There are few words in economics more feared than unemployment. The irony is that many who fear unemployment also hate their jobs. What they really fear is not unemployment, but poverty. The fact that the two are so closely linked often leads to what I call "work fetishism," the valuing of jobs and work as an ends in themselves, rather than means to an end, namely prosperity. Consider, for example, those who decry labor-saving machinery. Such machinery can increase productivity and thus create more wealth. Yet it is feared by the workers, because it might cost them their job. It will, of course, increase the demand for mechanics and engineers to operate and maintain the machinery, but the unskilled laborers are out of luck.
But what if it was in everyone's interest to look after society's well-being instead of just their own? What if the two were one in the same? Suppose society itself were a publicly traded stock, in which each of us had an equal share, that paid dividends?
What if every citizen received a guaranteed income from the government? A guaranteed minimum income isn't as heterodox as it seems. A surprising number of mainstream economists support a negative income tax as a replacement for the current tax system. A negative income tax is a flat tax with a fixed rebate that makes the tax progressive in practice. The rebate acts a guaranteed minimum income.
But suppose this guaranteed income, rather than being a fixed amount, was instead a dividend of the total socially produced wealth. This social wealth, or rent, is found mostly in land values. It the value of living or doing business in a given location as a result of inter-subjective social relations. It is not produced by any one individual, but rather by the aggregate value of social and commercial activity. Thus, it rightly belongs to society as a whole. Land value taxation, therefore, would essentially be a society's investment in itself.
And why shouldn't that investment pay dividends, like so many stocks do? It would give us all an equal share in the overall well-being of our society. The amount of the dividend should be at least at the level of subsistence, but could be far greater. The consumption of both consumer and capital goods would increase the rent by approximately the amount spent, so the government would actually get back most if not all of the money spent on the dividend, and would not have to choose between dividend payments and social expenditures.
The worker whose job is threatened by labor-saving machinery would actually profit from that machinery, as technology tends to advance rents. So what if they get laid off? The dividend should be able to support them while they look for better opportunities, while the machinery that caused them to get laid off would also increase that same dividend. While being sustained by the dividend as they're out of the job, they can spend their time going to school and learning new marketable schools. Or perhaps this worker has an artistic side that they never get the chance to express. They could spend their time painting or writing that novel they always wanted to write, and not have to deal with the anxiety that comes with being a "starving artist." Their artistic work would also enrich society, and make us all better off.
But what if they decided to do nothing? This is what some people fear from a guaranteed minimum income. It's why many of those who do support it believe that it should be below the level of subsistence. In many ways, this coincides with attitudes towards welfare recipients under our current system. But the difference is that under a land value tax regiment, the guaranteed income would be a social dividend which is not earned by any individual but is rather the equal right of every citizen. The fact that economists talk about a natural level of unemployment indicates that there is a surplus of labor. Therefore, we don't need everyone working.
In fact, many people at the top of the economic ladder do not produce goods and services for society, but rather engage in idle speculation that is useless at best, and poisonous to society at worst. There are also those whose job is to lobby Congress to create laws that are preferential to their employer. In addition, a great deal of marketing dollars go towards creating demand where there would otherwise be none. We would likely be better off as a society paying such people to do nothing rather than their current jobs.
Some may worry about certain jobs not getting done. But this will simply mean that those jobs will have to offer higher pay to attract people to those jobs. They could also try to create better working conditions, which can be as much if not more of a motivator than higher pay. It would also increase the demand for labor-saving machinery, creating greater incentive for innovation. We could eventually do away with most if not all unskilled jobs, and we'd all be richer for it.
People would be all the more motivated to pursue an education, to innovate, and to explore their talents. They would have greater access to capital, and therefore could start their own business. Self-employment would become far more commonplace, and could eventually become the norm. Volunteerism would also likely increase, as people who didn't have to worry about earning a paycheck could instead devote their time to serving the community.
The idea is not to eliminate work, but to eliminate needless toil. In a more prosperous, technologically advanced society, free of the need for thankless wage labor, people would be able to find the kind of work that best matches their talent and ability, without having to worry about their livelihood. Such a society would foster not just employment, or growth, or capital formation, or any of those indicators with which economists are so concerned, but rather that greatest value of all: happiness.
