On the Fetishization of Employment
[S]pending is good, and while productive spending is best, unproductive spending is still better than nothing. … [S]uppose that U.S. corporations, which are currently sitting on a huge hoard of cash, were somehow to become convinced that it would be a great idea to fit out all their employees as cyborgs, with Google Glass and smart wristwatches everywhere. And suppose that three years later they realized that there wasn’t really much payoff to all that spending. Nonetheless, the resulting investment boom would have given us several years of much higher employment, with no real waste, since the resources employed would otherwise have been idle.
OK, this is still mostly standard, although a lot of people hate, just hate, this kind of logic – they want economics to be a morality play, and they don’t care how many people have to suffer in the process.
It is strange that Krugman invokes the notion of a morality play because the critique seems to apply most acutely to him. He has fetishized employment beyond all else. You can only believe the above if you think there is no higher calling for an economy than full employment. That is the only way that “resources” that are “idle” can be conceived as the only type of “real waste”.
Viewing this from the business school rather than as an economist, I find this goal incredibly depressing. My goal for the economy is almost the opposite. I think the point of the economy is to get people the stuff that they need or want to do what they need or want to do. The end. And if you can do that with less employment rather than more, that would not be worse. It would be even better.
An economy where more people have the stuff they need or want is superior. It is superior even if fewer people are employed. Indeed it is all the better if fewer people are employed. Ceteris paribus, unemployed time is free time (though it might not feel that way if you don’t have all the stuff you need or want).
Employment only matters inasmuch as it produces what people need or want. If they can do that without being employed, that would be better, not worse. In Krugman’s nightmare, machines replace all of us in all our jobs so we aren’t needed. That’s my utopia (assuming the machines don’t require payment or servicing).
Addendum: You might object that people need to be employed to get paid, and non-productive labor does at least make those payments happen. That argument falls flat for two reasons. First, Krugman doesn’t say the problem is unpaid resources. He says the problem is idle resources. Second, if the concern is the workers not being paid, then the solution would be to pay them unemployment while they write books and play tennis, not to produce things of no value.
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