From Human Action — surrounding passage

Institutional unemployment emerges. Firmly committed to the principles of interventionism, governments try to check this undesired result of their interference by resorting to those measures which are nowadays called full-employment policy: unemployment doles, arbitration of labor disputes, public works by means of lavish public spending, inflation, and credit expansion. All these remedies are worse than the evil they are designed to remove.

“Assistance granted to the unemployed does not dispose of unemployment. It makes it easier for the unemployed to remain idle.”

The nearer the allowance comes to the height at which the unhampered market would have fixed the wage rate, the less incentive it offers to the beneficiary to look for a new job. It is a means of making unemployment last rather than of making it disappear. The disastrous financial implications of unemployment benefits are manifest. Arbitration is not an appropriate method for the settlement of disputes concerning the height of wage rates.