Anyone who has spent much time around small children probably recognizes that they are fundamentally Keynesians at heart–or if they aren’t full-on Keynesians, it’s pretty clear that they reject Bastiat, or haven’t yet read him. I’ve noticed that my kids do all they can to encourage full employment within the household: every day brings new adventures in stepping on things with sharp corners, in mysterious puddles of questionable content and origin, or on misplaced foodstuffs. They also seem to enjoy giving further expression to their apparently Keynesian worldview by building (and knocking over) towers made of blocks. This keeps Mrs. Carden and me fully employed, and there’s no doubt that our additional spending on paper towels, cleaning supplies, and electricity to run the dustbuster and vacuum cleaner stimulates the larger macroeconomy.
Sometimes, we need to get our little gales of creative destruction out of the house and to the zoo, a nearby playground, or to the Children’s Museum of Memphis, aka CMOM, which is one of our favorite places in town. On a recent trip to CMOM, I saw a new installation that holds the key to fixing high unemployment. As part of their “Going Places” exhibit, the museum has rigged up a set of conveyor belts that are supposed to simulate the system by which packages are moved around at a FedEx facility. Basically, you put one of the packages on a conveyor belt, you turn a wheel that conveys the package up to an automatic conveyor belt in the belly of the (partial) FedEx plane they have as part of the exhibit, and then the automatic conveyor belt conveys the packages to a slide where they reappear near where the whole process starts. You expend a lot of effort to move a box that ends up where it started, and while nothing is really accomplished, the kids get to learn a few lessons about motion, cause and effect, etc. They find it very entertaining.
The museum also has an earthquake simulator that we have played with a time or two. Basically, you build a structure out of blocks and then press a button to start an “earthquake.” Some structures make it through the earthquake unharmed. Some structures don’t, and the rebuilding process begins.
This got me thinking about how we could solve our unemployment problem. We should install adult-sized versions of these and pay people to turn the wheels that move the belts that carry the boxes from point A (essentially) back to point A. We should also pay people to build structures out of blocks that will then be knocked down when we press the button that turns on the earthquake simulator. Would anything be produced as a result? No. But that’s not the point. If the point of economic activity is to provide employment, then the increased expenditures and increased employment from such a scheme are just what the economy needs to get back on track.
Of course, I may be wrong:
And it’s also true that our friends at EconStories.TV might have something to say about it, as well.
Obligatory Disclosure: I received (and expect) no valuable consideration for mentioning CMOM in this post.
{ 23 comments }
Great posting, Art. Don’t forget the shovel-ready projects in the backyard sandbox, at least until the ground freezes–endless possibilities of creative destruction.
Love it. Hoppe did also mention children have high time preferences. so not only do kids provide an endless source of employment as you have shown, but their tantrums stimulate aggregate demand. Its amazing how childishly simple Keynes’ theories are.
Thank you, thank you, thank you. I will be teaching an intro econ course next spring at a community college and intend to teach “Economics in One Lesson” on the first day. I was wanting a video to explain the Broken Window Fallacy and now I’ve found one. Did I thank you yet? Thanks again.
@EconAndre: great point. There are also a lot of shovel-ready projects in the flower beds, as well!
@Michael: well put.
@Tom: Thank you for your kind words. LearnLiberty.org, a project of the Institute for Humane Studies, has a ton of short videos on basic economic principles. Disclosure: I have received valuable consideration from IHS for a variety of different projects.
Art, why do you keep doing the disclosure? Nobody here is going to accuse you of being “on the take” by recommending Economics in One Lesson or by referencing Bastiat. Also, a fine post! As an expecting father, I look forward to full employment … and less sleep and free time.
These are all good ideas for getting full employment, but I can one up it. I was thinking we could choose a major metropolitan area in the country at random, evacuate everybody inside, and just carpet bomb it into dust. Then we’d get extra employment from the demand to rebuild the city AND from the demand to replace the bombs we dropped, without having to wait around for events like earthquakes to improve our standard of living.
When Krugman suggests this, you heard it here first, folks.
Your idea is just a twist on the broken window fallacy. It has also been suggested to build a vast fleet of ships and then promptly sink them. Then rebuild them again.
Didn’t we actually do that in WW2?
Yeah, I’ve heard Robert Higgs make that argument on a past LvMI podcast. Wish I could remember which it was. It’s a very good argument for why destruction doesn’t cause prosperity.
I’m being facetious when I suggest destroying our own stuff of course, but given that Keynesians typically hold (A) a general indifference to property rights and (B) a complete lack of accounting for the unseen, I’m genuinely worried that their logic takes us there.
Actually, if the city to be carpet bombed was Washington, DC it absolutely would help the economy. And we wouldn’t even have to waste time rebuilding it!
