07 November 2011

Unemployment is a failure of imagination. But whose?

EconLog | Arnold Kling | Nice Sentence

From Ed Glaeser.
Unemployment represents a crisis of imagination, a failure to figure out how to make potential workers productive in the modern economy.
That might be a one-sentence articulation of PSST.
Good sentence, but I would make it better by modifying it to:
Unemployment represents a crisis of imagination, a failure to figure out how to make potential workers productive in the modern economy or a corresponding failure by workers to figure out how to make themselves productive for others.
For example, Joe "Master of Puppets" Therrien is not unemployed because employers have failed to imagine a way to make him productive.  He is unemployed because he has failed to imagine a way to produce something other people will voluntarily pay for.

Potential workers aren't just entities sitting idle that other people have an obligation to figure out what to do with. That's the impression I get from the original version. I don't think Glaeser or Kling actually intend that, but many (including Obama) often sound like they do.

PS If I was really going to edit the original, I would propose changing "crisis of imagination" to "crisis of problem solving." But that's a smaller matter.


  1. Excellent post.

    ...but we need to add that there are ways that he COULD be productive, and that he's even aware of, but he REFUSES to either (a) take a job at McDonalds, or (b) come up with a new idea for a catering service / educational tutoring / home decorating inspired by historical epochs / whatever.

    He'd rather bitch and moan than take some of the OBVIOUS steps.

  2. Fantastic post, just like TJIC said. However, I have one thing to add: big corporations and the ultra-wealthy cannot have their cake and eat it too. Right now, they're strongly pushing the idea that they are "Job Creators", and using that to excuse a lot of behavior which really shouldn't be excused. If they're going to use supposedly-being-job-creators as their banner, and they get significant support from the state because of it, then yes, they kind of DO have an obligation to imagine ways to make people productive.

  3. I think I'd need to know a little more about what behavior you see as being excused. If you're talking about rent-seeking, then yes, I agree. But if that's the case then I think by far the best solution is to not give them rents rather than to continue rewarding them and then expect them to soak up idle human resources in exchange.

    The other thing I would add is that just because a business owner does employ some people (ie has created some jobs) does not give them a responsibility to employ *more* people. If you've gone out and fed the hungry you're justified in bragging about that all you want. (Putting the propriety of bragging about your good works aside.) That doesn't mean you're to blame if other people remain hungry.

  4. @tjic, how about changing "crisis of imagination" to "crisis of decision making"? That covers failures of imagination, information, motivation, etc.