There are few statements that irritate me more than this seven link coil of bullcrap masquerading as wisdom:
“The best social program is a job”.
No, it’s not.
A “job” is something that creates wealth for someone else in excess of whatever paltry or princely sum they pay you.
A “social program” is something that redistrubutes wealth created by those who have a “job” into the pockets of those who don’t.
Nobody goes into business to create jobs, no matter what they might say when angling for tax incentives. They go into business to create wealth for themselves, which sometimes necessitates paying others to help them create it.
But wait, Kate! What about all those jobs building infrastructure?
Kate, the best comment I ever heard on this subject came from an immigrant from Eastern European. Paraphrasing, he said: “When the Soviet Union took control of my country, we pretended to work and they pretended to care. Now I come to Canada and hear people in the NDP advocating exactly the same thing.”
I don’t think there’s a need to get caught up in debates over semantics here. Those who use the phrase in question are certainly not intending to equate a job to the commonly held perception of a social program, otherwise they wouldn’t be making the juxtaposition in the first place.
A social program is typically constructed with the intention of helping society (obviously it can be debated that these intentions are misguided). The phrase you’re upset about, Kate, is trying to suggest that a job fills this need much better. It’s a poke at traditional, government run social programs.
Language is anything but static and definitions of words or phrases are dependent on their popular use.
Take the word “liberal”. It is often used in modern times to mean tax and spend, big government, lefty, etc. This is especially true in the United States. Classically and academically the word “liberal” in a political context is often used to describe a hands off approach to governance.
So anyway, don’t get to irked up by the statement above. Language is about context and intention rather than just static literal interpretation.
In the case of the US? Are they about to experience “Kenyan Economics”???
Just wondering…
Ignatieff in his media conference is disingenuous on his position on the Coalition Accord.
In paragraph 2. of the Accord it is stated:
“The Prime Minister will be the leader of the Liberal Party of Canada.”
At the bottom of the Accord the signatories are:
Agreed on Dec. 1, 2008
Hon. Stephane Dion
Leader, Liberal Party of Canada
Hon. Jack Layton
Leader, New Democratic Party of Canada”
Now that Dion is gone and Ignatieff is the “leader of the Liberal party of Canada” .. will Ignatieff ask that the Accord be revised with HIS signature, and meet with Layton and Duceppe to reconfirm his support of the Coalition Accord?
Ignatieff can’t have it both ways with his “Coalition if necessary, but not necessarily a coalition” position, and then proclaiming he is still behind the Accord.
The current Accord names Dion as the Liberal leader, and Ignatieff cannot present himself as the Liberal leader and the next Prime Minister, without re-signing the Coalition Accord.
I want to see Ignatieff sitting at the same table with Layton and Duceppe, signing the Accord and then shaking hands with the other two allies.
Taxes are like a game of Telephone. What goes in is never the same as what comes out. Too many middle men.
I don’t actually agree with that statement about people don’t go into business to create jobs, but rather wealth for themselves.
I measure the state of my wealth in my business in part by the number of jobs I’ve created.
Job’s are an important aspect of my planning as a businessman. Wealth creation, while important for myself, comes secondary to the impact of the jobs I’ve created in my community.
What point wealth if everyone around you is poor and unemployed? The more jobs I create, the better the community economy, the better the community economy, the better the regional economy. The better the regional economy, the better the national economy and so on.
The better the global economy, or the national economy, the more product I’m selling, the more product I sell, the greater number of employees needed to meet demand.
It’s erronious to assume that greater productivity and higher employment is necessarily going to create wealth for me personally.
In fact, if I wanted more immediate wealth, I’d fire everyone, pare down my production, rarify the access to my product, and sell it for more.
I would keep a higher profit at a lower cost of production in relation to labor.
In truth, I’d make a lot more by firing almost everyone.
So to equate motivation in business as strictly wealth creation is misleading at best, and a gross over-simplification of the charactor of most business people at worst.
Every business person I know seeks to create wealth through growth, and growth creates jobs.
So say rather that people go into to business to create wealth, not necessarily immediate wealth for themselves, but wealth in the growth of an entity which utilizes labor.
Personally I find the whole concept of “jobs” as very paternalistic – it demeans both the employer (parent) and the employee (child). I think a much better approach is that everyone becomes an independent contractor who negotiates a set services to be provided at a given cost for a given period. This creates an equal relationship between two consenting adults. Of course unions and lazy people will fight this notion to the gates of hell.
