II - CLAUSE #1
5. THE DEMANDING PROVIDER
The modern state has to provide for its children; it is the positive reinforcement way to rule and, presently, we will have no other. This is the consequence of an interdependence that began first with the division of labour, has grown through the consumer/producer equilibrium of the Machine Age, and will now bloom fully in a creative society of Helots and Alphas.
"Give or give more"... Give too much though, and you have entropy; do it awkwardly and you court anarchy. State the Provider must learn to be fair and efficient, lest the "give or give more" approach that comes with the new imperative lead us into deep troubles. This does not mean that the welfare system should not provide for the special needs of the quadriplegics and the blind, that we must not care for the totally handicapped, or that our veterans are not entitled to everything they were promised. We cannot and should not suppress all transfer payments.
It means, however, that in most cases, giving, for the Stat,e will become
a matter of give and take. Welfare policies will restrict unconditional
transfer payments to those who cannot contribute to the common efforts
at all, and the able-bodied adult will not receive money unless he does
something in exchange. What he receives will be related to what he offers,
and he will be expected to be available for work. The State will become
a more demanding provider.
If the worker plays along, though, the State will meet its responsibilities and be true to its word. When as Matchmaker, Teacher and Trainer the State will have had its say, it should be up to it to find employment for the worker... or at least to provide him with an income that corresponds to the new skills he has acquired through training. The State will move into income policies. In the beginning, the offer to enter an "income contract" with the State will be made to students in professional education and trainees only; but, because the number of students and trainees will grow rapidly to reflect the increased mobility of workers on the labour market, the number of people enjoying this type of deal will soon become significant.
As a second step, the Fair Broker will volunteer to take people out of the labour market for part of their active life, and to sponsor their leisure and entrepreneurship while it integrates as much as possible of the labour force in the job framework. This does not look very demanding? Yet it is, because the approach, in both cases, totally diverges from present policies.
As we share the load and drastically reduce the number of unemployed to increase the "leisure" of all, we move away from a basket-case, "obligations-related" system of transfer payments seen as gifts, to a new "skills-related" system of complementary payments by the State, based on income contracts as a right. Payments then reflect the "category" of the worker, based on his skills and on his desire to grow and contribute with all his talents to our common objectives.
A far more efficient system, because motivation is the first problem in an affluent creative society; the present approach is disastrous. The moment transfer payments begin to reflect the change up from a level of subsistence to the level of consumption income, the "obligations-related" approach can offer no more incentive: only a "skills-related" approach can provide the positive reinforcement that we seek. In years to come, the worker will go through a constant cycle of unemployment and training. How do we expect him to put his heart in it, if every time he becomes unemployed once again, his income falls back to the same level as his untrained mates and bears no relation to his previous training efforts and the skills he has acquired? As unemployment becomes a normal part of a career plan, we cannot afford not to introduce a differential in unemployment related transfer payments.
The "skills-related income contract" approach is not only more efficient. It is also fair, because it asks from the worker what the worker can give, but sends back to Caesar the responsibility that only Caesar has the means to endorse. It is the State, matchmaker, teacher and trainer, that can estimate the manpower requirements by skills and can determine how many workers should be trained to fill these requirements. It is the State that has the relevant information to decide which workers have the best profiles to be admitted to training, and it is the State which will eventually certify that trainees have learned what they had to learn and are now qualified. It is the State, from now on, that should make sure that everyone is employed as productively as can be and receives his income as a right, not as a stipend. It is the State that will gamble and fully underwrite the employment risks of individuals.
A government must not only have the authority to match its responsibilities but assume responsibility for its authority. The State, even in full possession of its charts, figures, data, statistics, projections, production objectives for various horizons, manpower requirements for the short and long terms, can still make mistakes in its estimation of manpower needs. The State sometimes may err, but this should not be the individual's concern.
When the State, acting on the people's behalf, decides that an individual would be useful with this or that qualification, and asks him to devote his time and efforts to acquire the necessary skills, it should not, later on, be up to the complying individual, but up to the State, to worry about miscalculated needs and technological changes. The individual should not be held responsible for the planners' mistakes and it is the State which should pay for the damages, not the individual. We will, soon thereafter, extend the skills-related income contract approach to all workers and bring in all the hard-core unemployed that a "work-first-the-maximum-hours-for-your-skill-category" provision will have kept away from the Broker's bonanza. We will bring in all adults Do-not's who will care to register and to be certified for a skill-category and job participation. The State, at last, will pledge guaranteed employment for all.
"Guaranteed employment" is the community's point of view but
for the individual worker it reads "Guaranteed Income" and it
means life-long security. It means, beginning on his or her 16th birthday,
a minimum guaranteed income for each and every American citizen who cares
to register as a worker. This will be a great positive move for
a benevolent Octopus involved in a perpetual popularity contest... and will
prove the answer to most of our employment-related problems.
