More on jobs and trade -
The Challenge is to Create, Not Jobs, but Wealth
Don Boudreaux
Today I sent this letter to the Washington Times:
Like economic alchemists, Senators Clinton and Obama peddle plans to spend billions of taxpayer dollars on various government projects that will create millions of jobs ("Obama's economic plan," February 20).
Creating jobs - creating demand for workers - is no challenge. Vandals and arsonists do so routinely. What is a challenge is to create opportunities for workers to earn good incomes while producing real value for others, where value is confidently measured by the amounts that buyers voluntarily pay for what is produced. As far as I know, Sens. Clinton and Obama (and, for that matter, McCain) have never created a business whose success relied upon producing outputs efficiently and then selling these outputs at prices attractive to consumers.
So why suppose that any of their "plans" to create innovative industries and jobs are anything more than the cheap-to-dream-up fantasies of self-important politicians accustomed to spending other people's money?
Sincerely,
Donald J. Boudreaux
cafehayek.typepad.com
Why We Trade
By Russ Roberts
invisibleheart.com
Capitalism is Proving Too Dynamic For Progressives
Those of us with long memories, say back to the 1970's, can remember that the Left constantly complained about manufacturing and assembly-line work as "dehumanizing." Their goal was for workers to transcend this Tayloristic "hell" into clean, white collar office work. Well, now that we have done so by replacing many assembly-line workers with machinery programmers and service workers, the Left now makes the argument that assembly-line work was the Nirvana of all employment, and the only possible road to the middle class for many Americans. If I was an academic with time on my hands to do an in-depth research project, I would love to go back to records of leftish complaints about the economy form the 1960s and 1970s. Because in large part, they have gotten everything they were asking for and more, but now they complain about the change.
One of the explanations of this paradox is that progressives, despite their name, are extremely conservative (little c) in that they fear change in the economy and in work patterns more than anything else. Changing trade patterns, changes in economic mix, changes in work relationships -- these all send progressives into a tizzy. I know that in some sense I am answering a paradox with a greater paradox. Rather than repeat the argument, here is my argument in depth that capitalism is too dynamic for progressives. An excerpt from that post:
Beyond just the concept of individual decision-making, progressives are hugely uncomfortable with capitalism. Ironically, though progressives want to posture as being "dynamic", the fact is that capitalism is in fact too dynamic for them. Industries rise and fall, jobs are won and lost, recessions give way to booms. Progressives want comfort and certainty. They want to lock things down the way they are. They want to know that such and such job will be there tomorrow and next decade, and will always pay at least X amount. That is why, in the end, progressives are all statists, because, to paraphrase Hayek, only a government with totalitarian powers can bring the order and certainty and control of individual decision-making that they crave.
Progressive elements in this country have always tried to freeze commerce, to lock this country's economy down in its then-current patterns. Progressives in the late 19th century were terrified the American economy was shifting from agriculture to industry. They wanted to stop this, to cement in place patterns where 80-90% of Americans worked on farms. I, for one, am glad they failed, since for all of the soft glow we have in this country around our description of the family farmer, farming was and can still be a brutal, dawn to dusk endeavor that never really rewards the work people put into it.
Postscript: I still argue that the "decline" of American manufacturing is a chimera of how statistics are gathered. As I wrote here:
The best way to illustrate this is by example. Let's takean automobile assembly plant circa 1955. Typically, a large manufacturing plant would have a staff to do everything the factory needed. They had people on staff to clean the bathrooms, to paint the walls, and to perform equipment maintenance. The people who did these jobs were all classified asmanufacturing workers, because they worked in a manufacturing plant. Since 1955, this plant has likely changed the way it staffs these type jobs. It still cleans the bathrooms, but it has a contract with an outside janitorial firm who comes in each night to do so. It still paints the walls, but has a contract with a painting contractor to do so. And it still needs the equipment to be maintained, but probably has contracts with many of the equipment suppliers to do the maintenance.
So, today, there might be the exact same number of people in the factory cleaning bathrooms and maintaining equipment, but now the government classifies them as "service workers" because they work for a service company, rather thanmanufacturing workers. Nothing has really changed in the work that people do, but government stats will show a large shift from manufacturing to service employment.
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