|
C
HAPTER
9
Disbanding Troops and Bureaucrats
1
W
hen, after every great war, it is proposed to demobilize the
armed forces, there is always a great fear that there will not be
enough jobs for these forces and that in consequence they will be
unemployed. It is true that, when millions of men are suddenly
released, it may require time for private industry to reabsorb them—
though what has been chiefly remarkable in the past has been the
speed, rather than the slowness, with which this was accomplished.
The fears of unemployment arise because people look at only one side
of the process.
They see soldiers being turned loose on the labor market. Where
is the “purchasing power” going to come from to employ them? If
we assume that the public budget is being balanced, the answer is
simple. The government will cease to support the soldiers. But the
taxpayers will be allowed to retain the funds that were previously
taken from them in order to support the soldiers. And the taxpayers
will then have additional funds to buy additional goods. Civilian
demand, in other words, will be increased, and will give employment
to the added labor force represented by the soldiers.
If the soldiers have been supported by an unbalanced budget—that
is, by government borrowing and other forms of deficit financing—
51
EconOne_Prf2_Q5_to_client.qxd 3/3/2008 8:42 AM Page 51
the case is somewhat different. But that raises a different question: we
shall consider the effects of deficit financing in a later chapter. It is
enough to recognize that deficit financing is irrelevant to the point
that has just been made; for if we assume that there is any advantage
in a budget deficit, then precisely the same budget deficit could be
maintained as before by simply reducing taxes by the amount previ-
ously spent in supporting the wartime army.
But the demobilization will not leave us economically just where
we were before it started. The soldiers previously supported by civil-
ians will not become merely civilians supported by other civilians.
They will become self-supporting civilians. If we assume that the men
who would otherwise have been retained in the armed forces are no
longer needed for defense, then their retention would have been sheer
waste. They would have been unproductive. The taxpayers, in return
for supporting them, would have got nothing. But now the taxpayers
turn over this part of their funds to them as fellow civilians in return
for equivalent goods or services. Total national production, the wealth
of everybody, is higher.
2
The same reasoning applies to civilian government officials when-
ever they are retained in excessive numbers and do not perform serv-
ices for the community reasonably equivalent to the remuneration
they receive. Yet whenever any effort is made to cut down the num-
ber of unnecessary officeholders the cry is certain to be raised that
this action is “deflationary.” Would you remove the “purchasing
power” from these officials? Would you injure the landlords and
tradesmen who depend on that purchasing power? You are simply
cutting down “the national income” and helping to bring about or
intensify a depression.
Once again the fallacy comes from looking at the effects of this
action only on the dismissed officeholders themselves and on the par-
ticular tradesmen who depend upon them. Once again it is forgotten
that, if these bureaucrats are not retained in office, the taxpayers will
be permitted to keep the money that was formerly taken from them
52
Economics in One Lesson
EconOne_Prf2_Q5_to_client.qxd 3/3/2008 8:42 AM Page 52
for the support of the bureaucrats. Once again it is forgotten that the
taxpayers’ income and purchasing power go up by at least as much as
the income and purchasing power of the former officeholders go
down. If the particular shopkeepers who formerly got the business of
these bureaucrats lose trade, other shopkeepers elsewhere gain at least
as much. Washington is less prosperous, and can, perhaps, support
fewer stores; but other towns can support more.
Once again, however, the matter does not end there. The country
is not merely as well off without the superfluous officeholders as it
would have been had it retained them. It is much better off. For the
officeholders must now seek private jobs or set up private businesses.
And the added purchasing power of the taxpayers, as we noted in the
case of the soldiers, will encourage this. But the officeholders can take
private jobs only by supplying equivalent services to those who pro-
vide the jobs—or, rather, to the customers of the employers who pro-
vide the jobs. Instead of being parasites, they become productive men
and women.
I must insist again that in all this I am not talking of public office-
holders whose services are really needed. Necessary policemen, fire-
men, street cleaners, health officers, judges, legislators, and executives
perform productive services as important as those of anyone in pri-
vate industry. They make it possible for private industry to function in
an atmosphere of law, order, freedom, and peace. But their justifica-
tion consists in the utility of their services. It does not consist in the
“purchasing power” they possess by virtue of being on the public pay-
roll.
This “purchasing power” argument is, when one considers it seri-
ously, fantastic. It could just as well apply to a racketeer or a thief who
robs you. After he takes your money he has more purchasing power.
He supports with it bars, restaurants, nightclubs, tailors, perhaps auto-
mobile workers. But for every job his spending provides, your own
spending must provide one less, because you have that much less to
spend. Just so the taxpayers provide one less job for every job supplied
by the spending of officeholders. When your money is taken by a thief,
you get nothing in return. When your money is taken through taxes to
Disbanding Troops and Bureaucrats
53
EconOne_Prf2_Q5_to_client.qxd 3/3/2008 8:42 AM Page 53
support needless bureaucrats, precisely the same situation exists. We
are lucky, indeed, if the needless bureaucrats are mere easygoing
loafers. They are more likely today to be energetic reformers busily dis-
couraging and disrupting production.
When we can find no better argument for the retention of any
group of officeholders than that of retaining their purchasing power,
it is a sign that the time has come to get rid of them.
54
Economics in One Lesson
EconOne_Prf2_Q5_to_client.qxd 3/3/2008 8:42 AM Page 54
Do'stlaringiz bilan baham: |
