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Jobs are a Means, Not an End

from Kevin Williamson in National Review, The Social Machine:

The purpose of an automobile factory is not to “create jobs,” as the politicians like to say. Its function is not to add to the employment rolls with good wages and UAW benefits, adding to the local tax base and helping to sustain the community — as desirable as all those things are. The purpose of an automobile factory is not to create jobs — it is to create automobiles. Jobs are a means, not an end. Human labor is valuable to the extent that it contributes to human prosperity and human flourishing, not in and of itself as a matter of abstraction.

There are cases in which this is so obvious that practically everybody understands it. When we talk about building new pipelines (and good on the Trump administration for getting out of the way of getting that done), our progressive friends sometimes sniff that many of the new jobs associated with that work are “temporary.” (“Temporary jobs” is a phrase usually delivered with a distinct sniff.) Here is a little something to consider: Unless you are building the Second Avenue Subway in New York City, all construction jobs are temporary — buildings get built. Projects come to completion, and work gets finished. It is in the nature of construction jobs to come to an end. And it is not only construction: A technology-industry friend attending the recent National Review Ideas Summit in Washington bluntly shared the view from Silicon Valley: “All jobs are temporary.”

HKO

Every job that is “created” by government  comes at the expense of another job that is not.  We see the job that is created, we never see the one that is not. This is the essence of Bastiat’s broken  window fallacy made immensely popular by Henry Hazlitt; another great economics writer I compare to Kevin Williamson.

Jobs are created by ideas that increase productivity and wealth.

Risks Too Great for Private Industry

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“The case becomes even clearer if we turn from farming to other forms of business. The proposal is frequently made that the government ought to assume the risks that are “too great for private industry.” This means that bureaucrats should be permitted to take risks with the taxpayers’ money that no one is willing to take with his own.

Such a policy would lead to evils of many different kinds. It would lead to favoritism: to the making of loans to friends, or in return for bribes. It would inevitably lead to scandals. It would lead to recriminations whenever the taxpayers’ money was thrown away on enterprises that failed. It would increase the demand for socialism: for, it would properly be asked, if the government is going to bear the risks, why should it not also get the profits? What justification could there possibly be, in fact, for asking the taxpayers to take the risks while permitting private capitalists to keep the profits? (This is precisely, however, as we shall later see, what we already do in the case of “nonrecourse” government loans to farmers.)”

Excerpt From: Hazlitt, Henry. “Economics in One Lesson.” Three Rivers Press, 2010-08-11. iBooks.
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Check out this book on the iBooks Store: https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewBook?id=419260862

The Net Result of Government Credit

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“Perhaps in an individual case it may work out all right. But it is obvious that in general the people selected by these government standards will be poorer risks than the people selected by private standards. More money will be lost by loans to them. There will be a much higher percentage of failures among them. They will be less efficient. More resources will be wasted by them. Yet the recipients of government credit will get their farms and tractors at the expense of those who otherwise would have been the recipients of private credit. Because B has a farm, A will be deprived of a farm. A may be squeezed out either because interest rates have gone up as a result of the government operations, or because farm prices have been forced up as a result of them, or because there is no other farm to be had in his neighborhood. In any case, the net result of government credit has not been to increase the amount of wealth produced by the community but to reduce it, because the available real capital (consisting of actual farms, tractors, etc.) has been placed in the hands of the less efficient borrowers rather than in the hands of the more efficient and trustworthy.”

Excerpt From: Hazlitt, Henry. “Economics in One Lesson.” Three Rivers Press, 2010-08-11. iBooks.
This material may be protected by copyright.

Check out this book on the iBooks Store: https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewBook?id=419260862

A Different Kind of Bridge

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A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works—of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.”

“A bridge is built. If it is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money if it had not been taxed away from them, there can be no objection. But a bridge built primarily “to provide employment” is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only of where bridges must be built, the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries.”

Excerpt From: Hazlitt, Henry. “Economics in One Lesson.” Three Rivers Press, 2010-08-11. iBooks.
This material may be protected by copyright.

Check out this book on the iBooks Store: https://itun.es/us/-Mw_y.l

Two Sides of the Same Coin

Hazlitt-photo

“Those who think that the destruction of war increases total “demand” forget that demand and supply are merely two sides of the same coin. They are the same thing looked at from different directions. Supply creates demand because at bottom it is demand. The supply of the thing they make is all that people have, in fact, to offer in exchange for the things they want. In this sense the farmers’ supply of wheat constitutes their demand for automobiles and other goods.
All this is inherent in the modern division of labor and in an exchange economy.”

Excerpt From: Hazlitt, Henry. “Economics in One Lesson.” Three Rivers Press, 2010-08-11. iBooks.

This material may be protected by copyright.

Check out this book on the iBooks Store: https://itun.es/us/-Mw_y.lY