How long could you the reader go without using Google, Amazon, Wi-Fi, or the supercomputer (a.k.a mobile phone) that sits in your pocket? Odds are most would be on edge rather quickly.
The late 1990s are fondly remembered as a boom period. Even so, a rather primitive version of Amazon was the only market good in wide use among the four mentioned. What’s apparent (at least in retrospect) is that when the 20th century neared its end, there were major shortages of the smartphone, Wi-Fi, Google and online shopping variety.
Market signals and post-collegiate wages have long transmitted the need for a new system.
Going back further in time to the late 80s when the economy similarly boomed, the Tandy 5000 desktop was released. Billed by its creators as “the most powerful computer ever!”, this $8,499 machine (monitor and mouse not included) wouldn’t come close in terms of performance to the $200 desktops of today, and that are available brand new at Best Buy.
Of course, the shortages mentioned didn’t register with us at the time. Memory is hazy, and then we tend to overrate the past as the present worship of manufacturing jobs reveals in living color. The beauty of entrepreneurs is that they mass produce for us what we didn’t know we needed, not to mention that they take what is obscure and expensive, only to make to make it common and cheap. Looking at computers through an even bigger timeframe, the original creations retailed for over $1 million. Talk about a shortage of a necessary market good. Who among us could function nowadays sans the computers that are ubiquitous?
What’s important is that market forces, while not tangible, are expert at routinely turning scarcity into abundance. That’s why high prices are so important. If the inventory of expensively priced goods is regularly being cleared by buyers, the latter is a precious market signal telling the innovative what they’ll be rewarded for mass producing.
Trump and Jobs
Which brings us to President Trump’s recent call for more muscular federal support of private-sector apprentice programs. The first obvious question is why? Assuming U.S. companies benefit from such programs, that they do brightly explains why there’s no need for the federal government to act in the first place. That the right have largely been quiet about what screams superfluous raises an obvious question about what the reaction would be from that same right if President Hillary Clinton had introduced something similar.
We don’t need yet another government program to convince more people to skip college.
If Clinton were in office and calling for what is wholly unnecessary, the right would be loudly criticizing cronyism from the White House, along with a progressive president usurping the role of the marketplace in dictating what companies and workers do and do not require in order to prosper.
Most crucially, the right would be talking about freely arrived at price signals, and how they efficiently communicate to the marketplace what’s in short supply, and what isn’t. The problem now is that a nominal Republican in Trump is in the White House, which means policy understanding among Republicans goes out the window in favor of partisan nonsense.
Indeed, in their support of what’s unnecessary, they’re claiming among other things that Trump’s apprentice program will shrink the inflow of individuals into expensive colleges and universities. According to certain members of the right newly convinced about the good of government to correct subpar individual decisions, “not every kid is cut out for traditional college, and those who struggle in high school may be better off learning a trade.”
Ok, there’s no debating the previous point, it’s great to see the influential belatedly come to the realization that college education is overrated, but then the previous truth speaks to why we don’t need yet another government program to convince more people to skip college. We don’t simply because market signals and post-collegiate wages have long transmitted just this information.
Technical Skill
The right are also cheering Trump given the belief among some that one “restraint on economic growth is the increasing U.S. labor shortage, especially for jobs that require technical skills.” Really? How can members of the commentariat, or economists who write for the public, presume to have a clue about what’s allegedly in short supply? Were these same self-proclaimed labor experts bemoaning the shortage of Google, Wi-Fi and smartphones in 1997, or low-priced supercomputers in 1987?
Surely the arrival of each unearthed massive labor shortages given how they profoundly transformed the way we work, but was there a crisis that necessitated a governmental response? Implicit in their conceit about what’s scarce in the workplace is that they have a clue about what the future job market will look like. But if they did they wouldn’t be earning their keep as commentators.
As for CEOs who bemoan an alleged technical-worker shortage, it’s not the job of the federal government to subsidize away their unease. Rather than ask for the government’s help, they should increase the salaries they’re offering in areas defined by scarcity. They’ll be surprised by how quickly individuals possessing the skills they’re looking for will come knocking.
Why on earth would the feds meddle in what the markets will solve in remunerative fashion?
Furthermore, federal responses to presumed shortages are unfair to the very workers they purport to help. We know this because in the real world of commerce, one way shortages are solved is that the prices of scarce goods (labor a market good like any other) rise to levels that exist as a lure for supply.
Translated, if technical workers are really in short supply, the individuals who offer up their services in the technical space, or who pursue technical knowledge, will be rewarded handsomely. Why on earth would the feds meddle in what the markets will solve in remunerative fashion?
Lastly, let’s not forget the evolution of computer pricing. In the free marketplace high prices are what beget lower prices mainly because if markets are functioning freely, entrepreneurs gain by virtue of crafting ways to profit from the shortage in ways that benefit us all. Along these lines, we’re more and more witnessing the mechanization (think robots) of what was once labor intensive. Assuming a technical shortage, here lies the opportunity.
Seemingly forgotten by a right wedded at least rhetorically to limited government is that there’s nothing about growth in the Constitution. The founders knew that free people would be free to prosper. Along these lines, the mere notion of a federal apprentice program smacks of massive government overreach, and worse, it’s unnecessary. If it makes financial sense for businesses to apprentice more workers, then they should do just that without the helping hand of President Trump.
This column originally appeared in Forbes
John Tamny
John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).
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