a learned skill, it tires out your hands (mine anyway), you can’t nap while doing it, and it produces something that’s been on the world market for millennia. I’d count it as work, even though I sometimes do it for fun. Perhaps we could find out if the women would be criticized or punished (unmarriageable?) for not doing it, as with going to church.