Monday, September 9, 2013


Johnny Cash sings a song in which he says “St. Peter don’t you call me, ‘cause I can’t go, I owe my soul to the company store.”  This thought now dominates popular thinking .  But why is it that jobs depend on capitalists any more than returns to capital depend on labor?  Did you ever try to build something with only dollar bills?  Confusion on this point leads to local governments subsidizing companies to locate in their jurisdictions to the extent that taxpayers give back much of their wages in taxes. And then they bitch about taxes.
It leads to Congressional representatives objecting to reduced military spending and base closing because it reduces local employment.  But the money would be spent for other goods providing equal employment.  Instead of subsidizing military production, we should help employers and employees by sharing the costs of transition.  Contrary to much economic thinking, reallocation of labor and capital is not costless and if it is not shared, political action freezes assets in old lines of production.

No comments: