Stop pushing political panic buttons
Published June 23, 2022
By John Hood
Remember when rapid automation was going to render large swaths of the workforce unemployed? Politicians and other professional worrywarts warned that robots would displace production workers, that self-driving vehicles and drones would displace truckers and delivery personnel, and the algorithms and kiosks would displace service and managerial employees.
Radical responses such as universal basic income would be needed, they argued, to quell the chaos to be engendered by lasting unemployment.
Politicians argued this as recently as two years ago. Now, in 2022, we are in the midst of a massive labor shortage. Businesses are desperate for employees and will hire them at a premium — including for many of the same jobs, such as drivers and fast-food servers, previously forecast to disappear.
Yes, I realize that in theory there could be a short-term labor shortage followed by a longer-term labor surplus. In the real world, however, technological innovations (and free trade, for that matter) don’t produce net job destruction. They produce net job creation. As consumers save money or time by purchasing goods and services produced at lower cost, that frees up money and time for them to patronize new businesses that hire employees of their own.
I also recognize that some specific concerns about the labor market are warranted. One factor explaining the current worker shortage is pervasive drug addiction, for example. And in the long run, some jobs will eliminated, leaving their current or prospective occupants with the need to retrain, relocated, or rethink their futures.
What I don’t agree with is the hysterical way politicians often talk about these issues. They may believe such emotive performances are what the public wants, that using such language will signal how much they care about those who are suffering. Or politicians may believe that if they punch their fingers into enough panic buttons, solutions will materialize. In this, they are following Teddy Roosevelt’s leadership advice: “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
Another possibility is that at least some of these politicians are, in fact, hysterics. Roosevelt certainly was.
A subsequent Republican president, Calvin Coolidge, was his temperamental opposite — and offered much sounder advice: “If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.”
Policymakers can and should take practical steps to help today’s workers prepare for tomorrow’s economy. They can improve and extend job-retraining programs. They can restructure the unemployment-insurance system to encourage rapid reentry into the workforce (including the option of a one-time cash payout to cover the expense of moving to where new jobs are being created). They can reform tax and regulatory obstacles that keep entrepreneurs from founding or expanding new enterprises.
What they can’t do — what no one can or should attempt to do — is stop change from happening. If machinery can make things faster and cheaper than human hands, great! In the past, such innovations freed the vast majority of us from having to scratch our living out of the soil, as most human beings did for most of human history. Labor-saving methods and devices allow us to redirect our efforts to more productive pursuits.
One of the great products of modern engineering is, in fact, the panic button itself. A Boston inventor named Augustus Pope patented a battery-powered version in 1853. A businessman named Edwin Holmes bought Pope’s patent and began selling electric-alarm systems to homes and businesses. Later innovators developed a variety of military, industrial, and medical uses for panic buttons.
In some cases, these applications displaced the need for human beings to monitor critical areas or perform emergency tasks. The net result was, however, to make workers and consumers better off.
Not all problems are emergencies. Pretending otherwise is itself dangerous. On this, and on much more, Coolidge was wiser than Roosevelt.