by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Everyone is at it — Joe Biden, Boris Johnson, the G-7, the United Nations. All are in the business of “creating” green jobs. Johnson wants 250,000 of them, to be “created” by clean energy technologies. Biden promises no fewer than 10 million. Everything, I guess, is bigger in America.
Bigger still, though, is the logical flaw in their arguments. Indeed, it is so vast and so obvious that it is a wonder anyone takes them seriously. Do I really need to spell this out? Governments cannot “create” jobs — at least, not without destroying other jobs.
The state could, if it wanted, pay people to dig holes and fill them in again. But, to cover their wages, it would need to take the money from other people. Some of those people would have spent the cash on hiring others. All would have used it to buy things, thereby calling more jobs into existence. These jobs, not depending on state largesse but upon meeting spontaneous market demand, would have been more productive.
“There is only one difference between a bad economist and a good one,” wrote the great French economist Frederic Bastiat. “The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” …
… Bastiat illustrated his point by imagining the effects of smashing a shop window. The shopkeeper would have to pay a glazier to replace it. The glazier would then have extra money to buy a new pair of shoes, the cobbler would be better off, and so on. So why can’t a country make itself rich by hiring little boys to go around smashing shop windows? Because of the unseen costs. …
… “Green jobs,” indeed, any jobs maintained by government intervention, necessarily work on the same principle. Each job is sustained with cash diverted from a more productive part of the economy.