Why a Conservative Might Agree with Bernie Sanders
Today’s Oregonian included the following lead to a story:
A group of Democratic senators is urging President Joe Biden to support recurring direct payments to lower-income Americans, arguing that regular, additional cash assistance is necessary until the economy fully recovers from the pandemic-induced downturn.
The story goes on to give details of the proposal advanced by Senators Bernie Sanders, Ron Wyden, Cory Booker, and Elizabeth Warren, among others—politicians we usually label as “liberals.” I am not a liberal. On some issues, such as capital punishment or war, I am a radical. On others, e.g. abortion, I am a conservative. But on this issue I think conservative capitalists like me should agree with Senator Sanders; at least, we might come close to agreeing.
According to the newspaper, the liberal senators included few details in their proposal. They don’t say how long the recurring direct payments would last. They leave “lower-income” undefined. Given the close balance in Congress between Democrats and Republicans, it is very unlikely their idea will go anywhere. Not this year, anyway.
In the long run, though, something like Bernie Sanders’ direct payment scheme will come to pass. I explained why in a series of essays on the moral question of work in 2015. Here are the salient points.
From “Work, Part 1”:
The “moral law of labor” (revised): Every person who is able ought to work.
I said above that Paul’s words express a very nearly universal belief about work. Not just in the first century, and not just in the West. I’m confident that the positive moral value of labor is a universal judgment found in every culture throughout human history.
From “Work, Part 2”:
Let’s return to the moral law of labor. Can we imagine a culture that denied it? I believe that today we can, and I will explain later. But for most of human history it seemed obvious to everybody that people needed to work. Therefore, every culture has had a moral preference for labor over idleness.
Why? Why have we always believed that people have to work? The saying I cited above (which occurs twice in Proverbs, an indication of its importance in the minds of the ancient sages) points to the reason, an explanation obvious to everyone in the ancient world. If you don’t work, scarcity will overtake you.
Remember Paul’s words to Titus, which I cited in part one of this essay. He wanted Christians to work in order to “provide for daily necessities.” We all recognize that people have needs. Human life is impossible if these needs are not met. For all human history (until very recently, as I will explain) it has seemed obvious that many human needs can only be met through human labor. And it has seemed obvious that we need to work hard; in the story of the fall (Genesis 3) God tells Adam that he will wrest his living from the ground by the sweat of his brow. We hear echoes of an agricultural society in both Genesis and Proverbs, but the value of hard work was just as plain in pre-agricultural hunting or gathering societies. Mercantile and industrial societies experienced the same truth. Throughout human history, for most people in most societies, the margin for error was small. A bad hunt, a bad harvest, a bad year with fishing nets, a plague of locusts, a plague of germs, an earthquake—peasants (i.e. most people) always lived close to economic catastrophe. People needed to work hard to gain even a small edge against starvation.
From “Work, Part 3”:
The excess productivity of labor can be used in a variety of ways. In ancient Egypt, the pharaohs decided to devote millions of man-hours of labor to construct pyramids. In a very real sense, pyramids were physical instantiations of the excess productive capacity of Egypt’s agricultural economy. In economic terms, we could say that some of the excess production of Egypt was “saved” and turned into “capital.” That capital was then used to build temples and pyramids, and to support armies and a priestly class. Egypt was hardly unique, economically speaking. Ruling classes in civilizations around the world directed “capital”—in every case made possible by the excess production of those who labor to make necessities—to be used to create palaces, cities, roads, statues, prisons, libraries, navies, opera houses, and so on: in short, all the paraphernalia of civilization.
Occasionally, sometimes by accident, capital was used in a way that increased productivity. We can call this investment. Suppose a ruler commands that human capital be used to build not a statue to his own glory but a road connecting parts of his territory. A road, by making transportation speedier and safer, probably increases productivity in that country. Absent natural or human caused disasters, a ruling class that consistently invested capital (saved labor) toward increasing productivity would, in a few generations, rule over a very wealthy state. Unfortunately, rulers all around the world have burned up most capital rather than investing it; they do this primarily through war.
Also from “Part 3”:
Invested capital makes labor more productive. More and more, the production of goods relies on capital, not labor. And there is apparently no necessary limit to productivity. At one time, a farmer could feed his family and one other family. Today, a handful of farmers can feed thousands. There is no reason that in some tomorrow a small number of protein technicians could feed everybody.