Observant, you raise good points about the so-called “coalition” agreement. And let’s dig into that “agreement” a little bit. Now what is that agreement, really? Well, it is a contract of sorts between the signatories. It (in theory) binds them to their word. And what is that worth? Well, nothing really. If one or all of them breaks their word, what is the remedy? Well, nothing really. And what makes these clowns think that an agreement they signed between them somehow binds the rest of us? Talk about self-important delusions. The whole thing is a steaming pile. The words on the page are worthless….much like the coalition itself.
U R right John L
Duceppe was on Cpac the day after the signing and he specifically said that only his reputation was at risk if he defaulted from the deal. That being said, how can these leaders vouch for the rest of the MP’s in their parties? I understand party discipline, but it is not a crime for an MP to vote against his party leaders wishes, especially if said vote is detrimental to that MP’s riding. In reality, the only person any of these leaders can vouch for is themselves. I think it is important for the GG to consider this when she makes her decision in the new year (if it comes to that).
Joe Calgary,
Your ideas are more or less in tune with those of Henry Ford who instituted the $5.00 day, partly to keep his workers happy and partly to make it possible for them to buy his cars and provide him with the best kind of mobile advertising. (Economies of scale)
Kate,
I can’t agree that Keynesian economics are a “nightmare”. Why? Because they work. Ramping up production for total war in 1940 ended the hard times in Canada. On a smaller scale, boomtown economics yield spinoffs to those not directly involved with whatever is booming and create general prosperity.
Trudeau et. al. stood poor old Keynes on his head,
throwing money around like drunken sailors during good times. The wallet was empty, and funds which might have been usefully applied were going out the door as interest when, as they always do, recessions came along.
BTW, Keynesian economics aren’t necessarily “left wing”. I’m pretty damned right wing, and my professor of elementary economics – a dedicated Keynesian – was and old guard (i.e. pre-Dief) Conservative.
Good points made here from the belly of the beast, Ventura California (the town that is very broke).
When the Keynsian interventions fail, the rationalization will be that not enough intervention was done – the parallel being that Soviet Union failed because it wasn’t communist enough.
http://exurbannation.blogspot.com/2008/12/gnome-of-berkeley.html
Let’s hope that PMSH doesn’t allow the Librano trough hogs to leverage him into spending us into Trudeaupian Black Hole Version 2.0
Zog;You forget something,the USSR ramped up production during world war 2 but the boom that followed in other countries didnt happen there.Why you ask,because eveyone worked for the government.There was no private sector to pay taxes(govt employies dont pay taxes,they are paid taxes)thus no new money was produced to pay for govt wages.The eastern bloc hasnt recovered yet,I was in Ireland and the people working in the hotels were lawyers and doctors from eastern Europe as the wages in Ireland, working in a hotel,were better than those professions paid back home.
joe calgary;Someday when you go to the bank to keep your business running,you can use that argument with the banker to tell him that part of your capital is your workers.See what he says.
In paragraph 2. of the Accord it is stated:
“The Prime Minister will be the leader of the Liberal Party of Canada.”
Sure was nice of them to hand it over to Prime Minister Harper. Does he get a second pay check?
I don’t think Keynesian economics really apply to Canada’s situation right now…yes, lowering interest rates was a good step, but creating a bunch of public spending isn’t going to stimulate a whole lot. Our country exports goods…that is, and always will be our livelihood. Creating a bunch of public works projects will only create jobs for sectors of the economy that have nothing to do with import/export (i.e. building bridges, roads, power plants) since those jobs aren’t the ones being lost due to a global economic downturn.
For the U.S. however, I could see it being useful as it is becoming clear that there will be a chronic shortage of jobs in the coming future.
bar-jabus;In other words,besides bailing out the auto industry and the bankers,the US govt should borrow more money from whom may I ask? And for what purpose? Read the story of post WW1 in Germany and what it led to.Maybe some people should lose their houses.
As I understood from my university-level economics class many moons ago, Keynsian Theory posits that during an economic turndown in the private sector, the state can step in and maintain the same level of spending.
Once the economy turned around, then the public sector would step back.
I remember distinctly being pissed off at Mulroney because he did NOT cut back public sector spending during an economic upturn.
