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The fetish of full employment- Henry Hazlitt vs. Ezra Klein
Posted on 5/19/14 at 2:36 am
Posted on 5/19/14 at 2:36 am
Ezra Klein recently wrote an article about how joblessness, not inequality, is the great crisis of our time. In typical liberal fashion, he trotted out the good ole' government as a solution to this problem of joblessness- aka public works.
Mr. Klein needs to read this chapter from Hazlitt's "economics in one lesson". I bolded the important points.
Mr. Klein needs to read this chapter from Hazlitt's "economics in one lesson". I bolded the important points.
quote:
THE ECONOMIC GOAL of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor. It is for this reason that men began putting burdens on the backs of mules instead of on their own; that they went on to invent the wheel and the wagon, the railroad and the motor truck. It is for this reason that men used their ingenuity to develop a hundred thousand labor-saving inventions.
All this is so elementary that one would blush to state it if it were not being constantly forgotten by those who coin and circulate the new slogans. Translated into national terms, this first principle means that our real objective is to maximize production. In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary byproduct. But production is the end, employment merely the means. We cannot continuously have the fullest production without full employment. But we can very easily have full employment without full production.
Primitive tribes are naked, and wretchedly fed and housed, but they do not suffer from unemployment. China and India are incomparably poorer than ourselves, but the main trouble from which they suffer is primitive production methods (which are both a cause and a consequence of a shortage of capital) and not unemployment. Nothing is easier to achieve than full employment, once it is divorced from the goal of full production and taken as an end in itself. Hitler provided full employment with a huge armament program. World War II provided full employment for every nation involved. The slave labor in Germany had full employment. Prisons and chain gangs have full employment. Coercion can always provide full employment.
Yet our legislators do not present Full Production bills in Congress but Full Employment bills. Even committees of businessmen recommend “a President’s Commission on Full Employment,” not on Full Production, or even on Full Employment and Full Production. Everywhere the means is erected into the end, and the end itself is forgotten.
Wages and employment are discussed as if they had no relation to productivity and output. On the assumption that there is only a fixed amount of work to be done, the conclusion is drawn that a thirty-hour week will provide more jobs and will therefore be preferable to a forty-hour week. A hundred make-work practices of labor unions are confusedly tolerated. When a Petrillo threatens to put a radio station out of business unless it employs twice as many musicians as it needs, he is supported by part of the public because he is after all merely trying to create jobs. When we had our WPA, it was considered a mark of genius for the administrators to think of projects that employed the largest number of men in relation to the value of the work performed—in other words, in which labor was least efficient.
It would be far better, if that were the choice—which it isn’t—to have maximum production with part of the population supported in idleness by undisguised relief than to provide “full employment” by so many forms of disguised make-work that production is disorganized. The progress of civilization has meant the reduction of employment, not its increase. It is because we have become increasingly wealthy as a nation that we have been able virtually to eliminate child labor, to remove the necessity of work for many of the aged and to make it unnecessary for millions of women to take jobs. A much smaller proportion of the American population needs to work than that, say, of China or of Russia. The real question is not how many millions of jobs there will be in America ten years from now, but how much shall we produce, and what, in consequence, will be our standard of living? The problem of distribution on which all the stress is being put today, is after all more easily solved the more there is to distribute.
We can clarify our thinking if we put our chief emphasis where it belongs—on policies that will maximize production.
Posted on 5/19/14 at 4:23 am to HailHailtoMichigan!
Henry Hazlitt should be required reading for anyone to vote. 75% of Congress probably don't know who he is.
Posted on 5/19/14 at 5:25 pm to HailHailtoMichigan!
quote:
Ezra Klein recently wrote an article about how joblessness, not inequality, is the great crisis of our time. In typical liberal fashion, he trotted out the good ole' government as a solution to this problem of joblessness- aka public works.
But didn't we already do the whole stimulus things? Shovel ready jobs and all that jazz?
I guess when you're too busy being a Jurnolist you miss those sorts of things.
Posted on 5/19/14 at 5:27 pm to HailHailtoMichigan!
I don't understand what point you're trying to make, or even if you have one.
versus
Public works ARE production.
quote:
Ezra Klein recently wrote an article about how joblessness, not inequality, is the great crisis of our time. In typical liberal fashion, he trotted out the good ole' government as a solution to this problem of joblessness- aka public works.
versus
quote:
We can clarify our thinking if we put our chief emphasis where it belongs—on policies that will maximize production.
Public works ARE production.
Posted on 5/19/14 at 8:23 pm to HailHailtoMichigan!
quote:
THE ECONOMIC GOAL of any nation, as of any individual, is to get the greatest results with the least effort.
Couldn't agree more, and it is this line of thinking that truly progresses a society. Focusing on jobs for the sake of jobs is very short-sighted IMO. It's all about production. Certain jobs should become obsolete at a constant or increasing rate if we are advancing as we should be.
This applies on a personal level also. I always laugh when I hear people talk about how many hours they work a week, and how hard they work each day. That's very nice if it makes you feel good, but how much have you actually accomplished with that time? That's what you should be focusing on.
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