Arnold Kling has written a lot about how labor is very much like capital in the new economy. But he has forgotten to add that government policy also makes L look a lot more like K:
And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company’s vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.
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