Jobs are a cost, not a benefit. Having to direct human labour to some task reduces the amount of such human effort that can be devoted to sating some other desire – it’s a cost. So that boast is that dealing with climate change would add 380 million costs to the global economy. Yes, obviously, this is an opportunity cost but if you’re not doing opportunity costs then whatever you’re doing it’s not economics.
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Samizdata quote of the day – One reason we don’t believe certain economic claims about climate changeSamizdata Illuminatus (Arkham, Massachusetts) · Economics, Business & Globalization · Slogans & Quotations December 6th, 2023 |
 27 comments to Samizdata quote of the day – One reason we don’t believe certain economic claims about climate change |
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so if no one has a job ,we will all
be rich…
@Ellsworth butler
so if no one has a job ,we will all be rich…
He didn’t say that. A job is a cost, but it is often a worthwhile cost. Groceries are a cost too, but money often well spent. Planting a garden is a cost, but the cost might be worthwhile if the stuff you grow is worth more than the cost of the job. If I buy some gold it is a cost, if I sell it later for more it is a net benefit, that doesn’t mean the purchase didn’t cost me anything.
One of the classic examples in economics is this. It is a thought experiment: if I put a brick through your window you have to replace it, and in doing so will employ a glazer, factory workers to make the window, a person to come in and clean up the glass and so forth. My brick has created a whole bunch of jobs. So does that mean that I am benefiting society by tossing the brick through your window? If not, why not?
Thomas Sowell famously says: “there are no solutions, only trade offs.”
Fraser you should also include the Police Officer who arrests you, the court staff at your hearing, the Probation Officer [if you are not sentenced to “durance vile”] and quite a few more.
You have been quite a financial boon to the economy – well done.
I think this is a great point. It would be strange to hear someone say “this new process for such and such requires x% more steel” for instance. It’s great if you’re a supplier of steel, but it means that the process is clearly less efficient with respect to steel usage if it is producing the same outcome for that usage, so that is probably not what you want to emphasize. Also, why should we select our process based on how much it benefits suppliers of steel? If that is not a factor, then why bring it up?
Most jobs are also a cost to the employee. If it is not a cost – there is a net benefit derived from merely having the job – then they are often called “volunteers”.
The emphasis on “job creation” is indicative of a mindset which believes that companies do not exist to make a profit but to “do good”.
Jobs are a cost to the employer. They are a benefit to the employee, the tax man and society as a whole as large numbers of unemployed youths and men will inevitably turn to crime.
Tim has agreed that “jobs are a cost” is only really true if there is a labour shortage. Britain does not have a labour shortage. It has a large number of people living on benefits and another large group doing makework jobs for the government. Getting some of those people doing productive jobs would benefit everyone, because we would, as a society, be producing more.
That being said, every penny spent on net zero is a penny wasted because net zero is a scam perpetrated on Western citizens by Western governments. Nobody in the rest of the world believes a word of it.
so if no one has a job ,we will all be rich…
(c) Aaron Bastani
Reductio ad absurdum
Nowadays many jobs are simply a cost but it keeps the plebs busy, paying taxes and happy. HR, DSI and ESG are just some of the labels used to keep the plebs quite. All of these are a cost to society whilst a benefit to our governments.
“Getting some of those people doing productive jobs would benefit everyone” except the people who are paid to select,supervise and control the people living on benefits and doing makework jobs.
No, they’re still a cost. The benefit is the-job-being-done: in the case of the employee, the pay; in the case of the employer, the product; in the case of the unemployed youth vis-a-vis wider society, him being taken off the streets. But the cost still has to be paid in time and labour. If it isn’t, there is no product, there are no wages, and the youths are still roaming the streets.
Whenever a politician tries to justify regulating economic behaviour in the name of “creating jobs”, it demonstrates that said politician is a liar or a fool.
Listening to the international establishment, such as the World Economic Forum, on economics, is listening to an astonishing level of ignorance.
Rich Corporate “Capitalists”, political leaders, and leading academics, coming out with economic fallacies that were refuted a very long time ago.
Such as….
The Labour Theory of Value, refuted by Carl Menger and others, at the start of the 1870s (indeed some economists, such as Richard Whately and Samuel Bailey, had refuted it as long ago as the 1820s).
Ricardo’s theory of land – refuted (by Frank Fetter) more than a century ago.
And on and on.
They are rich, they are powerful, but they are also ignorant – pig ignorant.
When these people (such as the late David Rockefeller – and the very much alive Klaus Schwab) decided to use the C02-is-evil theory and (later) “health”, as justification for the world “governance” they always wanted, they just assumed that, as the economic-political-and-academic elite, they were fit to rule – with everyone else as their de facto serfs.
