Tag Archives: Kim Stanley Robinson

What do people do when they are free from need? Reflecting on St James’s Way, John Maynard Keynes and science fiction

I have just returned from walking St James’s Way. It is perhaps the most famous of the medieval pilgrimage routes: for twelve centuries pilgrims have walked it to reach the cathedral of Santiago de Compostela, in northwestern Spain, and they still do. According to tradition, the apostle James is buried there; since the early Middle Ages, the church has granted an indulgence to pilgrims that make it to Santiago. The flow of pilgrims towards Santiago is believed to never have stopped since the Middle Ages. In modern times, it shrank to a trickle, but has been growing at double-digit since the 1990s. It is estimated that over 500,000 pilgrims walked 100 kilometers or more in 2024.

To walk the Way is to participate in a subculture in which it makes complete sense to set aside a month of your life so that you can walk six-seven hours a day, sleep in crummy hostels, deal with foot blisters and minor (and sometimes not so minor) injuries. It may sound counterintuitive, but people take to this kind of stuff so easily that I suspect it may be hardwired. Maybe we are evolved for the collective nomadism we practiced before agriculture? I have no idea. Certainly the same ease of adoption applies to endurance sports like long-distance running and its even more extreme cousins, triathlon and iron man competitions: they seem weird from the outside, but their popularity speaks for itself. You will be hard pressed to find extrinsic rewards that justifies these huge investments of time and effort. The simplest explanation for why so many people walk St James’s Way or run marathons is that they enjoy doing so. And that takes me to Keynes.

In 1930, John Maynard Keynes wrote a landmark essay, Economic Possibilities for our Grandchildren (full text). The Great Depression was raging on, but he refused to despair. Yes, the rate of technological change had temporarily outpaced the rate with which “we can find new uses for labour”. But the Depression was just a sideshow. Based on a conservative estimate of a 2% yearly increase in the stock of capital, and a 1% yearly increase in efficiency due to technical progress, Keynes concluded that “mankind is solving its economic problem”.

I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not—if we look into the future—the permanent problem of the human race.
John Maynard Keynes, “Economic Possibilities for our Grandchildren”

He then went on to argue that abundance is likely to cause disorientment and anxiety to “the old Adam” as the fifteen-hours working week rolls in. Our species has toiled for so long to scrape together a living that, when it finds itself in an age of abundance, it will simply not know what to do with itself. This problem was, to him, not overly concerning. It would surely solve itself as new mores evolve; meanwhile, “there will be no harm in making mild preparations for our destiny, in encouraging, and experimenting in, the arts of life as well as the activities of purpose”. Keynes walked the talk: though he was by then the world’s most renowned economist and the architect of Bretton Woods, he found the time to be the first Chairman of the Arts Council of Great Britain.

Keynes had his numbers right. His back-of-the envelope calculation of the prevailing rate of capital accumulation was not far off the mark. The “economic problem” – defined as the problem of producing enough to provide everyone with what was considered an adequate living standard in 1930 – is indeed solved. Most criticisms of Economic Possibilities focus on his failure to account for the role of positional goods, and to predict that capitalist enterprises would invent advertising as machinery to create more wants, so that workers in advanced countries would need to keep working long hours to satisfy them. His take on “the old Adam”’s psychological need to toil in order to feel useful is not usually challenged.

The reality of St. James’s Way, though, does challenge it. Many are the people like me, who have the privilege of taking substantial time off work and decide to use it on a 800 kilometers pilgrimage, despite (or because of) the discomforts associated with it. Maybe most people would walk the Way, or spend time and energy of some other idiosyncratic endeavour, if they had the same privilege. Economists think of this situation as a backward-bending labour supply curve: the higher the salary, the less time people devote to working.

The Black Death (1346-1353) is thought to constitute a natural experiment on the shape of the labour supply curve. A terrible plague wiped out about half the population in Western Europe. As the continent emerged from the plague, labourers found themselves in high demand: the number of available hands had dwindled, whereas the extension of land to be farmed had stayed the same. This engendered a period of high labourer salaries, known by historians as “the Golden Age of Labour”.

Confronted with greatly increased salaries and a general decrease in agricultural rents, medieval farmhands do not appear to have reacted pocketing the extra money. In many cases, they exploited their newfound market power to work less – in Koyama’s formulation, “they consumed their income increase in the form of leisure”. In England the number of official holidays that did not fall on a Sunday rose from the 20-27 pre-Black Death to the 38-43 of the 1450s. Contemporary writers from Mandeville to Petty agreed that workers had a strong preference for leisure and would work until their needs were me, and no more.

So what did medieval peasants do with the extra time? They participated in religious festivals, processions, carnivals, merrymaking. Some, I suppose, must have decided to walk St. James’s Way or other pilgrimage routes. Far from complaining, “old Adam” seems to have kicked back and enjoyed the ride.