To me, that demonstrably proved that once the public sector found a role in the economy, it was unable to step back once the good times in the private sector started.
On thing Kenseyan economics has guaranteed … an ever-growing bureaucracy in both bad and good times.
Now that we have a bloated bureaucracy during the good times, the answer is what … bloat it up even more now that the times are bad?
I would say the public sector is big enough as it is.
Isn’t there a line about those failing to learn history being condemned to repeat it?
We tried the Keynesian approach in the late 1960s and early 70s. What it got us was a large deficit, high inflation, and stagnant economic growth – look up the word “stagflation” (I always love the looks on my students’ faces when I draw the growth chart with a straight up vertical line).
When I spent a spell with the government as an MP’s EA, I was always reminding him that all government spending becomes structural, meaning, no-one wants to cut the “stimulative” programs even when they are no longer stimulative.
Keynesian spending is like sex – a little bit can be inflationary, it becomes addictive, and the results can be a surprise several months later…
CRC
Keynes advocated deficit spending in recessions, provided there were surpluses available in booms. Thus the business cycle could be somewhat smoothed out. Actually, if I remember my economics correctly, Keynes actually stated marginal cost equals marginal revenue.
Statists have misrepresented Keyes for decades; he never said run deficits ad infinitum.
“In truth, I’d make a lot more by firing almost everyone.”
Posted by: Joe Calgary at December 10, 2008 4:28 PM
Thank you for pointing out that not all business owners are completely heartless. I’ve kept people on during lean times, at considerable cost to my bottom line. The statement above is one I’ve also made on many occasions. Bringing on more people can amount to diminishing returns. It can also be very gratifying.
I’ve lived on both sides of this fence. Born in the Maritimes, moved to Alberta. Make-work projects have kept communities from starving in the past, and probably will in the future. By hiring people, and asking them to work hard for good pay, I feel like I’m making a contribution to society. I don’t need to be rich, in fact at least one of my employees takes home more money than I do. My early life taught me how easy it is to do without.
Why not ask the experts at the Fraser Institute?
“Milke’s findings include:
* Between 1994 and 2006, the last year for which statistics are available, Canada’s federal, provincial, and local governments spent $182.4 billion on subsidies to business.
* In 2006 alone, Canada’s federal, provincial, and local governments spent $19.3 billion on corporate welfare, almost double the 1995 figure of $10.3 billion.
* The total corporate welfare bill (federal, provincial, and municipal) has ranged from a low of $9.9 billion in 1996 to a high of almost $20 billion in 2005. In 2006, it amounted to $19.3 billion.
* The cost to each taxpayer who paid income tax in 2006 was $1,291, which was 38% higher than the 1995 figure of $934.
* Over 12 years, the total cost per tax filer who paid tax amounted to $13,639 per person (all figures adjusted for inflation to 2008 dollars).
* Between 1994 and 2006, provincial governments spent $98.5 billion on corporate welfare, while the federal government spent $61.4 billion and municipal governments spent $22.5 billion.
* Among provincial governments, the province which disburses the most amount of public money to corporations is Quebec, with over $5.4 billion in corporate welfare in 2006. Quebec was followed by Ontario at $2.4 billion and Alberta at almost $1.5 billion, with British Columbia fourth at just under $950 million.
“The old cliché that what is good for certain large corporations is good for the country has never been less true than it is today. With multiple companies lining up around the world for government-financed grants, loans and loan guarantees, bailouts for one company in trouble will merely make it more difficult for other healthy competitors in a tough economic environment,” Milke said.”
joe calgary – I really don’t think that you can equate wealth with the number of jobs you’ve created.
You wrote: “It’s erronious to assume that greater productivity and higher employment is necessarily going to create wealth for me personally.”
Why wouldn’t it? What puzzles me is your opposition to the creation of ‘wealth’. Wealth is another term for ‘surplus’ or ‘profit’. And without this surplus, a society is condemned to live hand-to-mouth, ie, a sustenance economy. Surplus, whether its seeds or money, enables one to invest in the future.
This can be the seeds for next year’s harvest (now lacking in Zimbabwe) or building new technology or new factories or whatever. But without wealth creation – you can’t control and develop your future.
You then said: “In fact, if I wanted more immediate wealth, I’d fire everyone, pare down my production, rarify the access to my product, and sell it for more.”
