News flash: Ron Paul has nice things to say about government workers!
Rep. Ron Paul in an interview with CNN's Wolf Blitzer was reported in the Politico as: "Paul was pressed by Wolf Blitzer on how eliminating about 221,000 government jobs across five cabinet departments would boost the economy. He responded: 'They're not productive jobs,' he said." The implication is that the 221,000 were employed in activities that would not be demanded by the private sector. Eliminating these positions would enable the 221,000 workers to pursue activities demanded by the market which are by definition "productive". The question is whether this is the case. Undeniably, many government jobs are a creation of the government's desire to grow itself. However, to address the issue of whether these jobs as productive, I fall back on the venerable Adam Smith. On May 29, 2009, I wrote "What would Adam Smith do? http://haroldblack.blogspot.com/2009/05/what-would-adam-smith-do.html). Here Smith on the role of government says that the functions of the government were national defense, administration of justice, and the provision of public goods (transportation infrastructure and education). Although many of us would quibble over education, it strikes me that some of these should be the province of the federal government while others belong to the states. For example, the national defense is the federal government's responsibility rather than the states. To argue that those employed in all aspects of national defense from the private sector companies servicing the demands of the military, to those directly employed by the military are "nonproductive" is at best specious. Although the market does not provide this service, it is because of the difficulties of measuring and meeting individual demands in the market place. All within proximity would receive the same service regardless of demand. In that case, all individuals would allocate $0 for the service. Thus national defense is as much a public good as in transportation infrastructure. Although some may argue that this is the responsibility of the states, one must consider the building of the interstate highway system - a wonderful boon to commerce and to public convenience. It would have been difficult if not impossible for this to have been done by the states. However, other than these few items, the federal government should have few if any other responsibilities rendering those other employees nonproductive. Rather than nonproductive, these workers are counterproductive in that they suck capital out of the real economy and dramatically raise the costs of production. In that sense, Ron Paul was being kind when he called them "nonproductive".
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com