James Meade’s “Middle Way”
Liberal-Socialism and the Mixed Economy
James Meade was, perhaps, the most innovative social-democratic theorist of the 20th century. An economics professor at the London School of Economics and, later, at Cambridge University, he won a Nobel Prize in economics in 1977. His Wikipedia page notes that he is remembered for his theories related to international trade and economic growth, but there is no mention whatsoever of his role in shaping modern social democratic thinking. There is also no mention of his profound influence upon John Rawls. Even the online Encyclopedia Britannica entry for him fails to mention his unique contributions to social democratic theory. My goal here is to give a brief introduction to his contribution to social democratic theory.
James Meade was, alongside figures like Anthony Crosland, part of the Labour revisionist movement of 1950s England. Meade followed the revisionist line in arguing that public-ownership of all enterprises is not necessarily desirable and ought not to be the goal of socialists. Instead, the revisionists promoted a mixed economy and a greater emphasis on the welfare state. Meade, however, was more radical than Crosland and was influenced by the ideas of his friend C. H. Douglas, as well as by the Lange-Lerner model of market socialism. As a result of this, he was a strong proponent of a social dividend (a policy akin to a universal basic income).
The Automation Problem
In Efficiency, Equality and the Ownership of Property (EEOP, 1964), Meade expresses his fears about automation.
“Most discussions about the social and economic problems which will arise in an automated world run in terms of the rise in real output and real income per head of the population. What, we ask, shall we all do with our leisure when we need to work only an hour or two a day to obtain the total output of real goods and services needed to satisfy our wants? But the problem is really much more difficult than that. The question which we should ask is: What shall we all do when output per man-hour of work is extremely high but practically the whole of the output goes to a few property owners, while the mass of the workers are relatively (or even absolutely) worse off than before?…
“Suppose that automation should drastically reduce [the proportion of the national income that accrues to wages]…. There would be a limited number of exceedingly wealthy property owners; the proportion of the working population required to man the extremely profitable automated industries would be small; wage rates would thus be depressed; there would have to be a large expansion of the production of the labour-intensive goods and services which were in high demand by the few multi-multi-multi-millionaires; we would be back in a superworld of an immiserized proletariat and of butlers, footmen, kitchen maids, and other hangers-on. Let us call this the Brave New Capitalists’ Paradise.”(EEOP, 1964)
His fear isn’t that all jobs will disappear but rather that automation will tend to depress wage rates and increase inequality as wealth trickles upwards into the hands of the property-owning class. The progress of social democracy, which had prevented the immiseration (impoverishment) of the proletariat in Europe, is about to be undone by technological advancements. Automation has the potential to create a crisis situation like the one we experienced during the Industrial Revolution, where the average wage-worker is impoverished, paid starvation wages, and forced to work in miserable conditions.
Meade enumerated four possible solutions that could be used to prevent the immiseration of the proletariat: (1) the Trade Union State, (2) the Welfare State, (3) Property-Owning Democracy, and (4) the Socialist State. He notes the pros and cons of each, observing that all of them have strengths and weaknesses, and ultimately ends up proposing a “mixed economy” borrowing from all four. Meade ends up synthesizing the conservative proposal of property-owning democracy (i.e. widespread distribution of private-ownership) and the progressive proposal of socialism (i.e. abolition of private property and replacement with public-ownership).
Property-Owning Democracy
Marxian socialism had proposed the abolition of private ownership of land and industry and its replacement with public ownership. In the early 1900s, conservative intellectuals proposed an alternative — widespread distribution of private ownership. This alternative was called “property-owning democracy” by Noel Skelton or “distributism” by Hilaire Belloc. Capitalism (at least in its current form) is a system in which a relatively few individuals own productive property and derive income from said ownership while the vast majority of the populace depends on wages for survival. The problem with capitalism in this form is that it divides people into two classes, an owning class of rentiers/capitalists vs. a lower class of wage-slaves. The fact that the average person does not own productive property and, consequently, that income and wealth tend to be distributed in a very unequal manner, according to Skelton, leads to instability. As a conservative, Skelton regarded stability and security as the ultimate political good. Inequality creates discontent and leads to insurrectionary and revolutionary sentiments. Thus, Skelton proposed widespread distribution of private ownership as an alternative to socialism that will allow liberal democracy to survive and become a stable system.
