The government causes unemployment

American government enforces the unnatural conditions of unemployment and homelessness. Most people are unaware of this and can not even imagine how the government would do such a thing. Today I will attempt to explain unemployment.

Let us begin with the fact that long term unemployment is a new phenomenon:

Read any account of economic history from the late Middle Ages through the 19th century and try to find any evidence of the existence of unemployment. You won’t find it. Why is that? Because long-term unemployment is a fixture of the modern world created by the interventionist state. “We” tried to cure it and “we” ended up doing the opposite. ~ Lew Rockwell

We live in a world where there are always many more things that need to be done than there is time to do them. I could hire 100 men today and keep them busy for a month just getting me caught up if I could afford them.

It has always been true that there were more things to be done that we have people and time to do them —  and it will always be so. This means that there will always be jobs. Unemployment is a problem of getting those who need things done together with those who would like to work.

The essential problem is affordability. The government makes it very expensive for a business to hire new workers. In fact, it is so expensive to have workers that business is letting people go and even looking to use robots instead of people. The problem is getting worse and will continue to do so long as there are barriers to deal-making between those who would hire and those who would like to work.

It is not lack of work. Rather it is the cost of getting the work done. So what makes the cost of hiring people so high? Government is the reason that cost is so high.

Lew Rockwell once listed a few of the reasons the cost of employment is so high. This list is far from being exhaustive:

The high minimum wage that knocks out the first several rungs from the bottom of the ladder;

The high payroll tax that robs employees and employers of resources;

The laws that threaten firms with lawsuits should the employee be fired;

The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;

The unemployment subsidy in the form of phony insurance that pays people not to work;

The high cost of business start-ups in the form of taxes and mandates;

The mandated benefits that employers are forced to cough up for every new employee under certain conditions;

The withholding tax that prevents employers and employees from making their own deals

The age restrictions that treat everyone under the age of 16 as useless;

The social security and income taxes that together devour nearly half of contract income;

The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.

 

The US could “be great again” if just these government interventions were eliminated. There would be employment for all who were able to work. Congress and the President could eliminate these barriers to employment easily.

Given a new laissez-faire approach; the hiring of new employees would be breath taking to behold. But some would object to this approach. What would be the objection to this approach? Many would say that we need “good paying jobs” and not just jobs. They would claim that being unemployed and dependent on government is much better to working for what you are worth.

There is no exploitation in a market-based labor contract. Humans would freely come to agreement based on their subjective view of the benefits of the proposed arrangement just as von Mises told us in “Human Action“.

Exploitation is violence or threat of violence implied in the negotiation of anything affecting the life worker or employer. So, everyone in our system is exploited by the government and the onerous regulations and laws that rob the unemployed of wages, businesses of opportunity to hire workers.

Everyone is robbed of opportunity. The government is the thief.

 

Advertisements

2 thoughts on “The government causes unemployment

  1. To be honest though, businesses would move to automation anyways because automation will laws be cheaper than human labor (unless its slave labor). Although I do agree with your point about long term employment being built into the system. That is a strange occurrence. Overall, I like reading you. Thank you for your words.

  2. Pingback: The government causes unemployment | Mississippi PEP

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s