They are not fit to rule, their rule must be rejected. They are dishonest (willing to say anything to gain more power), and they are ignorant – so even if they wanted to rule benevolently, they would be unable to do anything but harm.
As for politicians who accept the rule of the World Health Organisation, or the International Criminal Court, or all the rest of the international bodies – well if you accept the rule of these international agreements and bodies, what is the point of elections?
This strikes me as one of the stupidest things I’ve ever read about a subject in economics. “Jobs are a cost, not a benefit…”?
If that’s the case, how the hell does any business in the world remain operational? The real problem is that when some useless mandate like government compliance creates that job in the first place, then you’ve a drain on the organization and the economy. The real, actually productive jobs? Those all create wealth and make money for the business.
It strikes me that this was written by someone like Henry Ford’s accountants, who he described as knowing the cost of everything, and the value of nothing. An employer who looks at his employees solely as “cost centers” is not going to do well, at all. If nothing else, that mentality leads to very limited loyalty in either direction, which is death to any really cohesive business.
I fear that the author of this passage has never, ever run a business or done anything besides serve as a parasite on the body politic.
If you’re not waking up every morning as an employee, and thinking about how you’re going to contribute to the bottom line today, you’re probably in this guy’s class and you’re likely also a damn parasite on the business and the economy.
One of the things that got drummed into me as a kid was the attitude my grandparents had towards employment, which was that if you weren’t looking out for the best interests of your employer at all times, then you weren’t a good employee. That mentality kept my grandfather employed through the Great Depression, and enabled him to open his own successful business in the midst of it all. Granted, they expected equivalent loyalty from the employer in return, but that was the way they looked at it. If you cost the company money, and weren’t making enough to return that value, then you were wrong.
It’s unpleasant to realize that those are “old and outmoded” values.
if jobs are a cost, how the hell does any business in the world remain operational?
By PAYING those costs. Y’know *WAGES*. If jobs were not a cost, businesses wouldn’t have to pay anything for the people doing those jobs. Businesses would be out of business if they *didn’t* pay those costs, not because they *do* have to pay those costs.
Just apply some first level thought.
A business needs to obtain X,Y,Z in order to function. It insists on not paying for them. Result: is doesn’t have X,Y,Z, and is unable to function.
I want to make widgets. I buy a building. I buy equipment. I buy widget material.
It all sits there until I buy the human labor to assemble the material into widgets.
Those are all costs – money I have to pay in order to create a product to sell for (hopefully) more money than I pay out in costs.
This is why, when I go to McDonalds, I order into a kiosk machine. The machine costs less to buy and operate than it costs to hire and train and employ humans. They have figured out how to minimize costs.
Sure, some employees are better than others. Mostly, that lowers their cost to me (or raises their productivity), but they are still a cost.
When making a sandwich, bread is a cost. If you sell sandwiches, you must incur that cost. Same applies for the chap making the sandwich. He is a cost. Perhaps you can replace him with a machine to lower that cost, or maybe not if you are selling expensive handmade hipster sandwiches. Hopefully you sell those sandwiches for more than the assorted costs and remain operational.
I think we’re making two different interpretations of the material. If he’d said “an employee is a cost”, then I’d have to agree with the piece.
The “job” itself is a different category. Apples and oranges… If the job produces income for the company, then it’s not an expense. If the job is something entirely extraneous, like a mandated Diversity, Inclusion, and Equity position? That’s clearly a job that falls into the “expense” category.
It could be that I’m misreading the intent of the author, here. Or, there’s some specialized use of the word “job” that he’s thinking of which isn’t in the dictionary.
Like I said… Apples and oranges. Employee? That’s an expense. You say “job”, and I’m not thinking along that line, at all; I’m thinking “job” as in “position on org chart”, which isn’t exactly what I think of as an “expense”. Presumably, the company will have done the rational thing and worked out that they need the position, and that the existence of that position would imply that it’s making them money.
I was thinking about how in Wall Street and Gordon Gekko had his “greed is good” or in Other People’s Money when Danny DeVito had his “Amen” speech. Oliver Stone made Gekko such a Snidely Whiplash character who delighted in destruction or DeVito was just unlikeable because he was just an unlikeable character until you got to know him, what if the directors had made Gekko or the other character agonize over their decisions. If Gekko does his job and trims the fat from the company and sends the manufacturing overseas, good for the stockholders but he puts 20,000 people out of work and destroys a town in the process. I know the whole bit about a company’s only task is to make money for the owners bit, so let’s move on to the fact that those kinds of decisions have real world effects beyond a ledgerbook. Maybe have Danny DeVito’s character drive through the town a year later and see the foreclosed on houses and people moving away or have Gekko ask Charlie Sheen if there is such a thing as a human being’s worth to a company or not?