Meade picks up the idea of widespread distribution of private ownership (property-owning democracy/distributism) from Skelton and Belloc and stitches it into the fabric of social democracy. Earlier social democrats had focused mostly on the abolition of private property rather than seeking an egalitarian distribution of ownership. The Labour revisionists, however, came to see widespread distribution of property and better social welfare measures as serving the cause of social democracy better than the doctrinaire pursuit of constantly expanding public ownership. Meade ends up advocating a “mixed economy” in which there are socialized enterprises owned by the State alongside widely distributed private enterprises. He calls this mixture of socialism and property-owning democracy “liberal-socialism” and regards it as a “middle way” between communism and market-liberalism.
The Lange-Lerner Model of Socialism
As for the socialist aspect of his synthesis, James Meade adopted the market socialist model of Fred M. Taylor, Oskar Lange, and Abba Lerner. Meade had followed the socialist calculation debates closely and recognized the utility of markets. During the socialist calculation debate, the Austrian School market-liberal economists Ludwig von Mises and F. A. Hayek observed that central planners within a socialist state would be unable to rationally plan and allocate resources in an efficient manner. The knowledge needed to efficiently plan is distributed throughout society in the minds of individuals. The beauty of the market, Mises and Hayek argued, is that this information is encoded in prices. Prices tell us something about the cost of production, relative scarcity, and demand for a particular product. In a market system, the price helps us decide how to best allocate resources. In a purely socialist state, where all industry is publicly owned and all prices are set by government planners, there can be no encoding of that information into prices. Consequently, a central planner in a socialist economy would have to be effectively all-knowing. The planner would have to know all the little facts that are distributed throughout society in the minds of individuals in order to plan effectively. Fred Taylor, Oskar Lange, and Abba Lerner ended up conceding that the price mechanism was essential for planning effectively in a modern economy. Consequently, they proposed the Taylor-Lange-Lerner model of market socialism as a solution. The Lange-Lerner model of socialism hinged on the idea that you could preserve the pricing mechanism by preserving the institution of money. Under the Lange-Lerner model, all citizens would receive a cash dividend from the profits of socialized (publicly-owned) industry. The citizens, after receiving their dividend, would buy goods from the government, and the central planners would set prices through trial-and-error in an attempt to equilibrate supply and demand.
The Middle Way
The pure Lange-Lerner model, of course, doesn’t really allow for rational planning in any satisfactory sense. The central planners would not be able to rely on price signals to determine how resources ought to be allocated. Instead, they would just be guessing and making adjustments to try to achieve market equilibrium. The rationale behind central planning is based in a critique of the anarchy of production— since producers and consumers don’t all co-ordinate their actions with one another, there tends to be a disequilibrium of supply and demand. Producers have a tendency to either overproduce or underproduce. The business cycle is a result of this anarchy of production. The Marxists believed that you could fix this problem by having government take over the means of production and co-ordinate all production, thereby eliminating the anarchy of production. If central planners are just guessing and relying on trial-and-error, how is your market socialism even an improvement over the anarchy of production under capitalism?
Meade recognized the shortcomings of capitalism, but he also recognized the shortcomings of pure socialism. Even the Lange-Lerner model of socialism is deeply flawed. Taylor, Lange, and Lerner had been correct in recognizing that the institutions of money, markets, and pricing should be preserved. However, the model they proposed failed to actually keep the pricing mechanism in a way that would preserve its integrity and utility. Meade’s solution was to abandon pure doctrinaire Marxian socialism (in which all land and industry is to be publicly owned) and, instead, to opt for a mixed economy. If you allow a private sector of free enterprises to exist alongside government-owned industries, you preserve the market system and the pricing mechanism, thereby allowing the central-planners within government to utilize price signals to optimally allocate resources within the public enterprises. The middle way of liberal-socialism with a mixed economy avoids the shortcomings of both capitalism and socialism while retaining the best aspects of both systems.
Equality, the Pricing Mechanism, & the Democracy of the Market
In Planning and the Price Mechanism: The Liberal-Socialist Solution (PPM, 1949), James Meade explores questions raised by the socialist calculation debate that took place after WWI. At the time when Meade was writing, Britain, in the aftermath of WWII, was trying to decide whether it would continue wartime central planning or return to decentralized planning through the free market and the price system. Meade, reviewing the arguments of the socialist calculation debate, concedes that Hayek and Mises were right about the pricing mechanism.
