Jobs and the Man

KRISTOL, IRVING

THINKING ALOUD Jobs and the Man By Irving Kristol I have in recent weeks been "reading up" on the debate that is now taking place among economists on the question of unemployment. It really...

...Or the government could, through appropriate tax legislation, entice private industry into investing in the field of rapid transit...
...But to expect it to accomplish more than a little is, in my view, Utopian...
...On the other side are those who believe our unemployment is "structural" 葉hat is, related to certain basic changes that have taken place in the shape of the economy during recent years...
...No one could object to retraining and re-education: whatever it accomplishes is to the good...
...As for a public works program, it would probably do the trick, but I see two dangers in it...
...the introduction, in any industry, of labor-saving machinery at a pace faster than the growth of demand for the products of that industry...
...and the absence of new products that will excite demand that was previously nonexistent...
...They may yet get their chance...
...Even in America there are an awful lot of people who are perfectly capable of doing unskilled labor預nd nothing else...
...Why has the Council of Economic Advisers been so determined in rejecting the notion of "structural" unemployment...
...Besides, why must it be the government that undertakes "public works...
...Federal, state and local civilian employes now number some 10 million...
...To be sure, one can always demand that the economy grow faster and faster...
...In part, it may have been the streak of doctrinaire obstinacy which permeated the entire Kennedy Administration, despite its vaunted "pragmatism...
...I sometimes get the impression that these economists would really welcome a depression because then they could solve the unemployment problem quite easily and expertly...
...As Killingsworth has said: "The automatic [oil] refining unit and the automatic steel mill were not invented because of an urgent demand for vastly larger quantities of oil and steel...
...in 1954-56 it required $12,000 of increase in the gross national product to create a new job...
...This last point is an intriguing one, because it helps explain the disparity between recent rates of economic growth in the United States and in Western Europe...
...has been greater than the increase in productivity in these industries...
...They are using their money to replace their workers by one or another form of "automation"葉he tax laws encourage them to do so, and the unions unwittingly (but unremittingly) coerce them into doing so...
...What are we going to do with these people...
...My own feeling is that the American people and their political representatives would be far more receptive to a plan whereby private enterprise was channeled into "public works" than if the Federal government were to undertake the entire program on its own...
...It is not their fault that they are unemployed...
...Their positive program has essentially two points: 1) a huge retraining and re-education program for the idle, and 2) a huge public works program that would create new markets out of existing, unfulfilled needs: e.g., housing, hospitals, convalescent homes, urban transit, etc...
...and following the pros and cons of the argument is a brisk if cheerless indoor exercise...
...PWA was all right in its time...
...and it is really a ridiculous enterprise to ask them to solve the unemployment problem by making themselves over to suit the temporary shape of the labor market...
...This kind of schizophrenic system will end up with the specific vices of both capitalism and socialism, and with the specific virtues of neither...
...but no one who ever worked for it lamented its passing...
...As an interested spectator, I judge the "structuralists" to be far ahead in points...
...It is in answering this question that I find Professor Killingsworth and his associates unsatisfactory...
...The government could easily take this money in taxes, and build rapid transit systems in all the urban areas of the nation...
...On the one side, there are those who believe our unemployment problem results from inadequate demand in the economy as a whole...
...Germany has not been growing faster because the government refuses to plan the economy...
...He has gathered and analyzed statistics which demonstrate葉o my satisfaction at least葉hat there really is such a thing as technological unemployment, and that automation can, under certain circumstances, be "the curse" George Meany has called it...
...Secondly, I fear for its effect upon our economic and political system...
...in a period which, if words and figures mean anything, clearly deserves the label of prosperity...
...Moreover, I think the unemployed themselves would prefer it葉hey would have "real jobs" not "makework," and they would merge their identity with the working class as a whole...
...A tiny minority of the unemployable will be redeemed...
...For our unemployment problem to be solved by mere economic growth, our rate of growth would have to be astronomical...
...Both parties have first-rate economists in their ranks...
...The trouble is that those who most clearly see the need for "public works" are the most ideologically hostile to all forms of corporate enterprise, while those who like corporations are suspicious of all "public works...
