There is joy even in a Guardian editorial

Governments who tell their public sector workers to toil longer and for less money are first going to have to make sure the jobs exist.


People working longer for less is what creates those very jobs. For working longer for less is a synonym for charging less for that labour: and yes, econ 101 supply and demand really does work. Lower the price of something and unless it\’s a Giffen Good (most rare, so far only spotted in the wild as wheat noodles in Northern China and rice in Southern China) then demand for it will rise.

And no, this isn\’t some bone of contention between the various schools of economists. Everyone, Keynesian, classical, neo-classical, new classical, New Keynesian and no doubt the school of Tom Cobbleigh all agree: this is what happens. The disagreement is about how quickly this happens: and further, whether there is anything we can do to make it happen more quickly.

3 thoughts on “There is joy even in a Guardian editorial”

  1. Postan (I think) suggested this inversion of effect happened at times in the Middle Ages. If you were paying rent in, say, wheat but by value rather than weight, then the amount you needed to hand over fell as prices rose. People tended, if that was all they were worried about, to produce less under those circumstances, making prices rise higher, making matters worse. And vice versa if prices were falling.

    Why? Self-sufficiency rather than trade. Killer, every time.

  2. So why all this hand-wringing about “jobs” ?

    If not enough people have jobs, just hire people. Then they will have jobs.

    See how easy?

    And then, government can stop wringing its hands and get back to its preferred function–printing money.

  3. Alternately government should tell them that many of these public sector jobs don’t exist & never really did. Personally I would rather have most “planners” & “health & safety” staff toiling shorter hours, even at the same money. Every £ spent employing regulators means a £20 reduction in output by the regulated so here’s to some government waste.

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