Saturday, June 4, 2011


So the other day I attended a jobseek seminar. Sounds like fun, eh? In actuality, I simply turned up, was ticked off a list and was free to go. I stayed and chatted for a few minutes with a fellow "jobseeker" but that was that.

Someone arranged the letter that reminded me of the appointment time. Someone put the list together. A woman wastes her days ticking people off lists. There is a huge welfare bureaucracy here.

Of course the government has to humiliate you when you are out of work. The neoliberal myth is that we are at full employment. (The theory -- disproved so many times by, you know, reality that you'd think no sane economist would put it forward, let alone that it should be the basis of policy in the Western world -- is that inflation and unemployment are in a balance, and there is an equilibrium point -- NAIRU: allow unemployment to fall below it and inflation is inevitable; allow inflation to rise above it and unemployment is inevitable. The reasoning is that if everyone has a job, labour becomes a scarce resource and the price for it rises -- in other words, there is wage inflation -- and consequently prices for goods rise. Does this mean that true full employment would require carefully crafted policies to manage inflation? Yes. But does it mean that we need to keep 5% of the population out of work on purpose? No, it doesn't. But that is Australia's policy.) So there are jobs everywhere and if you don't have one, you are a shirker. This lie appeals to the public, because Australians are conservative on the whole and strongly believe in the dignity of labour (except for the rich: it's curious that those who need the state's help in hard times are "spongers", but "investors" who simply skim wealth from the economy without giving a thing in exchange are not only not spongers but are consider "high-worth" individuals).

As it happens, unemployment in Australia is 5%, with a further 8% underemployed (people who would work full time if they could but cannot get the hours). This is just those who are part of the workforce -- it ignores all the people who would return to work if there was work, but for one reason or another cannot or do not sign on. By calling this "full employment", the government can pat itself on the back for a good economic job well done, and ignore its responsibility for ensuring that there is work for all. I mean, what else is a government for? Why is it permitted to influence the economy if not for that end?

Is inflation even particularly undesirable? I will note that most of us are net debtors, so it affects us positively. Yes, goods may rise in price but this is not actually the concern of neoliberals. When they say they want to restrict inflation, what they mean is that they want to keep wages down. They want to prevent our share of the national income from rising. And if your wages rise, you can pay higher prices for goods without too much concern. The cool thing is that inflation lessens debt (because it effectively devalues the amount owed). Of course the rich don't want this (it effectively devalues their piles of cash too), but I often think to myself, why should the majority care a less about that?

It's only by lying to us that the neoliberals who run our countries can deflect our attention from our own interests. It is clearly better for most of us that there should be work for everyone who wants it than that savings are protected, given that most of us do not even have net savings (yes, many of us have modest amounts of deferred spending but we also have much greater levels of debt: few of us have savings greater than our mortgages).

It's one of the more pernicious lies that there is plenty of work and only those who don't want to work sign on. I mean, they pay me less than my rent! Of course I'd rather work. But there isn't any.

In any case, as I've noted before, I favour a "citizen's income". We could save a great deal of bureaucracy, accept our responsibility to support each other and provide a method of fiscal support to the economy that allows individuals to make decisions over resources instead of bureaucracy (the latter is the reason this approach has often been favoured by the right: the left, which tends to support bureaucracy because it creates jobs, has not favoured it so much -- indeed, President Nixon came very close to introducing a basic income and scrapping welfare). My allowance for being unemployed is about $600 a fortnight. The government could simply pay $300 a week to every Australian adult. Scrap the tax-free allowance (which is ridiculous anyway) and other tax breaks and tax from the first dollar of income (even better, tax land not income). No need for means testing, no hoops to jump through, no bureaucracy needed (money paid to everyone on the electoral register, ez game). I'd also pay money for each child (scrapping the various family benefits).

Wouldn't it all cost the government a lot of money? Yes, but luckily Australia is the sovereign issuer of its own currency and is not constrained by revenue. It can pay for anything it wishes in its own currency.

But it will never happen. It's easy to predict what the opposition to it would be. Even though none of the opposition would actually make sense, who cares about that? We live in a world of myths and lies, and it suits the people the government serves well. The rest of us, well, we sleepwalk through it, and until you are in need yourself, you don't have to think about it.


Blogger Bob said...

If I remember correctly, it was Milton Friedman himself who advised Nixon to introduce a negative income tax.
The country is run by technocrats who came from the elite universities and have no idea of how a person can survive on such a pitiful amount as the so-called dole.
They have no concept of what it is too be poor.
Damn them.

June 4, 2011 at 3:08 PM  
Anonymous Anonymous said...

If it 5% the true figure must be lower, as you have to factor in the cheats that are actually working on the side, those that simply do not want to work and those that are between jobs.

Tax land? all rich land owners would have to do is sign their holdings over to an off shore trust.

June 4, 2011 at 10:41 PM  
Blogger Dr Zen said...

No, the true figure is higher because those who don't return to work number higher than those who cheat.

It wouldn't help landowners to sign their holdings over to an offshore trust, because they couldn't move the land offshore, and that's what's being taxed, not the person who holds it.

June 5, 2011 at 11:01 AM  
Anonymous Anonymous said...

There is usually a separate figure for long term unemployed. If you actually lived in the real world and actually interacted with people you would know that a high percentage of long term unemployed actually worked.

The rich often place assets into trusts not always off shore to avoid tax. Its very easy to set up off shore holding company's. for example Boots in the UK is registered in Switzerland. Arcadia owner Philip Green channels money out of the UK via his wife to Monaco to avoid tax. Tax on land is a tax that can be avoided by the rich, they can avoid any taxation it the average man that gets screwed.

June 5, 2011 at 1:01 PM  
Blogger Dr Zen said...

How would you propose avoiding a land tax? Hide the land? A trust wouldn't do anything to help you.

June 5, 2011 at 2:55 PM  

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