The Parasite law of the Soviet Union and MMT theory

I have just bumped into an interesting twitter thread where an MMT theorist justifies their job guarantee by pointing to the Soveit Union’s Parasite law. 

Being born in the old Soviet Union, and having talked to my parents about their experience with it, I thought it might be useful to share my views on the topic. 

What is the Parasite law?

The parasite law was Article 12 of the old Soviet constitution.  It reads as:

In the U.S.S.R. work is a duty and a matter of honour for every able-bodied citizen, in accordance with the principle: “He who does not work, neither shall he eat.”The principle applied in the U.S.S.R. is that of socialism : “From each according to his ability, to each according to his work.”

The parasite law was introduced in the 1936 Constitution with the moral precept that “he who does not work shall not eat,”. However, the “anti-parasite law” that is usually discussed took effect later in 1961. The law then established that all able-bodied adults who do not contribute to the collective work efforts, namely living a parasitic way of life, will be sent to exile in a specific region for a period of two to five years. 

It is not clear how often people were actually sent into exile as parasites as a result of “unearned income” from second-economy activities, but from my parents’ experience I can give the following tip. Even though the law got abolished (amalgamated) in 1976, the perception and the social norms around the law persisted until the end of the Soveit Union. Before writing this post, I called my mom and dad and consulted thoroughly on their work experience under the regime. My dad is 1939 born and mom 1959 born, so they have lived through and worked under different Soviet leaders.

My dad has confirmed that under Khrushev’s and partially Brezhnev’s regimes, it was indeed obligatory for single men and women to work. It was unusual and suspicious to see people walking on streets in the middle of the day (because everyone was supposed to be at work), so the police (militzia) would question them why they are not at work – if they did not have work, they would be taken to a factory and the factory owner would be told to give them a job. My mom confirmed that the idea of obligatory work (especially under Gorbachev – effectively when I was born), would still apply, but mainly to single men.  Furthermore, the expectation wasn’t as strict towards women with kids. 

My parents spoke very positively about past times and they haven’t felt that the restriction was affecting their happiness. 

What is it to do with MMT theory? 

The recent blog by MMT theorist Bill Mitchell points out how this same view underlies the job guarantee he sees as essential to MMT as a functional macroeconomic and political theory.

Let’s note down the first clear problem with such a guarantee.  By treating those who are “less productive” as parasite we can easily go down a road of eugenics and facism – a society, or a nation state, whose sole purpose is maximising output per person may see individuals it deems as without productive value worthless.  And totalitarian regimes (including the Soviet Union) have shown this.  Furthermore, regimes that are excessively free market – without a sufficient safety net – lead to the same issue.

To be fair, Mitchell doesn’t go down this road noting:

Marx clearly considered a progressive society would be one where all those who could work would contribute their efforts to advancing society, while creating surpluses, which would ensure that all those who could not work, would still enjoy a material prosperity in line with the nations’.

Each person should work if they can and contribute to the social product, which would then be distributed according to material need.

People who couldn’t work, would still have their material needs covered.

So instead the moral is from each according to their ability to each according to their need.  Standard Marxism.  Even so there is something that just doesn’t sit right with me.

Often you will hear that a “job guarantee is good for people by ensuring they have work”, where such options are good things. But it is a short step from giving someone the option of work to making it an “obligation” – which is exactly what Bill is pushing. When you are obliged to work for the greater good, when your ability determines that you need to sacrifice your time “for the state”, doesn’t it start to sound like slavery?  Furthermore, what is your incentive to work, how does this ensure that you get allocated to your comparative advantage?

A job guarantee doesn’t ensure you get the job you want – it just ensures you are in a job.  The distinction is significant.  By forcing people to be in work, instead of giving people time to search (which is what most measured unemployment is outside of a recession), will that really put people into jobs where they are happier? Will it even really make the most productive jobs happen?  Finally, who wears the boots if you are obliged to work – does the employer get extra power over you, or does the state more strongly dictate what both of you can do?

Proponents of the Soviet/MMT left, pure free marketers, and the nationalistic right all share the view that someone’s value comes from their ability to produce.  Whether it be a view that all value is derived from labour or instead a more nuanced view that productive value stems from factors of production in general view is that our value comes from what we can produce.  Although theoretically the left and the right (of the above discussion) differ in terms of how that production is allocated, both sides agree that we have an obligation to produce as much as possible.

But this isn’t it.  There is a difference between these people and others who see “social value” embedded in factors of production and technology that should be shared without obligation.

A lot of my economist friends believe in a safety net that is provided without obligation – a minimum standard, a social dividend.  Then given that individuals should be incentivised to move into work, or invest in ideas or capital equipment, on the basis of what they can produce with it. 

The free marketers/strict capitalists overplay the incentive angle without thinking about the differences in power/opportunity – differences that can even destroy incentives to invest in skills and enforce hierarchies to make up for the lack of safety.  The Soviet/MMT/nationalists concentrate on their definitions of obligations and power without thinking about incentives or why production truly has value.  

Our modern society has looked past these naive definitions to give individuals choice, but to offer them a safety net when they fall – it is about maximising wellbeing, not making us machines that build as much stuff as possible.  Quite why people feel a romance for removing choice from others to ensure they are “productive” for the “nation” doesn’t make sense to me, and makes me uncomfortable about MMT – which I had previously thought had something to do with monetary policy.