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All-Labor Reward Program ~ Abbreviated A-LRP (Pronounced All-RP)
Boy, how deep is the Chinese wisdom. They say that every crisis is an opportunity. How true. Our current deep financial crisis offers us the opportunity of resolving the horrors of labor exploitation once and for all. Let us explore the way. Money as a common good Nothing is resolved in economics until we develop a thorough understanding of money. The source of much misunderstanding is the common expression that money is created out of “thin air." Thin air can be hot or cold, but it does not create money. A relatively long story analyzed some time ago reveals that money, all money, is created on the strength of credit. National money is created on the strength of national credit. That explains why a US dollar is worth more in international trade than most other currencies. The US economy is still more valuable than most other economies. Who creates the value of national credit? The answer is self-evident. All people of a nation create the value of their national credit. And if this is so, then all money created on the strength of national credit belongs to all people of the nation. Money, then, is a common good. It does not belong to the government; it belongs even less to the agency that is entrusted with the creation of the national currency, the Federal Reserve System (the Fed). That is why, since 1981, I have been advocating that the creation of national money be accomplished as a loan - not a grant - following three firm rules: - For the creation of real wealth alone, not to purchase financial assets;
- For the benefit of individual persons and, through ESOPs, all the people in the participant enterprises (no ESOPs, no access to national credit);
Why not grants Two major reasons have so far prevented me from advocating the creation of money in the form of grants: - First, because the government is not the owner of national credit;
- Second, because the creation of loans involves an automatic accounting destruction of money as the loan is repaid; thus, loans create an automatic insurance against inflation.
The ongoing financial crisis, with the immediate need to inject money in the system in order to sustain the economy, is opening up new vistas on the economic reality. The reality is this: Much wealth is being created by people who do not receive any monetary compensation for their contribution to the wealth of the nation. The value of housework appears in high relief. If mentioned at all in the past, this condition has generally been swept under the rug for a great variety of reasons. Now we need to pay attention to it. Necessity is the mother of all invention By bringing the value of this wealth to the forefront of our observation, and finding ways to reward it financially, we might be able to eliminate a flagrant crime so widely committed and overlooked up to this moment in history, the exploitation of work. No, this call goes much beyond the cry about “equal pay for equal work." This is a call to find a just compensation for housework. Since slavery is no longer a legal institution in most of the world, this form of exploitation of work need not necessarily be considered retrospectively but prospectively; these considerations, might indeed shed new light on the exploitation of so much labor that is forever being conducted under our very eyes. This is the work of love, love that involves housework. Ways to calculate the value of housework have already been taken into consideration: Detailed invoices can easily be constructed by calculating the value of work that is being contracted out in commercial venues. Averages and other more elaborate statistical indices can be rather quickly developed to eliminate the need to request specific vouchers from people who do not have adequate information. Bills can be presented, not to a husband or a wife, but to the federal government. The presentation of these vouchers might offer many advantages. Rather than use helicopters to blindly distribute federal money from above, the request would come from below, thus money would hit the pockets that most need to be reflated. Such an approach might also eliminate the need to provide adequate cut-off points, points that are always arbitrary and unfair. The hope is that families that do not need financial support will spontaneously avoid presenting such vouchers to the federal government. Not only would unavoidable accusations of unfairness be overcome, the political insidious work of this or that lobbyist to favor this or that class of people would also be avoided. The novelty under consideration here, to repeat, is that the bill can be presented, not to a husband or a wife, but to the federal government. The Treasury can rather easily verify the validity of such bills, with penalties for fraud clearly written out in the appropriate legislation. The Treasury can rather easily pay for such bills. Depending on accounting techniques used, the Treasury does not necessarily need to clear such operations with the Fed. If national credit has a greater value because it automatically includes the value of housework, then it is entirely proper and economically justified to compensate the creators of this value for the work they do. There is a present need to inject money into a tottering economy, to say the least to preserve it for available expansion when the dreadful current conditions pass us by. This present need can be reinforced by the requirement of stopping past and present injustices. Thus, the requirements of economics finally meet the requirements of morality. The value of housework There are many reasons why the value of housework is not taken into consideration yet. One is that this value appears to be ephemeral and transient. No so. Accurate accounting ought to give us a comprehensive view of such values. Two considerations might suffice. First, without daily maintenance, would not the value of houses be subject to rapid deterioration? Two, should not raising kids be considered an indispensable part of national capital investment? How much did raising Steve Jobs add to our national wealth? How to curb inflationary forces If housework is compensated in the form of grants, the money remains in the system forever and in the long run it is going to raise its ugly head in the form of inflation. How to avoid such a disruptive tendency of such a necessary and valuable action as fair compensation of housework performed? Taxation is the answer. The treasury can tax these funds and place them out of existence. (This requirement implies that the Treasury actually destroys, rather than spend, these funds once they have been collected). Conclusion There are many ways to inject cash in the economy. The urgent satisfaction of this need is widely recognized today. Many such programs are being recommended and even put in place these days. However, they all seem to be suggested on the basis of arbitrium and wishful thinking. They are all short-term programs with necessarily highly destructive long-term effects. Rights are separated from responsibilities. Needs are hardly individualized. Past injustices are hardly taken into account. And the money so indiscriminately being put into circulation today, unless inordinate hoarding of cash is foreseen, eventually will unavoidably destroy the overall economy in the flames of inflation. Paying for housework out of the national treasury will solve many problems at once. Acknowledgments Joan M. Gorga, my wife, has mightily contributed to this presentation. Appendix These are the major findings of a study published on April 8, 2020 by the Lund University School of Economics and Management: "Over the past decades, men’s and women’s time use has changed dramatically suggesting a gender revolution across industrialized nations. Women increased their time in paid work and reduced time in unpaid activities. Men increased their time in unpaid work, but not enough to compensate. Thus, women still perform more unpaid work irrespective of context."
(Ariane Pailhé, Anne Solaz and Maria Stanfors, 2020, "The Great Convergence? Gender and Unpaid Work in Europe and the United States". Lund Papers in Economic Demography, n°2020-1, Lund University School of Economics and Management.)
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ABOUT THE AUTHOR
Carmine Gorga is a former Fulbright scholar and the recipient of a Council of Europe Scholarship for his dissertation on "The Political Thought of Louis D. Brandeis." With a book titled The Economic Process and a series of papers, Dr. Gorga has transformed the linear world of economics into a relational discipline in which everything is related to everything else, This characteristic of Concordian economics has been recognized by JEL in December 2017 (p. 1642). He was assisted for 27 years by Professor Franco Modigliani, a Nobel laureate in economics at MIT. For a full understanding of Concordian economics, Gorga has gradually realized that we need to go beyond Individualism and Collectivism, toward Somism (men and women in the social context)—see www.somistinstitute.org—and then we need to pass from Rationalism to Relationalism: see www.relationalism.org. See also Wikipedia, Gorga Relationalism and Google Scholar.
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