Caesar's pledge to pay workers what they're worth at all times raises two serious questions. First, can we, as a society, afford a skills-related system of guaranteed income... and, second, what about the worker's freedom of choice and the rights of employers? Let's take these points in order.
First, of course we can afford it! We are paying that much right now. Remember that we will simply welcome back to the labour force - to work! - people who are already getting money from somewhere. They are not starving, now, are they? "Guaranteed Income" looks quite impressive - and it is meant to look impressive - but actually it imposes upon the State little that it is not doing already. Today, when things goes wrong and Johnny Worker finds no work, is he left penniless and totally lost for society as a consumer? Of course not! State the Father, through unemployment benefits, social security and other transfer payments, provides him with a minimum subsistence level income. Destitute citizens now do receive an income, and it is a recognized and accepted part of our present social contract.
So, let's not confuse symbols with reality: it is always the same global income, in terms of goods and services produced, that will come up for distribution and nothing, in a guaranteed income approach, says that the curve of distribution has to be skewered differently. A skills-related guaranteed income is intrinsically no more costly than the present "obligations-related" approach; The truth is that it can be any price we put on it, since it all depends on the number of people in each skill income category. Let State become the Provider and it is State the Trainer who must be cautious, for it is on the certification policy that rests the cost of the whole process.
Suppose for instance that, in 1982, the 62.5 million Do-not's in the active population all had been certified at a skill-category which would have guaranteed to each of them a minimum salary of $ 5.00 an hour. Suppose that a fair redistribution of the jobs would have integrated all of them to the labour force, to work the minimum 35 hours a-week, 48 weeks a-year that we now think reasonable, leaving unchanged the salary of all others. Would it have placed an insufferable strain on the finances of the State?
Total salaries paid to all the former Do-not's would have amounted to $520 billion, which it is enlightening to compare just as an illustration to the cost of our transfer-payment system during the same year: $592 billion. The back-to-work operation of the Demanding Provider would have meant a saving of $72 billion!
But suppose now, that skill certification had turned all the non-participants and the unemployed, not into minimum salary workers, but into more average workers at, let's say, a salary of $20,000 a-year for example. No savings anymore... the net cost increase jumps to over $650 billion! The point is that it could be these, or any other figure more or less generous that we find socially acceptable and economically convenient. Its all up to the Trainer.
Therefore, it is important not to confuse how much we give with the way we give; the skills-related system is not more costly than doles and hand-outs. We may - but we do not have to - use it to distribute wealth more equally, and more equality is not always the panacea it appears to be. The question thus is not whether we can "afford" the new approach to income redistribution, so much as whether or not we want to make redistribution a "right" rather than a "gift", and relate it to the State-certified skills of the worker rather than to "obligations" that will be dramatically reduced, by the way, when most adult Do-not's are accepted as Do's.
The price of welcoming them is but half the picture, though. The other entry on the ledger must be what the "back to work" movement of the Do-not's will bring us. Will moonlighting by workers who will enjoy security with leisure, and will be encouraged rather than dissuaded to engage in productive activities out of the job framework, generate enough additional wealth and welfare to cover the expenses? Will it justify the price tag that the Trainer will put on the income contracts, and therefore the cost above present transfer payments of the new skills-related guaranteed income and of the entrepreneurship sponsoring system?
It depends where the extra income will go, for "to afford it" means we can deliver welfare for the money issued, and it is the workers/consumers who will decide if enough welfare has been produced. Back on the job after work redistribution, the worker will receive a fair compensation in accordance with his skills and will have more money in his pocket. Just welcomed back to the labour force, he is unlikely to save, hoard, invest and build huge bank accounts; he will spend this money immediately, and more money into the system will mean either inflation or more effective demand for these additional goods and services that the moonlighting workers will produce in their leisure. Some of these services will sell and some will not...
There will be extreme elasticity in the demand and in the price of these services, since they will mean surplus income to the seller. The whole moonlighting production will become a buffer of "work", quite more acceptable than the present buffer of "workers". Good, but it all comes down, finally, to the workers either producing something valuable enough on their own, using their own creativity, to spend their own money to buy it... or else becoming "reluctant consumers" in relation to the very result of their own enterprise! If we will go on believing in initiative and a system of free enterprise, we better believe the first alternative will come true... and be right.
The second question is the balance of power between the State and the Individual. Will guaranteed income and the State's implication in employment procedures give it too much power? Will it mean less freedom for workers and employers? The truth is, guaranteed income does not take away from the individual any significant freedom of choice that has not been taken away from him already. We say that, today, the individual "chooses" his work, but it is a fallacy... it is the job that chooses the worker! For the worker, freedom of choice on the labour market is like a decision, between meat patty and shepherd's pie, in the cheap restaurants close-by, along the highway, when one's car happens to break down.
