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... t everyone will be making what they are actually worth. Full employment only means that everyone will be working. Just because some people work in a sweat shop does not mean they are paid for the quality of their work.
The government should not push to end unemployment of have the fetish for full employment; this would really just create a hard working poor person because they would not get paid that much. "The economic goal of an nation, as of any individual, is to get the greatest results with the least effort" (Hazlitt p 71). If a business had to employ more then they need, they would have to cut wages to make sure everyone received payment. Many institutions have fully employment, but that does not mean that it is in the best interest of their employees. Prison chain gangs have full employment just as slaves have full employment. The truth is that the employees under this status probably have a better chance for making more money not being employed then working. The point Hazlitt made on tariffs seemed a little weak.
He said that labor productivity is reduced as a result of a tariff and American wages also reduce because of the tariff. It seems if he was trying to say there is no need for a tariff because it causes more harm in the long-run. "It is true that the tariff hurts all consumers as such. It is not true that it benefits all producers as such. On the contrary, as we have just seen, it helps the protected producer at the expense of all the other American producers, and particularly of those who have a comparatively large potential export market" (Hazlitt p 81). How does that tariff hurt more than it protects?
It would seem that the tariff would do more to protect the American goods than hurt it. A tariff does protect the goods, but it would probably have a better effect of Americans made something that is better than another country that would cause them to protect that good. His point on sending more exports out is pliable. "It is exports that pay for imports, and vice versa. The greater exports we have, the greater imports we must have, if we ever expect to get paid. The smaller imports we have, the smaller exports we can have. Without imports we can have not exports" (Hazlitt p 85).
There is not one control that wants to trade with another country if one country is trying to give out their goods without accepting the other goods. To make money in this field, money has to be spent and vice versa. Hazlitt also said that it is not always good to give these goods away with foreign loans because it will just be giving hand outs to other countries and would cause the loaner to lose money. In the long-run as Hazlitt always refers to, it is better to stay consistent with imports and exports and to really do away with the tariff because it actually hurts a country more than protects it. Hazlitt made a few good points when he wrote about the credit system. He said that there are two types of loans: the one that is made to enable farmers to hold his crop off the market, and the other is a loan to provide to set the farmer up in business by giving him the ability to buy the whole farm, or tractor, or any other tools.
It would seem that the loan that would hold the crops off the market is just a loan to a poor farmer who is just trying to get by on what he has and is not really focused on making a profit. The other loan is seems to be made for the farmer who is farming as a business and is in need to get his business off the ground and running. The way this second loan is extended by the government is a problem because they usually give the second loan to people with bad credit or no credit. Then the farmer runs into trouble trying to keep up with the payments and finds he can not meet the payment deadlines. Yet the government still gives out these loans. Sometimes the government does not look at the other person who might have a better chance in keeping up with the loan that provides capital.
This is also true with other loans as well. It's hard to understand why the government will give a loan to someone who is already struggling to make ends meet. Giving out these loans only allows that person (s) to go farther in debt. It just doesn't make any sense. Hazlitt made some very good points in his book Economics in one lesson, but he also made some points that were not as clear, and not as strong. The broken glass itself is not a blessing, but because it helps the economy overall, that can be a blessing.
Hazlitt made a good point explaining this in great detail. He also thoroughly explained how war does increase production but only to the point where everything goes back to normal. Jobs do open up for people as long as there is war, but as soon as it is over the economy usually goes right back to where it started before the war. Hazlitt also made a good point about employment and how full employment does not exactly make the situation better for that person because there are many institutions that have full employment and there are no benefits for the employer. In dealing with credit system, Hazlitt pointed out how a person that is having trouble economically seems to have a better chance to get yet another loan that will most likely not get paid back, as opposed to a person that can pay it back immediately does not usually receive one at first glance. Overall Hazlitt did a great job, especially emphasizing on the long-run economics as the best way to handle things and not the short, quick, and temporary way of handling business.
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