The “moral law of labor” says that everybody should work. But there have always been a few people who are able to work but don’t. Historically we have labeled them as “dilettantes,” “lazy,” “parasites,” and so on. In current economic theory we call them “free riders.” Notice the tone of moral disapproval.
Some of the non-workers are independently wealthy. They inherit so much capital that they need not work. In popular myth, such “wastrels” fritter away their capital and come to a bad end. In reality, plenty of independently wealthy people show enough wisdom to trust their financial advisors and live, either modestly or extravagantly, on the profits of their investments. Given the productivity of capital, I predict that the number of wealthy non-workers will grow.
Some of the non-workers live at the bottom of the socio-economic ladder in social welfare states. In any country that has a sufficiently generous system of social welfare, there will be some people who choose not to work. Given the choice between very low wage jobs and welfare, they take welfare. These are the “free-riders.” Economists worry that too many of them will create a drag on economic growth. Perhaps they will. But in the long run, the productive power of capital will increase the overall carrying capacity of national economies, to the point where the free-rider problem disappears. I predict that in the long run the policy question will not be how to get those at the bottom to work; rather, the question will be how to get sufficient money into their hands so that they can buy things. A capitalist economy needs consumers.
I suggest the truth is this: people do not have to work to get the “daily necessities.” Capital is far more productive than humanity ever guessed until recently. As capital becomes responsible for producing a greater and greater share of the things we really need, more and more human jobs are devoted to creating non-necessary goods. We become educators and novelists. We invent new computer games. We write blogs. A tiny fraction of those blogs become commercial successes; most of them earn no money.
In the future, that is what people will do. They will “work,” if they choose to, at an ever-increasing palette of non-necessary jobs. Only a minority will have the privilege of laboring at jobs that produce necessities. Mostly, that group will consist of computer specialists, who tell the robots what people want to buy for Christmas.
And from “Work, Part 4”:
Objection: even if it were possible for capital to produce our daily necessities, our market economy requires that people work. Saving and investing capital is only half of a capitalist economy. Production has to be balanced by consumption. A capitalist system produces goods only in the hope that people will buy them, so consumers need to have incomes. If people don’t work, how will they have income to buy products?
Reply: we will need to invent ways of putting purchasing power into the hands of people who don’t work. Exactly what those ways will be, I don’t know. But already modern economies have found ways to chip away at John Smith’s order (for the Jamestown colony in 1608): “He that will not work shall not eat.”
Today we think it unremarkable that many people live as many years after “retiring” as they did “working.” We should remind ourselves how unusual, historically speaking, that is. Historically, most people worked until they were too ill, often dying. Invested capital has made our economy so productive that we can afford to have millions of unemployed consumers. We have adapted our thinking to this unprecedented situation by telling ourselves that retired people have “earned” the income they spend; thus, their condition doesn’t really violate the moral rule: all people who are able should work.
But that’s just false. “Retired” people violate the moral law of labor just as much as the traditional independently wealthy “dilettante.” The point is this: in both cases we have people who do not work or work only when they choose, and yet they have access to purchasing power so they can buy things in the market. And people who live on state support—through food stamps, disability payments, and other social security payments—are yet another group of people who do not work and yet have money to spend.
We need to get used to this idea. For a market system of production and consumption to work, those who buy things have to have money to spend on the goods produced. If, as I predict, many will not be able to participate in producing goods, they will need to be given purchasing power even if they don’t work.
This idea outrages many of us, precisely because it finally abandons the moral law of labor. It says that people ought to have money to spend in the market even if they didn’t earn it. I can’t pretend to make the notion easy to swallow. But maybe it will help if we look at production and consumption from the point of view of the 1%.
Very wealthy people own much of the means of production; in many cases their “work” consists of managing investments of capital. They look down on the economy from lofty financial heights. Some of them “earn” enormous amounts of money simply by leveraging other people’s money. But sometimes things go wrong. When things go badly wrong, we call it a recession. And when the economy goes into a recession, very wealthy people discover it is in their interests to “get the economy moving again.” Policy makers search for ways to encourage consumer spending in the face of low consumer confidence. Many economists point out that the most effective way for government policy to encourage consumer spending is to increase expenditures on food stamps; almost as effective is spending more on unemployment benefits. These measures put money into the hands of people at the bottom, people who will almost certainly spend it quickly. I’m confident you see the point: The people at the top need to recognize that it is in their interest to put purchasing power in the hands of people at the bottom. It doesn’t’ matter whether those people have earned it. It’s good for everybody if they have it.
