The Wasted Political and Economic Focus on 'Job Creation'
Rock and roll performer Chuck Berry won admiration as a songwriter, singer and guitarist before he passed away a little over three months ago – earning enormous admiration for such songs as “Maybelline” and “Roll Over Beethoven.” Perhaps he should also be admired for his economic insight, once pointing out that he became a musician because “I wanted a home of my own. I had a family. I had to raise them. Don’t leave out the economics.”
But many do leave out the economics, or even turn it on its head. We ignore the fact that no task is valuable – to ourselves or others – for its own sake alone. The fact is, people don’t live to work. They work to live. I primarily write for others. I love what I do. However, I do it not because I love it, but for the goods, services and security it allows me to purchase. Economic growth depends on consumer wants and how efficiently we meet them – not on producers’ needs and how well we can sell consumers on them. Otherwise, command-and-control economies such as the Soviet Union would thrive, rather than become defunct. You can love making surf boards, and be really excellent at it – but if you are trying to sell them in the Midwest, you probably won’t be doing it very long. You will do a lot better selling skateboards that far from the ocean?
But therein lies the political problem: We may consume hundreds of products and services, but we produce only one – and the thing we produce seems far more important to us than any of those we consume. However, we advance not through the job we happen to hold, but as consumers – through the needed and desired tasks that others perform for us and we perform for others. Not that long ago, there were no oncologists – anywhere.
Today, there are more than 10,000 in the United States alone, specializing in areas such as case diagnosis and management, radiation, surgery, image-guided therapies, and paediatric oncology. We didn’t create these jobs to provide career opportunities for people with a scientific bent. Rather, we spawned them to treat and cure people suffering from cancer. We don’t buy prescription drugs to provide jobs for drug researchers and developers; we research and develop prescription drugs for those who need them. The invention of the automobile was a crucial step forward not for the millions of jobs it created for people making them, but for the billions of consumers who buy them to attain mobility and pursue opportunity.
But too many people focus on creating jobs, rather than meeting needs. Too many see shedding jobs as a setback, when in fact it frees up assets – capital and human beings. When we cross tasks off our to-do lists, we don’t make ourselves obsolete; we free ourselves up to perform other tasks. When we use robots and eliminate jobs in the Rust Belt, we also create jobs in the Sun Belt – for the people who design the very robots and other labor-saving technologies that allow us to eliminate semi-skilled jobs.
The late economist Milton Friedman used to tell a story that illustrated the importance of meeting consumer needs and desires over creating make-work jobs. Visiting a construction site in a developing country, he saw workers using shovels. Why, he asked, weren’t they using earth movers? Because, he was told, giving workers shovels created more jobs. In that case, he responded, “why don’t you just give them spoons?” We build bridges, roads and subway systems not for the short-term jobs they create, but so that people can get where they want to go. The purpose of production is what you produce, how many will use it, and how much it will benefit them – not the immediate jobs it may spawn. Market-based production creates wealth for society, and an income for the people who make it up.
Rather than focus on the left-side of the ledger, the jobs immediately created, we should focus on the right side – the capital and human investment that a market economy most efficiently deploys to meet people’s goals and needs.
