Social Justice and Fair Taxes

Social Justice and Fair Taxes

Does spending create prosperity?

by RUSS ROBERTS on SEPTEMBER 13, 2010

in STIMULUS,UNCATEGORIZED

Does spending create prosperity? It’s a weird idea when you think about it. Spending is consumption. Consumption uses stuff up. How could it create prosperity? If anything, the causation is reversed–it is prosperity that creates spending.

The Keynesian logic, though, is pretty appealing. In times when there is high unemployment, spending should create demand. Any kind of spending. So if consumers don’t want to spend, then government can stimulate the economy. And demand should create jobs, shouldn’t it, no matter where the demand comes from, right? And then the whole thing juices the system through what is usually called “circular flow” or what is also known as the Keynesian multiplier. The newly hired workers now have more money to spend. Their spending creates more demand which in turn creates more employment. And soon, the economy is humming again.

The standard argument against this story is that the money the government spends has to come from somewhere. (I’ve put forward a version of this argument myself, here.) But the real way to think about is that the resources have to come from somewhere. And when resources are highly underused (unemployment around 10%, say), this argument is not as compelling as it might be in prosperous times.

But even within the Keynesian framework and even in times of high unemployment, the aggregate demand argument is still problematic–businesses in the real world when facing an increase in demand for their products might simply decide to produce more by working current workers harder or by raising their prices instead of increasing production. Both are sensible and viable when unemployment is 10% and you and your workers are worried about the future. Employers are hesitant about hiring new workers in those conditions. Workers are eager to work a little harder rather than looking for a less demanding alternative.

But I think the better argument against the Keynesian position is more holistic. When the economy is broken, why would you think an increase in spending would get it going? Why would it have any impact other than an immediate short-term impact limited to the people who receive the money? Why would it get the whole economy going again?

Think of having a lot of wet wood and trying to get it going by lighting newspaper as kindling. There’s a fire for a while, while the newspaper is burning. But once the newspaper is consumed, the wood hasn’t caught. Even burning a lot more newspaper (bigger stimulus package) isn’t going to get the wood dry enough to catch fire.

And so we are left with an empirical question. Is the Keynesian narrative with all its modern mathematical underpinning anything more than just a story? Is it true that government spending of a dollar creates more than a dollar of economic activity? Or is it a flash that dies down and if anything, creates more pessimism about the future.

Economists from either side of the ideological aisle come up with very different answers to that question. What they do to answer that question is use various econometric techniques to tease out the independent effect of government spending holding everything else constant. The resulting estimates are all over the map.

So it is natural to look to natural experiments. The Keynesians have one. World War II. As I have argued before, there is no reason to think that government military spending did anything more than stimulate the military sector. It did not create a boom in private consumption. Keynesians point to rising GDP and low unemployment. But if the government drafted every man, women and child to make rope and tie giant knots that the government purchased and then buried using more conscripted labor, unemployment would be zero, GDP would be large if the government set high prices for knots, and we’d all starve to death. That’s not prosperity. It’s the opposite of prosperity.

As Robert Higgs has pointed out, forcing people to serve in the military and growth as measured by GDP (that includes all those tanks and bombs and military salaries) tells you nothing about prosperity. You have to look at what people were able to consume. And what was left over after the tank and gun and bomb production wasn’t very much. Times were lousy for the economy unless you were in the military sector.

But there’s another natural experiment that has been tried with trillions of dollars.

Foreign aid.

The Western world has sent trillions of dollars to poor countries. Unlike domestic stimulus, this kind is insulated from the criticism that the resources have to come from somewhere. In the case of foreign aid, the resources come from outside the system. So this should be the ideal test of Keynesian stimulus. Most of the recipients of foreign aid have high unemployment rates. So there’s plenty of extra resources lying around waiting to be put into action.

Think of all the dams and bridges and roads and other forms of infrastructure that have been funded by international aid money.

But has foreign aid spending created prosperity in those countries? Usually not. Or maybe never. The money gets spent and then it’s over. The multiplier never materializes. And that’s because these economies are broken. They have lousy government. They have corrupt practices. They have stagnant labor markets. So the influx of money doesn’t create prosperity. It simply creates rent-seeking for the politically favored.

People will argue forever whether the Obama stimulus package was a waste of money, saved the economy from an even bigger downturn, or delayed the natural rebound of the economy. There is no evidence that it saved the economy from a bigger downturn. It could be true, but there is no evidence. The evidence that we do have on massive injections of money into broken economies is that they have little effect on the economy as a whole. They benefit the people who receive the money but do not repair what is broken.

