Wednesday, May 27, 2015

The economics of democratic communism: labor and employment

Under democratic communism, everybody eats, and everybody except infants, the disabled, and the retired works. Each person is required to have enough income to pay at least the same taxes as does a person at the minimum EoLR weekly time. Since any person by definition can get minimum EoLR work, every person can fulfill this requirement.

Employment of Last Resort (EoLR) includes not just adults who cannot find private employment, but other employment as well. Guaranteed work, at the standard EoLR wage, includes infant (full time) and child care (part time) and primary and secondary schooling: children are paid to go to school. (Payment to children goes to their adult guardians, who must spend the money for the benefit of the children. And yes, children have to pay rent.) So, if a family has a child, one adult can stay at home, take care of the child, and the government pays him or her at the standard EoLR wage. Alternatively, the family can hire a child care worker or place the child in daycare, and the government pays for that. Since daycare is probably more economically efficient than individual care, there should be some mechanism to share the efficiency gains between the family and society.

There are three broad categories of employment: EoLR employment (mentioned earlier), private cooperative employment, and public employment (direct employee of the government).

As noted earlier, individuals can form private cooperatives to run profit-making businesses. Employment in private cooperatives is more or less market based. Generally, training and education required for private cooperative employment must be paid for by the cooperatives, to prevent externalization of costs. Training and education is usually considered an investment expense, so cooperatives can seek government investment (on which they must pay capital taxes) to fund training and education. I'll discuss the theory of cooperatives in more detail later. If they can, cooperatives can pay below the EoLR rate, but individuals accepting wages below EoLR must work more hours to pay their minimum taxes.

In addition to EoLR, the government can employ people directly. In contrast to EoLR, individuals cannot simply demand government employment, and the government can pay wages above (or, if they can, below, with the same taxation issues as private cooperatives) the standard EoLR wage. All public employees (including EoLR employees) are members of a union, which negotiates with the people's delegates for wages and working conditions. All public employees have the right to strike. (The right to strike by public workers whose labor is immediately necessary for public health and safety, e.g. firefighters, sanitation workers, emergency medical workers, is a knotty problem that cannot, I believe, be solved structurally. The people and their delegates will have to work this issue out in practice.)

The police and the military are special institutions that have their own structure; since these institutions are primarily political, I'll talk about them when I talk about the political structure of democratic communism.

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