But if you increased the cost of your product, would you sell them? Would you sell as many? After all, if you reduce your competitive factor, then, you move yourself out of the market.
Therefore, as altruistic and genial as your post sounds, it doesn’t make, to me, any economic sense.
The function of a business is not to create jobs, but to create wealth. This means surplus, i.e. more income than the cost of production. The reason for this, is not only that we live in a market economy which operates via the mediation of ‘symbolic value’ or money, but we live in an economy that must structure and control its future. It doesn’t operate as a subsistence economy. Surplus,or profit or wealth is therefore a requirement.
And finally, I object to the sanctimoniousness of setting up a business to ‘create jobs’ in the community. It sounds too much like the Make-Work projects of an interventionist government – an action that leaves these employees passive and dependent on those who ‘make the jobs’. An example, besides the gun registry which made jobs in the Maritimes is the Wal-Mart store in Quebec, which closed. The locals sued Wal-Mart; they wanted it to operate there to ‘make jobs’ for them. It never occurred to them to set up their own store.
Such a negation of the Self as an active Agent in one’s own self-interest actually results in a loss of incentive. Our psychological reality is based on a perception of an obligation to the Self. If you deny its importance, as is done in all group-based societies (tribal, socialist, communist, fascist) then, you reduce the individual’s ability to intervene in his environment.
set you free, understands economics!
Keynesianism doesn’t actually work, but it can appear to work when it “creates” jobs, which is why it will always be popular with politicians, even if the theory is totally repudiated (which it is now).
To use Bastiat’s term, the fallacy is focusing on “the seen” (here are jobs that weren’t there before) while ignoring the “unseen” (the jobs which will be destroyed, but which you can’t point to, as this money is extracted from the private sector).
So, ignoring friction costs, it’s a wash. Problem is, the friction costs are enormous. Everybody, left, centre and right, knows, deep down, how inefficient government is.
Therefore, with G for government and P for private, here’s an approximate formula: +1 G Job = -1.25 P Jobs.
Finally, Keyne’s mortal flaw was his nutty belief that government can ACTUALLY pull back when the economy recovers. Everybody knows this can’t be done: just think of all those Great Depression era programmes which, 70 years after the emergency, are still in existence. Fannie Mae for one.
Keynesian doesn’t create jobs — it transfers jobs and wealth — favours one group over another, and destroys a good chunk of the wealth in the process.
“In paragraph 2. of the Accord it is stated:
“The Prime Minister will be the leader of the Liberal Party of Canada.”
Sure was nice of them to hand it over to Prime Minister Harper. Does he get a second pay check?
Posted by: Don at December 10, 2008 6:01 PM “
Sharp eye there Don!
I think the old East Bloc joke was “We pretend to work and they pretend to pay us.”This was especialy true during times of high inflation when the money was worthless.
Follow the money. This economic slowdown is a great excuse to start handing out money at a time when everyone should be exercising restraint.
Hey Robert: the line goes like this (which I’ve heard from tons of Eastern Europeans) and must be spoken with a phlegmatic Russian accent: “They pretend to pay us, we pretend to work.”
As much as I don’t like large government programs, spending on infastructure is something I support … not because it is some sort of “Jobs Program” but because certain infastructure enables your country’s companies to be more competitive.
Consider the internet as an example, countries (like South Korea) who lead the way in ultra high speed internet are going to develop the web-based products and services of the future. If the money was spent to develop the fiber-optic infastructure between communities (allowing cable/internet companies to handle the infastructure within communities) you would see a dramatic increase in the bandwith of internet connections at the same price.
“The best social program is a job”.
You do know it was RR that said that right?
Actually, he said:
“I think the best possible social program is a job.”
Of course what he was referring to, and what’s being talked about here, are quite different.
Joe Calgary at December 10, 2008 4:28 PM
I measure the state of my wealth in my business in part by the number of jobs I’ve created.
Then, clearly, Joe, you are very wealthy because, today, it is only the very wealthy who have the luxury of Noblesse Oblige
NoOne – but why is it the government, or the public taxpayer, who spends on infrastructure? If more money was left in the hands of the taxpayers, then, they would INVEST that money on their own, and develop the infrastructure.
