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Episode 55 – The Economics of Martin Luther King Jr. with Mathew Forstater
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The mainstream media has created a pasteurized and homogenized version of Martin Luther King, Jr, befitting the neoliberal cultural bell jar. That being said, our friend Mathew Forstater reminds us that Dr King had a laser-like focus on economics and unemployment. The massively successful August 1963 march was called The March on Washington for Jobs and Freedom. Without economic security, the social and political advances of the civil rights movement cannot take hold.
Steve kicks off the interview by asking Mat to speak about MLK in the context of today’s debate about a Universal Basic Income versus the Federal Job Guarantee.
Dr King and other civil rights leaders promoted an economic bill of rights that was specifically and intentionally not a UBI. The three-part platform demanded a job for anyone willing to work, an income guarantee for those who cannot work, and a raise in the minimum wage sufficient to lift the working poor out of poverty. All three prongs are necessary — a job guarantee alone doesn’t help those who cannot work; raising the minimum wage doesn’t help the working poor.
Dr King’s vision of a job guarantee encompasses four vital components.
1. The development of education and skills must be outcomes of the program and not prerequisites. Rather than being trained for nonexistent jobs, people are to be hired first and trained while they’re being paid.
2. Any jobs should produce community services — the public and social services that are in short supply and benefit the neediest communities. Labor is directed to our most pressing needs, including environmental and social justice.
3. The program generates income for families that have unmet basic needs. There must be an improvement in basic standards.
4. Acknowledge that there are numerous psychological and social benefits for individuals, families, communities, and the nation as a whole. This is based on his recognition of the social and economic costs of unemployment. Research outside the field of economics confirms the importance of work.
In contrast, a UBI provides no development of skills and no production of public services to benefit the community. In a UBI only the income piece is addressed.
Supporters of the UBI tend to look at work or human labor not as it was meant to be — a pursuit of one’s life mission. They’re looking at dead-end low-paying jobs with horrible working conditions. It’s understandable that they would oppose that kind of work.
We have always distinguished our version of a job guarantee from draconian workfare — the kind that forces welfare mothers to take underpaid jobs where they’ll develop no skills or knowledge. Our plan is built around the understanding that people enjoy contributing, working with others, and developing their talents. For models, we look to successful programs of the past like the WPA, CCC, and Argentina’s Plan Jefes.
In the rest of the interview, Mat explains that Dr King was not alone in advocating for a JG. He talks about the history of the Humphrey-Hawkins Act, which was originally intended as full-employment legislation but ultimately was gutted. From 1946 to 1978 virtually every major African American leader and organization came out for full employment, including James Farmer of CORE, Bayard Rustin of the AFL-CIO’s A. Philip Randolph Institute, and Oliver C. Cox, who wrote a number of Marxist critiques of capitalism. The #2 demand of the Black Panther Party’s 10 Point Program was that the government provide “full employment for our people.”
Our Macro n Cheese audience will appreciate this fascinating history of the intersection of the civil rights movement and the ongoing fight for a Federal Job Guarantee.
Mathew Forstater is a Professor of Economics at the University of Missouri–Kansas City and Research Director at the Global Institute for Sustainable Prosperity.
www.global-isp.org/research-director/
@mattybram on Twitter
Macro N Cheese – Episode 55
The Economics of Martin Luther King Jr. with Mathew Forstater
February 15, 2020
Mathew Forstater [intro/music] (00:03):
The job guarantee and the income guarantee both are intended to address the major structural weaknesses of the capitalist way of organizing our economic life. I think the primary reason that I started delving into all the rich writings by and about African Americans was because if there’s a group that is suffering economic circumstances disproportionately, I want to hear what those folks have to say.
Geoff Ginter [intro/music] (01:32):
Now let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.
Steve Grumbine (01:34):
And this is Steve with Macro N Cheese. Today I have Professor of Economics from UMKC, none other than original gangster, Mat Forstater. I am so happy to have him. Mat is also the research director at the Global Institute for Sustainable Prosperity.
And Mat, with that, you know, this is a really interesting time we’re living in and as we’re trying to build massive coalitions, I think oftentimes the progressive movement fails to effectively address the needs of minorities and those who are incapable of working and are in need of public state support and so forth.
I think people are not quite familiar with the history of this, and you have a deep rich history, which is what makes this show today so exciting for me.
Forstater (02:35):
Well it’s great to be here and it’s always a pleasure, Steve.
Grumbine (02:39):
So you and I, prior to the show here, we were talking a little bit about Martin Luther King, Jr., and the Universal Basic Income and the Federal Job Guarantee, and some of the misnomers that are perpetrated in the public space, the public discussion, about how to handle this gap between those who are cut out of the economy and those who are inadequately in the economy and those who have no choices.
And now I’m curious, what was Martin Luther King’s stances on this? What was his stance on the Basic Income and the Federal Job Guarantee?
Forstater (03:22):
Well, Dr. King, and recall that the March on Washington, the full name was the March on Washington for Jobs and Freedom. It was not the March on Washington for Income and Freedom. Although income is inextricably tied to the job guarantee, but Dr. King over and over again, in speeches, books, especially his 1968 book, “Where Do We Go from Here?”
But in his Economic Bill of Rights, which was originally a phrase coined by FDR, but picked up by Dr. King, Economic Bill of Rights. But he also had his Poor People’s Campaign, which is another umbrella for packages of many policies and demands and so on. But throughout his writings and speeches, he reiterated that government must become an employer of last resort.
He used the terms “employer of last resort” or “public service employment” as synonyms for the job guarantee. He specifically said, we need an Economic Bill of Rights. This would guarantee a job to all people who want to work and are able to work. It would mean creating public service jobs. And we have many, many quotes like this.
And in terms of income, of course, those who cannot or should not be working will still receive an income under every proposal for a job guarantee that I’ve ever seen. That is not the same thing as a Universal Basic Income.
It’s similar to the Freedom Budget that was put forward by Bayard Rustin and the A. Philip Randolph Institute in the sixties where they had a three-part platform, a job guarantee for everyone ready and willing to work, an income guarantee for those who cannot or should not be working, and what we today would call living wage.
They referred to raising the minimum wage. We would call living wage to lift the working poor out of poverty. So that was sort of a three-legged stool, so to speak, that would address… Because raising the minimum wage alone will not help the unemployed directly, right?
And a job guarantee, if someone cannot truly cannot or should not be working. So you need all three. And I would even add that a shorter work week is perfectly consistent with the job guarantee and this three-part formula that came out of the 1960s.
Grumbine (07:05):
It’s interesting because as we listened to the various political candidates, you know, running here in 2020, you’ve got Andrew Yang who has basically kicked any concept of a job guarantee to the curb and is running on a thousand dollars a month, which those of us who have lived in the real world know that a thousand dollars a month doesn’t guarantee a whole lot.
And also Tulsi Gabbard who has come out and said that the job guarantee is a failed platform, that it’s a failed program and that only a “freedom dividend” would work. And so between her and Andrew Yang, they have taken what I consider to be the progressive libertarian front and have kind of side-railed them against a Federal Job Guarantee.
And it seems to be only Bernie Sanders right now, running who has a bold policy prescription, if you will, for the Federal Job Guarantee as part of a “just transition,” for a Green New Deal, and a host of other things. I mean, it seems to me like Martin Luther King, Jr.’s vision fell far more in line with that of the Bernie Sanders approach than these others who have laid claim that Martin Luther King was for a basic income. What would you say to that?
Forstater (08:25):
Absolutely. I mean, listen, so I had been familiar with some of Dr. King’s speeches and writings, but I think like many I had missed or forgot the first time around not only how much he was focused on the economic question as necessary to answer in order for civil rights and advances, and political rights, and social and political equality to actually take root and hold.
Without the economic piece, without economic security then the promises of the gains of the Civil Rights era and other advances in the political and social spheres just will not take hold and be real. You have to have the economic piece, and then within the economy, King was focused, I mean a laser-like focus on the problem of unemployment in addition to, of course, racism.
So you have joblessness with all the social and economic costs that accompany longterm unemployment, and then, as well, the economic security, financial security, income, which also means spending. King and Rustin both, it wasn’t their main focus.
But they did at least each once mention that business people should welcome true full employment through a job guarantee with open arms, because the income that is created is in the hands of those within lower and middle income groups that have unsatisfied consumption demand just in the realm of basic needs.