“There can be no doubt that money and the pricing system are among the greatest social inventions of mankind. Properly used they should be capable of giving each individual a general command over his fair share of the community’s resources; of allowing each indivdual to decide for himself — where private choice is appropriate — in what form he will exercise this command; of allowing initiative to individual producers and merchants — where technical conditions permit — to produce what is most wanted, in the most economical manner, in the markets where supplies are most needed; in short, of combining freedom, efficiency and equity in social affairs.”(PPM, 1949)
In order to preserve the pricing mechanism as a tool for rational planning, Meade preserves also private ownership of enterprises. Nevertheless, even here Meade breaks with capitalism, insisting that widespread distribution of wealth is necessary for the pricing mechanism to function properly.
The pricing mechanism works by way of the democracy of the marketplace. The price of a product is determined by the voluntary interaction of individuals when they vote with their dollars. If an item is scarce, people will pay more for it. If it is useless, even if it is scarce, they will not pay much for it. If it is difficult to transport, the company that delivers it will charge high shipping costs. In this way, information about products is encoded in their price. This information, encoded in the price, helps individuals, as non-central planners, within the marketplace to determine how to best allocate resources.
Prices tell us something about the cost of production, the relative scarcity, the quality of the product, etc. and that helps us to decide the best way to allocate scarce resources. But what if the price is actually just high because people with extra votes decided to manipulate the market in order to make a profit, as is the case with Bitcoin?
“…it is necessary to take radical measures to ensure a tolerably equitable distribution of income and property. Otherwise the money and pricing system is like an efficient and secure election machinery with the freedom ensured by secret ballot — but one where some people are given a thousand votes, and others only one vote, to cast.”(PPM, 1949)
Inequality thwarts the democracy of the marketplace and distorts price signals. If some people have too many votes relative to others, it allows them to manipulate prices and encode misinformation. The price system, therefore, becomes inefficient and, insofar as it is distorted, useless. If you want to use the pricing mechanism for rational economic planning, you need a relatively egalitarian distribution of wealth. Of course, you cannot have pure equality any more than you can have pure democracy — perfection is unobtainable. The pricing mechanism, although it needs an egalitarian distribution of money in order to function properly, also needs some relative inequality as well. People must be allowed to have some profit margin in order for the price system to function. Differences in prices will necessarily result in differences in the distribution of income and the relative profitability of one course of action over another helps determine prices.
“When it is a question of it becoming a little more profitable to produce this, and a little less profitable to produce that, private risk-bearers can reasonably plan their operations to meet the changed circumstances, and thus gradually move resources to where they are most required by society. Mistakes will be made; but the evil social effects of even these mistakes can often be met by the shock-absorber of stocks. If slightly too few bricks are in fact being produced for the number of houses in process of building, the building industry can live on its stock of bricks until the higher price of bricks which will result stimulates a greater output.”(PPM, 1949)
Meade observes that there are “clashes between the ‘efficiency’ and the ‘distributional’ aspects of prices.”(EEOP, 1964) On the one hand, the price system helps to efficiently allocate resources. On the other hand, the price system results in an unequal distribution of income that can, in the long run, undermine the price system itself and render it inefficient. The solution, according to Meade, is to allow the market to distribute income unequally through the price system but, after the fact, to use tax policy and government spending to prevent extremes of inequality. You should use taxation and welfare provisions in order to ensure a relatively egalitarian distribution of property.
Progressive Taxation
Meade advocated a wide array of progressive taxes in order to rectify the inequality that necessarily results from market processes. He suggests the use of “progressive income tax as part of the machinery of the Welfare State to tax the rich in order to raise funds to subsidize the poor,” but observes that such a tax does “have adverse effects upon incentives to work, enterprise, and save.”(EEOP, 1964) Georgists will be disappointed to find that Meade is not a vocal proponent of Henry George’s land value tax. He does, however, mention the option of nationalizing agricultural land and having the government collect a ground-rent from the producers who utilize that land. Additionally, he suggests a sort of partial land value tax as a condition for lifting rent controls: “Any measure of rent derestriction could be accompanied by a temporary and diminishing tax on the occupation of dwellings which would ensure that the difference between the new and the old rents paid by tenants accrued to the State and not to the landlords.”(PPM, 1949) Most of all, however, Meade advocates a capital levy (a one-time wealth tax) alongside a progressive inheritance tax.
