Down is Not Up

by Don Boudreaux on July 6, 2011

in Growth, Myths and Fallacies, Standard of Living, Technology, The Economy, Work

Here’s Mark Perry’s take on David Brooks’s belief that, to quote Brooks, it’s among America’s “problems” that “[m]anufacturing employment is cratering even as output rises.”  (We might cite also Pres. Obama’s concern that technologies such as ATMs ‘destroy’ jobs.)

And here’s more on this very topic from Frederic Bastiat (1801-1850) – chapter 3 (“Effort and Result”) of his Economic Sophisms.  Paragraphs 24 and 25 of this essay are especially relevant (original emphasis):

I have also cited the opinion of another Minister of Commerce, M. d’Argout. It deserves our attention for a moment. In an effort to strike a blow at the sugar-beet industry, he said:

    Doubtless the cultivation of the sugar beet is useful, but its usefulness is limited. Its potentialities fall far short of the gigantic developments that people are fond of predicting for it. To be convinced of this, one need only note that its cultivation will of necessity be confined to the limits set by the demands of the consumers. Double, triple if you will, the present consumption of sugar in France; you will still find that a very small portion of the land will be enough to satisfy the needs of the consumers. [Now, there's a remarkable complaint!] Do you desire proof of this? How many hectares were planted in sugar beets in 1828? A total of 3,130, or 1/10,540 of the arable land. How many are there today, when native sugar supplies one third of our consumption? A total of 16,700 hectares, or 1/1,978 of the arable land, or forty-five centiares per commune.22* Even if we assume that native sugar were to supply the whole of our consumption, we should still have only 48,000 hectares cultivated in sugar beets, or 1/689 of the arable land.23*
There are two elements to be noted in this quotation: the facts and the doctrine. The facts tend to establish that it takes little land, capital, and manual labor to produce a great deal of sugar, and that every commune in France would provide itself with an abundant supply by devoting one hectare of its area to cultivating the sugar beet. The doctrine consists in regarding this circumstance as harmful, and in seeing in the very efficiency and productiveness of the new industry a limit to its usefulness.
Plus ça change, plus c’est la même chose.
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{ 23 comments }

vidyohs July 6, 2011 at 6:57 am

Speaking of efficiency in agriculture, my wife persuaded me to watch the propaganda film “Food Inc.” last night because our liberal friends had her excited about the nasty food industry.

Over and over in the film (decidedly slanted film, I might add) the makers seemed to condemn efficiency as something bad. Last but not least, in the summation it preached the Locavore concept.

Mark Anthem July 6, 2011 at 11:14 am

While it is great that we have advanced technology opportunities. What is not great is that people are not allowed to use animals and grow crops for their survival as in the past.
It becomes a case of running faster and faster just to stay in place.
Behind this locavore nonsense is the reality that it will be just as much a government granted privelege to grow food or use animals as it now is to sell cars or open a doctor’s office.
When we live in a nation with only a few days of food in our stores and transact with each other with scraps of paper like common rail road bums writing each other IOUs you can be sure we have reached our destination on the road to serfdom.

ArrowSmith July 6, 2011 at 11:42 am

I don’t know what you’re talking about. Everywhere I go, supermarkets are stuffed to the gills with food. Fresh produce everywhere. A veritable cornucopia!

SaulOhio July 6, 2011 at 7:51 am

I am continually tempted to say, in response to many criticisms of free markets and capitalism: “You say that as if it was a BAD thing.”

Upton July 6, 2011 at 8:09 am

A variation on that one is my oft-repeated reply: “And?”

T Rich July 6, 2011 at 11:05 am

@ Saul and Upton:
*LIKE* both

Captain Profit July 6, 2011 at 9:04 am

Much as I hate to stickle, Mark Perry’s take is actually here: http://mjperry.blogspot.com/2011/07/bastiats-one-hand-solution-to-job.html

Don Boudreaux July 6, 2011 at 9:28 am

Ah, yes. Thanks. I forgot to include the link. Corrected.

Floccina July 6, 2011 at 2:21 pm

Did David Brooks really want to say that employment opportunities for the least capable people are falling so fast that they out weight that gains to everyone else.

John Dewey July 6, 2011 at 2:33 pm

If so, that would be untrue.

Millions and millions of current and potential service sector jobs are available for the least capable workers. All that stands in their way is a minimum wage law that prevents them working for a wage equivalent to the value of their contribution.

tdp July 6, 2011 at 5:57 pm

There would still need to be some kind of program in place for people who despite working didn’t have the money to support themselves. As much as it is better for someone to be working for $2.50 an hour than on the government teat and unemployed, even if prices fell sharply after the economy was liberated from government manhandling, $5,000 a year would not be enough to support oneself.