And so the money is going to be spent and who is business going to sell to if people don’t have any income to spend? So it’s something everyone can understand, but there are several specific characteristics of Dr. King’s Job Guarantee proposal that I think it would really do us well to pay attention to.
Basically he elaborated four different parts of his vision of the job guarantee. So the first is that the development of skills and education are outcomes of the program, not prerequisites of the program. So it’s jobs first, training later – while being paid – rather than being trained for non-existent jobs.
And then the second is that the jobs are producing community services, social services, public services that are in short supply, and that benefit the neediest communities. This you do not get with the income guarantee. So this is the sort of supply aspect of the job guarantee: that labor is being directed towards our most pressing needs.
Of course, the Green New Deal, we know, including environmental and social justice and so on. And then the third characteristic is that the program does generate income for individuals and families that have unmet basic needs and so is absolutely key to increasing just basic standards.
And then the fourth characteristic of Dr. King’s vision of the job guarantee is that there are numerous social and even psychological benefits for individuals, families, communities, and the nation as a whole.
And many of these are based on his recognition of what we would discuss under the heading of the social and economic costs of unemployment – that unemployment is related to virtually every major social problem that we have.
And so a job guarantee would go a long way toward alleviating many of these social and economic ills. But you can see that the income guarantee, Universal Basic Income, there’s no necessary skill and education development. There’s no producing the community and public services that are benefiting the community.
So of these characteristics only the income piece, which is one of the four, because the fourth, the social benefits, psychological benefits are all related to the research outside of economics in anthropology, social psychology, sociology about the importance of work and not at a demeaning sub-minimum wage job, but to be able to really pursue one’s life craft or life mission.
I’m a teacher, you know, you are an activist and communicator, so we’re all able to develop our talents and through doing so give back to the community.
Grumbine (15:28):
What do you suppose is the attraction to just the Universal Basic Income? Why do you suppose that all those other components that you laid out there, that vast rich body of knowledge and benefit is kicked to the curb in favor of what I would consider to be largely turning us into consumption units at the behest of capital, to fatten the wallets of capital?
I don’t see the allure to that. And yet at the same time, though, it’s very present in the public debate today. It’s very much a part of the story right now. And maybe it’s because it’s easy to understand, just sort of easy. It doesn’t require any kind of nuanced discussion. But rather than me answer that, what do you suppose is the allure to that?
Forstater (16:24):
Well, you know, I don’t know if you saw the Cleveland Browns wide receiver, Odell Beckham, Jr., who was a LSU Tiger, handing out the cash after LSU won the college football championship. I mean, literally right on the field, he was just, you know, and then now it’s creating a big stir and everything, you know, with the NCAA and all that.
But the point is, listen, who wants to say, “No,” you know? Because it’s rooted in the desperation that those of us who are over our head in debt, who have been in the precarious situations where we could be out on the street, we could be homeless, where relatives who may be dealing with incredible, you know, health issues or student debt. And he gave us the money! It’s the answer to all problems. It’s why people play the lottery, right?
Grumbine (17:38):
Yeah.
Forstater (17:38):
But I mean, you can’t just say, “Okay.” I mean, this is like something we used to say when we were kids. “Oh, well, you know, why doesn’t we give everybody a million dollars?”
Grumbine (17:53):
Yes we did. I remember that.
Forstater (17:56):
So, I mean, I understand because capitalism, particularly unregulated, poorly-regulated capitalism intrinsically creates this kind of desperation on the part of the large majority of the population. And so we’re just constantly trying to find a way out.
As we get older, unfortunately, we see what this desperation for cash – you know, desperation for money, for credit to get out of debt, to have a regular income, to be able to send our kids to school, and so on and so forth – what it does to people. And so the idea that we could be free from that. Right? But the problem is that it’s not just like, okay, give everybody a million dollars.
I mean, so then there’s no structural changes in the economy. There is important work to be done, just, you know, climate change, social justice infrastructure, so on, so forth, there’s so much important work to be done.
If a supporter of Universal Basic Income is mostly focused on cutting the link between work and wages, I mean, I understand that that’s basically saying they want to eliminate capitalism.
Well, then say that. But that is not what Andrew Yang or, you know, many other proponents, in fact, you have had in different forms, basic income guarantee even supported on the right of the political spectrum, because Milton Friedman, negative income tax.
Grumbine (20:11):
Yes.
Forstater (20:13):
You know, I mean, some people used to always bring up the, you know, earned income tax credit or whatever, things like that as a form of a basic income, but in any case, the job guarantee and the income guarantee both are intended to address major structural weaknesses of the capitalist way of organizing our economic life.
And I think, you know, the job guarantee clearly, if you just look at the different aspects, like I just pointed out, Dr. King talked about the importance of income, but there’s also the other three parts, the creation of social and community services, public services, and the development of skills and education and talents and the social and psychological as well as important economic benefits. So he had it down.
And, you know, recently I read this line from the great female civil rights leader, Ella Baker, she said, Martin didn’t make the movement, the movement made Martin. So the movement was bigger than a single individual, which he would be the first to say, I’m sure. And my point being that King was not alone in specifying a job guarantee.
I began to look at pretty much from the end of the second World War until the Humphrey-Hawkins Employment and Balanced Growth Act, which was originally the Humphrey-Hawkins Full Employment [Act], and included a job guarantee, and then that got gutted before it was passed.
But from 1946, let’s say until 1978, virtually every major African American leader and organization came out not only for full employment, but specifically a job guarantee, whether it’s the National Urban League, the Congress of Racial Equality. And of course these organizations have individuals who were influencing and leading the way.
The A. Philip Randolph Institute. So we’re talking about James Farmer in the case of CORE, Congress of Racial Equality, Charles V. Hamilton did a lot of the work for the National Urban League. You had Robert S. Brown who founded the Review of Black Political Economy and the Caucus of Black Economists, which was a forerunner of the NEA, the National Economic Association, which is basically the Black Economists Professional Association.
My colleague Linwood Tauheed, professor at UMKC, is going to be president of the NEA, shout out to him. And he’s done some very relevant work to MMT by the way, with Randy Wray and on his own. In any case you have across the political spectrum within the Black community as well, because you had nationalist-leaning groups, let’s say, the Black Panther Party.
So they had their 10 point program. And number two was government must provide a job for anyone ready and willing to work, if they cannot find employment in the private sector or the regular public sector.
And you had more Democratic Socialist and Socialist leaning authors who were in support of the job guarantee, the great African-American sociologist, Oliver C. Cox, and truly it almost is harder to find leaders and organizations in the Black community over this period who did not support the job guarantee.
That’s almost more difficult to find, of course you could find it. But my point is it was totally mainstreamed. And it’s true that, I mean, it wasn’t just in the African American community, the job guarantee during the 1960s under the term usually “public service employment” was on the table, it was a serious part of the policy discussion as it is once again today.
And I would appeal to anyone who supports an income guarantee that if legislation for a job guarantee is actually a political possibility that you have serious political candidates in the mainstream of American society who are calling for a job guarantee, please don’t oppose something that would have so many benefits for so many, not just those who are in the program, of course, I mean, because, you know, full employment is good for everyone.
Grumbine (26:15):
Absolutely.
Forstater (26:15):
It really is. Now there is one aspect of some of the supporters for the income guarantee, this would be those who are looking at work and human labor, not as it was meant to be that we enjoy being productive. We enjoy contributing. We enjoy working together with others. We enjoy developing skills and talents, whatever, you know, those might be.
So they’re looking at work and human labor, not as the craft work and the gardening and the way of life that human societies have engaged in, you know, since time immemorial. Instead, they’re looking at actual dead end jobs, low paid, and we know the conditions under which many work are horrible. And it’s understandable that people would say they hate work or they wish they didn’t have to work.
Not because work is intrinsically bad. Like, in mainstream economics work is a disutility you’re supposed to avoid it; but rather because we have our standards for every aspect of employment are nowhere near where they should be, and this is some of the, I think, some of the confusion and maybe some of the unfair mischaracterizations that go on because, you know, we have always, from day one distinguished our vision of job guarantee from draconian workfare.
