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Scientific paper


Full Employment & Degrowth: The Social and Ecological Sustainability of The Job Guarantee

B.J. Unti

Entry type:
Scientific paper

Year of publication:

Degrowth Conference Venice 2012


Introduction: The Degrowth Declaration of the 2008 Paris conference called for the “development of policies and tools for the practical implementation of degrowth”. The Job Guarantee (JG) is one such policy. This paper demonstrates how a JG program may be used to achieve both full employment and degrowth. Traditional Keynesian and Post Keynesian policies provide useful tools for addressing some of the inherent social and economic flaws of capitalism such as involuntary unemployment, poverty and inequality. However, these policies fail to account for environmental limits. As such the solutions they offer all rely on increasing aggregate demand, stimulating higher levels of economic growth and throughput. By contrast, a JG program embodies special features that dissolve the apparent contradiction between employment and the environment: between economic and ecological prosperity. Section two of this paper examines Keynes’s diagnosis of and solution to the problem of unemployment in terms of effective demand. It is shown that the principle of effective demand has important and paradoxical implications for economic growth and the environment. Section three builds on Keynes’s insight regarding the central role of money in a capitalist economy. It is argued that monetary production (M – C –M’) is not only the root cause of unemployment, but also the driving force behind ecological crisis. Section four surveys the theoretical foundations of the JG via a discussion of modern monetary theory (MMT). MMT explains why a sovereign currency government can always “finance” a JG. The fifth section compares the JG and alternative paths to full employment grounded in MMT in terms of their environmental implications. The final section of the paper considers the possibility using a JG to achieve degrowth.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

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