Free Tibet? Why not Free Trade? Free Trade Benefits EVERYONE.

Now Where Did That Dollar Go? Same Place You Went!

My daughter's latest video.

If He Talk's Like He's Smart and Walk's Like He's Smart, It DOESN'T Mean He is Smart

American Thinker: Obama Buyer's Remorse

Just Where Does the Administration Get Its Cost Estimates?

by James C. Capretta

The latest numbers from the Medicare actuary puncture the health care spin

Yesterday, the chief actuary for Medicare released a memorandum providing cost estimates for the final health legislation passed by Congress and signed by the president.

Amazingly, the HHS Secretary tried to suggest that the memo confirms that the legislation will produce the favorable results that the legislation’s backers have touted for months.

That’s nothing but spin. In truth, the memo is another devastating indictment of the bill. It contradicts several key assertions by made by the bill’s proponents, including the president.

For starters, the actuary says that the legislation will increase health care costs, not reduce them — by about $300 billion over a decade. Yes, that’s over a very large base of spending (more than $35 trillion). But the president and his team have talked incessantly of painlessly cutting $700 billion or more of wasteful spending. Nothing in the bill comes close to making that happen. Overall health spending will continue to rise very rapidly after the bill is implemented.

The actuary also says that the financial incentives in the bill will lead many employers to stop offering coverage altogether. That means about 14 million people with job-based insurance today will lose it. Moreover, he estimates that the cuts in Medicare Advantage will reduce enrollment by 7 million people. So much for keeping the Democrats’ other mantra of “keeping the coverage you have today.”

The memo says the Medicare cuts will total nearly $600 billion through 2019, and that they will almost certainly jeopardize access to care for seniors by driving scores of institutions into financial distress.

Employers will pay taxes totaling $87 billion over a decade for not offering qualified coverage, and individuals who don’t sign up with approved insurance will pay another $33 billion in fines over the same period.

The various taxes and fees on insurers and producers of drugs and devices will largely get passed on to consumers, says the memo. In other words, these taxes will hit the middle class hard and drive their premiums up, not down.

The actuary says the new long-term care insurance program created in the bill faces “a significant risk of failure” due to adverse selection — meaning that the program will attract the kind of enrollment that will require higher costs than can be covered by the premiums collected. That, however, did not stop the Democrats from double-counting the program’s $70 billion in premiums as an offset for the massive health entitlement program. So not only did the bill use a budget gimmick to hide the costs of the health expansion, it also set taxpayers up for another bailout when the long-term care program runs aground.

By longstanding practice, the administration uses the health care cost estimates produced by the chief actuary when putting together the president’s annual budget submission in February and an update in mid-summer.

But the estimates that the actuary has produced for the health bill so clearly contradict what the president has said the bill will do that the administration is in an awkward position, to say the least. So awkward in fact that the administration has stamped every memo put out by the actuary during the entire health debate with this disclaimer: “The statements, estimates, and other information provided in this memorandum are those of the Office of the Actuary and do not represent an official position of the Department of Health and Human Services or the Administration.”

Which raises the question: If the actuary isn’t producing the administration’s health care cost projections, who is?

Just How "Progressive" are the Progressives?

