Archive for the ‘Private Industry’ Category

Fallacy of Massive Unemployment after a War

September 16, 2007

Fallacy: after a war, as many thousands of men and women are released into civilian life, there will be much unemployment.

It is true that when many thousands of soldiers are suddenly reintroduced into civilian life, it may take time for private industry to reabsorb them.

However, since the government will cease to support the soldiers, the taxpayers will be allowed to retain the funds that were previously taken from them in order to support the war.  Consequently, taxpayers will then have additional funds to buy additional goods, and this results in a greater number of jobs in private industry.

— Extracted from Economics in One Lesson by Henry Hazlitt