John Maynard Keynes did suggest welfare should be employing people to do things, even pointless things like building giant structures and them demolishing them again.
It seems silly, but if we truly recognize that long term unemployment has a horrible way of killing one's ability hold a job, then Keynes idea is rather practical.
The government not as welfare but simply as employers of last resort. Much like the Fed is the lender of last resort.
Obviously this has the danger of government employees lobbying for ever better pay until it is economically irrational for people to seek work in the private sector.
How about putting back together giant structures that are falling apart? Our infrastructure is rotting away --- that Minneapolis bridge collapse in 2007 was a bit of a wake-up call. There's no shortage of stuff in the United States that needs to get fixed.
Of course, govt spending is always political. At one time, one could both pay off supporters and build up the country. When we have to choose, the former always wins.
So...when the government pays people to do things, that's socialism?
I seriously doubt that's how a governmental program training and employing the youth to repair the infrastructure would be viewed, and especially not as proposed to the more socialistic policy of welfare.
So...when the government pays people to do things, that's socialism?
Of course, but the statement itself is a bit meaningless and appeared to me to be flippant, at that.
When the government pays people not to do things, that's a more extreme form of socialism.
To me, the question is one of subsidy. UI[1] is a 100% subsidy. A WPA type of deal could potentially be no subsidy at all, at least to the individuals. It would merely be directing tax money at a particular kind of boondoggle.
[1] Notwithstanding that the I stands for "insurance," since it's structured as a tax, at least here in the US.
Seriously? Have you lived in the US for the last 10 years or seen a Republican recently? rst, if anything, understated how Republicans would attack such a program.
"unemployed psychology majors" could do some work in special education or nursing homes for disabled and old or half-way homes for addicts, etc.. . Their skills would definitely be of much help there.
"John Maynard Keynes did suggest welfare should be employing people to do things, even pointless things like building giant structures and them demolishing them again."
In his lifetime though we already did this. If you were too poor to get by then you could go live at the town farm where you would receive public assistance in exchange for working.
You would think that all a government has to do is supply assistance to trades people to hire/train apprentices. I had a cousin go into the Navy just to learn a trade which upset me, as in previous decades he could have learnt the same trade by entering an apprenticeship. I belive some countries like Austria still support these programs, I have friends whose teenage boys left school early but were able to enter a subsidised apprenticeship rather than drop out and become unemployable.
I wouldn't have them do utterly useless jobs like this, but rather government jobs that need doing but don't take years of training. There will always be some churn of unemployment anyway, we should take advantage of it. Why hire someone to do this kind of job when we have people literally sitting around looking for something to do?
Of course to balance this you would need to raise unemployment benefit and get rid of this shameful "food stamp" concept. Everyone on unemployment gets a fair living wage, they just have to work part time in some government job with bursts to full time when needed (e.g. holidays, etc.).
Hmm interesting; I vaguely remember that, but had forgotten about the concept and term. Looks like it's still a fairly active idea being debated by economists, though not so much by politicians: http://scholar.google.com/scholar?q=%22employer+of+last+reso...
If he truly said that, I am even less inclined than before to see the merit of his theories. Not that I know them in detail, but this makes me not want to know them.
If people are still able and looking for jobs, their time is better spent looking for jobs than doing pointless tasks. This can be a real problem - writing applications (if that is your approach) takes a lot of time, and if you do 14 hours of taxi driving per day, there is less time for finding that job that would suit you better.
Then there are the people on welfare who are really sick or disabled - why should they have to build giant structures, and how?
Lastly there might be people exploiting the system, but I suspect they are not that many. At least were I live, being on welfare is actually work, anyway, because you have to wade through tons of bureaucracy to get it and stay on it.
Perhaps because the WPA is a lot more recent, it seems to be the thing Americans think of when a make-work program is suggested. I don't think I've ever heard them criticized as Dickensian; instead they tend to be criticized as socialist.
Paying people to make stuff isn't a bad idea, if your government would be doing public works (e.g. roads) anyway, you just get to do that stuff a bit quicker.
Paying people to do made-up jobs (e.g. most of the UK public sector) just destroys wealth.
If the jobs are truly pointless, they're not destroying wealth. Rather, they redistribute wealth. And even if they do destroy wealth (and you need to provide examples of specific positions and why they are counterproductive and not just unproductive) the destruction may be evened out by keeping them in the working mindset and being a normal member of society.
Tax money that goes to unproductive areas of the economy presumably must first be taken from productive areas of the economy (when I say productive areas I mean areas like manufacturing, high tech, agriculture etc. - they create wealth from scratch.) So redistributing tax from a productive area to an unproductive area acts like 'drag' on a car or airplane. The less 'drag' (less tax), the easier the 'vehicle' (the transport kind or the wealth creating kind) can reach peak performance.
It's not really wealth destruction as you've noted, but it does hamper the countries business environment that could otherwise potentially lead to even more productive jobs as companies can afford to hire more productive people.
It's just as easily to set up a useless, profitable company as it is to set up a useless government branch. So the assumption that the taxed area of the economy is productive is somewhat suspect. It's in fact possible to set up large, destructive, private bureaucracies that turn a profit. Our mounds of financial regulations do their best to make that hard, but the fact is people still make a lot of money doing it. Wealth creation and profit are two very different things.
Giving people pointless jobs creates stability, which in many cases is more valuable than any sort of physical good.
And let's remember that the argument in favour of government work programmes isn't solely to be contrasted with not-spending-the-money... it's to be contrasted with welfare.
So the society/government has, broadly speaking, three alternatives (and a continuum therebetween):
* Do nothing for the unemployed
* Give the unemployed some money
* Act as employer of last resort
Doing nothing acts as less drag on the productive aspects of the economy, and also it's really easy to implement. The downsides include civil unrest, and also arguably have long-term negative consequences on the productiveness of the entire workforce (compare with economically-inefficient government subsidies of shipbuilding in nations that wish to maintain the ability to go to naval war, e.g. the US).
Giving them money eases the civil unrest problem. Yay, less revolutions! And hopefully for people who go through temporary rough spots, it permits them to reenter the productive workforce, instead of falling into inescapable poverty. The main downside is screwed-up economic incentives for the unemployed.
Work projects have no greater drag on the productive economy than EI, but might have less drag. Also, they act as work experience, and they eliminate the wicked incentive for the underemployed workers. BUT, they create screwed-up incentives for the employers, who now have a source of cheap labour, which they are now incented to victimize. (Compare with the incentive problems with US for-profit prisons.) Work projects may prevent recipients from seeking new better jobs (through being busy during the workday). Work projects compete at the low end with non-government-run businesses, in ways that are sometimes seen to be economically troubling (I don't follow this argument, myself).
So, sometimes the arguments against work projects also apply to 100% subsidies: "that's anti-capitalist, anti-competitive, pinko commie socialism". But there are some other arguments that the left levy against work projects, like the victimization/incentive issue.
If these people would otherwise be unemployed, and if their wages are modest, then it doesn't destroy any wealth, and if what they do is even slightly useful, it creates wealth.
It seems silly, but if we truly recognize that long term unemployment has a horrible way of killing one's ability hold a job, then Keynes idea is rather practical.
The government not as welfare but simply as employers of last resort. Much like the Fed is the lender of last resort.
Obviously this has the danger of government employees lobbying for ever better pay until it is economically irrational for people to seek work in the private sector.