Response 11

At the level of the state, the proposition of the Breton Woods systems articulated by John Ruggie -- that a wealthy state is one with full employment -- strikes me as eminently reasonable. In some ways, this initial reaction is the most important reason why, regardless of what further reflection and logical analysis argue, I will  be inclined to agree with Ruggie's proposition. Most of the class, if not all of it, seemed to agree with Ruggie's underlying argument that wealth is subjectively and socially constructed; therefore, if I construct a wealthy state as one with a full employment, then a wealthy state is one with full employment. I'm further inclined to believe this construction is widespread, and most people associate low unemployment with prosperity. Many large-scale poverty reduction programs, including Indiana's WorkOne program, are based exactly on the on the connection between unemployment and poverty -- reflecting a degree of political agreement on the construction.

At the level of the individual, I react far more skeptically to the idea that a wealthy person is an employed person. I can simply think of too many cases where this isn't the case and employed people aren't what I consider wealthy. No matter how hard I worked at my job, for example I was never able to exceed the Mainwaring Line representing wealth.The volunteers we spoke with today at Bread For The City mentioned the political rhetoric appealing to the "working poor," a rhetoric which is rarely challenged and directly contradicts the values expressed by Breton Woods.

Does this mean that our construction of wealth at the individual level fundamentally differs from our construction at the state level? Maybe, but not necessarily. Wealth may not be fundamentally constituted by employment, but in a large population there is nonetheless a strong correlation between the two. However, with small sample sizes the strength of the correlation decays (I'm not sure if I'm articulating the mathematical logic correctly, but the principle fundamentally works out; I'm drawing a blank on statistics right now) We can then tangentially discuss another question: if employment is only a proxy for wealth, is a monetary policy that pursues employment the best way to pursue wealth? My instinct is no, following the general logic expressed by Seamus McGregor in his most recent post that we shouldn't be maximizing labor input but rather productive capacity. But I'm not going to tackle this issue in detail; monetary policy is my weakest are in macroeconomics (although, to be fair, my high school econ class consisted mostly of watching The Apprentice and I'll leave it up to BoVice and MNadler to argue the finer points of full employment.