Threats to Individual Autonomy: ObamaCare, Salt and Sugar

April 22, 2010

by Mario Rizzo 
I love-hate the word “progressive.” Its political uses derive from the so-called Progressive Era and the less-than-socialist reforms that were enacted during that early twentieth-century period. 
Today, of course, few people who use the term think about its historical origins. They think it is simply a word that means “advanced,” “better,” – well, “progressive.” 
For a long time in the nineteenth-century, “progress” meant the gradual liberation of human beings from the control of the state. For some thinkers, like Herbert Spencer, it was tied to a particular view of evolution. For others, like Benjamin Constant, it was based on certain historical changes that involved increasing complexity of life spurred on the process of “globalization.” Increasing division of labor, specialization and trade were critical in this view. Others, like Sir Henry Maine, emphasized the legal changes: from status (serf/nobility) to contract – each of us now decides how to relate to others in commerce. 
Constant reminded us that the “liberty of the ancients” was a collective liberty. The citizens of Athens could do whatever they liked. The “liberty of the moderns” is an individual liberty. The individual is sovereign. It is a liberty against the state. 
Now this progress has become reversed. The new “progress” is back to the “liberty” of the collective. We are the state. We are in the process, in many areas of political life, of merging ourselves with the state – of conceiving of ourselves, not as individuals, but as part of a collective that somehow commands itself. The master appears to be us, but it is not: It is “them” disguised as “us.” It is the paternalists, the special interest seekers, the crony capitalists, politicians seeking glory, and the ignorant. 
As government becomes more and more involved with healthcare, the expenses associated with it become increasingly socialized. Taxpayers now have a stake in the health of everyone. My irresponsibility is no longer my problem alone; now it becomes your problem too.
What of individual autonomy?  We can see the handwriting on the wall. All sorts of clever proposals to turn us into wards of the state are coming forward. There are proposals to tax sugar in soft drinks In New York and other “progressive” states, and now the Federal Drug Administration (FDA) is planning to “slowly” reduce the salt content of food.  
I am not arguing for people to increase their consumption of sugar or salt or even not to reduce it. I am simply saying that if we wish to be individuals and not automatons, we need to make our own decisions about health and much else. There are few decisions more personal or more intimate than deciding what to eat. 
But when we look to the state to pay for our healthcare we unleash social and political processes that have a life of their own. Step by step we give up the control of the decisions that makes us human. We become playthings of state. This is not progressive. It is reactionary. 
Where are the civil libertarians in all of this?

George Carlin - The Planet is Fine, Beware of Save The Planet Nuts

An Economics Lecture No Student Will Ever Hear

An Economics Lecture No Student Will Ever Hear

The More We Spend The More We Make!

The free free lunch

The Hidden Compliance Costs Of the Income tax

ObamaCare: When the Dominoes Start to Topple The End Will Not Be Pretty

American Thinker: ObamaCare's Economic Dominoes

North Korea WIns The Lights Out Low Carbon Footprint Award

North Korea's Dear Leader – like his father before him – works tirelessly to keep his nation’s carbon footprint to a bare minimum; in fact, if you look carefully you can see what is likely his, and only his, office light glimmering in Pyongyang.

North Koreans show their reverence for mother nature not with a mere Earth Hour but, rather, with an entire “Earth Lifetime.”  That’s true commitment! 
(From a letter by Donald J. Boudreaux to World Wildlife Fund President Carter Roberts)

Blackout: While South Korea is a blaze of light, 

there's barely a glimmer in North Korea

Disasters Do Not Create Wealth

Surprise! Castro Praises ObamaCare! Just like CastroCare he says.

Castro Calls Passage of Obama's Health Care Plan "A Miracle" | The Foundry: Conservative Policy News.

Viva Le France! Peering Into Our Healthcare Future?

Peering Into Our Future?

by DON BOUDREAUX on MARCH 22, 2010

in HEALTH, REALITY IS NOT OPTIONAL

Mathieu Bédard, who often comments here at the Cafe, sent the following e-mail to his American friends. I post it, and the accompanying photographs, here with Mathieu’s gracious permission.

……

Dear American friends,

I really hate to rub it in, but a man forewarned is a man forearmed.

As some of you know, I’ve been living in France for almost 7 years now. I am pretty much blessed with a good condition, so I never had to deal much with the French healthcare system until my son, Arthur, was born in May 2009.

During holidays Arthur had to be hospitalized for a few weeks when he caught the H1N1 flu on top of his already severe bronchiolitis. He’s alright now, but his stay at the hospital was hard on him. Attached are some pictures of his room in the pediatric service of Hopital Nord, Marseille, that I thought I’d share so you get a good idea of what “world class universal healthcare coverage” looks like.

On this first picture you can witness the comfort of world class state provided healthcare. Now, my son is obviously too young to use the bathroom, but this room was in the pediatric service, where kids up to 14 years old actually resided while trying to recover. Notice the seatless toilet (great for kids!), the mold in the corner, the paint job… all a kid needs to ‘get well soon’ at a “world class” level.

A hole in the wall through which live wires come out. In a pediatric bathroom. Really.

It was wintertime and the window was stuck open, but don’t worry, THEY TAPED IT SHUT.

The great economist Thomas Sowell stressed a lot lately that healthcare probably isn’t what influences a population’s general health level most, and that standards of living and other factors usually brought about best by the free market probably weighed in a lot more. I’d go a step further, and say that even when on individual cases healthcare is what’s going to make a difference, some level of material comfort is still necessary, like, say, WINDOWS THAT CLOSE DURING WINTERTIME.