Interestingly, this is an economic problem where science fiction authors have weighed in. Two in particular: Iain Banks and Kim Stanley Robinson. Banks is best known for his much-loved Culture Series. The eponymous Culture is a pangalactic civilization which wields such advanced technology that scarcity has been completely eliminated. Culture citizens spend their time engaging in arts, extreme sports (like something called “lava rafting”, which is exactly what you imagine it is), partying, flirting and developing highly specific interests (for example fanbases of individual starships).

Robinson’s Mars Trilogy depicts the first 200 years or so of colonisation of Mars. The first years are very hard as the colonist struggle to get a foothold; then political strife with Earth and revolution absorb everyone’s attention and time. But, by the third book in the series, people are getting serious at having fun. You guessed it: traveling, partying, making art, extreme sports. Robinson goes to the length of imagining a race that is a cross between an ultra-ultra-marathon and orienteering, and runs all around Mars’s equator.

It was coming time for the Round-the-Worlder, which began every other perihelion. Starting from Sheffield the contestants could run east or west around the world, without wristpad or any other navigational aid, shorn of everything but the information of their senses, and small bags of food and drink and gear. They were allowed to choose any route that stayed within twenty degrees of the equator (they were tracked by satellite, and disqualified if they left the equatorial zone), and all bridges were allowed, including the Ganges Strait Bridge, which made routes both north and south of Marineris competitive, and created almost as many viable routes as contestants.

– Kim Stanley Robinson, Blue Mars

It may be that Keynes, free spirit though he was, was inadvertently making a normative moral statement, rather than a descriptive psychological one. Not “the common people are going to be uncomfortable and rudderless if they do not work a full time job”, but rather “society cannot be stable unless the common people are occupied selling their labour so that they do not go hungry”. Certainly the latter position reflects the prevalent view of 19th century English élites (I am also re-reading Karl Polanyi’s The Great Transformation, which has a lot to say on the matter).

Whatever Keynes’s reasoning, the people I met on St. James’s Way agree with Iain Banks, Kim Stanley Robinson and medieval peasants, and disagree with him. When (relatively) free from need, people do not face the loss of meaning Keynes attributes to “old Adam”. Instead, they embrace (or invent) deliciously whimsical endeavours such as walking 800 kilometres to visit the shrine of an Apostle. I have no doubt that, should technology allow it, running around Mars’s equator and rafting on lava would find their own crowds of enthusiasts. Through these activities people meet new people, brag about their achievements, flirt and fall in love, and are at their happiest and most human, most of them far more so than when they are working a job. For what is worth, I agree with them too, and wish to dedicate my own work to bringing about a sustainable, time-rich society where we can stop inventing fake needs for each other, provide for the needs (not the artificial “wants”) of everyone, step down from the daily grind, and walk, or run, or raft, to our hearts’ content.

Photo credit: Bjørn Christian Tørrissen – http://bjornfree.com/galleries.html CC BY-SA 3.0

On Modern Monetary Theory, science fiction and where to look for the violence

About Modern Monetary Theory

MMT’s main idea is: currency issuers can never, by definition, run out of the currency they issue, as long as that currency is “full fiat”, not pegged to something else (like gold or another currency). This has profound implications:

A currency-issuing government does not spend tax revenue. Rather, it spends money into existence and taxes it out of existence.
A currency-issuing government budget deficit is just a number on a spreadsheet, and has no economic significance.
If a currency-issuing government issues the currency commonly accepted as payment for international trade, its foreign trade deficit is also just a number that has no economic significance. In today’s world, that would be the USA.
Fiscal policy, not monetary policy, is the main tool for government intervention in the economy. Used well, it opens up a much broader array of outcomes than we are accustomed to seeing. More on this later.
Inflation is a potentially serious problem, because a currency-issuing government could in principle stoke up a demand for more resources than are available in the economy, pushing prices up.
However, inflation control as we do it today is inefficient. Moreover, it is inhumane. In many countries, authorities target a rate of unemployment that they think will not cause inflation (NAIRU). In Kelton’s vivid words, this policy “uses people as human shields against inflation”.

I find MMT compelling. It’s not even a theory, exactly: Kelton calls it a description. It’s based on accounting identities and careful consideration of the concrete legal mechanisms whereby the US Congress authorizes public federal expenditure, and the Federal Reserve issues and buys back securities. These are not theories or opinions, but facts. I cannot find any contestable claims here. So, at least for now, I accept that MMT holds true.

MMT and science fiction economies

Understanding the Public Service Employment program

I propose that some of the science-fictional economies we have been looking at are a good fit for MMT. It seems likely that those worlds are “MMT worlds”. To make this argument I have to go a bit deeper into MMT’s policy prescriptions.

