Economic Ignorance Accelerates

Just when you thought economic ignorance couldn’t sink any lower, a letter in the Washington Post criticizes Mitt Romney for repairing a brick walkway at his house rather than hiring a contractor — and thus “cheating people out of jobs.”


Uh‐​oh. I just made myself a sandwich, thus cheating a deli employee out of a job. I drive myself to work instead of using a chauffeur, thus putting chauffeurs out of work. I do my own laundry — well, this could go on all day.


Of course, the writer’s argument isn’t really any different from the usual complaints about trade, outsourcing, and shutting down unprofitable businesses. Everyone seeks to produce as much output for as little expenditure as possible. That’s why we trade with each other, so as to improve our standard of living. Lord Keynes himself, encountering a stack of towels in a men’s room, is said to have “swept the whole pile of towels on the floor and crumpled them up, explaining that his way of using towels did more to stimulate employment among restaurant workers.” I would like to have seen the look of gratitude on the face of the restaurant worker who saw Lord Keynes creating jobs.


Economic progress happens when people find more efficient ways of doing things. Sometimes that means “outsourcing” a task, whether it’s a business’s payroll function or taking your laundry to a service. Sometimes it means “insourcing,” as when word processors made it easier for writers and executives to do their own typing, or the price of shipping rises and a company finds it cheaper to manufacture in an American plant rather than in China, or when a homeowner decides he could repair his own walkway for less than the cost of hiring a contractor. And as long as we allow markets to function, billions of people will make tens of billions of decisions every day that will push toward the optimal use of resources to satisfy as many human wants as possible.