[This opinion piece was originally submitted to The New York Times on April 11, 2020. The editors of that newspaper have not replied to my piece for over a week and have, instead, doubled-down on their willful ignorance with a whole section dangerously promoting it in its Sunday, April 19, 2020, edition, thereby showing a reckless disregard for human life.]
C. P. Klapper is the author of “Popular Capitalism”, a reformulation of political economy which solves the problem of poverty.
A Crisis of Unnecessary Employment
The editors of The New York Times have discussed the relief bills from the standpoint of employers paying employees a survival income. However, that view is tragically misguided. As many of our fellow citizens have been made painfully aware during the present Great Depression, now in its twelfth year, employment is not assured for more than a few years at a time, and gaps in employment are regularly six months to a year long and, in many cases, can stretch on for a few years. Despite what the contrived statistics allege, people do not drop out of the labor force into a comfortable ether, but rather into a precarious homelessness, one step from a shelter or the streets. Now that the novel coronavirus, SARS-CoV2 pandemic has forced most commercial establishments into a lengthy hiatus, those who have held onto their jobs up to this point in the Great Depression II are now learning that they cannot rely on employers for a survival income in the future.
That the present age is only now coming to this realization is a testament to the lack of scholarly reflection, which is its own pandemic in a culture of memes and hurtling pejoratives. A little over two centuries ago, Robert Owen, the Father of Socialism, wrote a speech in which he urged his fellow “master manufacturers”, among other things, to pay their employees a decent wage:
The most substantial support to the trade, commerce, and manufactures of this and of every country are the labouring classes of its population… It is evident that food must be procured by the working man and his family before he can purchase any other article. If, therefore, this class of our population is so degraded and oppressed that they can only procure the bare necessaries of life, they are lost as customers to the manufacturer…
— To the British Master Manufacturers; On the Employment of Children in Manufactories, March 30, 1818
Then, as now, that is a difficult sell. The reason is that there is no valid argument in economic reasoning for a market to value any product at a price sufficient to sustain the workers who created it. In short, working for a living has not, does not, and never can work. We need to dispense with that specious phrase and reject all policy which comes from it. Specifically, we should give no aid to employers or the unemployed and we should not seek to increase GDP or wages artificially.
Instead, we need to pay our citizens directly with a stipend. As with all stipends, it is intended to provide the necessities in a sufficient and comfortable manner, so that each citizen can perform their civic duty, as they see fit and without being beholden to any boss in commerce or in politics. In the present exigency, where the civic duty is to stay home, the stipend allows the citizen to order their food to be delivered, paying the restaurant and the delivery service sufficiently to ensure an uninfected supply chain from farm to home. The stipend makes employment unnecessary for a survival income, but directs the economy in the path of necessary employment.
In Popular Capitalism, I had set the amount of the stipend to $1460 per week, based on an implementation of the Uniform Rule of Naturalization clause in the Constitution. More recently, I increased the amount to an even $1500 per week, to rhyme with the topical minimum hourly wage initiative. The weekly period is essential. Not only is a smaller amount disbursed from the Treasury, but it is more rapidly circulated in the economy and thus more quickly gathered back in taxes. The $500B or so which is created by the Treasury each week for the stipend is added to the total money supply subject to destruction by taxes, so that the total money supply generated by the stipend quickly approaches an asymptotic upper limit. [If 1/5 of the money supply is destroyed in taxes each week, then the total money supply generated by the stipend would be the $500B times the sum of geometric series with terms (4/5)^i, thus 1/(1 — (4/5)) = 1/(1/5) = 5.] The $1500 Weekly Citizen Stipend is therefore sustainable, reaching a stipend-based money supply stasis of about $2.5T.
Implementing the stipend can be done through the Social Security Administration, using the Social Security Number (SSN) database and extending its existing direct deposit capability so that SSN holders can receive the stipend in their bank accounts. Existing retirees are already set up, as are those receiving disability payments. Further, many SSN holders already have online accounts to check their retirement savings. Remote staff can be hired to help with technical issues and social workers with PPE can assist those without bank accounts or computer access.