Home > upward income redistribution > Maximum wage—or, even better, no wages

Maximum wage—or, even better, no wages

from David Ruccio

One way of dealing with the problem of growing inequality is to establish a maximum wage. That’s what Franklin Delano Roosevelt proposed back in the early 1940s—a 100 percent marginal tax rate on incomes over$25,000 a year (roughly $350,000 in today’s dollars)—in order to “provide for greater equality in contributing to the war effort.”

Infuriated conservatives saw red, literally. The “only logical stopping place for this movement,” fumed Princeton economist Harley Lutz, would be “a completely communistic equalization of incomes.”

Simon Wren-Lewis reports his own recent suggestion for a maximum wage was greeted in much the same manner.

Well, if mainstream economists are going to howl about tinkering with tax rates, why not make them howl about a real change in the system whereby incomes are distributed? Like Filip Spagnoli’s suggestion to get rid of wage-labor entirely.

Spagnoli’s proposal is to combine a universal basic income (“to cover the costs of the necessities of life”) with an outright prohibition on wage-labor (in order to promote more cooperative, democratic forms of economic organization).

Would a UBI not be sufficient to allow people to pursue their goals? Why also prohibit wage labor? A UBI indeed loosens us from the system of wage labor – it provides a financial cushion that removes the risks inherent in abandoning a job and pursuing our “true destiny” – but it doesn’t go far enough. It gives us the freedom to turn down unattractive work but the pursuit of life’s goals often requires cooperation. Only the prohibition on wage labor makes cooperative ventures more common. A UBI by itself only pushes us towards more satisfying jobs and leaves some of the drawbacks of wage labor intact.

Makes sense to me. Guarantee a basic income for everyone and then, on top of that, encourage the formation of new kinds of enterprises, based on the idea that those who work in the enterprises decide how they should be organized (including, of course, how much they should be paid, what should be done with the surplus, and so on).

One of Spagnoli’s concerns is, “If people can’t work for a wage, many of the ‘dirty jobs’ may not get done anymore.” The fact is, we already have Cooperative Home Care Associates in New York City, which is the largest worker-owned cooperative in the country. It’s relatively easy then to imagine a system of such cooperatives, in which democratically organized workers do everything from toilet cleaning, waste disposal, and mining to teaching, healthcare, and software design.

The time is ripe to open up the debate about proposals like establishing a maximum wage, guaranteeing a basic income, and prohibiting any and all forms of wage-labor. The only price of admission is to listen to the howling of mainstream economists.

  1. F. Beard
    July 31, 2014 at 10:05 pm

    Or you could abolish the devilish (literally?) money system whereby the rich and clever are deemed creditworthy of the stolen purchasing power of everyone else and provide restitution to its victims and encourage the use of common stock as private money to justly share wealth and power rather than unjustly concentrate them.

    I won’t hold my breath though since I’ve learned that abolishing government backing for private credit creation is almost unthinkable to most.

  2. July 31, 2014 at 11:22 pm

    “Why would you tax using a basis that is both unequal and unjust, when there exist “a means of taxation already in existence that is totally fair, equal and would produce all the revenue distribution helpful …” “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”
    TAXATION is the best place to start.
    As President Obama *even* knows but somehow does not understand that he has the answer, yet.
    Stated on ” 60 minutes” (12/11/11)” President Obama said,”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ?
    YES,YES…reduce FICA to zero. Reduce federal personal income taxes to
    a $100,000 deductible and a 20% tax for all income over $100,000.
    As Einstein would have remarked; That simple!
    Dare you ask , “Where is the “SOMEWHERE ELSE”?
    *****There shall be but one and only one issuer of the sovereign currency.
    Any issuance after the recording of the wealth of the sovereignty shall be by way of loans.The amount on deposit belongs to the social group and is in trust for them and exchangeable on demand as the Central Bank is the caretaker of all the sovereigns wealth. All new issuance must be loans and shall bear a taxation, commonly known as interest. INTEREST paid to the central bank shall be the taxation which is turned over to Congress for appropriations..
    Surely: You are aware that the private for profit banks have raise over $100 trillion as interest profit for themselves since inception of being legally allowed to do just that: issue new currency and tax it via interest!
    $100 trillion that the PFPB have taken out of our pockets, spent for their our interests. We need to just mandate the Federal Reserve to do for us what they have previously done for the private for profit banks.
    Just do for the people what we have allowed the Private For Profit Banks to do—Issue currency as loans with a tax attached.Where we went wrong is not in establishing a Federal Reserve Bank; it is in : We have destroyed “In God We Trust” and turned that into “In Private For Profit Banks (PFPB) We Trust”.
    It was the fear of giving the awesome power to one institution that allowed for legislation to give PFPB the power TO ISSUE and TAX our sovereign currency.
    Whom would you now rather trust?
    The PFPB have shown their greed, do you believe it may be time for a change?Why would you not investigate the validity of this comment?
    Why would you not want prosperity for yourselves and your children?
    Read : Read more:
    Where we went wrong and how to fix it.
    FREE, yes no money required. Download this book :
    “The Role of Money” by Frederick Soddy (written in 1926, 1931)
    ALSO: http://www.positivemoney.org/
    Then read this FOOLS interpretation again.

  3. August 1, 2014 at 5:59 am

    Ideas like the maximum wage, basic income, and abolition of the money system have been debated for a long time (the history I have seen goes back to the early 1800’s) but it is true that most people don’t really consider them (or only in part—since alot of ‘barter’ and underground economies exist, but mostly as a supplement to the standard one—and this includes unpaid domestic work often peformed mainly by women in the past, not to mention slavery).

    Money has proven to be both extremely efficient and seductive for creating the modern world (iphones, sports economies, etc.) and more people find those topics more interesting than ones of fairness, justice, or economic alternatives. (For almost 15 years I have been talking with very average (ie non academic, non elite ) people about things like basic income (which milton friedman proposed in the 60’s, and charles murray endorses of some kind) , maximum wage, gift economies, alternative currencies—and most of the people involved seem to think they invented the idea—-and the ones I know often then write some little book on the subject and hope to become a savior-messiah-prophet (plus a little profit).

    This dynamic is not too different, to me, from people like Krugman as described by Palley (new keynsianism as a club)—you recycle old ideas to further your career, and actually don’t try very hard to make them applicable outside your own environment (since that is what really matters to most people). Its like the common teacher saying ‘if out of 100 students I teach, one learns something and doesn’t end up homeless or something,then i feel satisfied (plus i got an income)’. People may not like Walmart style wages or the fact much of what they sell is made in sweatshops, but they’ll still shop there, and work there (just as they may dislike high salaries but also support their local sports teams and hollywood stars, and use computers (to the best of my knowledge (the perfect information of this perfect market, and union ) i have never used a computer, and cannot tell a lie).

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