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Wednesday, 10 November 2010
It's not work that creates wealth. It's wealth that creates work.
In buoyant economic times near-full employment comes about as a consequence of people flush with cash going out and spending it: someone has to make the jet-ski that they buy or the resort hotel in which they book a room. And recessions are created by people hunkering down, sensibly hanging on to their money now that that rainy day has come, and thereby throwing the other people who would have been servicing their needs out of work.
Now, apart from buying lunch and a couple of commuter tickets, people actually at work are not spending a lot of the money that their work is earning for them. The company for whom they are working may be spending as a result of their activities, but the amount available for the company to spend is comparatively low. The total assets of the people who work for a company usually far exceed the assets of the company itself.
Almost all the money those people spend is spent during their free time.
Yet we have the idea that hard work and long hours are what makes for a strong economy. Nothing could be further from the truth. Hard work and short hours are what makes for a strong economy. People with more leisure time spend more money on that leisure. Further, as they are working fewer hours, there is more employment available to supply the goods and services that they are now buying.
As a consequence of all this I offer a five-word election manifesto to any political party that simultaneously wants to get elected and to improve its nation's economy. It has such instant appeal to the electorate that it would guarantee an election win, regardless of how dismal the party's previous poll ratings were.
It is this: Add Friday to the Weekend.