The problem in Canada is that it has set itself up as a nation of dependents. We do not, on our own, become investors, take risks, innovate, or develop our own industries. We leave that up to other countries – such as the US. Then, we copy their innovations and set up factories to build them or produce cheaper copies.
We haven’t developed an investor class here; we are so heavily taxed that we cannot do this. We require foreign wealth to come in and build our factories.
We expect these foreign companies to provide us with jobs. We expect our government to build the infrastructure and the industries to provide us with jobs. We are employees not employers – and we don’t admire wealth or surplus. That makes us dependent on other economies.
ET, with respect, re:
“The function of a business is not to create jobs, but to create wealth.”
You’re missing Joe Calgary’s point.
The function of a business can be anything the entrepreneur wants it to be, and if he likes to create employment (for whatever reason), that is actual profit (or increased “wealth”) to him. And why would I have a problem with that?
re: “I object to the sanctimoniousness of setting up a business to ‘create jobs’ in the community.”
What the heck is sanctimonious about that? Joe just tells you why *he* does something, tells you what he likes to create…and you get all “sanctimonious”.
When Kate wrote “Nobody goes into business to create jobs, no matter what they might say when angling for tax incentives. They go into business to create wealth for themselves, which sometimes necessitates paying others to help them create it.” she had the first part wrong, but the second part exactly right. And that’s all Joe Calgary seems to be saying.
What private business folks do with their own money is perfectly OK, even if they want to create jobs. Government wants to get that same nice fuzzy feeling Joe gets, but they want to do it with other people’s money–and that’s the difference worth criticizing.
ron goo d- yes, I agree, government wants to ‘create jobs’ using other people’s money – and I agree that that’s a problem. However, I don’t think that an economy based around job creation rather than wealth creation is a robust economy. After all, that was the mode of the communist economies – everyone worked – and no wealth was created.
I think that an economy has to be based around wealth creation, ie, the creation of surplus. This enables the economy to both ‘spread that wealth’ to support non-producing members of the society (who MUST be in a very low percentage)and also, to put back into the economy in the form of infrastructure and future based goals. So, I disagree with Joe’s notion of a ‘good economy’. Yes, of course he is free to do as he likes, but this question wasn’t about one’s personal beliefs but, hopefully, had a broader societal implication about what should a society do…
I just heard Jack Layton, for about 3 minutes, on the National. Heard only a few questions..one of which was referred to the ‘economic crisis’ (this is taking over from AGW as a Layton agenda) and Layton’s insistence that the government must ‘do something’.
He stated that the Coalition’s plan was ‘clear’ about what must be done, but ingored that its wording of ‘infrastructure development, child care, and ‘economic stimulation’ were the type of empty generalizations that are meaningless.
He also stated that Harper was in Welland(?) when a company let off over 800 workers; Layton was quite upset about ‘the govt’ over this. Of course, Mansbridge didn’t ask him the question I wanted asked, which was – Do you expect the government or other taxpayers to take over this private company and rehire those workers?
That does, however, seem to be the NDP and Liberal solution.
And, Layton accused Harper of ‘cutting the right of civil service to strike’ (they don’t have such rights) and also, women having equal pay (:?????) but alas, for some odd reason, Layton didn’t whisper a word about cutting the, slurp, slurp, subsidies to the political parties.
Layton is obviously trying to insist that Ignatieff signed a commitment to the Coalition, and for some odd reason, he’s still promoting it. Hasn’t he seen the polls? Hasn’t he read the outrage?
have a whistle , things can be that bad.
http://www.youtube.com/watch?v=8BtJG0BonMQ
Joe in Calgary,
“The more jobs I create, the better the community economy, the better the community economy, the better the regional economy. The better the regional economy, the better the national economy and so on.”
So then, do you get up in the morning and say to yourself, “I’ll make the world better and create a job this morning”?
“Every business person I know seeks to create wealth through growth, and growth creates jobs. ”
I think thats not so incongruent with what the Captain was saying!
On the other end of it, if you got up tomorrow and the government had increased your taxes to a point that you were making less profit, perhaps you’d do what what you pointed to earlier in your rant, fire some of your employees in an attempt to keep more profit.
Just a thought.
Zog
“I can’t agree that Keynesian economics are a “nightmare”. Why? Because they work. Ramping up production for total war in 1940 ended the hard times in Canada.”