John Dewey July 6, 2011 at 6:27 pm

tdp,

I could be wrong, but I believe the market-clearing wage for the millions of lowest-skilled workers would be at least $5.00 an hour. A 2006 Labor Dept study showed that less than 500,000 workers – other than table service employees who earn tips- received minimum wage when that rate was $5.85 an hour a few years ago. Also, I recall a CBO study from back then showing that 2/3 of all minimum wage earners live in a household which includes another worker.

In most of the U.S., a person can easily survive on $10,000 a year if he shares rent with someone else.

vikingvista July 7, 2011 at 3:21 am

You think work should only be permitted for those who wish to support themselves with it?

tdp July 7, 2011 at 10:43 am

@vikingvista
No, I’m saying that there will always be someone, somewhere, whose necessary living expenses will be greater than what they can earn, especially if they do live alone or have some kind of expensive personal emergency or disaster. You would still need to have minimal government assistance in such cases.

@John Dewey
If there were 500,000 workers making minimum wage in 2006, let’s assume that if the minimum wage were abolished we’d have at least that many people working at or below whatever the current minimum wage is now plus however many currently unemployed people would find jobs…maybe a million or so. 2/3 of 1.5 million is 1 million, so you would have 500,000 people living alone or with dependents (as the only wage earner) on between $10,000 a year and $20,000 a year.

John Dewey July 7, 2011 at 11:12 am

tdp,

If someone is living alone or with dependents on $10K a year, that is their choice. No one forces that on them. Furthermore, in most U.S. states, one can live alone on $10K a year. If someone who only earns $10K a year chooses to remain living in a high-cost state, that is their choice.

John Dewey July 7, 2011 at 11:14 am

tdp: “You would still need to have minimal government assistance in such cases. “

Why?

tdp July 7, 2011 at 11:28 am

@John Dewey

How do you know if it is someone’s choice or not to be living without any other wage earners? They might not have any wage earners in their family or among their friends who can support them. They might be alone because they are fleeing domestic abuse. They might have medical or other problems that leave them either unable to work or unable to earn enough to cover their expenses. Additionally, moving to a lower cost area is often not an option because there are fewer jobs there. Areas with a high cost of living also have lots of employment opportunities available.

You don’t want any government assistance for these people, either because you think they don’t deserve it or because you believe private charity will provide them with enough money, but if private charity was all that was needed to stop poverty in cases like this, there wouldn’t be nearly as many poor people as there are, would there?

vikingvista July 7, 2011 at 11:47 am

“there will always be someone, somewhere, whose necessary living expenses will be greater than what they can earn”

I know. When I was in college, I was unable to earn enough for my living expenses. And although the government gave me an earned income tax credit anyway, I was living very comfortably without ever a shortage of extra spending money, thanks to the generosity of my parents. I hardly think the government largess was necessary, so why do you?

vikingvista July 7, 2011 at 11:52 am

“if private charity was all that was needed to stop poverty in cases like this, there wouldn’t be nearly as many poor people as there are, would there?”

You think a person who receives private charity is no longer poor?

You think the growth of government support relative to private charity organizations over the decades has resulted in decreased poverty?

John Dewey July 7, 2011 at 11:54 am

tdp: “How do you know if it is someone’s choice or not to be living without any other wage earners?”

If a person has no friends or can find no one they deem acceptable to share rent with, that is solely due to choices that person made about whether to have friends or about what they deem acceptable.

tdp: “Additionally, moving to a lower cost area is often not an option because there are fewer jobs there.”

If immigrants from Mexico can cross a desert border and find jobs in just about every state in the union, I see no reason why an American citizen could not do the same.

tdp: “You don’t want any government assistance for these people, either because you think they don’t deserve it or because you believe private charity will provide them with enough money, “

I do not want government redistributing money from one person to another. If you decide that you should give some of your income to someone you deem to be needy, fine. If you decide I should give money to someone you deem to be needy, that’s not fine.

FYI, I believe I am not responsible for some stranger’s welfare. It matters not to me whether that stranger lives in Des Moines or in Sudan.

If I decide to help some stranger I deem to be needy, that is my business – not yours and not the government’s.

Ike July 7, 2011 at 2:02 am

Don, are you a closet Rush fan?

vikingvista July 7, 2011 at 3:22 am

Band or talk show host?

jfhiller July 10, 2011 at 1:41 pm

Apparently Albertsons is taking Obama’s comments to heart and promoting job growth through inefficiency in their equivalent of removing the ATM machine. Something tells me there’s more going on to drive this decision than the PR spin reflects…

Albertsons LLC, which operates 217 stores in seven Western and Southern states, will eliminate all self-checkout lanes in the 100 stores that have them and will replace them with standard or express lanes, a spokeswoman said.

“We just want the opportunity to talk to customers more,” Albertsons spokeswoman Christine Wilcox said. “That’s the driving motivation.”

[MONEY QUOTE]
Wilcox said the replacement of automated checkout lanes with human-operated lanes likely would mean more hours available for employees to work.

http://www.msnbc.msn.com/id/43687085/ns/business-consumer_news/

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