If he is lucky and there happens to be work available for which he is qualified, the worker today has the right to go and peddle his services around; he has a right to choose where he will work. What work he will do, though, depends on the training he was able to afford when he was young. Real choices are made at the educational level, and it is the options taken then, at a relatively young age, often at random or under duress, without knowing very well the collectivity's real needs for skills, that presently determine what type of jobs the worker will "choose"... if he is lucky.
If he is not "lucky", if there is no need for the type of work he can do, either because he took the wrong educational decisions in the first place or because the market for his skills has vanished, then the worker, in our supposedly free choice system, has gambled and lost. If he is a bad loser, he may stay down and stop working altogether, because no one needs him in the first place.
An interdependent society of Alphas, in which we will need the work contribution of everybody, has to be another ball game altogether: it ceases to be practical to let the individual gamble and loose on training and employment. Let the State gamble and the workers work...
As for the impact on employers, let's wake up to reality. Some may believe that a work contract today is still an agreement between two private parties, but the truth is that this supposedly "private agreement" has long ceased to be so, and now implicates the State in all its essential parts.
Transfer payments are particularly interesting for our discussion, because the fact that the State has already extended a "safety net" below the trapeze, to catch and put safely back into play workers unfortunate enough to trip and fall, proves without a shadow of doubt that "employment" and "work" are collective matters; it is you and me paying to spread a net below for the unlucky misinformed, ill-trained workers....
But the net below is just the friendliest aspect of it, just the ultimate expression of the new reality. Look at the nets around the employment process. The minimum salary that can be paid to a worker is defined by the Law; the maximum number of hours he can work is defined by the Law; so are the hygiene and security conditions of the jobs. The extent of the work he can do, in relation to his skills and qualifications, and the salary he must be paid for a given occupation are also, more often than not, determined by the Law, or by collective agreements that are enforced by the Law ...
Look at the present constraints on the "employer- employees" relations. A deal for guaranteed income does not put an additional burden on the employers but, to the contrary, it frees the production system from a whole bunch of social and moral responsibilities that could best be taken care of outside the production system. With guaranteed income, employers may once again abide by the straight rules of productivity and common sense: producers may produce economically and the State may take care of social implications.
The danger of loss of freedom is not in the new approach. The danger is here to-day, with those nets all around work rather than only below the worker. In fact, the only significant clause now missing from the work-contract - which is really now, a three-way social and public agreement - is a clause to stipulate that the worker must work... Which leads to the beneficial impact of the GIA move on us all. There is nothing, in the present social contract, which says clearly that, corresponding to his right to receive an income, the worker has also a social obligation to work. Anything that would relate compensation to skills, and make it conditional upon services rendered, would be a net gain for taxpayers.
There will be something for us all in the guaranteed income approach, because its corollary is that there will be at least some modicum of work to be expected from the Do-not's. A definite improvement on the present transfer payments for which we receive NOTHING. Let each average Do-not produce the same output as the average Do, and it could simultaneously increase the standard of living of the average American by 20%... and reduce the working week by 25%...! And more, much more, may be expected to result from the enterprises of the moonlighting workers as they get to work on their own.
Guaranteed income will come to pass for two main reasons. First, the
advantages in terms of good planning, motivation, human dignity will more
than justify the differential, if any, between whatever certification pattern
and income profile State the Trainer might decide upon and the ever growing
cost of transfer payments. Second, it will also mean exceptional goodwill
for the Administration that will take this initiative. We will love it so
much that it will probably be made the object of a constitutional amendment...
The XX... th Amendment
The Guaranteed Income Amendment will stipulate that the optimal management of our human resources is now the responsibility of the State. It will not be a forced labour approach; the employers will go on hiring who they want and workers will work as they like, even more so as the net of social measures around the work contract will lose some of its importance. It is when the worker falls into the net below that the GIA will visibly come into play, and then it will mean significant changes for the worker.
To begin with, State the Matchmaker will have work for him; it may be a job, it may be a training assignment, but it will be a productive activity. State the Provider will also have a cheque for him, just like today, but it will not comply with its obligation to hand him the cheque unless the worker too, complies with his own obligation to work.
For some of the workers, if not for society, this may be the bad news. The good news is that, if he complies, the cheque will not be a dole to survive but will be issued for the worker's full compensation at the highest level of certification he has reached: certification, in the skills-related guaranteed income system, is an income contract. The State does not owe some kind of minimum subsistence level income, as a charity, to the unemployed worker who has kept his part of the bargain to follow a State-designed career plan; it owes him his full salary on a contractual basis. It owes him his salary not only for the actual use of his services, but for his availability.
