Why is the government only focusing on jobs? Earlier today there was this article, then we also had $155m for employers to keep their apprentice's. Earlier in the week (surprise surprise) we had the unions telling us that we're talking people out of jobs. Right.
The issues we're facing have nothing to do with jobs. The focus needs to be on increasing wealth or value in our economy, not on full employment. Full employment is easy to achieve: Cavemen had full employment; the Egyptians had full employment; prisons have full employment. As lord Keynes once suggested, we can bury old bottles with money in them and then ordinary incentives will get people out there digging! Unfortunately this will do nothing to ease the crisis and get us back to where we need to be. In fact, it will only delay the restructuring process by keeping people in jobs where resources have been inefficiently allocated.
The only way to achieve greater wealth or value, thereby improving our economic well being and possibly (if the state doesn't get involved -- hah) achieving full employment, is by increasing production. Full production needs to be the goal. So why can't the politicians see that, why do they still harp on about jobs? It's quite simple really: they don't know the truth (politicians are generalists not economists); they're probably receiving their advice from 'brains for sale', people with vested interests in not achieving full employment; and emotion sells (or in this case buys votes). Here's a quote from Henry Hazlitt that sums it up nicely,
It would be far better, if that were the choice—which it isn’t—to have maximum production with part of the population supported in idleness by undisguised relief than to provide “full employment” by so many forms of disguised make-work that production is disorganized. The progress of civilization has meant the reduction of employment, not its increase. It is because we have become increasingly wealthy as a nation that we have been able virtually to eliminate child labor, to remove the necessity of work for many of the aged and to make it unnecessary for millions of women to take jobs. A much smaller proportion of the American population needs to work than that, say, of China or of Russia. The real question is not how many millions of jobs there will be in America ten years from now, but how much shall we produce, and what, in consequence, will be our standard of living? The problem of distribution on which all the stress is being put today, is after all more easily solved the more there is to distribute.
We can clarify our thinking if we put our chief emphasis where it belongs—on policies that will maximize production. -- Henry Hazlitt, Economics in One Lesson
