A number of high-level economists (John Maynard Keynes and Paul Krugman, among them) have said it would be good for the economy if we were to pay people to dig ditches and fill them up again.
That way they’d have money to buy stuff and pay taxes.
Yeah, right. All that proves is that there are idiot economists who don’t know what real value is all about.
Adam Smith, a Scottish social philosopher and the pioneer of modern economics, who died 220 years ago, insisted that individuals in a productive society need to have a product, something to sell at the end of work.
If you make shirts and I make shoes, we can exchange our goods and we both benefit. Now that is something that makes sense.
Wealth comes not just from the natural materials in shirts and shoes, but from the work that makes them. So the shirtmaker will have money to buy other products from other workers who produce everything from cars to houses and computers.
If too many material goods are produced — no doubt some in America have too many shirts — workers can become part of producing important nonmaterial products like education, entertainment and accounting services.
What we need is a system where people can work to produce material and nonmaterial goods competitively. Then prices would stay down and people could purchase what they most need and want.
That’s the kind of grass-roots capitalism that Adam Smith would applaud, and it’s a lot saner than what we heard recently from the New York Times’ Nobel Prize-winning economist Krugman.
We can’t do a lot to change Washington or big corporate policies. But we can do some things to make ends meet in these tough economic times.
• We can exchange goods and services with friends and neighbors in a kind of barter system — cleaning, cooking, home maintenance, babysitting. Many microbusinesses are already doing this.
• We can go to the Internet for valuable free information. At my last visit to my eye doctor I asked him how much vitamin D was too much. He said, “Let’s find out” and went to the Internet to find out that it was 25,000 milligrams. I realized that I now have the same access to information as my surgeon.
• We can use public spaces (parks, schools and libraries) to get all kinds of benefits. Even private spaces like shopping malls can give us free heat, light and water as we enjoy the beautifully designed buildings and products.
• We can use these and many more free blessings here in America and have a pretty decent life, even if we earn a minimum wage. We can “beat the system.”
For individuals without a high-paying job, the lesson here is to get to work and benefit yourself and your neighbor. Stop looking for the government to take care of you, unless you really can’t take care of yourself.
For our governments at all levels, the lesson is: Let’s stop building “bridges to nowhere” and instead fix the bridges and potholes we already have. That will stimulate commerce and aid workers in creating the goods and services we need far more than unproductive “make-work.”
But extending unemployment benefits without expecting any work from the beneficiaries (other than looking for jobs that aren’t there) has got to stop. Most unemployed workers would be happier if they earned their unemployment check by performing some useful service.
Today we are told that businesses are not spending their cash because they can’t count on a strong demand for their product. Maybe they are right. Maybe we have too much “stuff” and should just produce what people really need at a grass-roots level, by letting the marketplace decide.
Above all, let’s stop (metaphorically) paying people to dig ditches and fill them up again. Let’s get back to a grass-roots supply-and-demand system that gives all of us meaningful products and meaningful work.
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Joe Selvaggio, Minneapolis, is founder of PPL, the One Percent Club and MicroGrants.