One thing though, The government contracted for specific goods it required with the purpose being to win a war, rather than to create jobs. I don’t remember there being an education component to any of the spending to win the war either.
The other part of it this is that Canada and the US during the 40’s were producing weapons not only for their own governments, but for the governments of many foreign powers also. Money not coming from our own economies. Perhaps that wouldn’t qualify in the same way as keynesian.
ET, re: “I don’t think that an economy based around job creation rather than wealth creation is a robust economy”
Oh, me neither. I think a robust economy is based on the drive and (this is essential:) the *freedom* to work to achieve a huge range values.
But this: “[the question] had a broader societal implication about what should a society do” is just making the usual socialist core mistake: thinking “society” is some single thing in its own right, somehow apart and separate from the individuals who are subsumed by the term.
The normal next step is to entertain conversations about what “society” ought to do, since society is now assumed/understood to have differing goals and rights than individuals, and it is also assumed that the ethics of action for individuals as opposed to society differ–and that is *false*.
So, when you say “government wants to ‘create jobs’ using other people’s money – and I agree that that’s a problem“, you’re only part way there. It’s the “other people’s money” part that is *exactly* the problem; as if “society” has some special right to people’s “stuff”.
Zog, re: “I can’t agree that Keynesian economics are a “nightmare”. Why? Because they work…
I can make a poor man rich if I steal enough money and give it to him and get away with it. And that won’t be a nightmare for the formerly poor guy.
What about the folks I take the money from? Tell me about their sweet dreams.
ron – I’m not a socialist, and a society is not simply an aggregate of individuals.
You wrote: “the usual socialist core mistake: thinking “society” is some single thing in its own right, somehow apart and separate from the individuals who are subsumed by the term.”
Actually, a society IS something in its own right; it is a CAS, a complex adaptive system, and is not just the sum of its individual parts. As a CAS, processes occur within a collective that operates as a complex network that would not occur by the intention or will of just a single individual.
For example, a society develops ‘normative habits’, which are norms of behaviour that are used as references against which individual actions are measured. These are communal processes which inhibit or encourage individual behaviour. These are called ‘history’ or ‘culture’ or ‘beliefs’.
Society develops networked relations of exchange of goods and services; this network is not a sum of individuals but as a complex ‘thing in itself’, it has its own dynamic, a dynamic which has nothing to do with the individual.
You then wrote: “The normal next step is to entertain conversations about what “society” ought to do, since society is now assumed/understood to have differing goals and rights than individuals, and it is also assumed that the ethics of action for individuals as opposed to society differ–and that is *false*”
No, your outline both ignores that society is a CAS, and that networking processes in it function in ways different from individual pyschological intentions, and it also ignores the collective ‘normative habits’ which must underlie any society. The individual’s life span is not the same as that of the society – and the society’s knowledge base, its collective wisdom, so to speak, must endure longer than an individual. So, your ‘nominalist’ perspective of society, as an aggregate of individuals, is not one with which I concur.
As for the ‘ethics of society’ – that would be the ethics of the community, and no community can function without such a grounding. The individual learns these within the framework of the community. Who says that the two must differ?
You then write: “when you say “government wants to ‘create jobs’ using other people’s money – and I agree that that’s a problem”, you’re only part way there. It’s the “other people’s money” part that is *exactly* the problem; as if “society” has some special right to people’s “stuff”.
I suggest you are being pedantic. There’s no need to assert that my not putting in the term ‘exactly’ suggests that my view is ‘only part way there’.
Actually, society or the collective DOES have some special right to ‘people’s stuff’. That’s because no man lives, or can live, in isolation. Our knowledge base is not genetic but learned from the collective or society; our economy is not individual but communal; therefore, society or the collective most certainly has the right to some of our products to develop shared properties, whether these be communal huts, fishing nets, roads, or hospitals.
Canuck: “One thing though, The government contracted for specific goods it required with the purpose being to win a war, rather than to create jobs. I don’t remember there being an education component to any of the spending to win the war either.”
Perhaps not, but there was a gigantic research component to the war budgets, and THAT is what made such a huge contribution to the post-war economic boom when these developments were applied to commercial products. Just making tanks and bombs did very little.
