Job guarantee programmes: back to the future?

Following Peter May’s mention in his blog of the 8th January of Dr Fadhel Kaboub and Modern Monetary Theory (MMT), and his advocacy of proposals for job guarantee initiatives, I happened to spot a link to a presentation by Dr Kaboub in a TRUK blog (http://www.taxresearch.org.uk/Blog/2018/05/05/the-case-for-a-job-guarantee-in-the-uk/).

The presentation is worth watching in full, not least because it contains a fairly straightforward explanation of MMT, and because, in a brief aside, Kaboub takes issue with the term Modern Monetary Theory, because, as he rightly points out, it is not a theory but a description of how money creation actually occurs in countries that enjoy full financial (monetary) sovereignty (e.g. US, UK, Japan, Australia, China, etc). Thus, a far more accurate term would be something like (my suggestion) Actual Monetary Practice (AMP), or, as Kaboub notes, a term that acknowledges that what is being referred to is a system (Actual Monetary System, perhaps?).

Of course, the issue of MMT being a misnomer has been raised by Peter May before on this blog and is a serious one in the sense that use of ‘theory’ means MMT is a “loaded” term. By that I mean that most people (and I know this from many years teaching undergrads and postgrads) take theory to mean we are talking about a supposition or set of ideas that may – and that’s the key word here, may, not does or can – explain a situation, action, or phenomenon. Use of ‘theory’ therefore instantly undermines the accuracy and descriptive power of the MMT approach.

Anyway, that’s simply one – and not the main dimension – of Dr Kaboub’s presentation, which is more specifically about the idea of job guarantee policies. This is what I wanted to pick up in this blog for a very simple reason. Watching the presentation I was particularly interested in the examples he provides of what job guarantee initiatives might focus on and how they might operate. And as I listened I realised that his examples were very similar to an example of social policy that has been tried before in the UK.

Here I’m specifically referring to what were regarded at the time as job creation programmes. Anyone reading this blog who was unemployed for more than six months in the late 1970s or early 1980s may well have direct knowledge of these programmes, as I do. The scheme introduced by the then Labour government was known as the Community Enterprise Programme (CEP). This was initially maintained by the Thatcher government through to 1983-84 when it was replaced by a similar but inferior scheme simply known as the Community Programme (CP).

Put briefly, CEP allowed mainly voluntary/third sector organisations to apply for funding to employ staff for community based enterprise (in the broadest sense of the term) projects. In my case, having done some voluntary youth work since becoming unemployed I was fortunate enough to gain employment as a development worker tasked with setting up a network of toy libraries in a deprived area of Nottingham. CEP posts were typically for one year only, although extensions were possible in exceptional circumstances. Pay was on a par with what would now be regarded as the minimum wage. My recollection is that there were quite strict conditions that applied to the type of employment and project supported, such that CEP could not be used to undercut or replace jobs that were or should have been funded from other sources (e.g. local authorities). Nevertheless, a wide range of projects were supported. In my area as well as my project there were people working on after-school club provision, environmental development and protection, and health, education and advocacy related projects – all similar to examples Dr Kaboub outlines in his presentation.

I can only speak from my own experience when I say that quite often CEP employment provided the basis (i.e. the skills and experience) to apply for jobs elsewhere once your time on the scheme came to an end. But herein lies the rub, and in large part the reason for the demise of CEP and, in time, why the successor CP scheme went the same way. Employment in the public sector – often with local authorities – was the next step for a fair number of CEP workers. Indeed, in my case, the local authority took over funding the post and the project costs through grant aid, although as far as I know that was a relatively rare occurrence.

Nevertheless, under a Tory government that regarded pretty much any form of public sector employment as a waste of money, local authorities – particularly Labour controlled ones – as the enemy, and public services other than the bare essentials necessary for the welfare “safety net” as examples of the “nanny state”, any programme such as CEP was a form of policy to be actively attacked. And that, I fear, is where we currently stand in the UK with any form of job guarantee initiative as long as we have a Tory government that is not that far removed – and in many ways (Brexit) worse – than Thatcher’s governments.

In short, the apparently widespread (and deliberately manufactured) perception that job guarantee policies are about paying people to do nothing (an argument debunked by Dr Kaboub), and the fear that the type of project that employment attaches to are often public sector related – thereby increasing the demand and cost of these services, which is anathema to Tories – means, I strongly suspect, that this is an idea that goes nowhere without a change of government.

Sadly, I don’t see that happening anytime soon. And even if it did I don’t see an incoming Corbyn Labour government having a majority large enough, or at all, that allows the adoption of policies such as job guarantee programmes that will be mercilessly attacked by the mainstream media, the Tory party and all those who fail to understand both how and why such policies can be funded (see MMT) and the short and long term economic and social benefits. That said, if you haven’t already done so I still strongly recommend watching Dr Kaboub’s presentation.

