One of the things we want in an economy is flexibilty. For things are always changing and the faster we can adapt to these changed circumstances the less unemployment we will have. Thus the richer we shall be.
For example, the Austrian view of recessions is that they are a period of recalculation: we\’ve worked out that what we were doing isn\’t actually what everyone wanted us to be doing (say, too much investment in houses, or cars) but we haven\’t yet worked out what it is that everyone does want. So while we\’re scratching our heads thinking about it, some people are unemployed: just as other economic assets are going unused.
My own view, for what little it\’s worth, is that this is certainly a part of every recession: although I\’m not convinced that it\’s all of any of them.
However, we do seem to be making things worse for ourselves:
However, the Daily Telegraph has learnt that no more than \”a few hundred\” are ready to start work this week, and barely a quarter of the 30,000 will be able to start work next week.
The Royal Mail is forced to ensure the workers are fully vetted before they are allowed to handle any mail. The rigorous checks follow a series of thefts at sorting offices during 2002 and 2003, when the Royal Mail was fined £11.4 million for failing to check workers\’ backgrounds thoroughly enough.
This mania with CRB checks has simply added yet another inefficiency to the economy. Maybe it\’s worth it and maybe it isn\’t: but I\’m 100% sure that no one even considered this cost in their eagerness to insist that everyone should have such a check.