During an economic malaise one of the endless reams of statistics to which pundits glue their eyes is the number of jobs that are either created or destroyed. The state makes “job creation” a central plank of its economic policy to put people back to work, and the impression that more people are being hired and fewer fired buoys their hubristic impression that we must be on the road to recovery.
In the first place, we might as well point out that, for as long as humans strive to create more wealth, there will never be a shortage of demand for productive work. Labour is the ultimate scarce commodity – however much machinery we have and whatever our state of technological progress there is no production process that does not require an input of labour (any such process which did not require labour would essentially be producing free goods). Thus, the phenomenon of involuntary unemployment is made possible only by the artificial costs and restrictions that the state places upon employers – such as minimum wages, health and safety laws, working time restrictions, taxes, compulsory national insurance contributions, etc. – which mean that employers and employees cannot work together on terms that are acceptable to them. This is on top of the distortions and upheavals of state-induced business cycles which create clusters of bankruptcies and redundancies in the first place.
That aside, however, the obsession with jobs is another example of the error of looking at an isolated aspect of economic achievement rather than at the entire picture – much like trying to boost consumption in order to further growth which we explored in myth #2. Read more