I’m again reminded of the West Virginia Mine Wars and the conditions the miners and their families lived in. Unsafe mines, company stores, bribed sheriffs, company owned housing made of the lowest grade materials, private “detectives” that killed more than one troublemaker, and all of it because the people were little more than draft mules to the owners. Was making money really worth that much pain? The nation was willing to look the other way because of the demand for coal so on a national level there was no real desire to see how the sausage was made, but on a local and state level the human cost was known and seen.
I’ve said before that the one real flaw in capitalism is it requires moral men to be the ones making decisions and, sadly, far too often those moral men don’t end up as CEOs and CFOs. They are more than content to destroy just so they have more than the next guy, like it’s some big game of Monopoly and not peoples’ lives. Just numbers on a spreadsheet and not real human beings outside of the C Suites.
Steven R said:
Couple of thoughts, here. One is that the reason those guys wind up in charge is that they’re the only ones willing to step up and make hard decisions. Which means that they’re mostly at least borderline sociopathic… Like all our leaders almost have to be. Empathy and love for the employees only goes so far, and then the ugly economic facts slap you right in the face.
Case study to be made with Malden Mills, the guys who pioneered PolarTec Fleece. The owner when they went bankrupt back in the early 2000s was a really great guy, descendant of the founders, all that jazz. After an explosion/fire wiped out the plant, he kept the workers employed, rebuilt, and tried to make a go of it. They were bankrupt within a couple of years. Bought out, the new company was eventually forced to leave Massachusetts.
Sentiment and loyalty are great things, but when the economy and the local government turn on you, you’re still going to be screwed. There are a lot of things that contributed to Malden Mills going down, but in the end, it was the economics of the situation they were in. Being a “nice guy” and “good employer” did nothing to keep the company going… Which sucks. But, there you are: A perfect case study for why the MBA programs encourage cold-blooded sociopathy. It works.
@Steven:
I’ve said before that the one real flaw in capitalism is it requires moral men to be the ones making decisions
No it doesn’t, in fact, in a sense it needs the opposite of moral men — it needs self interested men and women. The CEO must convince people to buy from them because it is in his interest to keep his job and his big fat salary (and those customers? also self interested), so he has to make products and services that they want and are willing to exchange money for. And to do that he has to get managers and workers to produce those goods and services in a way that satisfies the self interest of those customers. So he does this by setting up incentives in the company that reach out the the self interest of the employees and managers. And to make it all work, he needs to raise enough money to pay the employees, buy the equipment, pay for the advertising and so forth. And to do that he has to rely on the self interest of investors who put up their money entirely for the purpose of getting more back.
Capitalism, or, I’d rather say free market systems, are build on the one thing you can rely on with people — namely they are out for themselves, they are self interested, they do what works for them.
Of course when government get involved it gums up all the works where they demand that these people pretend they are not acting in their own self interest, where voters group together to use their self interest and the force of government to force those CEOs, or employees or customers to act against their self interest (since the loss from this is less than the threat of violence from the government.)
Those miners? The problem was not the companies, but the fact that they had not developed skills of higher value that digging rocks out of the ground. Which, if anything, is why the greatest tragedy of all of this is the dreadful state of government schools.
I have run many businesses — and here the the truth that most people don’t know. The primary function of any business is sales and marketing. Convincing people to buy is far and away the hardest thing any business does. All businesses, except those propped up by the government, are utterly at the mercy of their customers.
Fraser,
Capitalism does require men to act morally (I assume that “men who act morally” is what you mean by “moral men”), and tries to achieve this by placing punishments on those who do not. There is very little question about whether people will act in their self interest, almost all people do who are not insane, and then they may just have the wrong idea about what is in their interest. Even religions which say that people should act against their self interest now promise great returns or punishment in the future – hence, they still require people to act in their own self interest.
Indeed, but so does communism. If the punishment for not doing something is going to the GULAG, and performing the task is better than going to the GULAG, people will perform the task. They are acting in their self-interest by choosing the best (or least bad) option.
Perhaps the difference is that it’s only in the free market system where it’s moral to openly declare that you serve your own interests.
In all other systems, it seems that you must lie about valuing your own worth, or at least show open shame over it.
“Most jobs are also a cost to the employee.”
Of course. That’s why they have to pay us to go do them.
Here’s a clarification on my thinking with this “job” costing thing.
Categorically, a job is an expression of the need for labor, and “cost” really isn’t relevant to it at all. The job exists because the “need for labor” is out there, no matter what. How you fill it, and who does the work? That’s the cost.
Let’s say that I have a yard that needs landscaping and maintenance. That’s a “job”, in the sense that there’s a vacuum of effort that hasn’t been filled. It becomes a cost or an expense when I fill that void by hiring an employee or doing it myself… There’s an economic activity happening relating to it. Now you can “cost” it out.
