What, then, can be done about chronically unemployable people? What can businesses do? My answer would not be a new social compact, but a determination to remember the old one more precisely and live up to it more intelligently.
The old compact had always assumed that companies would self-interestedly support certain government actions to enforce the rules of the competitive game. Government would police property rights, establish the courts to punish criminals and settle judicial disputes, build roads and bridges, defend borders. Read “The Wealth of Nations.” The mutual obli-gations of companies and governments were specified from the start, and haven’t really changed. Though Adam Smith opposed anything like labor unions, one could find a rationale for most New Deal regulations, even collective bargaining, in what Smith had to say about government’s obligation to protect competition from the dangers of private monopolies.
But in one crucial respect, the old compact clearly needs an amendment, the part that has to do with education. The old compact assumed that government would educate children to be qualified for work, and that businesses would go along willingly. But to be qualified for a factory job, all that was necessary was bare literacy.
But none of this means businesses can themselves become responsible for education. Our companies invest more and more in training, but we cannot make our employees trainable. Businesses are more like specialized graduate schools than elementary schools; we need people to present themselves for work ready to learn and practice our marketing, design and production strategies, ready to learn our high technologies and quality systems. We cannot teach the basics.