Meade advocates a one-time capital levy rather than a recurring wealth tax because he fears that a wealth tax would have too adverse of an effect upon incentives and, therefore, may distort markets. Instead of a recurring wealth tax, he suggests a one-time highly progressive tax upon all property, wealth, and capital, though he suggests that people ought to be allowed to pay it off through a series of installments rather than in one lump sum. He notes that there is some risk of a capital levy or wealth tax encouraging rich people to leave the country and take their money with them, which is why he suggests breaking up the payment into installments in order to ease the burden of the tax. After this initial redistributive tax, he suggests that other predistributive taxes, like inheritance tax and an inter vivos gift tax, could be utilized to help maintain a more egalitarian distribution of property and wealth without requiring as much reliance on redistributive means. You could, he suggests, place a high tax upon large inheritances and gifts. His suggestion is not so much to tax inheritance and gifts in order to generate a lot of revenue as to encourage people to divide up their fortunes between multiple heirs. If you leave, for instance, $1 million dollars to one heir then the tax may be 50%, yet the tax may be only 10% if you leave $100,000 to ten separate heirs. He also suggests that you could make the tax rate also be contingent upon the wealth of the individual receiving the inheritance, such that $100,000 given to a multi-millionaire gets taxed at 50% but the same gift given to a poor person carries no tax at all. Designing inheritance taxes and inter vivos gift taxes in this way would encourage excessively large accumulations of wealth to break up naturally — people would voluntarily divide up their wealth among multiple heirs rather than allow huge inherited estates to grow indefinitely.
The Welfare State
Meade advocates “the taxation of the incomes of the rich to subsidize directly or indirectly the incomes of the poor” through the mechanism of the welfare state. (Cf. EEOP, 1964) While following other Labour revisionists in placing greater emphasis on the use of the welfare state to advance the cause of social democracy, he insists that the welfare state is not, in itself, sufficient to ensure distributive justice.
“The [welfare state] system could be used to equalize incomes; but it would not directly equalize property ownership. Extreme inequalities in the ownership of property are in my view undesirable quite apart from any inequalities of income which they may imply. A man with much property has great bargaining strength and a great sense of security, independence, and freedom; and he enjoys these things not only vis-a-vis his propertyless fellow citizens but also vis-a-vis the public authorities. He can snap his fingers at those on whom he must rely for an income; for he can always live for a time on his capital. The propertyless man must continuously and without interruption acquire his income by working for an employer or by qualifying to receive it from a public authority. An unequal distribution of property means an unequal distribution of power and status even if it is prevented from causing too unequal a distribution of income.”(EEOP, 1964)
Nevertheless, while recognizing that the welfare state, in itself, doesn’t guarantee distributive justice, Meade notes that it does guarantee a certain minimum standard of living for all and therefore is a highly beneficial institution that ought to be praised.
“In particular, rates of taxation on income are now much more steeply progressive than before the war; the extension of old, and introduction of new, measures of social security and welfare (including children’s allowances, old-age pensions and unemployment and health benefits, a national health service and extensive educational reform) have greatly consolidated the ideas of a ‘national minimum’ and of ‘equal opportunity’ for all citizens; and the duties on large properties passing at death have been much raised. Those who have laboured to obtain a more equal distribution of income and property may well be proud of these achievements, which — as many members of the pre-war ‘upper’ classes and as many workers who in pre-war days were working (or being unemployed) on intolerably low standards can testify from their own personal experiences — have brought about a quiet but complete social revolution in the last ten years.”(PPM, 1949)
Full-Employment
James Meade had integrated liberal, socialist, and welfare statist ideas into his vision of a social-democratic “middle way,” but he was also a Keynesian and integrated the insights of John Maynard Keynes into his model.