This is not forcing, you know, welfare mothers to work for $2 a day, you know, at jobs where they won’t develop any skills or knowledge, where they won’t have any of this kind of a thing. So that has never been… Instead, we’ve looked to those successful programs of the past, and it’s not so long ago, right?
The New Deal ABC organizations like the WPA and the CCC and so on, but also SETA was very successful despite opponents trying to complain about it. But SETA was very successful, and there were many lesser known programs, some targeting youth or some targeting rural areas or whatever that had been very successful.
So we have so much research that it’s not even, I mean really, it seems to me that if you want to educate yourself on this kind of thing, there’s no reason why people should misunderstand what the job guarantee can be.
Intermission (29:41):
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Grumbine (30:34):
You know, it’s interesting you say this because I want to make a clear delineation. My experience has shown me that people think the federal government is too weak to do anything right. They have been conditioned to believe that by underfunding programs, by the farce, the political theater, where they act like we’re in this horrible situation of scarcity.
You’ve got the Democrats pleading for revenue-neutral and Pay-Go. You’ve got all these things where we think we’ve got to chase the rich to shake them down for coins, Robin Hood style. We’ve got all these misnomers out there that have polluted the airwaves, and trying to get to the truth is so dramatically… It’s just a radical concept. Truth is just unbelievably radical.
And as we go through this, they somehow or another believe the government is strong enough to give them a basic income, a Universal Basic Income at that. But the government’s not strong enough, however, to give them a Federal Job Guarantee. And maybe even more to the point, which is probably even more frustrating, is the lack of rigor and the lack of attention span, if you will, that the public is giving.
I mean, we’re run ragged. We’re filled with disinformation. It’s no wonder, quite frankly, that we don’t have more energy toward this, but yet when you talk to people on a one on one basis, it’s quite clear that these things touch on the very important things that we all need.
And I’m just curious, what do you think it will take to elevate this conversation in such a way that the masses will be able to disabuse themselves of the falsities and grab hold of these very, what I consider to be clear messages of hope, of, I hate to say the word salvation, but of being freed from the strictures of capitalism to some degree.
By at least taking away the stranglehold of employers by allowing them to have the public option of going into the Federal Job Guarantee? It seems like a no-brainer. And then take it down to Social Security. You heard Alan Greenspan giving Paul Ryan an education in understanding sovereign economics…
Forstater (32:56):
Right.
Grumbine (32:56):
…At least in a moment of clarity, stressing them. There’s absolutely no financial constraint for keeping Social Security around. The question is can we create an economy that has the real resources available for the things people would like to purchase?
This is kind of a point-counter-point. How do we address the price anchor concept and how do we address these other things that keep cropping up these – as Randall Wray said I think in an article many years ago – the “Bop-a-Moles.” How do we get this thing clearly in a nice, neat package to address things like price anchor, to address the fallacy, if you will, that the government is not powerful enough to do these things, and yet at the same time, demonstrate to them that real value? It seems elusive.
Forstater (33:46):
Right. Well, this is the question we’ve been trying to answer and address from the very beginning. And I think in many ways we have to remember how far we’ve come. Because even though the job guarantee was in the mainstream of political policy discussions through the seventies, let’s say, at the time when those of us who developed – began working on – what eventually came to be called MMT, this was the mid-nineties.
People, I mean, very few the National Jobs For All Coalition was the one group I can think of as a political activist group that had never stopped fighting and they’re still going at it. They’re great, and I’ve learned so much from the late Sumner Rosen and Trudy Goldberg and Helen Ginsburg and that whole group. And now a lot of younger people, Phil Harvey is also part of that group.
And this is something I thought about in the last few days, anticipating this conversation. You know, I think there were those in the past who, while they did not explicitly identify the Chartalist Theory of Money or “functional finance” and so on and so forth, they didn’t have the money and budgetary side of things all wrapped up in a neat bow.
They were supporting a job guarantee. But I think in the case of people like Dr. King, Bayard Rustin, Coretta Scott King, and so on and so forth, that they almost kind of had an intuitive feel for the fact that the federal government can never go bankrupt.
Because remember, you know, Keynesianism had a big influence on, if not Martin Luther King, certainly both the Freedom Budget and the Humphrey-Hawkins Legislation. Leon Keyserling was a New Deal Keynesian who contributed a lot of the, you know, maybe more technical economics behind the Freedom Budget and the Humphrey-Hawkins Legislation.
So you had so much slack in the economy and then often authors would refer to the amounts of money that were being spent by the federal government on military, for example, and well, you know, if we can do that, why can’t we also…
So they didn’t have soft currency economics and so on, but they almost had a kind of, I don’t know, gut feel for maybe the budgetary side of things. In any case, the good news is that Randy Wray, Stephanie Kelton, Warren Mosler and so on and so forth, have done that groundwork. So to get back to your question, it’s a multipronged approach.
That’s been my sort of lesson learned over the 20 years, 20-25 years working on this that you have to, you hit them high, I’ll hit them low. You know, some of us are going to be doing academic research, trying to influence people in the classroom and through our journal articles and books, others are going to be out on the street or social media; others are going to be advising and working on the implementation stages, which are, you know, so crucially important.
So one of the really great reasons for hope is the interdisciplinary expansion of MMT into legal scholarship and the humanities, because, you know, Billy Saas, he’s a professor of rhetoric. I mean, what do we need more than someone who understands the way that we communicate ideas – is so important.
You can have the best ideas, but if you cannot effectively communicate them. So we need the humanities. This is not just a sort of, “Oh the humanities, they’re going to paint a picture of the job guarantee,” or something, which is not anything to be dismissed either. The art that came out of the New Deal era is some of the, you know, great artists and so on.
But the importance of the, let’s say, in law and economics… And I think the Modern Money Network, really, we have to be thankful, you know, for all the good work that they’ve done starting, I don’t know what it was, 10 years ago at Columbia with a couple law students or something.
So we have now law professors at the, you know, Ivy league schools like Chris [Christine] Desan at Harvard and Bob Hockett at Cornell, and so on and so forth, who are carrying the torch. And yeah, I mean, macroeconomics alone, I don’t think, you know, obviously there are certain basic economic ideas, like the idea of the job guarantee and the idea of chartalist understanding of monetary theory and history and functional finance, and so on, the sectoral balances, of course.
These came out of economics more or less, but listen, UMKC heterodox economics even alone is not enough. It’s gotta be interdisciplinary. Interdisciplinary alone is not enough. It also has to be heterodox. We need both, interdisciplinary heterodox social inquiry for political economy.
So I think the primary reason that I started delving into all these rich writings by and about African Americans was because if there’s a group that has double the unemployment rate, good times or bad, and who is suffering economic circumstances disproportionately, I want to hear what those folks have to say.
Grumbine (41:08):
Indeed. Indeed.
Forstater (41:11):
Right.
Grumbine (41:11):
Let me ask you a question. The neoliberal mindset, it is so pervasive today, that is so much a part of everything from sitcoms to just everything, I mean, it literally is laced through every single thing we do. How do we present… I mean, I understand it’s a framing issue.
Forstater (41:33):
Oh yeah.
Grumbine (41:35):
This is such a deep well. The levels of connecting points… You know, I look at dependencies, inputs, outputs tools, and techniques in everything that I do professionally. And I think to myself, I’m trying to disassemble this Gordian Knot of insanity that is neoliberalism.
And it has a purpose, and that purpose is to evacuate as much GDP up to the wealth as it can while leaving us to scramble and point fingers at each other, and try to do better, and consider ourselves just lacking in something.
I don’t how to break that stranglehold, especially for folks in compromised, vulnerable communities, and to present this in such a way that they don’t think of that as the only way – “there is no alternative” kind of moment.
It seems like breaking that stranglehold of “there is no alternative” is absolutely paramount to making bold sweeping changes. What is your belief? What is your understanding, your scholarly understanding, of how these things come to be and breaking free of them?
Forstater (42:50):
Well, for what it’s worth, I would say that if neoliberalism has not always been this culturally pervasive into every nook and cranny as you were describing, right? If it hasn’t always been, that means that it doesn’t need to always be. If it could be done, it can be undone.
So the one thing I guess that, you know, neoliberalism has on its side is the tremendous wealth and resources at its disposal to push its agenda.
