Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22
UK House Prices Real Terms Sustainable Trend - 17th June 22
Why I’m buying the “new” value stocks… - 17th June 22
Optimize Benefits from R&D in Software Product Development with an R&D Tax Credit Software - 17th June 22
Want To Save On Your Business Energy? Here Are Some Helpful Tips - 17th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Real Jobs vs Fake Jobs

Economics / Employment Jul 19, 2010 - 06:39 AM GMT

By: LewRockwell

Economics

Best Financial Markets Analysis ArticleIn many ways, the unemployment numbers are much worse than they appear. One factor has been the timing of the US census. The bureau hired some 700,000 workers to collect data — people who otherwise were having a very difficult time navigating the choppy labor markets. They went for the jobs because they were a sure thing, paid decently, and didn't require unusual skills (anyone can knock on a door and pester people about their private lives).


That inflated the jobs number for a while. But now these jobs are at an end — a highly unusual event because government jobs usually last a lifetime. Now all of these people are facing the bracing reality of looking for employment in an economy wrecked by the government.

The press has been posting tributes to these people and their jobs and wailing about their fate now that their jobs are vanishing. And that raises questions. If these jobs are so great, why should they be eliminated at all? Surely, there is a way that these people could be transitioned to some other kind of government-funded service? That way, one might reason, people would have jobs, work would get done, and everyone would be better off.

Right? Wrong. Census jobs perform no market function, and the wages of these workers are paid by the taxpayer, meaning that these jobs are actually destructive of wealth. They siphon wealth and work out of the private sector into the wasteful sector. In fact, we can go further to say that eliminating these jobs is actually a step toward economic recovery.

Given the way economic fallacy has gone viral these days, it seems necessary to explain the issue further. The point of employment is not just jobs: it is productive and economically viable jobs.

It would be possible, for example, to reduce unemployment to its bare minimum simply by a mandatory regression in technology. We could abolish the trucking industry and force all freight to be carried by car, thereby creating millions of new jobs. Or we could abolish the car and create even more jobs for people to haul freight around by hand.

"The point of employment is not just jobs: it is productive and economically viable jobs." In each case, the number of jobs created would vastly outnumber the number of jobs lost. But would we be richer as a result? Not in any way. It would amount to a mandatory drop in living standards for everyone. These kinds of policies violate the Hazlitt dictum that part of good economic thinking consists in looking at what is good not just for one group (the unemployed) but for all groups in society, and not just for the short term but for the long term.

The point of jobs is for people to work towards providing goods and services that are valued by the marketplace. If there is no consumer-driven demand for the things people are doing, their jobs are nothing more than waste. It does nothing for society if everyone is employed building pyramids, contrary to what Keynes once claimed. It would be senseless to have a business that employs thousands to do nothing but break new cellphones and repair them again, or to dig holes and fill them. And why is that? Because there is no economically rational basis for these tasks to exist.

To be sure, a wealthy entrepreneur can create a business doing anything, even something that loses money and is even socially ridiculous. But in order to sustain that, he will have to continue to throw good money after bad for an indefinite period of time, even unto the end of time. The day that he decides to stop doing it, the jobs will go away.

Of course, no businessman in his right mind wants to do such a thing. If you are going to create and retain uneconomic jobs, there is really only one way to do it: government. The government takes money from the private sector to throw around in inefficient ways, regardless of whether the job is worth doing in the first place.

The taxing and debt creation that is necessary to fund the government jobs is extracted from the real engine of wealth creation. This is not only true of census jobs but of all public sector jobs, whether in the federal bureaucracy, the military, or the educational sector. For this reason, the public sector's payrolls really ought to be excluded from the employment rolls.

One objection might be that some of what public jobs produce is actually necessary for long-term economic health. We need an educated society, people might say, and even the results of the census are necessary for private-sector planning. But if that is true, there is no reason why the private sector would not have the incentive to provide these services themselves.

And they do in fact. The private sector has ever more sophisticated means for educating its employees and making up for the inferior products of public schooling. It is the same with the census results, which are used by the state to keep track of us and control us; the private sector has its own methods of assessing demographic concerns over business location and product development. Even if there were government jobs that are in fact productive in their results, they could be performed at a profit instead of by extortion.

While everyone obsesses about the plight of census workers, there is a genuine calamity taking place in the private sector, which is being attacked by government every day. This is why the latest jobs numbers show nothing like robust job growth where it matters most. We see only slight overall increases from a decade ago, with boom-time jobs almost entirely wiped out in the bust.

This is what needs attention, but not from government programs. We need an absence of government programs, plus dramatic cuts in taxes and regulations of all sorts, and across the board. We need wage reductions in some sectors so that employment can grow in other sectors. Government cannot plan real job growth. It can only get out of the way and let it happen.

Llewellyn H. Rockwell Jr. is chairman of the Ludwig von Mises Institute in Auburn, Alabama, editor of LewRockwell.com, and author of The Left, the Right, and the State. Send him mail. See Llewellyn H. Rockwell Jr.'s article archives.

© 2010 Copyright Ludwig von Mises - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in