Saving Jobs: A Political Red Herring

Freeman Online: In any period of economic distress there is a renewed search for political solutions to unemployment. It seems obvious that jobs must be saved, and the government must be the key to preserving those jobs. So we get another round of government intervention: economic stimulus packages, scapegoating, bailouts, and protectionism.

One of the problems with this effort to keep unemployment down is its underlying assumption that the basic economic problem is a lack of jobs. The assumption seems reasonable enough; after all, financial hardship usually accompanies a layoff. Yet jobs per se are not the ultimate goal of the economy. Jobs are a means to an end. Even though a few of us may enjoy our jobs enough to be willing to work for free, we generally work so that we can purchase things or give to others with the income the job provides. Most people, in fact, look forward to a time around age 65 when their financial situation allows them to quit their current jobs and pursue other worthwhile activities.

Jobs by themselves are useless unless they are productive. People can appear industrious without actually producing something of value—it’s what we call “busy work.” Having someone vigorously make mud pies is probably not going to contribute very much to our standard of living, because mud pies are not usually thought to have any value. The price system, which includes wages, is the surest guide to what consumers want.

A change of focus is needed. Instead of concentrating on preserving jobs in this industry or that downtown area, we should pursue the satisfaction of human needs. Job-preservation, by itself, is a red herring. Too often the media and political figures can use the concept misleadingly, because the gains to the beneficiaries are highly visible, while the losses are largely concealed.

Lots of people had jobs during the “boom” but most were jobs of subsistence. They paid bills and mortgages but I suspect they didn’t contribute a whole hell of a lot to the individuals quality of life.