Wednesday, December 2, 2009

Listening to the Past

In 1959 Senator Eugene McCarthy was chair of the Special Senate Committee on Unemployment, which held hearings outside of Washington and invited widespread testimony. "Although this committee considered the proposal to reduce work hours, it was not recommended because the committee members felt that other remedies ought to be tried first."

Thirty years later, McCarthy co-wrote a book with Bill McGaughey called Nonfinancial Economics: The Case for Shorter Hours of Work pointing out that the other, conventional remedies that were actually pursued had failed to arrest the steady upward creep of unemployment.

There was a note of pessimism to McCarthy and McGaughey's book in that they recognized that:
The main reason that leisure is in disrepute among Treasury Department officials is that they can't tax it. A proposal such as the shorter workweek, which would redistribute the burden of work and its income more evenly, would reduce the tax collector's take from a given volume of economic activity. Therefore, it cannot be.
When that simple truth is acknowledged, the whole debate about "jobs" takes on a different perspective. Or, as Larry Summers so eloquently put it, "It may be desirable to have a given amount of work shared among more people. But that's not as desirable as expanding the total amount of work." Jobs? We don't have to show you any stinkin' jobs!


Anonymous said...

This is ultimately what leads the so-called progressive movement to reject shorter hours - absent the increasing power of government to tax, all their pet projects come to naught. Deficit spending cannot be sustained unless social hours of work are constantly extended.

The predicament for them in this crisis is obvious: if sufficient deficit spending is not forthcoming, employment will not rise, private sector employment will not be triggered, and the public debt becomes unsustainable.

We could call it the "Krugman-Wray-Galbraith Dilemma."

Myrtle Blackwood said...

Employment can rise without 'deficit spending'. Local currencies need to be employed.