Following government discussion of whether or not investment in infrastructure will or will not improve the economy and boost job growth seems like a no-brainer for the STS crowd (i.e., as a rich topic for discussion); however, to the best of my knowledge, this is relatively rare to find in the pages of our journals (even if the insights we could glean may very well have helped such dire governmental circumstances).
Eduardo Porter, writer for the New York Times “Economic Scene” section, recently wrote a piece on infrastructure. The piece, “Confronting Old Problem May Require a New Deal,” provides readers with the predictable ‘public’ perspective on the relationship between employment and infrastructural development painting the all-too-familiar picture that more of the former requires more (investment) in the latter. This is hardly new. During times of economic strife, low investment in (even crumbling infrastructure) further diminishes job growth on a grand scale (which we’ve discussed with regard to Germany, the US, and the austerity-infrastructure relationship).
Porter takes us on a tour of political and economic history, showing readers that this relationship may not be so clear-cut. For example, Keynes predicted — thanks to technological efficiencies, improvements in management, and so on — a persistent level of unemployment is inevitable. A solution is investment in infrastructure, and such discussion, Porter reports, go a ways back:
In “Freedom From Fear,” his history of the United States through the Great Depression and World War II, David Kennedy notes that fears that what Keynes called “technological unemployment” might become a permanent feature of the labor market, especially among the less skilled and the elderly, date back to the administration of President Herbert Hoover.
The inability or complete failure of the American government to produce enough consensus regarding new programming as aggressive as those of FDR’s era has lead to concerns and fear that we are on a path toward permanent employment stagnation.
However, at this moment in history, it may not be possible, even if the political will did exist, to invest in enough infrastructure to get us out of this mess. In the 1970s, a failed job stimulus plan (similar to Obama’s failed plan) showed Americans that, and we’ll go to a Harvard specialist for this:
“It works best if you hire people that would not otherwise be hired, to do something productive that is not already being done by somebody else,” said Lawrence Katz of Harvard, formerly chief labor economist in the Clinton administration.
Katz goes on:
“Long overdue infrastructure investments would be a good place to start, coupled with funding for positions cleaning parks and the like, which could help disadvantaged workers like the long-term unemployed.”
And then Porter intercedes:
Not every unemployed worker may be qualified to build infrastructure. But many might. Today, there are 1.5 million fewer jobs in construction than there were before the financial crisis six years ago. Plenty of unemployed workers out there know how to build things.
Only, we don’t need house-builders, we need re-construction, de-construction, and renovation. Perhaps that is not so unlikely to be fulfilled; after all, the cost of borrowing money is low and the amounts of money needed for such massive projects is available, but it simply will not — no matter how many libertarians tell me so — be done if not by the government. My intuition is that large firms in the US that use such infrastructure with regularity would only step-in after it all far too late … we are getting closer by the day, after all. The last serious investment in nation-scale infrastructure might very will be during the Great Depression.