Anthropologist David Graeber is probably best known for writing the 2011 book Debt: The First 5,000 Years. Last summer he penned a thought-provoking (in a good way) article titled, “On the Phenomenon of Bullshit Jobs,” which posited as a general rule that “the more obviously one’s work benefits other people, the less one is likely to be paid for it.” Jobs like nurses, cooks, and fight-clubbers-who-guard-you-while-you-sleep-so-do-not-fuck-with-us are good, bond traders, not so much. “Bullshit Jobs” was attacked by every neoclassically trained economist for rejecting marginal product theory, and rightly so. The problem isn’t marginal product theory but what John Bates Clark did to it: tear land out of the factor distribution because he was a shill for robber barons who hated Henry George and his land-taxing followers. The result is a tax system that rewards unproductive activities like land ownership while punishing work and investment.
Graeber sat for an interview with PBS and discussed why he favored giving everyone a basic income instead of government welfare benefits of various types, a proposal favored by a handful of conservatives, most notably Charles Murray. I’ll get to that proposal in a moment, but Graeber gave this fantastic line, which is worth a post:
In our society we have a very, very limited demand for brilliant poet-musicians, but we have an infinite demand for corporate lawyers; anybody who can get a law degree will get a job. Well, is that because most people think that corporate lawyers are better to have around than poet-musicians? No. Almost everybody, given the choice, would go for the poet-musicians, but people with lots of money like to have corporate lawyers, so that’s what the market actually ends up saying.
To his credit, Graeber recognizes that high-end lawyers’ incomes are often due to rich people’s and corporations’ willingness to pay them. Compare this with liberals who think the ABA creates an artificial shortage of lawyers.
However, in the real world, demand for corporate lawyers is finite and it is not true that “anybody who can get a law degree will get a job.” In fact, just two weeks ago, we learned that the unemployment rate for recent law school graduates was 11.2 percent, and only 55.3 percent were employed in full-time, long-term, bar-passage-required positions that weren’t funded by a law school. Another 15.6 percent were employed in the treacherous “business and industry” category.
And on and on. You get the idea.
My point is that like people who think the ABA engineers a lawyer shortage, Graeber is ignorant of the real crisis faced by law students and graduates. Instead, he thinks that there’s “infinite demand” for corporate lawyers when 5,229 law grads from last year beg to differ.
As for the actual topic of the interview, basic income instead of government services, there are a few problems. One, landowners will suck the benefits up, so without taxes on land rents, poverty won’t vanish. If all taxes come out of rent (ATCOR), then all subsidies flow to rent (ASFTR (wow, that doesn’t work at all)). Two, paying for a basic income out of the current tax system will distort incentives for higher-income taxpayers (to the extent their incomes aren’t rents). Three, government isn’t filled with bureaucrats who push paper. Okay those SEC guys who were watching porn all day not so much, but some people need more government services than the basic income check will provide. These are reasons to shift taxes off of labor and capital and onto land before implementing basic income schemes.