“I am not forgetting the overriding importance of using financial policy for the maintenance of full employment and the promotion of economic growth. When the economy is threatened with stagnation because effective demand is not growing sufficiently to maintain a full pressure upon the available real resources of the community, expenditure on goods and services both for consumption and for investment should be stimulated by a monetary policy (which eases the terms on which funds can be borrowed for expenditure) and by a tax policy (which increases the funds available for, and the incentive for, expenditures on goods and services.) What is needed is short-run flexibility of monetary and tax policies to preserve the desired level of effective demand in the interests of full employment and economic expansion.”(EEOP, 1964)
The business cycle is an inherent aspect of market economies. Due to the anarchy of production whereby free individuals are allowed to choose what and how much to produce at any given time, there will inevitably be some degree of temporary disequilibrium of supply and demand. Individuals (as planners within the free market) will tend to either produce too much or too little of a given commodity. If overproduction becomes a general phenomenon, a recession will set in. There will not be enough demand for available goods and services to clear the market. As a result, businesses will take a hit in their profits. This will result in some workers being laid off. Those workers, now unemployed, have less money to spend on goods and services, and their unemployment, then, results in a further decline in aggregate demand. This sets off what Keynes called a “deflationary spiral,” where the economy goes into a downward spiral and tends not to self-correct in any timely manner.
The way to avoid really bad recessions or economic depressions, therefore, is to stimulate aggregate demand through government spending. When the economy goes into a recession, aggregate demand falls, and unemployment increases, government must step in to ensure that the people have enough money to purchase the goods and services that they need. As soon as the recession sets in, the government will need to lower taxes and increase deficit spending in order to curb the downward deflationary spiral and stabilize the economy.
The best way to ensure economic stability and avoid deflationary spirals would be to create an automatic stabilizer, a policy whereby government automatically increases spending and cuts taxes as a recession sets in, thereby preventing the recession from doing any significant amount of damage. There are, currently, two popular proposals for such automatic stabilizers in the United States. The first is Claudia Sahm’s plan from Direct Stimulus Payments to Individuals, where she suggests that the government create a system whereby stimulus payments are automatically sent out to individuals if we start entering into a recession: “Making the payments automatic by tying their disbursement to recent changes in the unemployment rate would ensure that the stimulus reaches the economy as quickly as possible.” This approach would also bypass policymakers and prevent politics from holding up the stimulus, a problem that tends to make recessions worse than they would have been if the stimulus had been done sooner. Michael Bennet included this plan as part of his 2020 Presidential campaign platform. The other popular automatic stabilizer proposal at the moment is Hyman Minsky’s Federal Job Guarantee proposal, which proposes to make government the employer of last resort, much as the Federal Reserve serves as the lender of last resort. With the Federal Job Guarantee, the government will provide jobs to all people whom the private sector fails to provide with a job. This would essentially work exactly like Sahm’s direct stimulus proposal, except the receipt of the stimulus payment would be contingent upon a work requirement. This policy was a central part of Bernie Sanders’ 2020 Presidential campaign platform. An interesting thing about Meade’s model of liberal-socialism is that such automatic stabilizers as these seem to be easy to integrate into the model.
The Social Dividend
You may be wondering, “Why should we have socialized enterprises at all? If the preservation of the pricing mechanism is necessary, which means that we must preserve a private sector with free enterprise, and we have decided to use the welfare state and progressive taxation to bring about an egalitarian distribution of wealth, what is the rationale for having any socialist element to our model at all?” The obvious answer is that the market doesn’t provide certain services well. There are certain areas where the incentives of the market lead to socially destructive behaviors, inefficiency, and less than optimal results. Insurance and healthcare are two areas that come to mind.
Usually the profit motive leads businesses to behave in ways that are ultimately good both for the producers and the consumers. However, sometimes this is not the case. It is in the best interest of your insurance company to charge the highest amount possible and cover as little as possible. This, of course, conflicts with the very purpose of insurance. In most areas, competition tends to keep prices down and encourage companies to provide better services, but the insurance industry tends not to be effectively self-regulated by market forces. A private insurance company will maximize their profits and pay their CEOs and shareholders as much as possible. The CEO of an insurance company will have an income of roughly $10 to $20 million per year. If an insurance company were taken over by government, it would give the people some degree of democratic control. We could then structure the industry to maximize social welfare rather than profits. Instead of giving millions to the highest-paid employees in the company, everyone could be paid reasonable wages and the savings could be passed on to the consumer. We see a similar problem with healthcare. It is in the interest of pharmaceutical companies, doctors’ guilds, and healthcare insurance providers to keep the cost of healthcare high. It is in the interest of the nation to make healthcare affordable. When the free market cannot adequately provide necessary services and government cannot easily rectify the situation with piecemeal regulation, it makes sense to have the government take over the provision of those services so that the industry can be run with social welfare (rather than profits) in mind and so that the people can have some degree of democratic control over the provision of those necessary services.
