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The Pavement of the Road to Serfdom Is Surprisingly Banal

Sunday, January 8, 2017 16:25
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(Before It's News)

(Don Boudreaux)

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Here’s a second letter to my new correspondent, Vince Vogel:

Mr. Vince Vogel

Mr. Vogel:

You allege that in this blog post I “falter.”  You say that your parents taught you that “anyone that works hard and lawfully gets to enjoy middle class prosperity” and that “it’s a duty of government to help guarantee this [outcome].”  With respect, my parents taught me differently.  They taught me that, while anyone who works hard and lawfully improves his or her prospects of enjoying middle-class prosperity, no one is guaranteed any such outcome and, further, that the only agent responsible for my well-being is me and not the state or anyone else.

I then learned additional lessons from economics.  One such lesson is that hard work is not self-justifying.  Suppose that for years I work 24/7/365 to learn how to sing every Elton John song backwards.  And suppose that at the end of my labors I’m unable to earn a living by selling the fruits of my hard-earned skill.  Am I entitled to have government force you and others to support me simply because I worked hard and lawfully?  I, for one, think not.

Another lesson that I learned from economics is revealed in this next thought experiment.  Suppose that you’re given a choice between two careers.  In career one you’re guaranteed never to lose your job.  But your real annual income will never be higher than $1,000. In career two, in contrast, you have no such guarantee as you have in career one, yet the annual income that you can reasonably expect – although not be guaranteed – is $60,000.  Unlike in career one, in career two there’s a chance that you’ll be unemployed for long stretches, but also a chance that some years your income will be six, or even seven, figures.  ($60,000 is merely the annual income that you can statistically expect to earn in career two.)  Which career would you choose.  I’m sure that the answer is career two (given that you almost certainly can now, but refuse to, find someone to employ you on the same terms that I spell out for career one).

A key reason that career two pays more than career one is that career-two workers are more productive that are career-one workers.  Career-two workers’ efforts and skills can be transferred from performing less-valued to performing more-valued tasks.  Thus, economies with lots of career-two workers are vastly more productive than are economies dominated by career-one workers.

For most of human history career-one jobs have dominated – and each pays about $3.00 per day.  Career-two jobs are relatively recent.  They’re a product of the industrial revolution – that is, of an expansion of trade and of what Deirdre McCloskey calls “market-tested innovation.”  Today, typical career-two jobs pay between $100 and $300 a day.

We could, if we are unhappy not having jobs guaranteed for life, return to a society of nearly absolute job security.  But the unavoidable result would be that all but a very few of us would become desperately poor serfs, although ones quite secure in our jobs and in our status.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030



Source: http://cafehayek.com/2017/01/41965.html

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