But I think history has shown, I mean, I teach young people and they are very affected by, you know, the state of the world today, what’s going on in the world today and so on…and once in a while, I have to remind them because they did not live through it, that four or five years before Nelson Mandela was elected president of South Africa, he was in his 27th year of prison under apartheid.
And I mean, nobody thought that apartheid would end without blood shed, and that there was no way that multiracial, multiethnic multi…could live in peace moving forward, and not withstanding South Africa’s own problems, also dealing with global neoliberalism and so on. But the end of apartheid? How about the Soviet Union? So, you know, whatever your politics doesn’t really matter.
The fact is that most people I know were not celebrating the actually existing socialism of the Soviet Union and for the Soviet Union to voluntarily dismantle itself? Right? I mean, but all what has to be understood is the people on the ground, the grassroots, the mass movements.
And I think we have to remember that is something that I was advised early on – that Humphrey-Hawkins and even the 1946 Full Employment Bill, which became the Employment Bill, right – that us getting a meeting with the economic advisor to a member of Congress, that is not going to get a job guarantee passed, okay?
You have got to have mass grassroots support. I mean, basically every near quasi job guarantee program that we know of – WPA in the U.S, the Gandhi Rural Program in India, the Jefes program in Argentina – every single one of those was the result of a popular grassroots protest and demands.
Which is why I like to go back to Frederick Douglass, appropriately enough in this conversation, that “power concedes nothing without a demand. It never did, and it never will.” And we would do well to understand. And that’s why I’m so excited by the Sunrise Movement, for example.
Youth standing up! You know, it takes a lot of courage to do what these young people are doing, takes a tremendous amount of courage to stand up and speak for the generations that have not yet been born and to say we want them to have an earth that is habitable.
You know, it’s heartbreaking to see, but it really sobers you up quick when you hear somebody like Greta [Thunberg] say, “I don’t want you to feel hopeful!” You know? I mean that really sends a chill because I think, you know, one of the important lessons from Dr. King and the movement was the importance of maintaining hope.
That has been, you know, I think a theme of the African American freedom struggle for over 400 years, of maintaining hope. Recently, I read great line: “Hope is a decision.”
Grumbine (48:19):
Interesting, interesting. There’s a quote, and I’m going to butcher it, but perhaps you can help me fill it out where W. E. B. DuBois basically said, most people cannot fathom freedom without someone else’s slavery, or something to this effect. Yes.
Grumbine (48:39):
I wish I could quote it perfectly, but I don’t have it on the tip of my tongue. [“Most men today cannot conceive of a freedom that does not involve somebody’s slavery.”] But this stands out to me as such a key… To be able to break free from this, that right there is like the door that is locked.
And I feel like somehow or another, we’ve gotta be able to show that by freeing some doesn’t mean that we have to put ourself in jail, that we’re freeing all. If everyone’s not free and able to partake in economic security and opportunity and have a life of abundance, then we just are basically pouring gasoline on a problem. And it becomes a self-fulfilling prophecy.
Of course, people are desperate, and they’re doing things that people that are having their basic needs taken care of aren’t doing. And at the end of the day, I think that this is a part of the neoliberal scapegoat model that requires winners and losers, ne’er-do-goods, and, you know, winners and so forth..
Forstater (49:37):
And blaming the victim.
Grumbine (49:39):
Absolutely. Victim shaming. “Oh, if you’d have just done better, made better choices.”” And I think that that whole concept is the real Holy Grail of the enlightenment, if you will, that we need to somehow or another take… Because I think it plays into all of these points that we’re talking about.
Every single one of these points that we’re trying to raise, I believe come down to: can you fathom giving someone else freedom without you seeing it as a negative to you? And it makes no sense to me that we can’t get past that.
Forstater (50:15):
Right. It’s a zero sum game. It’s competition. It is survival of the fittest and all this other garbage, but, you know, fortunately there is an alternative, Steve. I mean, there are alternatives, like there are so many. And this is why we have to study history and we have to teach the children, right?
We must tell the children the story of the movement. I mean, those who don’t learn history are doomed to repeat it. Some things become cliches because they just have been shown to be true time and time again. So the dangers of fascism, totalitarianism, authoritarianism, and that there is an alternative, that everything is not a zero sum game.
That because you win, it does not mean I lose. We win together. I can’t win unless you win, actually. I think it’s the… I don’t know what you would call it, but is just the opposite of the zero sum game, right?
Grumbine (51:41):
Absolutely.
Forstater (51:42):
Yeah. Cumulative causation that the amplification and sort of exponential generation and regeneration. And it’s because we’ve all been inspired by the human spirit. You know, we had a session in San Diego on climate change and the Green New Deal.
There were a couple of different ones, and somehow I forget how it came up, but at the end of the session, I said that everyone in this room has had what I would call a religious or spiritual experience. And by that, what I mean, and I prefaced it by saying, “I am just spiritual atheist.” You know, there is something more, we’re not just a lump of meat.
And so by a religious experience, I meant a kind of transcendental expansive state of life. Maybe it’s when you’re listening to music or it could be when you’re out in nature. And the greater self is predominant rather than the lesser self, which is rooted in greed and hate. Right? So by that, I meant if we can unite around just commitment to a life-affirming principle.
I mean, the inherent dignity and respect-worthiness of all life. That should not be something that people find hard to sign on to. It’s not saying you have to believe in this or that, or complicated, you know, organized religion and all that thing, or external powers even. It’s simply saying that life is inherently respect-worthy and dignified, and that means that we don’t hurt another person.
We don’t harm another person. We don’t step on someone else’s face to make our way up one or two rungs in the ladder. I think, you know, it’s not popular to – on the left – to bring up spiritual, you know… But I don’t know what else to call it.
That there is something that is driving us, right. And it is because we have a sense of justice, fairness, it hurts us to see people treated unjustly. It’s wrong, and we must do something about it, right? And this is why we get back to this issue of the right to a job.
Grumbine (54:57):
Absolutely. It’s interesting because I was looking, as you’re talking, I was desperately trying to find that quote by W. E. B. Du Bois. And I stumbled onto a quote, accidentally, that fits right in here. And I just… He says, “There is in this world, no such force as the force of a person determined to rise.
The human soul cannot be permanently chained.” And it speaks to exactly what you were saying. We have the ability to rise up and overcome. And I think I sell out. I think I sometimes forget that.
Forstater (55:40):
Right.
Grumbine (55:40):
It’s easy to forget that. It really is. Because the news is so rarely positive, it’s so rarely in our favor that sometimes it’s easy to forget that we can rise up, and we can do this, and that there is an alternative. And Mat, I guess my thoughts are that you’re a beautiful man. You have wonderful insights. And I think that this subject has to be revisited and revisited often.
Forstater (56:09):
Absolutely. Absolutely. And listen, you and I met, you know, three times or, you know, we’ve talked on the phone a couple of times, but it’s like, we are brothers, compatriots, comrades forever.
Grumbine (56:30):
Amen.
Forstater (56:31):
I mean, it’s just something you feel. I mean, it could be, cause you know, are you in Harrisburg? I forget, but.
Grumbine (56:38):
I am.
Forstater (56:39):
You know who Hal Carmichael is?
Grumbine (56:42):
I do.
Forstater (56:42):
You know, most people don’t.
Grumbine (56:43):
I do. I do. I know who Wilbert Montgomery is. I know who [laughter] all those guys. Absolutely. Well look, on that note, Mat, I want to thank you so much for joining us.
Forstater (56:57):
Right, Steve. It’s always a pleasure. It’s always enlightening. I never know what’s going to happen with you. It’s great.
Grumbine (57:03):
[Laughter] That’s the way we keep it man, that’s exactly the way we keep it. So with that, I want to thank you. And I hope that we can have you back on again very, very soon. I mean, this is just absolutely always a pleasure for me – a huge passion of mine, obviously – to engage in these discussions as I learn something every time from you all.
I want to just say it’s absolutely not lost on me how blessed I am to have the opportunity to talk to each of you, especially in this case. I mean, you always bring a different perspective and I really thank you for it.
Forstater (57:40):
Well, thank you Steve. Let’s talk soon.
Grumbine (57:42):
You got it. Alrighty. Bye. Bye.
Forstater (57:44):
Bye.
End Credits (57:51):
Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Mindy Donham. Macro N Cheese is publicly funded by our Real Progressives’ Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.
