Mention
a lofty goal such as full employment or the end of poverty and cynics will
start crying that these are "unachievable dreams." Justify your position with
an outline of how these dreams are possible and the same nay-sayers will make
accusations that this is mere "theory" and demand that we need to be more
"realistic." But sometimes powerful ideas can make a real difference,
and most of the great achievements of humankind have started out as someone's
dream of a better world. One recent case is Argentina's successful jefes
(head of household) program, which has been responsible for getting millions
of Argentine citizens back to work and getting the South American nation's
economy back on the road to prosperity. The idea for the program can be
directly traced back to a unique proposal for full employment put forward by
an American businessman with no more than an undergraduate education in
economics.
Warren
Mosler first outlined his full employment proposal in an essay entitled "Soft
Currency Economics", which was initially privately published and circulated
among his friends and business associates. Through the wonders of the
internet, the essay was brought to the attention of professional economists,
who saw merit in the ideas and began debating the proposal on e-mail
discussion lists. Mosler wrote a second, follow-up piece, "Full Employment
AND Price Stability," which was eventually published in a professional
economics journal usually limited to authors with a Ph.D. in Economics (these
and subsequent writings by Mosler and others can be found at his website,
www.mosler.org ). Mosler's proposal eventually resulted in the founding
of an economic policy institute, the Center for Full Employment and Price
Stability (C-FEPS), dedicated to research on macroeconomic and monetary
matters (see
www.cfeps.org ). Many of the C-FEPS staff members were associates of the
Levy Economics Institute at Bard College in upstate New York. The Levy
Institute published a number of papers inspired by Mosler's proposal and
continue to have an interest in the full employment plan.
It was
through visiting the Levy and C-FEPS websites that Daniel Kostzer, of the
Argentine Ministry of Labour, became familiar with the Mosler plan, which he
believed offered his country a way out of the mass unemployment that was
threatening not only economic, but political and civil society in Argentina as
well. Kostzer devised the jefes program directly on the proposals that
came out of Mosler's original idea. The jefes program offered heads of
households in Argentina the opportunity to take a public service job at the
minimum wage. While the services provided by jefes workers (education,
community development, and so on) has been a tremendous benefit to Argentine
communities, the real economic success story has been the secondary impact,
which is the one originally predicted by Mosler in his original proposal. The
stimulus which job and income creation brings to the economy resulted in jump
starting the private sector, which then began hiring back workers from
the jefes program into jobs with long term career opportunities. The 2
million jobs initially created by the program has dropped back to 1.75
million, and this is only the beginning. The private sector is now hiring
more people away from the program than there are entering it! Currently, the
success of the Argentine jefes program is attracting international
attention and is being used to promote similar policies in the U.S. and
elsewhere.
The real
moral of the story, though, is this: powerful ideas can change the
world. What if Warren Mosler had listened to the cynics and naysayers who
called him a dreamer and his plan unrealistic? This is the real lesson that
needs to be stressed, especially with our children. Don't be afraid to dream
and dream big! It may make a real difference in the lives of millions of
ordinary people some day.