Truth is your healthcare system won’t become this “world class” overnight, and your system’s complexity might very well provide better (or worse) results than our system’s complexity, but it’s good to keep in mind what the things to come might be like.

Hoping this mail doesn’t turn out to be prophetic,

Mathieu Bédard

Throw The Bandaids in The Harbor

Morning Bell: Repeal | The Foundry: Conservative Policy News.

One Page Health Care Plan

As an alternative to the massive 2700+ page ObamaCare Socialization Bill now winding its way through the bowels of Congress, here is a one page bill that would actually make changes to encourage competition, reduce costs and improve service. 

Of course, this makes no sense if your real objective is to have the Federal Govt control 1/6 of the US economy and increase their control of an individual's life and behavior. 

1. Congress will amend the McCarran-Ferguson Act to allow interstate competition in health insurance. This will eliminate the anti-trust exemption for insurance and create competition among the nearly 1300 insurance firms for consumer's business in all 50 states. 

2. State regulation of insurance companies should reside in the state of the insurance company's home office. This will encourage insurance companies to incorporate in the state(s) with the least regulations allowing them to provide more responsive, market based products and services. 

3. Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

4. Congress will enact tort reform to limit damages in medical malpractice suits to actual damages. This will reduce the amount of redundant medical tests and procedures done by doctors in order to have evidence they "did everything possible" in case of a malpractice suit. 

5. Congress will equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. This will encourage and permit many more people to purchase personal insurance policies which will then not be tied to their employer and will be portable from job to job. 

6. Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).  HSAs should have no maximum, accumulate/roll over year to year and become an asset that can become part of an individual's estate. This will encourage consumers to shop wisely for medical services and reward them by letting them keep any unused HSA money from year to year and become part of their estate. 

7. Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

8. Either create a Govt web site or encourage private firms - like Edmunds for cars - to show consumers the comparable cost and coverage of various Health Ins firms policies.  Make costs transparent so that consumers understand what health-care treatments cost.

9. Revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

10. Provide Federal Funds to States specifically to increase the size of "high risk pools" for individuals with pre-existing conditions. 

11. Reduce regulations on insurance companies.They should be not be regulated more than any other firm or industry. Eliminate the almost utility-like stranglehold of regulations on the healthcare industry which increases costs, and decreases efficiency and market responsiveness. 

Be Afraid, Be Very Afraid

http://www.usdebtclock.org/#

Government Entitlements Kill True Charity

Obama and Charity

"Green Jobs" Come at a Price --- Destroying Other Jobs and Inefficiency

Green jobs have been the foundation to any of President Obama’s jobs speeches. “Building a robust clean energy sector is how we will create the jobs of the future,” he said in a speech last month. We’ve long argued that subsidizing jobs comes at the expense of others and will result in net job losses. Sunil Sharan, director of the Smart Grid Initiative at GE from 2008 to 2009, details in the Washington Post how smart metering will create jobs but destroy many more in the process:

It typically takes a team of two certified electricians half an hour to replace the old, spinning meter. In one day, two people can install about 15 new meters, or about 5,000 in a year. Were a million smart meters to be installed in a year, 400 installation jobs would be created. It follows that the planned U.S. deployment of 20 million smart meters over five years, or 4 million per year, should create 1,600 installation jobs. Unless more meters are added to the annual deployment schedule, this workforce of 1,600 should cover installation needs for the next five years.

Although a surge of new digital meters will be produced, the manufacturing process is highly automated. And with much of it accomplished overseas, net creation in domestic manufacturing jobs is expected to be only in the hundreds. In R&D and IT services, high-paying white-collar jobs are on the horizon, but as with manufacturing, the number of jobs created is forecast to be in the hundreds or low thousands. Now let’s consider job losses. It takes one worker today roughly 15 minutes to read a single meter. So in a day, a meter reader can scan about 30 meters, or about 700 meters a month. Meters are typically read once a month, making it the base period to calculate meter-reading jobs. Reading a million meters every month engages about 1,400 personnel. In five years, 20 million manually read meters are expected to disappear, taking with them some 28,000 meter-reading jobs.”

