There have been entire lengthy papers and books on this subject, but here are just a few quick thoughts.
A great deal of news and noise has been made lately about the need to create jobs, or how we’re not creating enough jobs, or creating them fast enough, or whether Obama can take credit for the recent jobs created.
Let me emphatically state this: there is no need to make a special effort to create jobs. We live in a world of scarcity, a world of unlimited needs and desires (we can discuss the word “needs” another day), and a world of scarce resources. As such there will always be an opportunity for jobs. Imagine the desert island. Crusoe or some other poor sap is sitting there by himself. Will he ever run out of work? Will all of his desires ever be fully satisfied? What if he had 99 companions on the island? Would they ever run out of things to do?
This business of “creating” jobs smacks of political chicanery and patronage, not to mention economic ignorance. And the belief that one person or even a body of several hundred people could direct the economy to create the correct types of jobs in the correct quantities is the height of hubris. That a professional economist or former Fed governor would speak in these terms is disturbing.
Government Mandates Do NOT Create Jobs: “Steve Moore tells a story about Milton Friedman traveling to Asia in the 1960s and visiting a worksite where a new canal was being built. Friedman was shocked to see that instead of modern tractors and earth-mover equipment the workers instead were using small shovels. Milton asked a government bureaucrat why there were so few machines, and the bureaucrat replied: ‘You don’t understand. This is a jobs program.’ To which Milton Friedman replied: ‘Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.’ A more recent version of the same story is happening in Michigan …”