MMT economists are fans of automatic stabilizers. These are components of public expenditure which react to the economic cycle, with no need for decision making. Taxes are an example: if the economy slows down and our income declines, our tax bill also declines, helping us to go through the difficult period.

The main policy prescription of The Deficit Myth is an unusual type of automatic stabilizer: a government job guarantee. The idea is this: the federal government hires anyone who is out of a job. It pays a not-very-attractive salary, but still a decent one, with health care and paid leave. When the economy is bullish, it is easy to find private sector jobs that pay better, so few people would want those government jobs. In a recession, though, many more people would take them rather than be unemployed. The number of people in these federal jobs, so, goes up and down according to the economic cycle, with no decision needed. This means perpetual full employment, which in turn means more buoyant consumption. This would help businesses get through the recession in a less traumatic way. Workers avoid great suffering and productivity decline associated to long-term unemployment.

Ok, but in practice what would these federal workers do? Kelton:

Several MMT economists have recommended that the jobs be oriented around building a care economy. Very generally, that means the federal government would commit to funding jobs that are aimed at caring for our people, our communities, and our planet.

There is a detailed proposal for such a program in the USA (report by Wray et. al.), called Public Service Employment (PSE). Its main policy objective is of course employment itself, but there is a list of additional ones:

To guarantee a basic human right to a job, as outlined in the UN Declaration of Human Rights and President Franklin D. Roosevelt’s call for an economic bill of rights.

To implement an employment safety net. […]

To serve the public purpose. […]

To be used as a vehicle for addressing other social ills—urban blight, environmental concerns, etc.

Only the federal government, as the currency issuer, can fund the PSE. But both Kelton and Wray insist that it should be up to the states and communities to decide what constitutes “public service” for them.

PSE is the cornerstone of MMT’s policy: if past experiences are anything to go by, it could employ between 5 and 25% of the labor force at any given time. That is a lot of people, and what they do matters. If we could really deploy this much workforce towards nonmarket objectives, there would be a lot we, as a society, could do.

Mariana Mazzucato rightly claims that innovation has not only a rate, but also a direction. MMT is compatible with expanding that statement: the whole economy has a direction, not just innovation. Given monetary sovereignty, policy makers can and should target objectives, or “missions” as Mazzucato prefers to say, that are not economic per se: go to the Moon, eliminate child poverty, beautify cities, reclaim ecosystems, abate aggressively CO2 emissions etc. This is what makes MMT so useful for sci-fi authors, and so attractive to me.

Provisioning, not paying

Kelton insists that, when it comes to public spending, “How will you pay for it?” is a meaningless question. Since currency-issuing governments create their own currency, by definition they pay for everything in the same way: they credit the Treasury account in the Central Bank. Treasury then goes on to use that account’s balance for paying salaries and bills. But there is a similar, meaningful question: “how will you provision it?” Which means: never mind financial resources, do the real resources actually exist to do what we want to do? Do we have enough skilled people, tons of steel, gigawatts of energy etc. to achieve our objectives? Are these resources lying fallow, or will we be competing for them with the private sector?

Kelton quotes excerpts from the speech president Kennedy addressed to Congress to ask it to approve the Apollo program. Kennedy used it to reassure representatives that America could put a manned flight on the Moon’s surface: the skills were there, the manufacturing capacity was there. He never mentioned money – he knew money not to be an issue.

A more passing reference is made at the WW2 wartime effort, the only time when America really achieved full employment. Again, what mattered to the strategists was provisioning the military: how many tanks can we make in a months? But wait, to bring them to Europe we will need extra ships – how many can we make of those? That depends on how many people we can hire in the shipyards and the steel mills providing them, which in turn depends on how much food and housing we can produce for the extra workers in those areas, and so on.

This is how the better thought-through science fiction economies work. Take Kim Stanley Robinson’s Mars Trilogy: in the first book, a hundred people and a lot of heavy industrial equipment land on Mars. Since on Mars there is nothing to buy, what they can do is limited by their resources.

In order to do anything (say, raising the athmospheric pressure as a first step towards terraforming) they need a habitable environment that protects them from cosmic radiation (or they will all soon develop cancer, and dead people do not terraform). But to build a habitable environment they first need to drill tunnels in the regolith, make enough air to pressurize them, and produce oxygen to make it breathable. This requires energy and plants. Fortunately, they brought nukes and a space greenhouse from Earth, but they need to manage them carefully across other possible (and competing) uses… you get the idea. Most of the Martian economy and society we see in the second and third book (except for people, since at some point Mars has strong immigration) are an outgrowth of the materiel and personnel landed in that one ship.

