When some says that something
or other is the answer, we always have the impulse to say, “What is the
question?” If you aren’t asking the
right question, frankly, any answer will do, just as if you don’t know where
you’re going, any road will get you there.
Fortunately, today’s question was asking why governments are reacting to
widespread unemployment and the disappearance of many jobs by advocating more
education.
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| Don't "multiply barren consumption." |
Last week we looked briefly
at how governments manage to screw up Say’s Law of Markets by artificially
stimulating demand instead of doing the rational thing and making people
productive. Jean-Baptiste Say is the guy
who pointed out that when there is insufficient consumer demand to clear all
the goods that are produced, the answer is not to “multiply barren
consumption,” but to make people productive.
This is because “production
equals income,” so (as Say put it) if some goods remain unconsumed, it is
because other goods are not produced.
The worst thing you can do is create demand artificially by issuing what
amounts to counterfeit money, legal or not.
(It’s significant that Irving Fisher called backing new money with
government debt “legal counterfeiting,” even as he advocated it.)
So, what exactly is education
supposed to do to resolve the Global Financial Crisis, which (despite what you
may have heard) is still going strong?
The real problem is not lack of education (read “job training”). Even “the economists” admit that jobs are
disappearing in competition with robots and artificial intelligence. Is education supposed to train people how to
be robots so they can compete with the machines?
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| Karel Čapek (1890-1938) |
A bit of irony there. The term “robot” comes from Eastern Europe in
the days when landowners could force tenants and serfs to work a certain number
of days each year without pay on the landlord’s estate or construction projects
or something. This was called “robot
labor.” In 1920 a Czech writer, Karel
Čapek, used “robot” as a term for a mechanical man in his play, R.U.R.,
and the term caught on.
No, the real problem is lack
of opportunity and means to become productive.
The modern focus on “jobs” and “stimulating demand” is a blind
alley. The whole concept of “full employment”
is based on the demonstrably false assumption that only human labor is
productive.
And that really tied the
economists in knots when they tried to make the case that land both is, and is
not, a factor of production, viz., David
Ricardo: “Land is a cost-free factor of production, and human labor is the only
thing that is productive.” Karl Marx:
“Labor is the only thing that gives value, unless it is expended on something
that has no value, in which case it doesn’t count as labor.”
Technology is easy, because
you just view it as accumulated or congealed labor. Economists generally resolve this by claiming
that there are at least three factors of production, land, labor, and capital,
but then measure productivity in terms of output per hour of labor. No one says you have to know what you’re
talking about to get a Ph.D. You only
have to fool a committee that doesn’t know anything, either.
So how, exactly, is more
education supposed to do something about the Global Financial Crisis? As near as we can figure, what it does is
create more jobs in Academia for professors who get paid huge amounts of money
for doing research, while palming off the actual teaching to adjuncts and
assistants for starvation wages. This
doesn’t actually prepare students for the work force, because the jobs aren’t
there to begin with, but it does keep people out of the jobs market for a
while, buying time for the politicians to waste more money trying to come up
with a solution when the answer is staring them right in the face.
And the answer is? Institute an aggressive program of expanded
ownership immediately, financed by an expansion of bank credit extended for financially
feasible new capital. Governments will
no longer have to worry about paying businesses to “create jobs,” or figuring
out ways to keep people out of the “jobs market.” No, given Say’s Law of Markets, you can have
as many owners of capital as you need, for being a producer — whether with your
labor or your capital — means that you automatically have the power to be a
consumer. Why waste money artificially
creating jobs or stimulating demand when you can solve the problem (and others besides)
just by doing the obvious?
And education? We won’t need less education, we’ll need
more. People are going to have the
leisure to develop more fully as human beings, and that’s the real purpose of
education, not job training for jobs that don’t exist.
#30#