A recent article by Jared Bernstein and Dean Baker made it into the Washington Post, and was subsequently posted to the Web site of their organization, the Center for Economic and Policy Research. The article, “Full Employment: The Recovery’s Missing Ingredient,” argued that failure to reach full employment had caused the recovery from “The Great Recession” to stagnate.
As brilliant and insightful as these men are, I believe the following needs to be addressed in addition to their policy recommendations. Adam Smith said it best:
“The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards.”
Smith was of course relating his observations related to the conduct of business for the wealth of nations, an archaic, nationalist ideology. The fact that Republicans champion policies favorable to those who have reduced the US economy to its current state—yet claim to be true patriots—is among the most galling hypocrisies imaginable.
Much has been said of Smith’s laissez-faire position, and nearly all of it takes his position out of context. He, unlike the framers of the US Constitution, had few illusions about the noblesse oblige of those with great wealth, and was very critical of their ill considered policies toward labor. He believed however that wealthy owners would see the light, and opposed government support for and collusion with the corporations of his time, not labor policy. The fact is that government simply did not have a policy related to labor—with the exception of those that supported corporations in suppression of labor’s ability to organize for its benefit, or getting labor under control when it rioted.
To overcome this, we need something more than the recommendations in the article. If we are ever to turn things around, I’m convinced that all legislation that impedes labor’s ability to oppose management excess needs to be repealed, and the legislation that addresses management usurpation of labor’s right to negotiate be strongly enforced.