Friday, November 4, 2011

The Economic Problem that Society Faces

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. (Friedrich Hayek's "The Use of Knowledge in Society")
Dr. Roberts discusses how the particulars of time and place are foundational to the division of labor and specialization that will be produced by an individual at any time.  The quote above from Hayek, with an earnest eloquence that only Hayek could of produced, provides a succinct and cogent description of the perennial economic problem that society faces and the accompanying solution – decentralization and freedom.  Individuals, when provided the freedom to innovate will generally work to solve their own problems.  At our last SWEET meeting, there was an emotive and specious discussion about how to ‘plan’ a better Alaska; how to stop allowing non-Alaskan workers from coming in and “stealing” jobs from Alaskans. 
Let us assay this topic in light of this week’s readings.  Did Dr. Roberts advocate intervention when the specifics of his island parable changed for the “worse” for one of the couples?  No, the situation changed and given time, the inhabitants of the island would adapt, without the heavy hand of a governmental authority to intervene.  One can jeremiad the change, but we must recognize that with change, innovation, or policy changes there will be people who will be made comparatively worse off and those that will become comparatively better off.  We should not look to an authority to foist upon us some “solution” but to the alacrity, innovation and creation of the individual.   “Alaskans” may resent that a person from the Outside comes to Alaska to work and then leaves, but isn’t this just trade?  An individual sells his or her labor on the open market; the skills and needs of a particular job at a particular time and place will be filled to a qualified worker who is willing to accept the wage rate offered.  Does holding an Alaskan driver’s license make a person qualified outright for employment? Probably not.   An employer will find a qualified individual that they can obtain at the lowest cost, this means that sometimes jobs will go to Alaskan’s, sometimes they will go to migrant workers, and sometimes they will go to an out of state worker. 
What role if any should the state hold in labor market in light of recent reading?  Is it the role of government to assure a living for every man and woman over 16?

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