The Political Alchemy of Jobs

Animated by an election season approaching its zenith, President Obama announced a six-year plan to magically “create jobs,” an ability that accepted political wisdom would suggest is the exclusive competence of the state.

It’s a curious kind of alchemy insinuated by the idea that state activity, compulsion its only method, could spawn employment opportunities, that government could make gold from copper. Nevertheless, the unfounded claims of statist sorcerers endure, a relentless parade of labor-harnessing pretenses that defraud a society of wealth. No more than any of us as individuals can the state extract value from out of the ether, “create liquidity” from its artificial money, or “create jobs” through its game of patronage.

Although some stand to benefit considerably from the president’s $50 billion racket, the windfalls of the proposal will never reach the wage earners identified with such empathy in his eloquent orations. Rather they will support the sedan chairs of our idle ruling class. State projects, again no different from any other human endeavor, can create jobs, but, notes Isaac M. Morehouse, “the proper question is, do they create wealth?” If I raze my neighbor’s house to the ground, I have generated employment opportunities for all of those workmen who will provide the component parts of his new home, but regarding the creation of value what has been the overall result?

The president’s argument, long recognized and refuted by true free market economists, is a species of the broken window fallacy, the idea that the destruction of property (and accordingly wealth) is an engine that drives industry and economic activity. French political economist Frederic Bastiat first explicitly identified this mistake in 1850, describing a shopkeeper whose son had broken a storefront window. Bastiat pointed out the theoretical inconsistency in the claim that the broken window was, on the whole, a boon for economic activity, showing instead that “[t]o break, to spoil, to waste, is not to encourage national labor; or, more briefly, ‘destruction is not profit.’” Though his reasoning would seem to be clear enough, the state has kept us preoccupied with employment numbers in order to convince us that 100% employment in shoveling dirt for bigwig contractors is a worthwhile exercise.

Anyone could offer a job — or hundreds of them — if its source and the source of the value used to compensate the worker were irrelevant. Unless we believe that the state really is endowed with a supernatural ability to fabricate something of worth from nothing, we should not give credence to the premises that undergird the jobs program. There’s no good reason to believe that the state, which is ultimately defined by the coercive character of the relationships it creates, can do things that individuals working within cooperative, mutually beneficial relationships cannot.

State power is not a creative force, but a destructive one — the boy who broke his father’s window writ large. For the well-connected contractors on the winning side of this latest quid pro quo, who will take the state’s blood money to rebuild the 150,000 miles of road, the president’s expansive plan means a long succession of paydays. But for the working class who will suffer the penalties, whose taxes will pay for the cronyism and whose labor will ossify corporate power, the president’s buoyant speeches are so many hollow platitudes. “All of this will not only create jobs now,” proclaimed Obama, “but will make our economy run better over the long haul.” What it will do is destroy and inhibit voluntary associations that would otherwise corrode the deep-rooted infrastructures of statism.

To make the “economy run better” is to make the individual run better, not to do anything in particular, but to release people from the external threats and constraints that befoul the fertile connections between them. When the state makes the decisions about how to use societal wealth, this does not translate into “the people” making the decisions. That condition exists only in a freed market, absent of force. When government takes the reins, a few oligarchs hold them, steering in a way that solidifies their mastery over us.

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