...the vast majority will remain unaffected...
...At the present rate, by 1980 one employe in five will be in "the public sector...
...And it would rouse less opposition than any other legislation directed toward the same end...
...According to figures compiled by Nat Goldfinger of the AFL-CIO...
...The chief exponent of the structural unemployment thesis is Professor Charles C. Killingsworth of Michigan State...
...The legislation needed to direct corporate enterprise toward "public works"葉ransportation, hospitals, schools, and especially low-cost housing謡ould not be so very complicated...
...These inventions were the by-product of the very rapid growth of scientific knowledge in our generation...
...in 1963, it takes a $30,000 increase...
...and technology has not come forward with any new and exciting commodities to spur demand...
...The circumstances arc: a growth in population...
...That strikes me as quite enough...
...It really has all the makings of a Great Debate葉hough, the state of economic journalism being what it is, it may turn out to be the least resonant of all Great Debates...
...Or, as he puts it elsewhere: The distinguishing aspect of technological innovation in our day is that invention is becoming the mother of necessity...
...The groups of people in America who are most desperately hit by technological unemployment are the uneducated and the untrained, especially the teenagers, whose unemployment rate is 18 per cent and whose proportion to the general population is growing every year...
...First, it will inevitably have an ineradicable air of "make-work," and I do not see how anyone can wish to herd the unemployed into a specially contrived ghetto within the labor market...
...Both have been growing faster simply because they were more stunted to begin with葉he increase in demand for autos, dishwashers, television sets, etc...
...So much noise has been made about the "stagnation" of the American economy, and its failure to achieve a satisfactory rate of growth, that it comes as a shock to learn庸rom Federal Reserve Board economist Clayton Gehman葉hat the American economy in recent years has been growing at the general postwar rate, which in turn is very close to the economy's long-term rate of growth...
...Indeed, I have been surprised at how essentially flabby (if ingenious) is the case for the "inadequate demand" school, which has been argued vigorously by the President's Council of Economic Advisers, and is widely supported by many liberal neoKeynesians...
...France has not been growing faster than we have because the government helps plan the economy...
...A man working for a large corporation has a greater chance of moving (or being moved) about into new and perhaps more congenial kinds of work, and even of finding a vocation or career for his abilities, than would be the case in a state enterprise that existed solely to provide jobs for the jobless...
...They are what they are, and they are entitled to be treated with respect, and not merely with a reforming compassion...
...In the meantime, however, they are faced with an economic situation which is disconcertingly paradoxical: The economy is doing so well that it seems able to dispense with the services of over five per cent of the labor force...
...But the trouble is that, statistically, there seems no way for employment to grow with comparable speed...
...After World War II, the German shipbuilding industry was recreated by private German capital in just such a way...
...Inadequate demand can be cured by the government spending more money...
...There is nothing chimerical about this idea...
...There is no mysterious harmony between the rhythm of technological development and society's convenience...
...For too many liberals, the idea of a mixed economy is one in which the economic ideology encourages individuals and corporations to make money, while the political ideology prescribes that the government take the money away from them...
...And, when one thinks about it, that is the way practically all American railroads were built in the first place...
...One does not need to have morbid fears about "the road to serfdom" in order to be apprehensive about the future of liberty in a society where government employment is nearer the norm than the exception...
...Never did an Administration listen so little to so many...
...So long as this stalemate is allowed to endure, our unemployment problem will remain incorrigible...
...The large corporations in America today are, on the whole, "cash-rich...
...Structural unemployment can be abolished by no such simple scheme...
...These people are not "failures" or "misfits," and it is cruel to harangue and censure them as is now so frequently done庸or not being able to graduate from high or vocational school...
...But mainly, I would guess, it has rejected the thesis of structural unemployment because its practical implications are so politically inconvenient...
...Surely even they must suspect that there is something decidedly odd in calling for anti-depression measures (a taxcut, deficit financing, etc...
...The United States has already passed the peak of demand for these commodities...

Vol. 47 • January 1964 • No. 1


 
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