What Is A Job? 4

It's only a job if you're willingly paid to do it.

America is desperate for jobs, but our politicians don't agree on how to create them.  It seems like it shouldn't be too hard, though - just go out and hire some folks!

That's more or less what famous economist John Maynard Keynes taught as the way to escape economic depression:

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.

Notorious leftist shill and ex-Nobel-Prizewinning economist Paul Krugman recently made the same argument more colorfully, suggesting that the government should trump up a phony alien invasion in order to hire all Americans to build needless defensive works against nonexistent Martians.

As we've seen earlier in this series, this idea is no less ludicrous because it's proposed by highly-credentialed "experts"; hiring people willy-nilly didn't get us out of the last Depression and it won't get us out of this one.

That's because what builds national and personal wealth is not just "doing something," but doing something useful that increases the total wealth of society.  Some government jobs do increase total wealth, some private-sector jobs don't, but generally speaking a higher percentage of private-sector jobs are economically useful than government ones.

There is a very simple reason for this: private businesses go bankrupt if they cannot persuade people that their wares are worth more than the price of paying for them.  Government, in contrast, can simply extract more money from taxpayers at the point of a gun, at least until the entire economy and society collapses.

Will People Pay?

So we clearly see what virtually all of our politicians, most of our elites, and even all too many of our corporate titans seem totally blind to: a job, business, entity, or whatever is economically useful only if it does something that people would be willing to voluntarily pay for.  When our big businessmen and giant banks have to go to the government for bailouts with other people's money, they are admitting that their businesses are economically useless, that they should be shut down, and themselves summarily fired.

What about government jobs, which nobody pays for voluntarily?  It's true that all modern government jobs are paid for by forcibly-extracted taxes, but that doesn't mean that people wouldn't pay for some of them anyway.  You don't have to look too far back in history and even popular culture to find examples.

In the classic movie The Magnificent Seven... well, let's read the IMDB's description:

A bandit terrorizes a small Mexican farming village each year. Several of the village elders send three of the farmers into the United States to search for gunmen to defend them. They end up with 7, each of whom comes for a different reason. They must prepare the town to repulse an army of 40 bandits who will arrive wanting food.

Here we have ordinary people living in a lawless environment.  They had no effective police or army.  What happened?  They were consistently terrorized and robbed by bandits.

As the movie describes, the townsfolk decided to spend their own money to hire what amounts to a professional police or military force for the purpose of enforcing law and order.  This cost money they could ill afford, but the village elders wisely realized they'd spend less money on defense than they were losing to banditry.  And that's just what they did.

The same is true today.  Study after study has proven that spending more money on the police actually saves money, as Los Angeles Chief of Police William Bratton pointed out in a recent Wall Street Journal interview:

"The cost of a homicide to the city is $1 million," he said, citing an estimate based on a study by the National Institute of Justice that takes into account such costs as criminal trials and police salaries. "We've reduced the homicide rate by nearly 300 in six years," he said. "That's a $300 million annual benefit to the city."

His department, he said, has a record of making arrests and winning convictions in 70% of the homicides in the city. Keeping a convicted murderer in prison in California costs about $70,000 a year when legal costs and other items are factored in. With close to 300 fewer homicides a year, that is about 200 fewer people "getting convicted and going to prison for murder. Multiply that by $70,000," he calculates, and it leads to more than $13 million in reduced costs.

Crime is expensive, not just to the government to get criminals convicted and locked up, but to the community as a whole.  If the police are honest and successfully prevent crime from happening in the first place, they are worth well more than their salary.  Obviously, an army which deters foreign invasion pays for itself too.

No?  Then Force Them To!

Things aren't always as clear-cut in private industry as they used to be.  Is car insurance economically useful?  Certainly, most people have bought car insurance for many years, and when they chose to do so, by definition the product was worthwhile.  Today, though, most states require car insurance; individual drivers can pick between different companies but they have no choice in the decision to buy it at all.  Obamacare will make health insurance similar - often a good idea, but since you're forced to buy it regardless, it's hard to say.

All through our economy, there are countless items that seem like ordinary commercial products and businesses subject to free-market laws of supply and demand, but when you look under the hood you discover that the market exists only because of government fiat and legal manipulation.  Parents have chosen to buy infant car seats for many years, but next to nobody kept their kids in special seats much beyond toddlerhood until states started passing laws forcing them to.  It doesn't matter that, in the real world, car seats for kids over 2 aren't any safer than ordinary adult seatbelts - the manufacturers have used government power to create a market for them.  This isn't capitalism, it's cronyism, and the "manufacturing jobs" making these needless car seats aren't, in economic terms, real jobs at all.  People only buy the useless product because they have to, not because they want to.

On the other hand, think about those grossly overpaid professional athletes that you occasionally hear pedants complain about.  How can it be economically useful to pay millions of dollars to some steroid-enhanced thug to shove a ball around?

Ah, but it is - because individual people choose to spend their money watching the sport.  Maybe it makes them feel better, maybe it brings a sense of camaraderie and community.  It doesn't matter; all that matters is that individual buyers, un-coerced, choose the product and pay for it with their own money.  Would it be more economically useful if they drowned their personal frustrations in liquor or popped a Valium instead?

The Core Capitalist Meme

The whole point of capitalism is to make people happy by providing a means for them to get what they want.  Some people want big houses and cars, others a little home by the sea, still others the ability to cheer on a sports team in the company of thousands of other screaming fans.  The reason capitalism has been so phenomenally successful is because it, as an institution and economic structure, makes no value judgments about what you ought to want; you get to decide what you want to spend your own money on, and anyone who provides you something you want to pay for will profit.

The more the government gets involved in meddling with the free operation of the market - forcing people to buy things they don't want and preventing them from getting what they do - the more inefficient the system gets and the poorer we will all be.

Of course some intervention is always necessary - you may want to hire a hitman to bump off your ex-wife, but that would infringe her right to life and is legitimately illegal.  But why on earth can't we buy Edison's lightbulb anymore, and why must we buy useless and awkward carseats to imprison our children until they're practically teenagers?  For no good reason save the raw power of government autocrats and their no-longer-capitalist company cronies - none of whom have jobs in the economic sense, and all of whom should be fired forthwith.

We've now examined a wide variety of "jobs" that aren't really jobs, and other activities that don't look much like a job but really are.  We've discussed the economic and philosophical underpinnings of how to determine whether a job really is one, and why we see so very many non-job jobs these days.

In the final article in this series, we'll talk about what's required for an economically-worthwhile job to come about.

Petrarch is a contributing editor for Scragged.  Read other Scragged.com articles by Petrarch or other articles on Economics.
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