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The mainstream media has created a pasteurized and homogenized version of Martin Luther King, Jr, befitting the neoliberal cultural bell jar. That being said, our friend Mathew Forstater reminds us that Dr King had a laser-like focus on economics and unemployment. The massively successful August 1963 march was called The March on Washington for Jobs and Freedom. Without economic security, the social and political advances of the civil rights movement cannot take hold.
Steve kicks off the interview by asking Mat to speak about MLK in the context of today’s debate about a Universal Basic Income versus the Federal Job Guarantee.
Dr King and other civil rights leaders promoted an economic bill of rights that was specifically and intentionally not a UBI. The three-part platform demanded a job for anyone willing to work, an income guarantee for those who cannot work, and a raise in the minimum wage sufficient to lift the working poor out of poverty. All three prongs are necessary — a job guarantee alone doesn’t help those who cannot work; raising the minimum wage doesn’t help the working poor.
Dr King’s vision of a job guarantee encompasses four vital components.
1. The development of education and skills must be outcomes of the program and not prerequisites. Rather than being trained for nonexistent jobs, people are to be hired first and trained while they’re being paid.
2. Any jobs should produce community services — the public and social services that are in short supply and benefit the neediest communities. Labor is directed to our most pressing needs, including environmental and social justice.
3. The program generates income for families that have unmet basic needs. There must be an improvement in basic standards.
4. Acknowledge that there are numerous psychological and social benefits for individuals, families, communities, and the nation as a whole. This is based on his recognition of the social and economic costs of unemployment. Research outside the field of economics confirms the importance of work.
In contrast, a UBI provides no development of skills and no production of public services to benefit the community. In a UBI only the income piece is addressed.
Supporters of the UBI tend to look at work or human labor not as it was meant to be — a pursuit of one’s life mission. They’re looking at dead-end low-paying jobs with horrible working conditions. It’s understandable that they would oppose that kind of work.
We have always distinguished our version of a job guarantee from draconian workfare — the kind that forces welfare mothers to take underpaid jobs where they’ll develop no skills or knowledge. Our plan is built around the understanding that people enjoy contributing, working with others, and developing their talents. For models, we look to successful programs of the past like the WPA, CCC, and Argentina’s Plan Jefes.
In the rest of the interview, Mat explains that Dr King was not alone in advocating for a JG. He talks about the history of the Humphrey-Hawkins Act, which was originally intended as full-employment legislation but ultimately was gutted. From 1946 to 1978 virtually every major African American leader and organization came out for full employment, including James Farmer of CORE, Bayard Rustin of the AFL-CIO’s A. Philip Randolph Institute, and Oliver C. Cox, who wrote a number of Marxist critiques of capitalism. The #2 demand of the Black Panther Party’s 10 Point Program was that the government provide “full employment for our people.”
Our Macro n Cheese audience will appreciate this fascinating history of the intersection of the civil rights movement and the ongoing fight for a Federal Job Guarantee.
Mathew Forstater is a Professor of Economics at the University of Missouri–Kansas City and Research Director at the Global Institute for Sustainable Prosperity.
www.global-isp.org/research-director/
@mattybram on Twitter
Macro N Cheese – Episode 55
The Economics of Martin Luther King Jr. with Mathew Forstater
February 15, 2020
Mathew Forstater [intro/music] (00:03):
The job guarantee and the income guarantee both are intended to address the major structural weaknesses of the capitalist way of organizing our economic life. I think the primary reason that I started delving into all the rich writings by and about African Americans was because if there’s a group that is suffering economic circumstances disproportionately, I want to hear what those folks have to say.
Geoff Ginter [intro/music] (01:32):
Now let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.
Steve Grumbine (01:34):
And this is Steve with Macro N Cheese. Today I have Professor of Economics from UMKC, none other than original gangster, Mat Forstater. I am so happy to have him. Mat is also the research director at the Global Institute for Sustainable Prosperity.
And Mat, with that, you know, this is a really interesting time we’re living in and as we’re trying to build massive coalitions, I think oftentimes the progressive movement fails to effectively address the needs of minorities and those who are incapable of working and are in need of public state support and so forth.
I think people are not quite familiar with the history of this, and you have a deep rich history, which is what makes this show today so exciting for me.
Forstater (02:35):
Well it’s great to be here and it’s always a pleasure, Steve.
Grumbine (02:39):
So you and I, prior to the show here, we were talking a little bit about Martin Luther King, Jr., and the Universal Basic Income and the Federal Job Guarantee, and some of the misnomers that are perpetrated in the public space, the public discussion, about how to handle this gap between those who are cut out of the economy and those who are inadequately in the economy and those who have no choices.
And now I’m curious, what was Martin Luther King’s stances on this? What was his stance on the Basic Income and the Federal Job Guarantee?
Forstater (03:22):
Well, Dr. King, and recall that the March on Washington, the full name was the March on Washington for Jobs and Freedom. It was not the March on Washington for Income and Freedom. Although income is inextricably tied to the job guarantee, but Dr. King over and over again, in speeches, books, especially his 1968 book, “Where Do We Go from Here?”
But in his Economic Bill of Rights, which was originally a phrase coined by FDR, but picked up by Dr. King, Economic Bill of Rights. But he also had his Poor People’s Campaign, which is another umbrella for packages of many policies and demands and so on. But throughout his writings and speeches, he reiterated that government must become an employer of last resort.
He used the terms “employer of last resort” or “public service employment” as synonyms for the job guarantee. He specifically said, we need an Economic Bill of Rights. This would guarantee a job to all people who want to work and are able to work. It would mean creating public service jobs. And we have many, many quotes like this.
And in terms of income, of course, those who cannot or should not be working will still receive an income under every proposal for a job guarantee that I’ve ever seen. That is not the same thing as a Universal Basic Income.
It’s similar to the Freedom Budget that was put forward by Bayard Rustin and the A. Philip Randolph Institute in the sixties where they had a three-part platform, a job guarantee for everyone ready and willing to work, an income guarantee for those who cannot or should not be working, and what we today would call living wage.
They referred to raising the minimum wage. We would call living wage to lift the working poor out of poverty. So that was sort of a three-legged stool, so to speak, that would address… Because raising the minimum wage alone will not help the unemployed directly, right?
And a job guarantee, if someone cannot truly cannot or should not be working. So you need all three. And I would even add that a shorter work week is perfectly consistent with the job guarantee and this three-part formula that came out of the 1960s.
Grumbine (07:05):
It’s interesting because as we listened to the various political candidates, you know, running here in 2020, you’ve got Andrew Yang who has basically kicked any concept of a job guarantee to the curb and is running on a thousand dollars a month, which those of us who have lived in the real world know that a thousand dollars a month doesn’t guarantee a whole lot.
And also Tulsi Gabbard who has come out and said that the job guarantee is a failed platform, that it’s a failed program and that only a “freedom dividend” would work. And so between her and Andrew Yang, they have taken what I consider to be the progressive libertarian front and have kind of side-railed them against a Federal Job Guarantee.
And it seems to be only Bernie Sanders right now, running who has a bold policy prescription, if you will, for the Federal Job Guarantee as part of a “just transition,” for a Green New Deal, and a host of other things. I mean, it seems to me like Martin Luther King, Jr.’s vision fell far more in line with that of the Bernie Sanders approach than these others who have laid claim that Martin Luther King was for a basic income. What would you say to that?
Forstater (08:25):
Absolutely. I mean, listen, so I had been familiar with some of Dr. King’s speeches and writings, but I think like many I had missed or forgot the first time around not only how much he was focused on the economic question as necessary to answer in order for civil rights and advances, and political rights, and social and political equality to actually take root and hold.
Without the economic piece, without economic security then the promises of the gains of the Civil Rights era and other advances in the political and social spheres just will not take hold and be real. You have to have the economic piece, and then within the economy, King was focused, I mean a laser-like focus on the problem of unemployment in addition to, of course, racism.
So you have joblessness with all the social and economic costs that accompany longterm unemployment, and then, as well, the economic security, financial security, income, which also means spending. King and Rustin both, it wasn’t their main focus.
But they did at least each once mention that business people should welcome true full employment through a job guarantee with open arms, because the income that is created is in the hands of those within lower and middle income groups that have unsatisfied consumption demand just in the realm of basic needs.
