Life, Liberty And Employment

August 9, 2010

As proclaimed by the United Nations, most countries on earth believe in the human rights of  life, liberty, and security.  The U.S. Declaration of Independence speaks instead about the rights to life, liberty and the pursuit of happiness.  It is agreed that people are endowed with inalienable rights to life and freedom from political oppression be that from foreign or domestic sources.  However, two differences emerge concerning the third fundamental right.

In one respect, the U.S. view is more broadly defined than the worldly one.  Security would seem to embody an important element of happiness but does not capture every ingredient.  One can feel secure, that is protected from physical or other types of harm, without attaining happiness.  The proper genetic predisposition, sense of community, health, and family circumstances are other significant prerequisites for happiness.  The second difference in the third identified basic right is that the U.N. doesn’t qualify the right to security.  The entitlement to security is as fundamental as those to life and freedom.  America’s founding fathers spoke only of the opportunity to secure happiness.  Attainment is up to the individual.  The state mustn’t prevent people from finding happiness, but it likewise is not obligated to deliver every precondition.

People wanting work but unable to find employment lack an important building block of both security and happiness.  Loss of work can lead to loss of shelter, a choice between food or health care, and the harassment and stress of not being able to pay other bills in a timely manner or at all.  For those with a financial cushion, a loss of paid work still damages the sense of self-worth and identity, both important factors for a society-wide sense of confidence.

The U.S. brand of capitalism, where businesses have fewer impediments to the pursuit of earnings and workers enjoy a more porous net of state-financed security benefits, has been an enormous success story, nonetheless.  For generations, America provided top-notch education at all levels and produced an enviably high and improving standard of living.  Recessions were unavoidable and experienced decade after decade, but periods of expansion more than made up for episodes of economic destruction.  In the past, spikes of unacceptably high unemployment were temporary.  Likewise, the duration of joblessness on an individual basis was manageably short-lived. 

In spite of such periodic recessions, U.S. employment rose 3.27% per annum in the 1940s, 2.22% per annum in the 1950s, 2.78% per annum in the 1960s, 2.44% per annum in the 1970s, and 1.84% per annum in both the 1980s and 1990s.  Over the first 11 years and 7 months of the present century, however, jobs slid 0.02% per annum, which is a dramatic deviation from anything experienced since the Great Depression.  Only the Civil War of the 1860s posed a greater threat to America as we know it than did the Great Depression.  Continuing U.S. job growth far below normal will subject the country to tremendous strain.

Top economists do not agree on what needs to be done now to reinvigorate America with the kind of vitality shown in previous generations.  Princeton Nobel Laureate Paul Krugman blames the current situation on a deficiency of aggregate demand, as well as decaying  infrastructure and neglectful law enforcement to preserve competition, all made possible because of anti-government voter sentiment.  Columbia Nobel Laureate Edmund Phelps rejects the notion of too little demand.  His prescription is better incentives to promote invention, applied technology breakthroughs, and other long-term capital spending.  I continue to be struck by the irony of a broken labor market in the midst of explosive productivity growth of 3.5% per annum in the three years between the first quarters of 2007 and 2010.  This juxtaposition can happen in short bursts, and in fact usually does because rapid productivity means much more is getting produced with fewer workers.  However, the co-existence of no net growth in jobs and a golden age of labor productivity is not supposed to happen and has thus far not been compellingly explained by my profession.

The Federal Government recognized that the American covenant would be jeopardized by sky-high unemployment if Washington assumed the attitude that there’s nothing politicians can or should do about getting people back to work.  Many of the initiatives were unhelpful, and some were worse than neutral.  But the important thing, and why America lived to fight another day, is that officials did not turn their back on every individual’s right to pursue happiness, a part of which meant the responsibility of political leadership to maintain a landscape in which an adequate share of the labor force can find a productive job.  Will the same challenge be met in this later era?  The verdict remains out.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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