>Jeffrey Levin wrote:
>
>> Rather than increasing direct employment, we
>> might see programs that provide subsidies to private companies or
non-profit
>> agencies to increase hiring there, which might deflect some criticism
about
>> government competing with the private sector.
>
>It might deflect criticism, but it would be based on misunderstanding.
Just
>such a program as you describe (interesting and informative post, btw,
Jeffrey),
>is put forward by none other than Edmund Phelps of Columbia. His book is
called
>REWARDING WORK, I believe. In fact, however, subsidies to the private
sector
>are much more "interventionist" or "interfering" with the private sector
than a
>government guaranteed jobs program need be. The State can choose to employ
>workers in many areas that do not compete with the private sector, and that
are
>also socially beneficial.
>
Just to clarify, I'm not advocating subsidies over public works programs, I'm suggesting that in the current climate public works programs are off the map (early in the Clinton administration it looked like maybe something might be forthcoming, but that was eons ago).
Subsidy programs may be more interventionist, but I don't think they are seen that way. Especially if they are provided in the form of tax credits and other indirect expenditures. Some of this already exists here and there, just not on a large scale.
BTW, public works programs compete with the private sector in two ways....in terms of their product (though you are correct to note that the State can employ people in areas that don't compete with the private sector), and in terms of demand for labor power. Government efforts to directly boost employment levels would tend to boost wages. The advantage (from a capitalist standpoint) of subsidies and credits is that they reduce the cost of labor power for the firms that receive such subsidies.