why we have jobs

In the morning, you go to work.  You make something.  Or part of something.  Or you support someone else who makes something.  Maybe you just clean the windows so the people who make something will enjoy their view more, making them more productive.

After work, you climb in a car that some other workers made.  You drive to your home, which was made by yet more workers, and which is filled with products which were made by even more workers. 

All of those workers had people who supported them, too, maybe even someone like you who just cleaned their windows and made them more productive.  Productivity is good, because it's the difference between products that only some of us can own and products that everyone can own.

Now suppose a million people have lost their jobs.  That's a lot of stuff that won't get made.  Even if you didn't have to support the unemployed, you're worse off simply because they're no longer producing.  Even worse, because you do have to support them: jobless people still have to eat.  So, you either give up some of your food, or you give up buying some other products so that the people who produce the food can give some food to the unemployed.

Other workers see what's going on, and they worry.  Even you, who have a job, have started to buy fewer goods and save more money, just in case your job is the next to go.  And that means even less work for other workers, and all just because of uncertainty.  Just the thought of losing jobs is costing jobs.

Now let's suppose Obama puts a million of these unemployed people to work building wind turbines (and, of course, supporting people who build wind turbines).  Wind turbines aren't particularly viable as products go.  They can't compete in a free market, and so the market will have to be made a little less free so they can compete.  Some of your money -- and the products you make or support -- will be diverted to pay people to make wind turbines, since nobody actually wants to put their own money into windmills.

People who make things get paid better than people who make nothing, but that's usually because other people want the things that are being made.  In the case of wind turbines, you will be forced to buy things you don't want, as evidenced by the fact that wind turbines don't sell very well on their own.

Some of your money will be taken to pay for the wind turbines, leaving you with less money for yourself.  Wind turbine workers will use that money to buy some of the things you produce, leaving less to be exchanged between the people who produce things that are actually wanted. 

People who build cars aren't the only people who have cars -- they also trade their product for the products of people who build the other things they want.  That's how the rest of us came to have cars.  But you're not going to surrender your own money to buy wind turbines -- even worse, neither are the people who will be making them.  They don't want to buy windmills, either -- they want jobs so they can buy the same things you want to buy.

And since wind turbines require expensive materials and skills, fewer other products can be produced as well.  You will produce less, and you will buy less, just because wind turbines are being made.  And you will share more of the desirable products you make with people who aren't making anything of value because they're now making windmills.  With your money.

When you compare your personal situation -- between having a million other people unemployed and having a million other people building windmills -- you will actually be worse off with the windmills.  This is a recurring theme in government: you would be better off if they just took the money -- what they do with it invariably makes things even worse.  Yes, wind turbines produce electricity -- but other ways of producing electricity are cheaper.  A lot cheaper.  You still lose.

It may be beneficial to have a job, but an employee is a cost.  Usually, it's the cost of producing something that's wanted, resulting in a net benefit.  Usually, that cost falls onto the business, with both the risk -- and the profit -- going to the investors who own it.  When nobody wants the product, it means that investors guessed wrong.  It means all the resources -- the machinery, the material, the inventory, the workers -- would all be better off for society doing something else.  The business fails, and only investors' money is lost.  Everything is liquidated, resources find their way to more valuable uses, and everyone is better off.

But if a business gets "bailed out," that loss is at your expense.  Resources stay tied up where they're not wanted.  And the superior, more highly valued efforts -- efforts those resources could be used in -- never happen.  We are all poorer for it.

And with something like wind turbines, the product can't even make it to the market without a bailout.  That's right: the entire windmill industry is one big bailout, for a product so bad that it can't even get started without your compulsory support.

Jobs are not a benefit, they are a cost -- the cost of producing something.  If the job can pay for itself, then the product is a benefit worth that cost.  But if the entire effort needs to be subsidized, then not only is the job a cost, but so is the product.

Green jobs are not benefits, they are costs.  And everything they produce is a cost, too.

Comments

[Mitch Baker]

Wow. A job as cost, sometimes worthwhile, depending on product. I've never thought of it that way or heard it explained that way. No wonder I visit this site every day. Thanks.

[hiscross]

Yes, a job cost money to a producer. That is why we have lay-offs. When you work for free it is community service or slavery, take your pick.