“Saving” Jobs Means Destroying Wealth

State Representative Pryor Gibson (D-Anson) a couple of years ago declared that it was in the state’s best economic interest to “save” jobs, “even if they’re making buggy whips.” Such a ridiculous statement not only earned Gibson scorn from Civitas staffers, it exposed a broader mindset among politicians that “saving” jobs is somehow conducive to economic growth.  

But saving jobs through political means, as this Freeman article points out, stands in the way of economic progress.

Let’s make the obvious point first: Creating jobs is easy, but it’s nothing to be proud of. In fact, destroying jobs is the real path to wealth.

To use an example I’ve used before: One way to create jobs on a big construction project is to take away the machines that dig out the foundation, and limit the workers to shovels. Or better yet, spoons. That will create lots of jobs. But that is not progress. Using more labor than needed to get the job done costs wealth. Better to use the machinery and free up all the shovel- and spoon-toting workers to produce output in addition to the foundation. By the same logic, we could create lots of jobs by destroying all the farm machinery. Surely, though, we would not be richer for doing so.

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Saving jobs means putting the engine of human creativity in neutral if not reverse.  The healthiest economies are those that consistently destroy jobs by inventing new and better ways to satisfy existing human wants with less and less labor, while freeing other labor to satisfy new and not-yet-dreamed-of wants.

Remember this point when you hear about the North Carolina General Assembly’s next targeted tax credit or corporate welfare giveaway scheme. Such policies merely serve to freeze in place the state’s economy, impeding the dynamic process by which new and more efficient means of production and innovation of new products are discovered. By propping up certain companies and industries through political favors such as tax breaks and handouts, state lawmakers are in fact not helping the economy grow, but rather creating a roadblock to progress.