Additionally, things like national defense are simply too risky to leave up to the free market. If another country attacks or invades, the successful defense of the nation may require the use of all available resources for fighting the war. And private militias, in the absence of a centralized military, can easily become corrupt and bring about a state of civil war, where one private army is vying against another in order to control people within a certain geographical area. And private armies are not accountable to the people who live within the territories in which they operate. For this reason, the military ought to be run as a public enterprise. Other things, like space exploration, may be desirable but require a level of organization and access to an amount of capital that is so high that no company in the private sector is likely to enter upon the adventure. And, even if they do, they would not have social wellbeing and the advancement of science and technology in mind as much as the maximization of their own profits.
There is, therefore, a good case to be made for government-run national health-insurance (or, alternatively, for a national health service), for publicly-owned labs that do research and development of pharmaceuticals; for a publicly-owned organization in charge of space exploration, etc. I could even see expanding the public sector to include multitudes of labs and organizations devoted to biology, ecology, technology, computer science, anthropology, and more.
Meade argues that the profits of such publicly-owned enterprises — that portion of their income that does not cover costs or get reinvested — ought to be used for two purposes: (1) to reduce the tax burden on people who are not excessively wealthy and (2) to provide all citizens with a social dividend. Since such industries are owned by the nation, each citizen is to be treated as a shareholder of the company. As such, they ought to receive a dividend when the company is doing well. Public enterprises would “pay out an equal social dividend to every citizen”(EEOP, 1964) If the country is doing well and there are enough publicly-owned enterprises, the social dividend will effectively serve as a universal basic income for all citizens.
“It is suggested that a straightforward monetary payment or allowance or ‘social dividend’ should be paid to every man, woman and child in the country — although the rate of payment might, of course, be lower for children than for adults. This would take the place of all social security benefits such as unemployment benefit, old-age pensions, health benefits, children’s allowances. Every man, woman and child would thus have his or her basic minimum whether in sickness or in health, in work or out of work, young or old. There need be no means test and no tests whether a man was seeking work or whether a man was genuinely ill. Doctors could stop writing out health certificates and get on with their job of curing their patients. Employment Exchanges would stop fussing about unemployment insurance and get on with their job of introducing employers with vacancies to workers without jobs.”(PPM, 1949)
Such a policy would have several advantages. First and foremost, it would guarantee a certain minimum income to everyone, effectively eliminating poverty. Additionally, it could smooth the transition to a more automated future. (I’ll remind you here of Meade’s fears about automation, which I mentioned towards the beginning of this essay.) As more things become automated, human labor will be needed less. This means that as automation progresses more and more of the nation’s total income will accrue into the hands of the owners of property and less and less will go towards the wages of workers. Suppose that a particular industry becomes fully-automated, such that the work is all done by machines — perhaps even the maintenance of the machines is done by the machines themselves. The government could take over ownership of such industries and distribute the profits more equitably throughout society. Using this market-socialist approach, automation would actually tend to increase the social dividend for all citizens and ensure that everyone is better off as a result of technological advancements.
If enough enterprises are publicly-owned, some of the revenue could be used to fund government spending. The result would be that government would no longer need to rely upon taxes for revenue. Of course, you would still want various Pigouvian taxes — Pigouvian taxes are designed to discourage negative behaviors, such as pollution. However, you could theoretically eliminate all income taxes, especially if income is relatively evenly distributed.
Having a social dividend, funded by socialized enterprises, could also serve as a Keynesian automatic stabilizer. If you have a system of progressive taxation in place, where people at the top are taxed at a higher rate than people at the bottom, alongside a universal basic income provided by the social dividend, the balance of transfers relative to taxes could be made to shift automatically with the ebb and flow of the business cycle. When the economy starts to enter into a recession, the government could automatically increase the size of the social dividend payments and could use deficit spending to fund the operation of the public enterprises. This would be functionally analogous to Claudia Sahm’s direct stimulus proposal. But you could also easily introduce something analogous to Minsky’s federal job guarantee proposal into this as well. When the economy goes into a downturn, the government could not only increase the social dividend and deficit spend to cover just the costs (to the public enterprises) of the increase in dividend payments, but also use deficit spending to fund an expansion of the public enterprises in order to create more jobs. Thus, within the framework of Meade’s liberal-socialism, you could easily integrate the two most promising automatic stabilizer proposals.
