As Nancy Pelosi so succinctly put it however long ago it was, “Jobs! Jobs! Jobs! Jobs! Jobs!” While she may be an Apple fan, I don’t think that is what she was getting at. ”Jobs” is the hot political buzzword du jour. And it’s not surprising, what with the recession and all.
But is the focus in the right place? Is creating a job all that big of a deal?
I think it isn’t. Jobs should not be the end goal. Wealth should be. If jobs are all that matter, then there’s nothing wrong with President Obama massively expanding the number of federal jobs. But there is a big problem with doing just that. Let’s explore why that is.
Human beings basically need food and water to survive. Shelter is a nice plus, especially when it’s cold out, and clothes are nice too. The trouble is that these necessities don’t spontaneously exist in nature in quantities sufficient to sustain the nearly 7 billion people living on the planet. Raw materials are nice, but without effort they remain just that– raw.
So we have farmers. There’s 1 job. Not everyone wants to farm, so we have tailors, let’s say. There’s a second job. The farmer’s labor changes nutrients in the soil, water, and energy from the sun into food. He gives the tailor some of that food in exchange for some clothes, and everyone is happy (we ignore the advent of currency in our discussion as it isn’t relevant to the topic at hand). Both of these jobs produce wealth, where wealth is defined as “goods and services useful to man’s survival.”
But then along comes the administrator. That’s job #3. As more and more people interact with each other, you need to have some administrators to basically keep the actual producers free to produce. That’s the essence of a good manager in software engineering anyway. Leave the coders free to code. Job #3 is not a waste, so long as his presence frees up the farmer and the tailor to produce more goods.
Now let’s suppose that the farmer and tailor don’t live in the same town. Job #4 is the trucker. This job also facilitates the production of wealth, because without him, the farmer couldn’t get his excess food to the tailor and vice versa. The farmer would produce enough for his own consumption, and he would be naked; the tailor would make enough clothing for himself, and he would be hungry. Because of the trucker’s labor, more food is produced, and more clothes are produced.
So up to this point, the number of jobs is directly related to the amount of wealth. Up to this point.
Where all of the politicians go wrong is that they think that by being able to report a higher employment number, everyone is happy. Government is really good at making Job #3 type jobs, that is jobs that don’t directly produce anything. At least not where people are free to own property. FDR created the program where people would dig a ditch and then others would come fill it up. Oh wow, 2 jobs! But at the end of the day, you still had a flat field with no ditch. While it is better to put people to work doing something before getting a handout, this type of job does nothing to help the economy. There is no net gain of goods and services. You just have more resources consumed with no new wealth relative to the number of consumers.
I want to see politicians talking about building wealth. They don’t, because creating wealth is something politicians can’t do. If they could, they wouldn’t be politicians. They can encourage wealth creation, and they would do so by not interfering with the farmer and the tailor, so long as these 2 honor their contracts and don’t cause harm to others. But instead they create tax codes and regulatory mine fields that rival a modern-day operating system’s source code in complexity. How many millions of dollars are spent each year on TAX COMPLIANCE? That’s wealth that could have gone into building houses or growing food, thus increasing the number of each relative to those who want them.
So jobs are nice in that they are the natural result of wealth. But it is quite easy to create jobs without creating wealth, as President Obama has so aptly shown. That is nothing worthy of applause.