Ha! That sounds like what is happening in the city of Christchurch in New Zealand. You see, those guys had a series of earthquakes that levelled the city. Now they have the opportunity to rebuild. New Zealanders will be the wealthies of the world! Better off than other OECD nations! That is, once they actually get around to starting the rebuilding work (a year has passed so far and they have barely begun- the entire central city is a no-go zone).
Meanwhile the govt hasn’t got enough cash to pay out all those it said it would pay out should a regional disaster like the Christchurch earthquakes occur. They already spent up large and now borrow around 250-mill each week. That’s just to stay afloat.
Then there are insufficent tradesmen and engineers and skilled people to rebuild the city. That’s ’cause New Zealand has been operated as a Keynesian collectivist paradise for so long that the “Kiwi” diaspora numbers in the multiple hundreds of thousands (from of a population of a mere 4-million). Pretty much all the productive ones have departed. Those productive that stay do so for family reasons, lifestyle choice (probably mistakenly), a sense of chauvenistic nationality and parochial pride, advanced age, fear of foreign climes, lack of resource to move, ingrained habit, ignorance, cultcha….
But if Bastiat were to be wrong, then the NZers soon be rich indeed!
Ha!
Sione
Wait until they start playing sports. You’ll be an economic stimulus all by yourself!! In fact, isn’t that the point of baseball, to hit the ball out of the park. Think of all the baseball manufacturers who have gainful employment.
On another unrelated note, where is Jeff Tucker? He’s been absent here for a while, and his presence very much missed. Hope he’s not ill or anything.
I was wondering exactly the same thing – where’s Tucker? And on the subject … where is Skip Olivia!? What with all the NBA Lockout and such, is he too busy?
He has taken a position over at whiskey and gunpowder (www.whiskeyandgunpowder.com)
His latest
The government can never have enough money. And taking it from the private sector just hampers job creation, while the state throws the money at decidedly unproductive activities like blowing up foreigners. In today’s feature article, Jeffrey Tucker explains further.
Whiskey & Gunpowder
by Jeffrey Tucker
November 17, 2011
Auburn, Alabama, U.S.
The Self-Expropriation of the Patriotic Millionaires
Well I’m fourteen years old, going to a government school, and have been reading Austrian economics since the age of twelve.
Cool beans. Keep on keepin’ on!
Nonsense…This is a false analogy. Families do not at large print and manage their own internal currency systems. Your children are not hired to work for those currencies and neither are you. There are no markets in your families. You are feeding the notion that the authorities are like our parents and that they know better. You are assuming that parents do not make arbitrary rules based on what they want. You are assuming that your children’s actions are rational economic movements in a system of exchange currencies. By your analogy, citizens (children) keep the government (parents) at full employment due to their utter incompetency. Your children should not be employed at anything other than learning and certainly should not be serving a function out side of their own self sufficiency (not employed at a profit by another person or to reduce the workload for the parents).
Our unemployment problem is solved by disallowing ultra rich people through a progressive tax structure and by creating vast incentives to generate high median incomes. Employment will be at its maximum when the average/median wage is at its maximum. This does not happen by eliminating taxes for ultra rich people and it does not happen through supply side economics since that favors the ultra rich. As long as you look to rich people for permission to work, you will be stuck at their feet. They will do as much as possible to keep you in that position since the spice of life for them is to have the masses at their feet in order to maintain their delusional notions of superiority.
Bongstar420, read this please: http://mises.org/daily/5807/Economic-Law-vs-Occupy-Wall-Street
Stupid Occupy hippy.
Are you assuming people are well informed and logical? I do not see that. Not in any particular group anywhere. I find the suits to be just as faulty as any long hair though both groups serve my agenda ironically.
It’s funny, that article you linked is pretty predictable in its format and content. I not very familiar with the working ideologies of the people who operate this site, but I was able to gather enough from a couple essays to derive the likely position that would predominate on this website.
You would not have that “Stupid Occupy Hippy” comment if there wasn’t a reason for them to be what they are- losers who didn’t get a golden parachute because they weren’t in the in crowd when an entirely predictable thing happened. Fact is some people have more than anyone has ever had while everyone else is experiencing reduced outcomes to expectation. The current state of affairs is predictable, and what will be done is predictable. You can think what you like and call me what ever derogatory term you like, but reality is what it is- objective.
I disagree with all the people in that link. Things being what they are allows for me to work my magic. I’m just here to drop a few rabble rousing lines and be on my way.
You won’t be missed.
“Smash the evil capitalist system and replace it with …um……, er…..we’re not quite sure what…., but, like, whatever man, it’s just gotta be stopped, y’know “
Haha. Your mention of museums tangentially reminded me of this absurdity, today housed in the Science museum in London:
http://www.sciencemuseum.org.uk/images/I034/10303579.aspx
This picture is Phillips’s (literally hydraulic) machine which purports to model the macroeconomy. I recall seeing it during a visit to the museum in about 2008 , and fell about laughing at the mere existence of the thing.
I agree with you, but please look at yonex badminton rackets.
Comments on this entry are closed.