The Purpose of Jobs and Employment

There is an especially poignant moment in the lyrics of the "Hayek vs. Keynes Rap Round 2" video, where Hayek explains the very purpose of jobs and employment, to counter Keynes's fallacies:

Creating employment is a straight forward craft when the nation’s at war and there’s a draft. If every worker were staffed in the army and fleet we’d have full employment and nothing to eat.

Jobs are a means, not the end in themselves. People work to live better, to put food on the shelves. Real growth means production of what people demand. That’s entrepreneurship, not your central plan.

One internet commenter put the matter well, here:

First we have to consider what the purpose of jobs are. The purpose of jobs is to create things that we want; things like pizzas, ipods, and TV's. If pizzas and ipods and TV's rained down from heaven, we wouldn't need to work anymore. The purpose of jobs isn't to have everyone work. If that's all you want then here is the solution: Have one-half of the country dig holes, and have the other half of the country fill them up.

One thing people get wrong is they think that there are only a limited amount of jobs available for people to do, hence a person who can't get a job is "forced" to take anything they can get, like a horrible job from GE. Actually, there are an unlimited amount of jobs, because people have an unlimited desire for goods. Think of jobs as like having a wish-list with all of the things that we want and dream of on the list. The more jobs we accomplish at the beginning of the list, the further down the list we can go.

Think of it like Swiss Family Robinson. At the beginning of their list are tasks like "Get Coconuts," then "Build House," then "Build Raft" then maybe far down "Create Work Of Art." The more things they can produce, the further down the wish-list they can go. When a company is able to increase their efficiency and thereby produce more goods with the same amount of labor, they then are able to sell us those goods for less money. That means we then have money to spend on something further down our wish-list. Like a new bicycle for instance. And guess what that means for the bicycle company? They now need to hire new people to make more bikes which everyone is now buying because they can suddenly afford it. So jobs just shift down the wish-list.

This actually cuts through the baloney in that scene in I, Robot, where Will Smith tells the executive that his robots are crapping on the little guy because they are doing jobs like furniture-making that people used to do. He doesn't get that if robots made all of our goods, then the goods would be so much more abundant and therefore cheaper because greater supply lowers prices. And the furniture-makers could move down the list and start making works of art or whatever. Think about this: 99% of the jobs people used to do, like farming for example, are done by giant robot machine combines that can do in 5 minutes what a man took a day to do. So why don't we have 99% unemployment today?

The reason why there aren't an unlimited amount of jobs in America today and there is unemployment is because of things like unions [voluntary unions are fine, government backed unions are not], minimum wages, zoning, managed trade agreements like NAFTA that benefit big corporations because only they have a team of lawyers that can maneuver through them, Dept. of Agriculture laws where the government pays farmers for growing millions of dollars worth of food and letting it rot in the fields so that the price of food goes up (uhhh... how about not doing that and letting those farmers work on another item on our endless list?) and the Federal Reserve that causes the boom-bust business cycle and inflation.

Just one comment: regarding the governmentally-stipulated burning of agricultural produce to raise prices, the fear is that if farmers grow too much food, the prices on food will go down, and the farmers will not earn enough money to live. Somehow, it never occurs to the government that a few things could happen: (1) a few farmers realize that there is over-supply of food, and hence over-supply of food producers, and that they should go find jobs in better-paying sectors, "better-paying" meaning that supply is not yet sufficient to mean demand, meaning that their labor is needed more there than here; (2) they could sell more food to people, that more supply of food at a lower price might boost demand for people who couldn't afford enough food; for example, perhaps poor inner-city individuals or starving Africans might buy more American produce if that produce suddenly got cheaper, but the government cannot conceive of the fact that demand might increase. As the commenter put it, it used to be that 99% of people were employed in subsistence farmer; we aren't all unemployed today because once farming became more efficient, and the same food could be grown with less labor, we all diversified and found new jobs to fulfill new desires that we never even had an opportunity for. (A Medieval peasant did not care about art; he was too concerned about food. Now that food is satisfied, we can go down the list.) So the government assumes that with more produce and lower prices, demand will remain the same, and the farmers will become poor; the possibility that demand will increase or that some farmers will liquidate their jobs and find new employment in a higher-demand sector somewhere else, never occurs to the government.