ET, what you are forgetting is that workers in a business are not just inanimate appliances. Business conditions always change, and those companies thrive best in any economic climate which are most capable of business flexibility and harnessing the talents of their employees. Nothing ever grows by subtraction, which I think is a large part of Joe’s point. Ask any CEO what his or her most valuable asset is and they will reply “Our people”. The successful companies are those which actually believe it and harness it.
cgh – do you think that those unionized companies, where, no matter how idle or incompetent the workers are, they cannot be fired – leads to successful businesses?
Our government bureaucracies are filled with such, where employess are, interestingly, frequently sick, and primarily on Fridays and Mondays. Where sick days not taken are counted up, and pay for these days is demanded. Where production falls to the ‘lowest common denominator’ because there is no incentive to work or repercussion for slack work.
Do you think that the MacDonald’s company which was forced to rehire a worker who refused to wash her hands because it gave her a rash – is acting in a ‘successful manner’?
I think that your view, an idealistic Platonic view akin to ‘all people are good’, ie, that ‘all workers are the best possible employees we could have’ – is naive. Are all of them talented? No, for that would assume that we are ALL talented, and we aren’t.
I do agree that the R&D of war had a huge impact on technological development of systems not used in war – the computer is just one example. This continues; I’ve been to scientific conferences in the US where the military is in evidence because they are looking for these new and innovative technical ideas – and they’ll certainly assist the funding. These ideas of course move out into the non-military zone – eg, robotics and shipbuilding, etc.
ET: You’re intelligent and interesting, and I understand what you’re getting at. And I appreciate the tone of your response. My thanks.
I wasn’t trying to be pedantic although I was trying to be specific. So, I still don’t understand how you ever get from here:
“society or the collective DOES have some special right to ‘people’s stuff’…society or the collective most certainly has the right to some of our products to develop shared properties, whether these be communal huts, fishing nets, roads, or hospitals”
to here:
“[You’re] not a socialist.“??
I don’t want to take unfair advantage of Kate’s hospitality, so I’ll end my contribution here at that, and I’ll carefully consider your response.
Spike 1: “You forget something,the USSR ramped up production during world war 2 but the boom that followed in other countries didnt happen there.”
Russia, from the Volga to Poland, was a vast battlefied with almost every town and village in ruins. That might have been a problem, dontcha think? Sheesh!
Anyway, there’s no mechanism for a command economy to respond to Keynesian stimuli.
Post Korean War, the economy of the USA was sliding towards recession. When the Eisenhour administration bankrolled the interstate highway system, as well as several Corp of Engineers water control projects, the little Keynesian jolt was enough to turn things around and give us the Fabulous Fifties.
The Interstates are, to this day, the finest integrated highway system on earth. Was it’s construction a misuse of public funds? I think not.
As far as I am concerned, the Accord(s) was/were signed, willingly, by three parties.It is in effect, untill it is recinded.
The upcoming election ballots will most likely have Canada’s four principal parties, and possibly a few others. I contend that this will be in fact a MISPRINT.
We have in fact, a COALITION of THREE PARTIES,in a SIGNED ACCORD, the Conservatives (presently in power), and Greens and other assorted groups. The ballots should NOT, in my never so humble opinion, list the Liberals, separate from the NDP, and in Quebec, the Bloc. They are ONE. Their LETTER to the GOVERNOR GENERAL, says so!!
This will be interesting…..
CRC: “We tried the Keynesian approach in the late 1960s and early 70s”
No we didn’t. For two decades, the Liberals consistently ran deficits – even in the best of times, which was the antithesis of what Keynes proposed. When times were tough, the wallet was empty, and the country, burdened with unnecessary debt, was scrambling to meet interest payments that, in a properly run organization, could have been available for useful enterprises.
When Mulroney came along in 1984, the same destructive practices continued. It was, I’m sad to say, Chretien and Martin who put a stop to such nonsense. As I said in my post of 5:15 PM, they stood Keynes on his head.
“Ramping up production for total war in 1940 ended the hard times in Canada.”
No. Producing more than the labour cost ended the hard times. In other words, wealth is created when the value of output exceeds the cost of effort. In WWII, there was a powerful motivation to win (high value), and a general disregard for the effort it took to achieve this. Economically, the derivative and secondary effects of this “win the war” effort bootstrapped the economy out of the doldrums. Coupled with the unpent demand after the war, and an expanding population, a growth curve was inevitable.