In economic terms, the Martian colonists are working with something similar to a Leontief matrix. So are the walkaways in Cory Doctorow’s *Walkaway". The latter have access to scavenging the default economy for unwanted resources, but at the end of the day they have to produce their own food, energy, vehicles, communication networks, with these things being both products and production inputs to other goods and services. Having transitioned to a moneyless economy, they face constraints in terms of real resources.

Other fictional worlds in sci-fi work have less of an explicit emphasis on Leontief-like input-output planning techniques. Still, they set themselves civilizational goals, and then shape their economies so that those goals can be attained. For example, the Acquis in Bruce Sterling’s The Caryatids is basically a gigantic operation to reclaim ecosystems lost to climate change and other man-made disasters. Earth superpowers in Paul McAuley’s Quiet War books and the Utopian Hive in Ada Palmer’s Terra Ignota have a similar attitude. All these are much more compatible with MMT than with standard issue neoclassical economics.

Where is the violence?

MMT could be an important piece of the completely different economic system so many of us are longing for. This is why we need to make sure we fully understand the conditions for it to work. Which brings me to the violence.

Vinay Gupta taught me to look for the violence implicit in societal and economic arrangements. This is important for those of us lucky enough to enjoy relative safety, stability and comfort, because it is tempting to assume that everyone is OK when we are. “The war has started – Vinay would say – and you did not notice because your side is winning.” So, where is the violence in an MMT world?

Why money is useful

According to MMT, a currency-issue government can never run out of the currency it itself issues. Moreover, that government is sure that everybody will always want more of that currency. Why? Because it demands people pay taxes to it, and those taxes must be paid in the government’s own currency. Why does this make the currency attractive? Because the government has the power, and the will, to harm those that refuse to pay taxes. According to MMT, taxes are not where government gets its money, because governments issue their own currency. They are there to make sure people accept that currency as payment. Without threat of violence, there is no currency in the MMT sense.

This view is fully consistent with historical evidence on how cash money was invented and adopted. I learnt it from David Graeber’s fantastic Debt. The First 5,000 Years. Here’s how it works: Athenian army engages in imperialistic expansion wars in the Aegean Sea. The problem is provisioning the army during the invasion, with the home agricultural land too far away. The solution is this: army attacks rival city, pillages its gold from temples, divides it up in small lumps, gives it to the soldiers. At the same time it announces that it is going to extract a tribute, in gold, from the occupied city. Athenian soldiers then walk up to farmers and exchange their gold against food. Farmers collect the gold and give it back to the Athenian occupation administration, which uses it to pay its goons and start the cycle all over again. Voilà: the occupied are now provisioning the occupants. Without violence, there is no cash.

The continuum of monetary sovereignty

The Deficit Myth repeats several times that MMT only applies to governments with “monetary sovereignty”. It then goes on to repeat that monetary sovereignty “is best thought of as a continuum”. A government has it if:

It issues its own fiat, floating currency. This excludes local and city governments; states that use the currency of other states (like Costa Rica); states whose currency is pegged to the currency of other states (like Argentina before the corralito crisis); and the Eurozone countries, since the ECB, not they, is the issuer of the Euro.
It does not carry heavy debt denominated in currencies other than its own. This excludes many middle- and low-income countries, like Mexico, Brazil and Indonesia.
And then there is full monetary sovereignty. This term describes the USA’s unique position as the issuer of the currency used in international payments. They can ignore not only their internal budget deficit, but also their foreign trade deficit. In fact, the issuer of the global currency must have a trade deficit, otherwise there won’t be enough of that currency to carry out international trade. This is called the Triffin paradox.

It is easy to see that monetary sovereignty is highly correlated with sovereignty tout court. The stronger your economy, diplomacy and military, the more complete your monetary sovereignty. And the USA has by far the strongest military in the world. A good reason to accept the US dollar is that, if push comes to shove, the US might make you. A country could refuse to accept dollars as a payment, but it would probably suffer some diplomatic pressure, at least. It has even been claimed that the American invasion of Iraq was motivated by that country’s announcement, in 2000, that its oil exports were henceforth to be paid in Euro. Without a big military, there is no global currency.

To summarize…

MMT is an elegant, robust, pragmatic body of work in economics. It is heterodox, but solid and difficult to refute. It enables much more directionality in how we run our economies, and it allows a for a broader array of outcomes, including full employment. Its attention to real (rather than monetary) resources makes it a good candidate for running a sci-fi economy, especially in planet colonization scenarios.

At the same time, the acceptance of currency in MMT is predicated on the threat of violence. This is not to say that competing approaches (say, money supply theory) are any less violent. Nevertheless, when incorporating it in the systems we imagine in the Science Fiction Economics Lab, we need to pay attention to this violence, and make sure it is exercised with appropriate restraint, if at all.

Reposted from Edgeryders with minor modifications. Image: By Avij (talk · contribs) – Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=30112364