- Cafe Hayek - http://cafehayek.com -

The Make-Work Fallacy for the Gazillionth Time

Tweet [1]

Here’s a letter to the Wall Street Journal:

Thomas Geoghegan’s outburst against Boeing’s plan to operate a factory in South Carolina is a swirl of disingenuous, illogical, and economically laughable assertions (“Boeing’s Threat to American Enterprise [2],” June 20).  To the extent that one deciphers this zany mess, Geoghegan’s argument boils down to this: by taking advantage of a less-costly source of labor, Boeing undermines its own quality and America’s industrial might while discouraging young people from going to college.


Firms remain vibrant in a competitive economy by constantly reducing their production costs.  And switching production activities from high-cost workers to lower-cost workers is no less effective a means toward this goal – and no more unusual or ominous – than is switching production activities from high-cost workers to lower-cost machines.

Would Mr. Geoghegan argue that Boeing’s consistently increasing mechanization of its operations over the years promoted American industrial decline?  Would he support government efforts to force Boeing to destroy all of its computers and have its aircraft designed instead by armies of engineers equipped only with slide rules and pencils?  Would he want Boeing’s production-line workers to use only 1950s-era (or, better yet, 1920s-era) hand tools?  Does Mr. Geoghegan think that returning to such labor-intensive methods of aircraft design and production would improve the quality of Boeing’s operations and products while simultaneously promoting America’s industrial might and encouraging young people to go to college?

The head aches just to pose the questions – and aches worse to realize that his ‘arguments’ imply that he’d answer ‘yes.’

Donald J. Boudreaux