Channeling FDR: The Moral Case Against Unemployment

Photo: jimcintosh

My last weekend in D.C. provided a final chance to enjoy my favorite haunts. And so I found myself walking amongst the memorialized giants of U.S. history: Washington, Lincoln, and now, Martin Luther King. On I walked, through the FDR Memorial, where I stumbled across the chiseled message below. Sure, I had seen it before. But I had forgotten how beautiful it is. And with the President about to announce his new jobs package, and Congress set to (hopefully!) debate these measures, it seems well worth sharing my serendipitous moment with Franklin Delano Roosevelt.  A reminder, if you like, of why we care.

If my photo isn’t entirely clear, let me reproduce the full quote:

No country, however rich, can afford the waste of its human resources.  Demoralization caused by vast unemployment is our greatest extravagance.  Morally, it is the greatest menace to our social order.

I’m sure FDR would acknowledge the usual economic case against unemployment—billions of dollars of lost output and rising fiscal pressure. And certainly, we hear this a lot in Washington. But I find FDR so persuasive because he advocates an explicitly moral argument, reminding us of the corrosive and demoralizing effects of unemployment.

This speech continues beyond the parts that were memorialized, and it is just as important:

I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return.

Wise words, worth bearing in mind when the policy debate heats up.

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  1. Will Williams says:

    The words do not distinguish between short term and long term unemployment. Not do they acknowledge that high unemployment in particular regions might be best addressed by relocating to where there is more work.

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    • Joe D says:

      How many people would love to relocate, but can’t sell their home? My wife has colleagues who *have* relocated and are paying two mortgages (and two insurance premiums, and two sets of property taxes, only one of which is eligible for a homestead exemption!), one in FL and one in IA. As professionals, they can afford it (barely); what about the licensed plumber or electrician, who used to have lots of work, bought a home, and now can’t get out of it to find a new job?

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      • Enter your name says:

        This problem is easily solved: we should discourage more people from buying homes. Renters have no such trouble relocating.

        My proposed first step in reducing the number people buying homes is to require a larger downpayment (people in their 20s and even 30s will need to rent while saving up) and to significantly limit the mortgage-interest deduction, so that people will eventually remember that mortgages are for paying off, not for refinancing endlessly to support their lifestyles. The “security” goal of owning a home is not met if you don’t have it paid off when you retire.

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      • Joe Eagar says:

        I have to admit, Adam Smith’s chapter on the dangers of property ownership concentration makes me wary to embrace a renter’s culture (this is one case where the Wealth of Nations can be used to support a government program, heh).

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  2. A. Wilson says:

    I agree with AaronS. The hiding of comments is highly annoying. If the comment is offensive just remove it. Otherwise, let the discourse flourish!

    FREAKONOMICS–STOP HIDING COMMENTS BECAUSE OF A LOW RATING. I READ SEVERAL TODAY THAT WERE QUITE THOUGHTFUL, BUT HAD BEEN HIDDEN. INSTEAD, JUST SHOW THEIR “SCORE.” PLEASE…AND THANK YOU.

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  3. Joe Eagar says:

    This is all well and good, but what about the poor Chinese worker whose savings is ultimately tied in dollar assets? Reducing unemployment by increasing consumption (and the trade deficit) would transfer wealth from dirt-poor poor Asian workers to coddled, wealthy Americans. That isn’t right.

    What we need is less consumption coupled with structural reform. I know, I know, democracies don’t do structural reform. But is it really right for us to steal the bread of hard-working Asian workers abroad to avoid politically-difficult hard choices at home?

    This is what annoys me about the debate here in America (and in most developed nations, now that I think about it). Yes, cranking up consumption can solve all ills–but someone has to pay for it, and it just isn’t sustainable.

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