And so the money is going to be spent and who is business going to sell to if people don’t have any income to spend? So it’s something everyone can understand, but there are several specific characteristics of Dr. King’s Job Guarantee proposal that I think it would really do us well to pay attention to.
Basically he elaborated four different parts of his vision of the job guarantee. So the first is that the development of skills and education are outcomes of the program, not prerequisites of the program. So it’s jobs first, training later – while being paid – rather than being trained for non-existent jobs.
And then the second is that the jobs are producing community services, social services, public services that are in short supply, and that benefit the neediest communities. This you do not get with the income guarantee. So this is the sort of supply aspect of the job guarantee: that labor is being directed towards our most pressing needs.
Of course, the Green New Deal, we know, including environmental and social justice and so on. And then the third characteristic is that the program does generate income for individuals and families that have unmet basic needs and so is absolutely key to increasing just basic standards.
And then the fourth characteristic of Dr. King’s vision of the job guarantee is that there are numerous social and even psychological benefits for individuals, families, communities, and the nation as a whole.
And many of these are based on his recognition of what we would discuss under the heading of the social and economic costs of unemployment – that unemployment is related to virtually every major social problem that we have.
And so a job guarantee would go a long way toward alleviating many of these social and economic ills. But you can see that the income guarantee, Universal Basic Income, there’s no necessary skill and education development. There’s no producing the community and public services that are benefiting the community.
So of these characteristics only the income piece, which is one of the four, because the fourth, the social benefits, psychological benefits are all related to the research outside of economics in anthropology, social psychology, sociology about the importance of work and not at a demeaning sub-minimum wage job, but to be able to really pursue one’s life craft or life mission.
I’m a teacher, you know, you are an activist and communicator, so we’re all able to develop our talents and through doing so give back to the community.
Grumbine (15:28):
What do you suppose is the attraction to just the Universal Basic Income? Why do you suppose that all those other components that you laid out there, that vast rich body of knowledge and benefit is kicked to the curb in favor of what I would consider to be largely turning us into consumption units at the behest of capital, to fatten the wallets of capital?
I don’t see the allure to that. And yet at the same time, though, it’s very present in the public debate today. It’s very much a part of the story right now. And maybe it’s because it’s easy to understand, just sort of easy. It doesn’t require any kind of nuanced discussion. But rather than me answer that, what do you suppose is the allure to that?
Forstater (16:24):
Well, you know, I don’t know if you saw the Cleveland Browns wide receiver, Odell Beckham, Jr., who was a LSU Tiger, handing out the cash after LSU won the college football championship. I mean, literally right on the field, he was just, you know, and then now it’s creating a big stir and everything, you know, with the NCAA and all that.
But the point is, listen, who wants to say, “No,” you know? Because it’s rooted in the desperation that those of us who are over our head in debt, who have been in the precarious situations where we could be out on the street, we could be homeless, where relatives who may be dealing with incredible, you know, health issues or student debt. And he gave us the money! It’s the answer to all problems. It’s why people play the lottery, right?
Grumbine (17:38):
Yeah.
Forstater (17:38):
But I mean, you can’t just say, “Okay.” I mean, this is like something we used to say when we were kids. “Oh, well, you know, why doesn’t we give everybody a million dollars?”
Grumbine (17:53):
Yes we did. I remember that.
Forstater (17:56):
So, I mean, I understand because capitalism, particularly unregulated, poorly-regulated capitalism intrinsically creates this kind of desperation on the part of the large majority of the population. And so we’re just constantly trying to find a way out.
As we get older, unfortunately, we see what this desperation for cash – you know, desperation for money, for credit to get out of debt, to have a regular income, to be able to send our kids to school, and so on and so forth – what it does to people. And so the idea that we could be free from that. Right? But the problem is that it’s not just like, okay, give everybody a million dollars.
I mean, so then there’s no structural changes in the economy. There is important work to be done, just, you know, climate change, social justice infrastructure, so on, so forth, there’s so much important work to be done.
If a supporter of Universal Basic Income is mostly focused on cutting the link between work and wages, I mean, I understand that that’s basically saying they want to eliminate capitalism.
Well, then say that. But that is not what Andrew Yang or, you know, many other proponents, in fact, you have had in different forms, basic income guarantee even supported on the right of the political spectrum, because Milton Friedman, negative income tax.
Grumbine (20:11):
Yes.
Forstater (20:13):
You know, I mean, some people used to always bring up the, you know, earned income tax credit or whatever, things like that as a form of a basic income, but in any case, the job guarantee and the income guarantee both are intended to address major structural weaknesses of the capitalist way of organizing our economic life.
And I think, you know, the job guarantee clearly, if you just look at the different aspects, like I just pointed out, Dr. King talked about the importance of income, but there’s also the other three parts, the creation of social and community services, public services, and the development of skills and education and talents and the social and psychological as well as important economic benefits. So he had it down.
And, you know, recently I read this line from the great female civil rights leader, Ella Baker, she said, Martin didn’t make the movement, the movement made Martin. So the movement was bigger than a single individual, which he would be the first to say, I’m sure. And my point being that King was not alone in specifying a job guarantee.
I began to look at pretty much from the end of the second World War until the Humphrey-Hawkins Employment and Balanced Growth Act, which was originally the Humphrey-Hawkins Full Employment [Act], and included a job guarantee, and then that got gutted before it was passed.
But from 1946, let’s say until 1978, virtually every major African American leader and organization came out not only for full employment, but specifically a job guarantee, whether it’s the National Urban League, the Congress of Racial Equality. And of course these organizations have individuals who were influencing and leading the way.
The A. Philip Randolph Institute. So we’re talking about James Farmer in the case of CORE, Congress of Racial Equality, Charles V. Hamilton did a lot of the work for the National Urban League. You had Robert S. Brown who founded the Review of Black Political Economy and the Caucus of Black Economists, which was a forerunner of the NEA, the National Economic Association, which is basically the Black Economists Professional Association.
My colleague Linwood Tauheed, professor at UMKC, is going to be president of the NEA, shout out to him. And he’s done some very relevant work to MMT by the way, with Randy Wray and on his own. In any case you have across the political spectrum within the Black community as well, because you had nationalist-leaning groups, let’s say, the Black Panther Party.
So they had their 10 point program. And number two was government must provide a job for anyone ready and willing to work, if they cannot find employment in the private sector or the regular public sector.
And you had more Democratic Socialist and Socialist leaning authors who were in support of the job guarantee, the great African-American sociologist, Oliver C. Cox, and truly it almost is harder to find leaders and organizations in the Black community over this period who did not support the job guarantee.
That’s almost more difficult to find, of course you could find it. But my point is it was totally mainstreamed. And it’s true that, I mean, it wasn’t just in the African American community, the job guarantee during the 1960s under the term usually “public service employment” was on the table, it was a serious part of the policy discussion as it is once again today.
And I would appeal to anyone who supports an income guarantee that if legislation for a job guarantee is actually a political possibility that you have serious political candidates in the mainstream of American society who are calling for a job guarantee, please don’t oppose something that would have so many benefits for so many, not just those who are in the program, of course, I mean, because, you know, full employment is good for everyone.
Grumbine (26:15):
Absolutely.
Forstater (26:15):
It really is. Now there is one aspect of some of the supporters for the income guarantee, this would be those who are looking at work and human labor, not as it was meant to be that we enjoy being productive. We enjoy contributing. We enjoy working together with others. We enjoy developing skills and talents, whatever, you know, those might be.
So they’re looking at work and human labor, not as the craft work and the gardening and the way of life that human societies have engaged in, you know, since time immemorial. Instead, they’re looking at actual dead end jobs, low paid, and we know the conditions under which many work are horrible. And it’s understandable that people would say they hate work or they wish they didn’t have to work.
Not because work is intrinsically bad. Like, in mainstream economics work is a disutility you’re supposed to avoid it; but rather because we have our standards for every aspect of employment are nowhere near where they should be, and this is some of the, I think, some of the confusion and maybe some of the unfair mischaracterizations that go on because, you know, we have always, from day one distinguished our vision of job guarantee from draconian workfare.
This is not forcing, you know, welfare mothers to work for $2 a day, you know, at jobs where they won’t develop any skills or knowledge, where they won’t have any of this kind of a thing. So that has never been… Instead, we’ve looked to those successful programs of the past, and it’s not so long ago, right?