If I never do it, and decide to let Mother Nature take her course, and return my yard to a state of nature…? That’s a “job” that is never, ever going to get done and generate economic activity relating to it. The “labor vacuum” is there, but the job hasn’t been filled and isn’t getting done. I’ve incurred no costs, and there are no expenses.
Of course, if the government intervenes and says I have to mow that lawn…? Different thing. That’s an imposed cost, and something that is akin to all those mandated government compliance “jobs” out there… It’s generating negative economic activity.
So far as I can define it, the use of “job” just isn’t something you cost out. It’s an apples and oranges thing when discussing the issue of costs: The employee is a cost. The position they fill isn’t anything at all, in relation to that. You don’t pay the position in the org chart; if it’s not filled, then that’s money and resources not allocated or utilized.
Which also leads to the other corollary here: When idiots like Biden talk about “jobs created” through government mandate, that’s a null concept, meaningless. If the job is created, and then not filled…?
It’s like all the calculations about the “net economic benefits” for building that high-speed railway to nowhere in California. Sure, the jobs are theoretically there, but how the hell can you say you’ve “created jobs” when there hasn’t been a mile of track put into operation as of yet…?
As well, what are the opportunity costs for this boondoggle? What productive use might have been made of the concrete poured and the labor used for this little overpriced bit of idiocy?
You are over-thinking, it’s really not that complicated. “Jobs” is shorthand for “labour”. Hiring labour is a cost. Acquiring land is a cost. Employing capital is a cost. You bung those things in a blender & get some kind of output you can flog, hopefully for more than the inputs cost. That’s it.
All Tim is doing is pointing out that contrary to what many (mostly on the ‘left’ but also on the ‘right’) keep suggesting, generating more employment… jobs… by ‘greening’ energy production means energy gets more expensive because… jobs are a cost. If you generate electricity by employing more people that before, that’s not as great as it sounds.
Taking the “Green” side for a moment (which is garbage, but hear me out) and the “green energy” jobs issue, doesn’t the economic argument need to include all energy production and thus all energy jobs? That is, “investing” in XX thousand green jobs, means not investing in some other number of non-green jobs, fossil jobs for example. The assumption being that what we are doing is transitioning from one method of energy production to another. From an energy sector perspective, isn’t the issue how much labor (and machinery, mineral resources, etc) it takes to produce one unit of output (KWH)?
Not that any given employer or investor considers that, they only consider their narrow inputs/outputs and thus profit. But others often argue about a larger “societal cost”. The Greens will argue that cheaper electricity isn’t the only benefit; it also matters if that energy production pollutes or damages the environment that others have to live in.
Energy production by historical methods has reduced pollution (real pollution, not CO2!) enormously. Will transitioning some of our power production to wind and solar reduce pollution enough to matter (fewer people getting sick)? Nothwithstanding the orange clouds I still see when flying near large cities, I think the answer is a big “hell no”!
And if you’re into doing “societal cost/benefit” calculations, offset that higher pollution “cost” of not transitioning to green energy with the extra wealth that results from sticking with cheaper fossils, nuclear, and hydro. The latter is easily trillions of dollars globally…how many lives are saved by that? Greens have no interest in such data or estimates, but is there a way to trick them into considering it? [tricking being the only way to persuade them, reason having been taken off the table long ago].
RE: Green “economics”
https://www.king5.com/article/news/investigations/former-wsdot-economist-accuses-state-retaliation-for-refusing-lie-gas-prices/281-09151707-2976-48e2-bdd5-c65e36a52aac
This is local to me, and to my mind, ought to result in the politicians in this state being tarred and feathered. They won’t be, because the credulous self-indulgent “goodies” in the two biggest urban counties will absolutely not be holding them accountable…
The issue about “jobs” is of a piece with this crap. Those “jobs”? The vast majority of them aren’t really “real”, in the sense that there’s an employee getting a paycheck, making money for the employer. It’s all notional, hypothetical. They say Solyndra’s subsidies created “thousands of new jobs”, but what did that really mean? As I recall, when the whole thing finally shook out, there were very few actual employees of the company. Most of the money given them for subsidies just… Evaporated.
We live in an era where public monies are casually dropped on these things, and then never followed up on. The whole “jobs” creation thing enables a lot of that.
And, here’s the rub to it all: If you’re relying on their fantasy numbers and stats, you get lost in the weeds and pretty soon, you can’t keep track of reality either. Go look at the actual energy outputs for all of these supposed “Green Energy” deals like the wind farms: Just what is the actual amount of electricity generated by these projects, compared to the projections? What’s the actual delivery to the grid, compared to what they promised us in all those grandiose brochures?
The “jobs” thing is of a piece with it all. Until there’s an actual employee drawing a check, you can’t rely on a damn thing. It’s all faked-up prospectus after faked-up prospectus.