Comments

  1. Sean Danaher -

    Thanks Ivan

    I’m not sure I will have time to watch the presentation till later today or tomorrow, but I find your description of the CEP bittersweet. In that it sounds like an excellent program but very difficult in the current climate. It is a symbol of what has been lost and reinforces the belief that the UK lost its way around the time of the Thatcher Revolution.

    1. Ivan Horrocks -

      After I published the blog I remembered several other examples of projects staffed by CEP/CP workers that went on to become succesful community based entreprises, Sean (such as a community transport project) all of which are close to examples given in the presentation. Of course, CEP was not a job guarnatee scheme in the way the idea is promoted now. But anyone who’d been unemployed for six months or more was entitled to apply for a CEP job and many of them were decent enough and well worth doing. But yes, very diffcult to imagine such a thing now with zero hours contracts and neoliberal ideology that permeates all policy making now.

  2. Nick H -

    Would renaming MMT to “Modern Monetary Tenets” be stretching the meaning of “tenets” too far?

    1. Ian Stevenson -

      maybe Modern Monetary Practice ?

  3. Pilgrim Slight Return -

    I will get around to watching the presentation but first a few thoughts if I may about the labelling of MMT.

    I think that MMT should be labelled BMS – (Base Money Supply) or AMS (Actual Money Supply) or what about RMS (Real Money Supply) because that is what MMT does: it supplies REAL money/currency (not bloody interest bearing credit whose interest destroys money’s value) into the economic system – it is (if you like) the headwaters of the economic money supply that irrigates the wider economy.

    As for CEP – CEP was done at a time when places like Brixton & Toxteth really put the frighteners on Thatcher’s cabinet in their rush to become good neo-liberals.

    These days, I feel that the Tories not only don’t like things like CEP because of ideology (it is an example of State intervention) but because by not providing such initiatives, the problems it could address are left to fester creating the sort of unhappiness that the Tories and people like Lynton Crosby can capitalise on.

    The Tories have become very good at riding close to the wind in their divide and conquer tactics. They have set people against each other even within families. I have never seen anything like it before in this country and only read about it in others. It’s as good as a civil war in my opinion.

    It is a dangerous and desperate way to rule a modern country. But it also throws people off the scent of the whiff of something rotten which came out of the 2008 crash.

    1. Ivan Horrocks -

      Agree with all that, Pilgrim.

  4. Bill Hughes -

    I agree with your points about the community programmes of the 70s and 80s. I was working as a specialist careers adviser for the unemployed and there was a plethora of “schemes” such as Work Experience, Training workshops, YOPS (Youth Opportunities Scheme, TOPS, FE courses for basic literacy and numeracy – many these schemes were excellent others not so good. It usually took 2 or 3 years for these schemes to really bed down and become really effective but then government would change or scrap them. The main motivation from government was to keep the headline unemployment figure down as the spectre of mass unemployment on the 1930s scale was still an important electoral factor then.

    1. Ivan Horrocks -

      I’d forgotten all about TOPS, Bill. If I remember rightly it was a TOPS course in hydraulic and pneumatic fitting that I did at a local Skills Centre – of which I think there was a national network at the time – in the late 1970s. A good course which meant I got a job pretty easily afterwards, as did quite a few of those in my cohort. All history now.

  5. Andrew (Andy) Crow -

    It is indeed a very thorough presentation of the Job Guarantee, based on the intro on MMT which explains how it is affordable.

    I was particularly struck by the example of buffering in the grain market (and other commodity markets) which serves to smooth supply and demand in an important commodity.

    Labour is also a commodity and one which badly managed has profound social aswell as economic costs. Labour is also one of a country’s major resources and current neglect of this is both cruel, to the individuals adversely affected, and also massively wasteful. To the point of stupidity I would suggest.

    Unemployment is always glibly ‘explained’ in terms of there being no work. This is of course a nonsense. It is not the work that disappears it is the willingness to pay for it which fluctuates according to the vagaries of markets with the business cycle. Work that still needs to be done simply doesn’t get done, to everyone’s disadvantage.

  6. Gavin P -

    I agree MMT is misleading with the word theory and Modern.
    I suggest a wise rebrand with a strap line

    Actual Monentary System AMS incorporating MMT modern Monetary Theory.
    Combining the names for say 10 years should be enough and both brands get created or kept.
    or reverse the usage eg
    MMT Modern Monetary Theory incorporating Actual Monetary System AMS.
    Then define Actual Monetary System as needed on wikipedia for reference.

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