The New Deal ABC organizations like the WPA and the CCC and so on, but also SETA was very successful despite opponents trying to complain about it. But SETA was very successful, and there were many lesser known programs, some targeting youth or some targeting rural areas or whatever that had been very successful.
So we have so much research that it’s not even, I mean really, it seems to me that if you want to educate yourself on this kind of thing, there’s no reason why people should misunderstand what the job guarantee can be.
Intermission (29:41):
You are listening to Macro N Cheese, a podcast, brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon, like and follow our pages on Facebook and YouTube, and follow us on Periscope, Twitter, and Instagram.
Grumbine (30:34):
You know, it’s interesting you say this because I want to make a clear delineation. My experience has shown me that people think the federal government is too weak to do anything right. They have been conditioned to believe that by underfunding programs, by the farce, the political theater, where they act like we’re in this horrible situation of scarcity.
You’ve got the Democrats pleading for revenue-neutral and Pay-Go. You’ve got all these things where we think we’ve got to chase the rich to shake them down for coins, Robin Hood style. We’ve got all these misnomers out there that have polluted the airwaves, and trying to get to the truth is so dramatically… It’s just a radical concept. Truth is just unbelievably radical.
And as we go through this, they somehow or another believe the government is strong enough to give them a basic income, a Universal Basic Income at that. But the government’s not strong enough, however, to give them a Federal Job Guarantee. And maybe even more to the point, which is probably even more frustrating, is the lack of rigor and the lack of attention span, if you will, that the public is giving.
I mean, we’re run ragged. We’re filled with disinformation. It’s no wonder, quite frankly, that we don’t have more energy toward this, but yet when you talk to people on a one on one basis, it’s quite clear that these things touch on the very important things that we all need.
And I’m just curious, what do you think it will take to elevate this conversation in such a way that the masses will be able to disabuse themselves of the falsities and grab hold of these very, what I consider to be clear messages of hope, of, I hate to say the word salvation, but of being freed from the strictures of capitalism to some degree.
By at least taking away the stranglehold of employers by allowing them to have the public option of going into the Federal Job Guarantee? It seems like a no-brainer. And then take it down to Social Security. You heard Alan Greenspan giving Paul Ryan an education in understanding sovereign economics…
Forstater (32:56):
Right.
Grumbine (32:56):
…At least in a moment of clarity, stressing them. There’s absolutely no financial constraint for keeping Social Security around. The question is can we create an economy that has the real resources available for the things people would like to purchase?
This is kind of a point-counter-point. How do we address the price anchor concept and how do we address these other things that keep cropping up these – as Randall Wray said I think in an article many years ago – the “Bop-a-Moles.” How do we get this thing clearly in a nice, neat package to address things like price anchor, to address the fallacy, if you will, that the government is not powerful enough to do these things, and yet at the same time, demonstrate to them that real value? It seems elusive.
Forstater (33:46):
Right. Well, this is the question we’ve been trying to answer and address from the very beginning. And I think in many ways we have to remember how far we’ve come. Because even though the job guarantee was in the mainstream of political policy discussions through the seventies, let’s say, at the time when those of us who developed – began working on – what eventually came to be called MMT, this was the mid-nineties.
People, I mean, very few the National Jobs For All Coalition was the one group I can think of as a political activist group that had never stopped fighting and they’re still going at it. They’re great, and I’ve learned so much from the late Sumner Rosen and Trudy Goldberg and Helen Ginsburg and that whole group. And now a lot of younger people, Phil Harvey is also part of that group.
And this is something I thought about in the last few days, anticipating this conversation. You know, I think there were those in the past who, while they did not explicitly identify the Chartalist Theory of Money or “functional finance” and so on and so forth, they didn’t have the money and budgetary side of things all wrapped up in a neat bow.
They were supporting a job guarantee. But I think in the case of people like Dr. King, Bayard Rustin, Coretta Scott King, and so on and so forth, that they almost kind of had an intuitive feel for the fact that the federal government can never go bankrupt.
Because remember, you know, Keynesianism had a big influence on, if not Martin Luther King, certainly both the Freedom Budget and the Humphrey-Hawkins Legislation. Leon Keyserling was a New Deal Keynesian who contributed a lot of the, you know, maybe more technical economics behind the Freedom Budget and the Humphrey-Hawkins Legislation.
So you had so much slack in the economy and then often authors would refer to the amounts of money that were being spent by the federal government on military, for example, and well, you know, if we can do that, why can’t we also…
So they didn’t have soft currency economics and so on, but they almost had a kind of, I don’t know, gut feel for maybe the budgetary side of things. In any case, the good news is that Randy Wray, Stephanie Kelton, Warren Mosler and so on and so forth, have done that groundwork. So to get back to your question, it’s a multipronged approach.
That’s been my sort of lesson learned over the 20 years, 20-25 years working on this that you have to, you hit them high, I’ll hit them low. You know, some of us are going to be doing academic research, trying to influence people in the classroom and through our journal articles and books, others are going to be out on the street or social media; others are going to be advising and working on the implementation stages, which are, you know, so crucially important.
So one of the really great reasons for hope is the interdisciplinary expansion of MMT into legal scholarship and the humanities, because, you know, Billy Saas, he’s a professor of rhetoric. I mean, what do we need more than someone who understands the way that we communicate ideas – is so important.
You can have the best ideas, but if you cannot effectively communicate them. So we need the humanities. This is not just a sort of, “Oh the humanities, they’re going to paint a picture of the job guarantee,” or something, which is not anything to be dismissed either. The art that came out of the New Deal era is some of the, you know, great artists and so on.
But the importance of the, let’s say, in law and economics… And I think the Modern Money Network, really, we have to be thankful, you know, for all the good work that they’ve done starting, I don’t know what it was, 10 years ago at Columbia with a couple law students or something.
So we have now law professors at the, you know, Ivy league schools like Chris [Christine] Desan at Harvard and Bob Hockett at Cornell, and so on and so forth, who are carrying the torch. And yeah, I mean, macroeconomics alone, I don’t think, you know, obviously there are certain basic economic ideas, like the idea of the job guarantee and the idea of chartalist understanding of monetary theory and history and functional finance, and so on, the sectoral balances, of course.
These came out of economics more or less, but listen, UMKC heterodox economics even alone is not enough. It’s gotta be interdisciplinary. Interdisciplinary alone is not enough. It also has to be heterodox. We need both, interdisciplinary heterodox social inquiry for political economy.
So I think the primary reason that I started delving into all these rich writings by and about African Americans was because if there’s a group that has double the unemployment rate, good times or bad, and who is suffering economic circumstances disproportionately, I want to hear what those folks have to say.
Grumbine (41:08):
Indeed. Indeed.
Forstater (41:11):
Right.
Grumbine (41:11):
Let me ask you a question. The neoliberal mindset, it is so pervasive today, that is so much a part of everything from sitcoms to just everything, I mean, it literally is laced through every single thing we do. How do we present… I mean, I understand it’s a framing issue.
Forstater (41:33):
Oh yeah.
Grumbine (41:35):
This is such a deep well. The levels of connecting points… You know, I look at dependencies, inputs, outputs tools, and techniques in everything that I do professionally. And I think to myself, I’m trying to disassemble this Gordian Knot of insanity that is neoliberalism.
And it has a purpose, and that purpose is to evacuate as much GDP up to the wealth as it can while leaving us to scramble and point fingers at each other, and try to do better, and consider ourselves just lacking in something.
I don’t how to break that stranglehold, especially for folks in compromised, vulnerable communities, and to present this in such a way that they don’t think of that as the only way – “there is no alternative” kind of moment.
It seems like breaking that stranglehold of “there is no alternative” is absolutely paramount to making bold sweeping changes. What is your belief? What is your understanding, your scholarly understanding, of how these things come to be and breaking free of them?
Forstater (42:50):
Well, for what it’s worth, I would say that if neoliberalism has not always been this culturally pervasive into every nook and cranny as you were describing, right? If it hasn’t always been, that means that it doesn’t need to always be. If it could be done, it can be undone.
So the one thing I guess that, you know, neoliberalism has on its side is the tremendous wealth and resources at its disposal to push its agenda.
