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What Causes Unemployment?
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21937 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
6 / 1993 |
5,190 Words |
| Author
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Lowell Gallaway and Richard Veddar
Lowell Gallaway and Richard Vedder are distinguished
professors of economics at Ohio University and the authors of
Out of Work: Unemployment and Government in Twentieth-Century
America (New York: Holmes & Meier, 1993) |
Whenever there is a business cycle downturn in the United States, such as we have been experiencing recently, pressure mounts for government to do something. Several things account for this situation. First is the American conviction that anything can be made better if we just put our minds to it. This is the ethic of perpetual progress. Second, numerous twentieth-century developments have great enhanced the possibility of government intervention in the economy. Once relatively small, with a limited capacity to influence the economy, government has been transformed into a behemoth capable of dramatically altering the course of economic events.
Together, these developments have fundamentally altered the psychology of the relationship between government, the public, and the economy. Among the populace there has been an increasing tendency to look toward government for the solution to any economic difficulties. Thus, as the twentieth century has unfolded, people have become prone to assigning to the government responsibility for what happens to themselves and the economy, whether it be at the national, state, or local level. Of course, viewing government, in the abstract, as being responsible for the flow of economic events means attributing to the people in charge, particularly those holding elective office, the blame or credit for what happens. This affects the behavior of actual and would-be public servants. Incumbent or potential presidents, senators, representatives to Congress, governors, mayors, and other public officials become "experts" on the economy and campaign on platforms of economic progress. A common theme dominates their economic promises. It can be summed up in the expression, "I can do it better." Even if things have been going reasonably well, there always is someone standing on the sidelines arguing, "If I had control of the levers of power, things would be different."
Inevitably, a situation of this sort shifts the emphasis in economic policymaking toward short-run problems and outcomes. What becomes important is today--not tomorrow. For the typical citizen, the attitude becomes "What have you done for me lately?" For the economic policymaker in the political arena, the focus becomes the short-run one of doing something now to assist in either acquiring or maintaining power. Historical perspective, the long view, becomes less and less significant. Worse yet, when historical events are considered, they are interpreted to fit the demands of the short run.
THE TREND TOWARD GOVERNMENT INTERVENTION
Nowhere is the
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