What does that mean? It means that a constant drive for more productivity and unrestrained technological improvements will make masses of workers temporarily "obsolete". In this situation, it is the willingness of the worker to comply with his obligation to work, rather than his actual participation in the production process, that must be the essence of the income contract. The worker's part of the bargain is to be available, to put his skills, brains, and energy at the disposal of society for productive work; the State's part of the bargain is to take advantage of this availability in the most efficient manner, and to provide him in return with the expected income. These should be the terms of the contract. The income contract will rest on "availability", not on actual use.
Surprising? Is it not the situation that now prevails in any corporation that hires people on a salary basis to have them at its disposal, rather than pay them bit by bit for the performance of specific tasks? Should the State make a mistake in its assessment of manpower requirements, it will honor its income contracts even if there are no jobs that fit precisely the worker's qualification. On the other hand, it must be legitimate for the State to alleviate its burden. Availability is of the essence of the bargain and, since the State's mandate is to optimize the use of our human resources, the worker also must be available ... and "availability" must be a willingness to work at what work there is to be done. This condition will apply in two occasions.
First, at the moment of certification. Everybody must have an income, and therefore has a right to be certified for some skills; on the other hand, society cannot afford to guarantee everybody an income for just being what they want to be, and it is undoubtedly in the public interest that certification, in each skill-category, be granted to the minimum number of workers necessary to fill the tasks for which there is a demand. As a result, more workers will hold the necessary educational prerequisites than can reasonably be admitted to training and certified, and many people will be certified below the skill-category that their full educational profile would support.
This will create systematically what we have at random now: an overall surplus of well educated, but yet untrained labour. This reservoir of knowledge and potential skills will not only be a most precious asset of a growing technological society and the essential basis for entrepreneurship and creativity, it will also be a deterrent against this threat of blackmail, to which we referred earlier and which will always be present in a complex, interdependent society of irreplaceable workers.
I can hear from here the outraged catcalls from the left corner of the ring, as I suggest to jeopardize the sacred bargaining power of the working class. You may hold your peace, Brothers, because this is not a proposal for a reserve of cheap semi-skilled labour for the benefit of the "capitalistic bourgeoisie"; the objective is not to make sure that we have more floor-sweepers than we need, but never to be more than a couple of months away from being able to replace such comrades workers as nuclear physicists or, going back to our previous example, anesthetists.
Second, the condition of availability will apply at the moment of assignment. A worker already employed should be perfectly free, of course, to accept or refuse an opportunity for training or promotion. If unemployed though, he should not refuse without a valid reason or, if he does, he should put all his chips on entrepreneurship and stop bothering society for assistance. If he does not meet his social obligation to work and refuses to be helped into another productive function to alleviate our collective burden, why should he enjoy his social right to a guaranteed income?
Then, sometimes, the Matchmaker will goof and be short of certain jobs for a while. The Provider will owe the surplus workers their full salary for availability but must make use of this availability; otherwise, unoccupied workers may go sell a second time, at bargain prices, the unused services for which they have already been paid once, and we may really end up with a reserve of cheap labour! Consequently, the State must be allowed to give the worker a job for which he is overqualified. The State then, will only have to pay the difference between what the worker is worth to the employer on the labour market - the wages for the skill-category in which he will be put to work - and what his own income contract stipulates in accordance with his certified skill-category.
Thus, an engineer may be paid as an engineer to do an assistant-engineer's job... This would be a mismanagement of our human resources, of course, as well as an embarrassment to the downgraded worker. Let the unlucky worker bow and cope with his embarrassment..., and the government be called to account democratically, in due time, for its management of human resources just as for the rest of its mandate.
It looks like a lot of power for the State. May we entrust that much to the Octopus? We may do so without fear, when we remember that the manpower management we have just described is for jobs only and that jobs will lose steadily of their importance. The State will match, teach, train and often pay workers for doing or even not doing their jobs, but these jobs will account for a small and ever diminishing fraction of their active professional life. Guaranteed Income may mean more power for the State... but over a much narrower part of human professional activities. It will mean a lot, though, for the worker, in terms of security and dignity.
Enough to make possible the gambit on leisure... and to make it necessary. A gambit on leisure is impossible without the basic security that only a guaranteed income can offer to the worker in transit to entrepreneurship. On the other hand, it is precisely the huge market for work activities outside the job framework that makes it reasonable for the State to take upon itself the responsibility to put everybody back to work, and to guarantee a continuing adequate income for an ever diminishing workload in the job framework.
With a guaranteed income for a "job" that will come to occupy a smaller and smaller portion of his available time, Man will take more risks, so you may forget about a tame society that will crystallize and slowly stagnate. Real action will take place outside the job framework. The Guaranteed Income Amendment will allow Man to fly higher and to become bolder on the Flying Trapeze of his ambition. Be prepared to watch the antics and frolics of universal entrepreneurship.
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