Is it so that "opportunity costs only apply at full employment,"?
I read that as politically loaded and dumb-dumb textbook parroting, so not an "MMT position". Maybe you can explain what Keen meant by that remark? (My perhaps also dumb take is:) The most one can say is that the cost of hiring someone in the public sector is the difference between what they are hired to do and what they would have done in the private sector. Who is to say that's a negative or positive difference? You cannot say! Unless you are an oracle.
Who is to say a public sector employee is not doing far more good for society than any random private sector employee? Plus, if a tax is not used to move the labour into the public sector, but rather higher wages are, and this is by design pro-inflationary, I think this is a darn good progressive thing, if a government has the balls to do it. (Re-gauge the lowest wages as the simple policy adjustment once the intended inflation is manifested, afterwards, not before, since you do not want neoclassicals crying "causation" in the backwards direction, at least until neoclassicals and Austrian's go extinct.)
In reality, opportunity cost exists whenever resources are scarce and choices must be made, regardless of whether the economy is at full employment or not.
I think the same gross politically biased concepts are applied to "social welfare burden/dead-weight". And I have not seen any decent heterodox thought on this one, except what I've mentioned now and again, or maybe Bil Mitchell. Under an MMT lens we can make social welfare the opposite of "dead weight". Even if poor social welfare design (a badly run JG for instance) the Okun Gap (real cost of unemployment) far exceeds the Harberger Triangles (inefficiencies of welfare).
There is massive cost for us all tomorrow (potentially catastrophic) in not having the public investment TODAY in sustainable energy and reduced consumption of ꖀ𐝥ꗇꘝ that comes out of the private sector (crypto, MSM ponzi, "AI" garbage, "news" reports, etc.). So I do not see expansion beyond "full employment" in any way as an opportunity cost. It is an opportunity cost for the private firm who needs cheap labour, but... so what? We should kowtow to them?
Even if governments increase hiring without increasing taxes to promote inflation, that'd be progressive. They should not even raise taxes on polluting industries producing goods no one needs, they should just fine them out of existence, but absent such fines I'll go for the tax. The industries pass those off to consumers anyway (both fines and taxes) who can choose whether or not to keep buying the ꖀ𐝥ꗇꘝ. The fine is a tax from the POV of government, but just faster acting.
Yes, it means all known labour and all known resources are fully employed. That is economy is at full capacity. So the opportunity cost is what you would do differently. You’re taking them away from one thing to do another. And yes the opportunity cost is that doing so may make things worse or make them better. Hence the cost of the opportunity, not the result of the opportunity.
Excellent article clearly written and should be put up on our MMT Facebook page.
Is it so that "opportunity costs only apply at full employment,"?
I read that as politically loaded and dumb-dumb textbook parroting, so not an "MMT position". Maybe you can explain what Keen meant by that remark? (My perhaps also dumb take is:) The most one can say is that the cost of hiring someone in the public sector is the difference between what they are hired to do and what they would have done in the private sector. Who is to say that's a negative or positive difference? You cannot say! Unless you are an oracle.
Who is to say a public sector employee is not doing far more good for society than any random private sector employee? Plus, if a tax is not used to move the labour into the public sector, but rather higher wages are, and this is by design pro-inflationary, I think this is a darn good progressive thing, if a government has the balls to do it. (Re-gauge the lowest wages as the simple policy adjustment once the intended inflation is manifested, afterwards, not before, since you do not want neoclassicals crying "causation" in the backwards direction, at least until neoclassicals and Austrian's go extinct.)
In reality, opportunity cost exists whenever resources are scarce and choices must be made, regardless of whether the economy is at full employment or not.
I think the same gross politically biased concepts are applied to "social welfare burden/dead-weight". And I have not seen any decent heterodox thought on this one, except what I've mentioned now and again, or maybe Bil Mitchell. Under an MMT lens we can make social welfare the opposite of "dead weight". Even if poor social welfare design (a badly run JG for instance) the Okun Gap (real cost of unemployment) far exceeds the Harberger Triangles (inefficiencies of welfare).
There is massive cost for us all tomorrow (potentially catastrophic) in not having the public investment TODAY in sustainable energy and reduced consumption of ꖀ𐝥ꗇꘝ that comes out of the private sector (crypto, MSM ponzi, "AI" garbage, "news" reports, etc.). So I do not see expansion beyond "full employment" in any way as an opportunity cost. It is an opportunity cost for the private firm who needs cheap labour, but... so what? We should kowtow to them?
Even if governments increase hiring without increasing taxes to promote inflation, that'd be progressive. They should not even raise taxes on polluting industries producing goods no one needs, they should just fine them out of existence, but absent such fines I'll go for the tax. The industries pass those off to consumers anyway (both fines and taxes) who can choose whether or not to keep buying the ꖀ𐝥ꗇꘝ. The fine is a tax from the POV of government, but just faster acting.
Yes, it means all known labour and all known resources are fully employed. That is economy is at full capacity. So the opportunity cost is what you would do differently. You’re taking them away from one thing to do another. And yes the opportunity cost is that doing so may make things worse or make them better. Hence the cost of the opportunity, not the result of the opportunity.