From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: Clinton on Economics (transcript of speech)
Date: Wed, 19 Aug 92 13:41:27 EDT
Organization: IFS Project, University of Michigan
Reply-To: jwh@citi.umich.edu

In article <1992Aug19.150321.29646@usenet.ins.cwru.edu>, au329@cleveland.Freenet.Edu (Ronda Hauben) writes:
|> 
|> "Growth" is a false category. So is "investment" . These false
|> categories have led us into the economic mess that the U.S. is currently
|> in.
|> 
|> Growth can mean more yachts or golden staircases are being produced
|> by backward hand labor - and the whole society falls apart as the 
|> wealthy are catered to.
|> 

In your example, who builds the yachts and the golden staircases?
The wealthy may be catered to but workers are employed to do the
catering.  In your example wealth is being exchanged, the worker
exchanges labor for 'money' and the wealthy exchange money for
some other good.  Society hardly falls apart in this scenario.

|> 
|> What is needed is that more of the wealth of the society go to more
|> of the people of the society.
|> 
|> And there is a need for more *WEALTH* for the society, not *growth*
|> for the wealthy at the expense ofthe society.

I don't disagree.

|> 
|> This requires figuring out where such walth comes from. It does 
|> *not* come from *investment* but from *labor* and *nature*, as
|> Sir William Petty, the Father of Scientific Economics, pointed out in
|> the 17th Century. He explained that Labor is the Father and Nature the 
|> Mother of*WEALTH* and that Labor is the active element and Nature the 
|> passive.

This, however, I do disagree with.  Labor and nature can only go
so far.  A farmer may be able to work very hard on fertile ground
and still not be able to produce enough food to provide for all
his needs (food and otherwise).  Making an investment in tools,
such as a tractor, suddenly enables him to make much more productive
use of his time and produce far more than he was previously capable
of.  This is the power of investment.  This is why capital formation
is the key to economic growth.  The key to increasing *wealth*
for all society.

|> 
|> That means labor legislation at the very minimum which shortens the
|> hours of work and vigorously enforces health and safety regulations,

How you can think that arbitrarily reducing the number of hours worked
and imposing extra costs on production can lead to increased wealth
is beyond me.  If hours are reduced because of new production techniques
which enable a worker to produce more than they used to then I
would agree with you.  This is what happened during the industrial
revolution and after.  Work weeks were able to be shortened because
of increased productivity.  Productivity did not increase because
of shorter work weeks.

|> the rights of workers to ORGANIZE into LABOR UNIONS OFTHEIR CHOICE
|> (which means getting rid of mandatory membership and dues collection -
|> i.e. returnign to the right of a union to represent workers in a shop if
|> they have a majority vote, but workers keep the right to voluntary join
|> or pay dues to that union.)

I have no problem with workers joining any organization they wish.  I
only object to special legal treatment granted to labor organizations.

|> Only an economic policy of government which enforces high standards in
|> how employers treat their workers can begin to change the economic
|> crisis in the U.S.

Only an economic policy which rewards capital formation can change
the economic crisis in the U.S.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         
Newsgroups: sci.econ