Policy Options

“If the marginal urgency of goods is low, then so is the urgency of employing the last man or the last million men in the labor force. … Such a step requires that there be a substitute for production as a source of income — and that it be ample.  But this accords wholly with the logic of the situation. … If we do not miss what these non-producers do not make when they are employed, we will not miss what they eat and wear and otherwise need for something approximating their accustomed standard of living.”

John Kenneth Galbraith, The Affluent Society, Houghton Mifflin Company, 3rd edition, 1976, pp. 259-260. First published in 1958.


Domestically, we have to devise ways to constructively absorb the U.S. share of the world’s growing population of idled workers — working age people who do not have opportunities to fully participate in the labor force.  Our federal and state governments will have to devise new policies and programs that institutionalize entitlements to income for segments of the population engaged in defined non-work activities (such as life style oriented educational activities, community service work, work skills development sabbaticals, extended family leave, career transition leaves, etc.).

To fund an expansion of public sector jobs and income entitlements, taxpayers will have to support extensive changes to federal and state tax systems so they capture a larger share of the new wealth produced each year in the U.S. by expanding economic activity and productivity gains.

We also have to put an end to the wasteful and unproductive economic competition among states and localities and equalize access to the benefits of citizenship across jurisdictions.  We have to build a stronger national civic and political community (but, one that is not jingoistic) and a stronger federal government that is empowered to create and implement a national economic development strategy that coordinates state and local economic and social development efforts.

In the international arena, we have to reduce our vulnerability to adverse global trends and events.  We must pursue two avenues of effort to accomplish this goal.

First, the federal government must devise policies that will limit outflows of capital from the U.S. to businesses and production facilities outside the U.S. and to limit imports.  This will not be easily done because the U.S. is legally constrained by participation in dozens of bilateral and multilateral trade agreements and membership in numerous transnational organizations like the IMF and the G-8.  For this reason, a second avenue of effort is required.

The U.S. will not succeed at reducing its vulnerability to adverse global trends by trying to go it alone.  The federal government must engage with the global community of nations to quickly reduce adverse global economic trends for all nations by making the rules of law that govern economic activity global.  This requires building global governing institutions with more power to set and enforce parameters on the investment, trade, labor, and political practices of the world’s corporations and nations.

Not Many Jobs without Government

Today, with the roles of machines,  computers, and fossil fuel energy in producing goods and services increasing rapidly and with the roles of working men and women declining, the private sector can’t possibly meet the challenge of producing jobs fast enough to meet demand.

In the 1950s and 1960s the U.S. had large employment generating government funded programs like the TVA, the Interstate highway system, expansive weapons production programs, the space program, and funding for health care services through Medicare and Medicaid.

Government spending also diverted large numbers of workers from the labor force through increasing spending on K-12 and higher education, a growing  federal welfare system, and federal employment training programs

It is doubtful the private sector could have generated sufficient jobs to employ all available workers during those decades.   Government spending played a decisive role in creating jobs and diverting potential workers from the labor force for varying periods of time.

Government Must Carry the Burden

Like it or not, government must carry the burden for creating jobs and funding alternatives to work so that we can continue to equitably distribute the enormous wealth the private sector can now produce with fewer and fewer workers.

Assigning this burden to government is not only a practical necessity, it seems essentially in keeping with the Preamble to the U.S. Constitution.

Strong Government Jobs Programs Better for the Private Sector

It may seem ironic, but assigning the burden for job growth to government would help ensure the future of the U.S. private sector.  By lifting the ideological burden on U.S. businesses for producing jobs for every U.S. worker, U.S. businesses would have more freedom to invest even more heavily in labor saving technologies, thus increasing their competitive advantages in the world economy.

Ending State Centric Economic Policy Development

Support for a strong federal role in maintaining a low unemployment rate through the strategy of diverting potential workers away from the private sector labor pool has been declining for at least two decades.  In place of that strategy we now have a de facto assignment of responsibility for employment to the states and to the workers themselves and their families.

State governments have neither the constitutional authority nor the standing in the global system of nation-states to effectively generate employment growth and fund alternatives to employment.  Only the federal government has the authority and the geopolitical power to meet the employment challenges in the U.S.