But give the American worker a giant mechanical shovel and, at the world's highest wage, he will produce the world's cheapest coal. With advanced technology, workers will produce the lowest-cost coal, wheat, jet aircraft and countless other goods. And so, we import lace and ball gloves and petroleum, and we export jet planes and wheat and chemicals. To attempt to retaliate against lower costs in certain foreign industries is an exercise in folly. Moreover, contrary to popular belief, imports don't cause unemployment, nor do immigration or automation.
Unemployment exists only when money wages are arbitrarily raised or held above the market price.
The Great Depression is the classic case of iatrogenic unemployment, i.e., induced by the economic doctor. For example, when the stock market crashed in 1929, it precipitated a deflation and concomitant lowering of all prices. The result was that twenty-five to thirty percent of the work force was unemployed . Unemployment soon disappeared and industry expanded. Unfortunately, a false lesson was learned that war is the health of the economy.