Zog, Shamrock:
Thank you; apparently, there are a few people left who actually understand what Keynes proposed. As you both stated, surpluses in booms and deficits in recession were a part of his plan; however, neither of you mentioned the part that sound money plays in his theories. At the Bretton Woods conference, some people suggested that the gold standard be abandoned, and that the creation of money be left to central bankers. Keynes was appalled and (I couldn’t find the exact quotation, so I’m paraphrasing here) said that though they be upright men, the temptation to fiddle with (i.e. expand) the money supply to meet political demands would be irresistible.
And that of course is exactly what we’re seeing in the US right now. Greenspan, and now Bernanke, have been pumping up the volume for years, and we saw the effects in the asset inflation bubbles in real estate, stocks until this year, art, etc. Now the air is coming out of the balloon, and the US is desperately trying to stop the leaks. Any sustained deflation would leave the US struggling to pay off hundreds of billions with a currency falling in value – bankruptcy or repudiation would be the only viable courses of action.
Already in the financial markets, the cost of insuring against US government debt default (through credit default swaps) has risen sharply in recent weeks. Think about that, people – the US federal government unable to pay off its bonds and debts. If you think we have a crisis now, just wait.
Bernanke has said he’d use a certain technology (aka “the printing press”) to forestall deflation. The markets have already sensed the likely outcome. Go to your local coin dealer, and see if you can buy gold Maple Leafs, Eagles, or Krugerrands. If they have any (which is increasingly doubtful; physical gold is practically unavailable), they are charging up to 10% more than spot, which means a 1 oz gold coin worth (as of writing) about $810 US would be selling for nearly $900. The usual premium is 3-4%.
Slamming “Keynesian” economics is about as sensible as slamming the OECD for following “capitalism”. When the government sector in the G8 countries accounts for a minimum of 30% of GDP, and is closer to 50% in most of the 8, we all live in mixed economies. We are as much “Keynesians” as the Liberal party are “liberals”, the NDP are “democrats”, and, for that matter, the CPC are “conservatives”. Labels are succinct, convenient, and misleading.
And I do agree with the posters who pointed out that “temporary” government measures have a long track record of becoming permanent. In 1913, the US created the Federal Reserve banking system (which many people consider the first step in the long debauching of the US dollar), and passed the 16th amendment, formally instituting an income tax, which had originally been enacted as a “temporary measure” during the Civil War, some 50 years earlier. We’re running up on the 100th anniversary of each, and I’m not looking forward to either one.
ron good – Because I define a society as more than just an aggregate of individuals but instead, as a CAS, a complex adaptive system, is not the same as ‘socialism’.
Socialism is a political and economic theory that advocates state or collective ownership (that’s the key word) of all production facilities and a non-hierarchical societal structure. A CAS is neither of these.
A socialist governance is engaged in both state interventionism, to ensure this equality of societal status, and to ensure the operation of the society’s economy.
A CAS operates by means of ‘hubs’ or ‘nodes’ of economic and informational activity; these hubs are best run as private but can certainly be run as publicly owned (eg a hydro system). I think that public or state ownership tends to bureaucratization and a loss of accountability and production.
BUT, since any activity is connected with other activities, this makes the relationship between hubs ‘social’ rather than private. Social or common relations does not mean ‘socialism’.
The collective, the society (which is not the same as The State) is represented by these interactive Relations. These relations are, again, social, and shared. If, for example, a community of private owners wants to have an ice rink and sports facilities on their land, they can share their resources and build one. The communal, the society, therefore, has a right to some of their individual wealth to build the common element in their collective.
If you take it larger, than, the communal or common element has the right to some of their individual wealth to build the common element, eg, a highway, a water purifying plant, and so on.
That’s not socialism; that’s an acknowledgment that some parts of our life are private and some parts are communal.
ET: you missed a key phrase in my comment, namely, “which are most capable of business flexibility…”
By their very nature, unions and public sector employment conditions both limit the flexibility of a workforce. I was in no way referring to the idealized conditions you suggest I was.
Hence this statement,
“I think that your view, an idealistic Platonic view akin to ‘all people are good’, ie, that ‘all workers are the best possible employees we could have’ – is naive. Are all of them talented? No, for that would assume that we are ALL talented, and we aren’t.”
is not correct. Unions and labour law, and indeed a host of other conditions all serve to limit flexibility. Also please be aware that nowhere in my post did I suggest “all people are good”.