Job destruction through efficiency improvements isn’t a bad thing, but it is when the government forces it upon us. If new smart metering technologies are economically sensible, the private sector will introduce these technologies to the market. Just as the government shouldn’t attempt to create jobs, it shouldn’t protect jobs from being destroyed, either. Sharan writes, “[I]nstead of creating jobs, smart metering will probably result in net job destruction. This should not be surprising because the main method of making the electrical grid “smart” is by automating its functions. Automation by definition obviates the need for people.” We replaced ditch diggers with mechanized agriculture equipment with the end result being a net gain in productivity and wealth. The process of creative destruction allocates capital and labor to better use, increases gains from productivity and makes us all better off. Using stimulus money for smart metering is unnecessary if it such a good idea.
The other way the government can destroy jobs through a clean energy initiative is to mandate and subsidize labor intensive, inefficient, and expensive power sources. If it takes more labor and capital to produce renewable energy, there is a net drain on the economy. Government spending will create some jobs to build windmills and solar panels and work at biomass plants but this diverts labor, capital and materials from the private sector that could be used more efficiently to create even more jobs
An Institute for Energy Research-commissioned study from King Juan Carlos University in Madrid by Gabriel Calzada found that, for every green job created, 2.2 jobs in other sectors have been destroyed. Furthermore, Spain’s government spent $758,471 to create each green job and used $36 billion in taxpayer money to invest in wind, solar, and mini-hydro from 2000-2008. The country’s unemployment rate is currently at 19.4%.
Losing jobs through increases in efficiency and productivity is a sign of progress. Losing jobs through government mandates and subsidies is a sign of Congress.

Posted February 26th, 2010 at 1:48pm in Energy and Environment 2

To Govern Little is to Govern Best

Instead of doing a few things well, government has mutated into a smothering cancer that does everything it can think of ---- badly. It's not that there is not enough money for police or firefighters or 911 service or garbage collection, it's that too much money is being spent on CRAP that the government has no business or legal authority to do.

From Cafe Hayek:


There’s a debate going on in the punditsphere about whether America is ungovernable. We can’t seem to get anything done. On one side people argue that the failure of health care legislation and cap and trade prove that America is ungovernable. On the other side are those who argue that those are unpopular and America is as governable and ungovernable as ever.
I think it’s the wrong debate. Thomas Friedman in the New York Times unintentionally illustrates why:

A small news item from Tracy, Calif., caught my eye last week. Local station CBS 13 reported: “Tracy residents will now have to pay every time they call 911 for a medical emergency. But there are a couple of options. Residents can pay a $48 voluntary fee for the year, which allows them to call 911 as many times as necessary. Or there’s the option of not signing up for the annual fee. Instead they will be charged $300 if they make a call for help.”
Welcome to the lean years.
Yes, sir, we’ve just had our 70 fat years in America, thanks to the Greatest Generation and the bounty of freedom and prosperity they built for us. And in these past 70 years, leadership — whether of the country, a university, a company, a state, a charity, or a township — has largely been about giving things away, building things from scratch, lowering taxes or making grants.
But now it feels as if we are entering a new era, “where the great task of government and of leadership is going to be about taking things away from people,” said the Johns Hopkins University foreign policy expert Michael Mandelbaum.
Indeed, to lead now is to trim, to fire or to downsize services, programs or personnel. We’ve gone from the age of government handouts to the age of citizen givebacks, from the age of companions fly free to the age of paying for each bag.

The lean years? The lean years!?!?!?!!?
Government has never been fatter.
The crisis of government in America is that it does too many things badly instead of doing a few things well.
We don’t need more money for government. We need government to do what citizens struggle to do for themselves. We can debate what that range of activities is. I am on the side that government has taken on too many tasks that we can do as well or better for ourselves. When government takes on too many tasks, it is hard to find money to do the core activities of government well.
The ungovernability aspect of this problem is that it is hard to take away things from people and thrive politically. If you think 911 is an important activity of government, it is easy to keep it free. Get rid of all the nonsense government does that doesn’t need doing. Go back to the “lean” years of 1995, say, when California and the Federal government spent a lot less. Those weren’t the dark ages. But along the way, a bunch of money got added to a bunch of deparments and for some reason, instead of saying that was a mistake or unnecessary or best done privately, we start charging for 911.
That is a sign of ungovernability and it comes from ignoring the proper role of government.
Stop subsidizing housing. It’s bad enough that the Feds do it. But there is a vigorous California effort on top of the Federal effort. Stop subsidizing food and rich farmers. Stop policing trans fats. And smoking in restaurants. Stop trying to steer education from the top down. Stop creating programs for retirement and health that give money to rich people. Stop subsidizing rail travel. Stop all corporate welfare. Stop all tariffs and quotas. Get rid of the nanny state.
The mission creep of government makes it obvious that governmen is poorly run. Get out of the things it does poorly and do important things well.
How do we get there from here?
Read. Listen. Educate yourself. Teach your children. Talk to your neighbors. Vote as wisely as you can.