But I think history has shown, I mean, I teach young people and they are very affected by, you know, the state of the world today, what’s going on in the world today and so on…and once in a while, I have to remind them because they did not live through it, that four or five years before Nelson Mandela was elected president of South Africa, he was in his 27th year of prison under apartheid.
And I mean, nobody thought that apartheid would end without blood shed, and that there was no way that multiracial, multiethnic multi…could live in peace moving forward, and not withstanding South Africa’s own problems, also dealing with global neoliberalism and so on. But the end of apartheid? How about the Soviet Union? So, you know, whatever your politics doesn’t really matter.
The fact is that most people I know were not celebrating the actually existing socialism of the Soviet Union and for the Soviet Union to voluntarily dismantle itself? Right? I mean, but all what has to be understood is the people on the ground, the grassroots, the mass movements.
And I think we have to remember that is something that I was advised early on – that Humphrey-Hawkins and even the 1946 Full Employment Bill, which became the Employment Bill, right – that us getting a meeting with the economic advisor to a member of Congress, that is not going to get a job guarantee passed, okay?
You have got to have mass grassroots support. I mean, basically every near quasi job guarantee program that we know of – WPA in the U.S, the Gandhi Rural Program in India, the Jefes program in Argentina – every single one of those was the result of a popular grassroots protest and demands.
Which is why I like to go back to Frederick Douglass, appropriately enough in this conversation, that “power concedes nothing without a demand. It never did, and it never will.” And we would do well to understand. And that’s why I’m so excited by the Sunrise Movement, for example.
Youth standing up! You know, it takes a lot of courage to do what these young people are doing, takes a tremendous amount of courage to stand up and speak for the generations that have not yet been born and to say we want them to have an earth that is habitable.
You know, it’s heartbreaking to see, but it really sobers you up quick when you hear somebody like Greta [Thunberg] say, “I don’t want you to feel hopeful!” You know? I mean that really sends a chill because I think, you know, one of the important lessons from Dr. King and the movement was the importance of maintaining hope.
That has been, you know, I think a theme of the African American freedom struggle for over 400 years, of maintaining hope. Recently, I read great line: “Hope is a decision.”
Grumbine (48:19):
Interesting, interesting. There’s a quote, and I’m going to butcher it, but perhaps you can help me fill it out where W. E. B. DuBois basically said, most people cannot fathom freedom without someone else’s slavery, or something to this effect. Yes.
Grumbine (48:39):
I wish I could quote it perfectly, but I don’t have it on the tip of my tongue. [“Most men today cannot conceive of a freedom that does not involve somebody’s slavery.”] But this stands out to me as such a key… To be able to break free from this, that right there is like the door that is locked.
And I feel like somehow or another, we’ve gotta be able to show that by freeing some doesn’t mean that we have to put ourself in jail, that we’re freeing all. If everyone’s not free and able to partake in economic security and opportunity and have a life of abundance, then we just are basically pouring gasoline on a problem. And it becomes a self-fulfilling prophecy.
Of course, people are desperate, and they’re doing things that people that are having their basic needs taken care of aren’t doing. And at the end of the day, I think that this is a part of the neoliberal scapegoat model that requires winners and losers, ne’er-do-goods, and, you know, winners and so forth..
Forstater (49:37):
And blaming the victim.
Grumbine (49:39):
Absolutely. Victim shaming. “Oh, if you’d have just done better, made better choices.”” And I think that that whole concept is the real Holy Grail of the enlightenment, if you will, that we need to somehow or another take… Because I think it plays into all of these points that we’re talking about.
Every single one of these points that we’re trying to raise, I believe come down to: can you fathom giving someone else freedom without you seeing it as a negative to you? And it makes no sense to me that we can’t get past that.
Forstater (50:15):
Right. It’s a zero sum game. It’s competition. It is survival of the fittest and all this other garbage, but, you know, fortunately there is an alternative, Steve. I mean, there are alternatives, like there are so many. And this is why we have to study history and we have to teach the children, right?
We must tell the children the story of the movement. I mean, those who don’t learn history are doomed to repeat it. Some things become cliches because they just have been shown to be true time and time again. So the dangers of fascism, totalitarianism, authoritarianism, and that there is an alternative, that everything is not a zero sum game.
That because you win, it does not mean I lose. We win together. I can’t win unless you win, actually. I think it’s the… I don’t know what you would call it, but is just the opposite of the zero sum game, right?
Grumbine (51:41):
Absolutely.
Forstater (51:42):
Yeah. Cumulative causation that the amplification and sort of exponential generation and regeneration. And it’s because we’ve all been inspired by the human spirit. You know, we had a session in San Diego on climate change and the Green New Deal.
There were a couple of different ones, and somehow I forget how it came up, but at the end of the session, I said that everyone in this room has had what I would call a religious or spiritual experience. And by that, what I mean, and I prefaced it by saying, “I am just spiritual atheist.” You know, there is something more, we’re not just a lump of meat.
And so by a religious experience, I meant a kind of transcendental expansive state of life. Maybe it’s when you’re listening to music or it could be when you’re out in nature. And the greater self is predominant rather than the lesser self, which is rooted in greed and hate. Right? So by that, I meant if we can unite around just commitment to a life-affirming principle.
I mean, the inherent dignity and respect-worthiness of all life. That should not be something that people find hard to sign on to. It’s not saying you have to believe in this or that, or complicated, you know, organized religion and all that thing, or external powers even. It’s simply saying that life is inherently respect-worthy and dignified, and that means that we don’t hurt another person.
We don’t harm another person. We don’t step on someone else’s face to make our way up one or two rungs in the ladder. I think, you know, it’s not popular to – on the left – to bring up spiritual, you know… But I don’t know what else to call it.
That there is something that is driving us, right. And it is because we have a sense of justice, fairness, it hurts us to see people treated unjustly. It’s wrong, and we must do something about it, right? And this is why we get back to this issue of the right to a job.
Grumbine (54:57):
Absolutely. It’s interesting because I was looking, as you’re talking, I was desperately trying to find that quote by W. E. B. Du Bois. And I stumbled onto a quote, accidentally, that fits right in here. And I just… He says, “There is in this world, no such force as the force of a person determined to rise.
The human soul cannot be permanently chained.” And it speaks to exactly what you were saying. We have the ability to rise up and overcome. And I think I sell out. I think I sometimes forget that.
Forstater (55:40):
Right.
Grumbine (55:40):
It’s easy to forget that. It really is. Because the news is so rarely positive, it’s so rarely in our favor that sometimes it’s easy to forget that we can rise up, and we can do this, and that there is an alternative. And Mat, I guess my thoughts are that you’re a beautiful man. You have wonderful insights. And I think that this subject has to be revisited and revisited often.
Forstater (56:09):
Absolutely. Absolutely. And listen, you and I met, you know, three times or, you know, we’ve talked on the phone a couple of times, but it’s like, we are brothers, compatriots, comrades forever.
Grumbine (56:30):
Amen.
Forstater (56:31):
I mean, it’s just something you feel. I mean, it could be, cause you know, are you in Harrisburg? I forget, but.
Grumbine (56:38):
I am.
Forstater (56:39):
You know who Hal Carmichael is?
Grumbine (56:42):
I do.
Forstater (56:42):
You know, most people don’t.
Grumbine (56:43):
I do. I do. I know who Wilbert Montgomery is. I know who [laughter] all those guys. Absolutely. Well look, on that note, Mat, I want to thank you so much for joining us.
Forstater (56:57):
Right, Steve. It’s always a pleasure. It’s always enlightening. I never know what’s going to happen with you. It’s great.
Grumbine (57:03):
[Laughter] That’s the way we keep it man, that’s exactly the way we keep it. So with that, I want to thank you. And I hope that we can have you back on again very, very soon. I mean, this is just absolutely always a pleasure for me – a huge passion of mine, obviously – to engage in these discussions as I learn something every time from you all.
I want to just say it’s absolutely not lost on me how blessed I am to have the opportunity to talk to each of you, especially in this case. I mean, you always bring a different perspective and I really thank you for it.
Forstater (57:40):
Well, thank you Steve. Let’s talk soon.
Grumbine (57:42):
You got it. Alrighty. Bye. Bye.
Forstater (57:44):
Bye.
End Credits (57:51):
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