This is a classic that I had forgotten.
Reprised in the WSJ in response to Obama’s blaming ATMs for taking jobs from gum-chewing tellers:
The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia.
Thousands of workers using shovels were building a canal.
Friedman was puzzled.
Why weren’t there any excavators or any mechanized earth-moving equipment?
A government official explained that using shovels created more jobs.
Friedman’s response: “Then why not use spoons instead of shovels?”
Now, I guess the President will be looking for spoon-ready public works projects …
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The Homa Files 
June 24, 2011 at 3:23 pm |
I think that economists sometimes forget that there are real limits to the mobility of labor. The WSJ article presents the good side (the technological improvements) but avoids discussing the bad side (the adjustments that need to take place and under what conditions they take place), which is what provides incentives to the politician. The investor wants more profits because he doesn’t have to deal with the political consequences of unemployment after he has laid off those people who made his labor more inefficient.
July 26, 2011 at 8:19 am |
[…] should explain this Milton Friedman quip to the reporters at UNC-TV. (Hint: jobs are a cost not a benefit.) The story goes that Milton […]