The Effect of Universal Health Coverage on Life Expectancy is.....Zero!

Medicare was introduced 1965 in the US. Public health coverage for the elderly existed by 1950 in Sweden, but full universal coverage dates to 1955 in Sweden (a public health insurance was founded in 1891, and public municipal public health existed for even longer).

In 1950, before Medicare, and before Universal coverage in Sweden the difference was +2.6 at birth and +0.3 at 65. In 2001-2005 the difference between the Sweden and US was +2.7 at birth and +0.3 years at 65. Identical!

First, regarding the life expectancy at birth we can note that 50 years of different health policy, labor mark policy, welfare state coverage seems to have had zero effect on total outcome.

The Left Thinks They're Right, But They're Wrong

The Left believes they are superior. They are smarter. They know what to do with your life and you don't. They believe there is no right or wrong. The individual must be sacrificed for the greater good of the State. The ends justify (their) means. Man is perfectible -- just look at them.

They are wrong and they are diametrically opposed to Conservatism which believes in the individual.

American Thinker: The Left's Great Motivator

Anthem Premium Increases - A Small Taste of What ObamaCare Would Produce

Contrary to the cries from the Obama administration, the recently announced premium increases by Anthem in California are not evidence for the need to pass ObamaCare, either the House or Senate version. It is in fact evidence of what will happen on a larger scale and nationwide if it is passed.

A Taste of Health Care Reform | The Foundry: Conservative Policy News.

UK Leftist Think Tank: Work Less, Save the Planet? I don't think so.

The New Economics Foundation claimed in a report the reduction in hours would help to ease unemployment and overwork. The foundation admitted people would earn less, but said they would have more time to carry out "worthy tasks". Why am I not surprised that a Leftist Think Tank thinks it knows of more "worthy tasks" for people to do --- rather than work?

Here’s an open letter to the study’s co-author, Anne Coote, who is quoted in the BBC report:

Ms Anna Coote
New Economics Foundation
London, UK
Dear Ms Coote:
The BBC reports on a newly released study in which you and your co-authors endorse a 21-hour workweek (“Cut working week to 21 hours, urges think tank,” Feb. 13).  You’re quoted by the BBC: “So many of us live to work, work to earn, and earn to consume, and our consumption habits are squandering the earth’s natural resources…. [With a 21-hour workweek] We could even become better employees – less stressed, more in control, happier in our jobs and more productive.”
Intrigued, I read your study on line.  I’ve many questions; here are four.
First, if a shorter workweek makes people more productive in their paid jobs, how do you know that they won’t the “squander the earth’s natural resources” at a faster pace than they’re doing now?
Second, even if a 21-hour work week results in less “squandering of the earth’s natural resources” while at paid jobs, why are you so sure that the total amount of resource “squandering” won’t rise as a result of all the “unpaid labour” that you are so keen that folks do with their time away from paid work?  Driving Granny on Friday to a holiday in the Cotswolds might “squander” more resources than staying in London to work for pay that day.
Third, because much paid work is devoted to discovering new resources, new supplies of resources, and new ways to get more output from each unit of resource, how do you know that shortening the workweek won’t result inlower supplies of the earth’s natural resources?  For example, BP’s recent discovery of a huge oil supply at its Tiber Prospect in the Gulf of Mexicoincreased the relevant supplies of the earth’s natural resources.  After all, resources that remain unknown to humans are effectively non-existent: these ‘resources’ might not be “squandered,” but being unavailable for use as resources today and forever means that, economically, they don’t exist – they’re not resources in any meaningful sense.
Fourth, you choose 21 hours because it’s close to the average amount of time each week that working-age Brits (employed and unemployed) work for pay.  So what?  If I work 42 hours a week and my unemployed neighbor works zero hours, why does the average of 21 hours of paid work between us present itself as the ideal length of the workweek – especially given your goal of reducing the total number of hours that people spend “squandering the earth’s natural resources” while working for pay?  Why not, say, a ten-hour workweek?  Because you merely presume that most people will be happier with Britain’s workweek shortened from 35 to 21 hours, why not presume that they’d be downright euphoric by being allowed to work no more than ten hours weekly?
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030