Socialists Don't Create Jobs

mikemorris (57)in #socialism • 7 years ago (edited)

Socialists have no concept of opportunity costs in economics, and no one should assume they would anyway. If government "creates jobs", they don't reason that it must come at the expense of something else: the alternative forwent, i.e., what efforts could have been made toward production that were now substituted for the government's idea of what should be produced.

"We need infrastructure projects", they cheer, unable to see the effect of government jobs-programs. And even if they did create jobs, which might be true nominally, it is certainly not true that what they produce is more valuable than what would have been produced had productivity not been taxed to pay for the government's jobs-program.

They see "jobs" are an end in themselves, and don't see they're only the means to the end of production; and nor do they see that the supply of labor is scarce and must be devoted to the highest-valued uses, or else we're relatively impoverished as a whole for taking away from that.

Not to mention, on the other hand they advocate for every job-destroying policy possible while still believing the government can "create jobs" too: minimum wage laws, occupational and business licensure, unions, regulations, taxation, permits, other legislation, you name it.

I would say all unemployment is voluntary in a free market; anyone who wanted to work could; there would be no government hurdles before them preventing them from taking such a position.

And of course, they also think property can simply be redistributed without cost; without this inducing a higher time-preference in people; without it decreasing the incentive to produce; without it being a net-loss; etc.

They think they can have their cake and eat it too. The socialist is the dumbest thing around.

#democracy #libertarianism #jobs #employment

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gwynethllewelyn (46) 7 years ago

All right, a few thoughts on your proposal. First, socialism can 'create jobs', but these are 'created' in organisations directly under the control of socialists, i.e. the State and its civil servants. Thus, the only 'jobs' that can be directly created by socialists are more civil servants, expanding government even more in size, requiring therefore more taxes to maintain it, and so forth.
Socialism can also 'preserve' jobs by nationalising private organisations — when that happens, a bankrupt company will still operate at a loss, but jobs will be 'preserved' — again, something which needs more taxes to pay for the loss.
The best that can be done under socialist rule — or perhaps more correctly, under social democracy — is to have the government sponsor private corporations to create something that will be used by the public in general. Typical examples are creating new infrastructure — roads, hospitals, schools — where the government gives corporations the money to build all those things and let them run them for a profit (with some rules, e.g. access to all, maximum prices that can be charged, and so forth). Because corporations get essentially 'free money' to expand their activity, they can hire more people (thus, 'more jobs' are indirectly created); and because they can often explore what they have created, it will also mean more profits in the long term. The government benefits from both: it taxes corporations for their extra profit and the extra people who now have jobs and therefore are able to pay taxes. This, in turn, will give government the opportunity to launch other megaprojects, inviting more companies to join, and so forth. One of the best examples of this at work is the model used in Japan, where the government regularly meets with the Japanese megacorps and hands them out free money so long as it is invested according to certain guidelines that the government believes to be prioritary (ex. become the leaders in the car industry, or in consumer electronics, or in cosmetics, etc.). In the Japanese case the 'public' doesn't need even to be directly benefitted (as would be the case of having the State sponsoring a hospital or a school), but it gets indirect benefits from an increase of economic activity which requires more jobs to be created to sustain the extra production, which in turn creates more consumers, which in turn require even more production, while at the same time, of course, the government is gathering taxes from all that and prepares the next meeting with the next set of megacorps in a different industry...
Note that most so-called socialists who claim they'll get people 'more jobs' have no intention to use any of the above examples.
Last but not least, you mention that 'in a free market unemployment is voluntary'. Now this is a fallacy for a simple reason: in an absolutely free market, the major cost for corporations will be human labour. Thus, all efforts to reduce human labour — through automation, more efficient forms of production, or simply by retaining the most productive workers and firing the rest — will benefit a completely free market. Ultimately, the goal of an industry magnate would be to have all its workforce replaced by robots, thus having zero labour costs. Our societies are geared towards increasing the investments in everything except labour costs — i.e. technology, machines, automation, better ways of doing things, market expansion, and so forth — because, that way, a company will be able to be more profitable even if it doesn't grow (it has just reduced labour costs). Not surprisingly, the first thing every company does when it risks bankruptcy is to fire people in droves, in an attempt to keep the labour costs down as much as possible.
We can take the simple example of the early 20th century, where the economy was mostly laissez-faire (i.e. unregulated), and countries like the US managed to have 25% of unemployed people. One of FDR's first actions was to start to heavily regulate banking; and only after that he started thinking about putting the New Deal in place, to get those unemployed (but qualified!) people back in the economy.
So... no, the more free the market is, the more it will replace the less qualified workers by machines, but, thanks to the advances in robotization, artificial intelligence, and industry automation, we are able, these days, to be able to replace even qualified workers. Consider the drivers of eighteen-wheelers, currently the 'blood' of the economy in the West, as they keep products circulating in the market — there are dozens of millions of truck drivers to keep that market buzzing with products. At the moment, we're able to replace all of them with self-driving vehicles (just like Uber is attempting with their own vehicles, for the same reason) — because, on the long run, the higher cost of carrying things in trucks all over the place is not the truck itself nor the fuel it consumes, but the driver. Replace the driver, and the logistic companies will have much more profit, without changing anything, or even expanding their market. They just need to become 'humanless'. Now, what will the market do with those dozens of millions of suddenly unemployed drivers?
The theory is that society can somehow turn 'outdated' people into valuable new workers, by using education. It's simply not true. We can certainly requalify some of the people, but others simply cannot benefit from education or retraining. It's too late for them. They have no choice but to become unemployed.
Continuing the example: a truck driver might be retrained to drive a different vehicle... but quite soon all vehicles will be self-driven, thus not requiring human drivers at all. So, being a 'professional driver' is a dead-end. There is no future in it. But the same applies to millions, hundreds of millions of jobs — including, at some point, even doctors, engineers, architects, and programmers, all of which can be even today be partially replaced by robots or AIs. And because the higher the wage of those specialised jobs, the more companies will save if they can replace them by robots and AIs, that's why they relentlessly pour vast amounts of funding in research of such technologies.
In other words: in a completely free and unregulated market, companies will always compete to reduce the number of workers (or reduce their wages) using all possible means. This creates more unemployment, not less; it's hardly 'voluntary' if your job and career is rendered obsolete because it's been replaced by a machine. But companies will be hard-pressed to create more and more sophisticated machines to replace humans and thus save labour costs. Unemployment rises under a completely free market, not the opposite.
That's why even in the most deregulated markets today there is some worker protection, to discourage companies from firing all workers and replace them by machines in a wink of an eye. The less regulation there is, of course, the less workers will be kept around, and those who will be out of the system — because ultimately they would be replaced by machines — will never get back to it...