Philip Copeman

Author and Activist

You can't create jobs

When will you guys get it? You can't create jobs!

You can't make money from some tax payer and pay it over to a worthy worker, without first taking it away from some other worthy worker first. You can't make a company employ a worthy worker, without getting that money from another worthy worker already working in the company. You can't take money from some heinous capitalist and give it to a worthy worker without first impeding that heinous capitalist's ability to employ another worthy worker.

The only thing that we are able to do is create business opportunities and these businesses will create a demand for workers. So Governments should focus on infrastructure and nurturing a growth environment rather than looking to transfer resources from a payer to a receiver.

Now that you have digested that, it gets worse. Before you even think of creating jobs you have to think about creating capital first. Focusing on capital is likely to increase inequality. It is too ghastly to contemplate the fact that high growth, decent work and egalitarian equality are mutually incompatible goals.

In a modern logistically efficient, globally deliverable market, production of knowledge or goods favors the use of capital. A single worker with a machine can produce more than 10 or even a 100 workers without a machine. Worse is that economies of scale favor the larger producer or the larger holder of capital. To win in manufacture or the knowledge economy, your ratio of capital to labor must be higher than your competitors. Focus on labor centric solutions is to take the road to extinction.

If you are able to believe Says Law that supply creates its own demand, then the only sustainable solution is to create an environment conducive to capital formation. By allowing entrepreneurs to thrive, not for the social purpose of employing people but for the extreme purpose of producing the highest quality product and the highest cumulative margin. This will maximise capital formation and by implication GDP. (and by implication employment)

If Says law fails, you have to allow the business to fail and for formation to happen somewhere else. You cannot protect or create jobs in a failing business, without taking it away from a successful one.

Only in Utopia, can you employ people, pay them with the output of production without them making a corresponding output and have a sustainable equilibrium with maximum growth.

They don' t call Economics the Dark Science for nothing.

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