Why do people work? With millions upon millions lingering in unemployment with no relief in sight, the answer may seem obvious: We work for a paycheck. But if we were to send everybody in the country — or the world — a paycheck every two weeks prorating $100,000 a year — or $100 million a year, pick your figure — people would still need to work. In fact, they would still need to work exactly as much as they do now in order to maintain our current shared standard of living.
This is not to go all reductio ad absurdum on the Democrats’ arguments for ever-extended unemployment benefits and ever-more-generous welfare payments, but to illustrate something much more fundamental and physical. The point of work is not to collect a paycheck, but to produce something: food, shelter, custom automotive upholstery, orderly business offices, artisanal glassware. Every good thing in this world is the product of somebody’s work. Under the influence of naïve Keynesianism in the Robert Reich mode, our policymakers have fallen into the error of thinking about practically all economic action as playing out on the consumption side. Call it “leaky Keynesianism,” the osmotic transmission of consumption-side thinking to the production side of the equation. So leaky is the current fashionable Keynesianism that we now think about work in terms of consumption, those “good-paying jobs” that politicians are forever going on about, rather than in terms of production.