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Does Government Create Jobs?
Many people have been talking about job creation lately, especially politicians. But is government the best creator of jobs? And is job creation the best thing for the economy? Professor Steve Horwitz explains that there is a difference between creating jobs and creating wealth. Creating jobs is relatively easy, but the most economic progress is made when jobs are eliminated because they become unnecessary. This does lead to some unemployment, but the alternatives are worse. To prevent transitional unemployment would also halt innovation, growth, and the reduction of poverty. So what is the best way to create valuable, meaningful jobs? Professor Horwitz says, “The best job-creation program in human history is the free market and the entrepreneurship it generates.”
You Do Not Own Your Labor
“This line of argument is confused because of an over-reliance on vague metaphor. We have to stop thinking of contract as binding promises or obligations. We have to think of it, as Evers and Rothbard argue, as transfers of title to owned resources. And we have to recognize that these owned resources are only scarce, physical goods—not “labor.” You do not own your labor. You own your body. That gives you the right to perform actions (labor), but you do not own your actions. If I perform an action that you like, and pay me for, you do not own my action. You do not even “receive” my action. You simply prefer that I engage in it, for a variety of reasons.
In other words a labor contract may be viewed as an exchange only economically, but not legally. Economically, the employer gives up title to money, in “exchange” for you performing some action. But legally, it’s not an exchange at all, it’s just a one-way transfer of title: a conditional transfer of future title to future money, conditioned on the occurrence of a certain event happening (namely: that the “employee” does a certain action). That is, if you mow my lawn, then title to this gold coin transfers to you. Again, the transfer of title in this case is both expressly conditional and future-oriented. Title to the coin transfers only if the lawn is mowed, and I still own the coin.
The performance of the action triggers the transfer of money from the employer, but the action is not literally “sold” because the employee did not “own” his labor, and the employer does not own it after it is performed. We have to stop thinking sloppily and overusing metaphors.”
— Stephan Kinsella, A Libertarian Theory of Contract
Stephan Kinsella posted a link to this on his facebook page today and I responded there and I’ll post my response here, as well:
One caveat I would add is that employers pay you to perform an action and this is a one way transfer but they do so with the expectation that your performance will result in a 3rd party transferring them some sort of payment, and usually greater than the original payment for your action.
If that second transfer isn’t possible or relied on or there is no expectation of a reciprocating action/reaction then most, if not all, employers would not initiate the initial action of transferring payment to you in the first place.
The secondary action can even be a negative. For example if you pay someone to stand guard as security on your property, your expected reciprocation from 3rd parties is that they will NOT bother you or enter your property.
You’re therefore paying for an action and expecting non-action in return.
The Truth About The Minimum Wage
FEE:
People don’t like to think that anyone’s labor is worth less than the minimum wage. Someone might end up flipping burgers for $5.00 an hour. You might think the minimum wage is a way of paying some sort of dignity premium—hence language like “living wage.” People with such good intentions look at the direct beneficiaries of these policies, say, burger flippers now making $7.50 an hour. They pat themselves on the back. But they rarely count the invisible costs: willing human beings who never get hired in the first place.
“But $5.00 an hour is not enough to live on!,” they’ll say. For whom? A teenager living at home with his parents? An elderly person who wants simply to stay active? A single mom with three kids? A single woman sharing an apartment with 2 roommates? Of course, not all of these people could live off of $5.00 an hour. But some of them could given the opportunity. Concerns about those who couldn’t don’t justify minimum wages even if we ignored the invisible costs of the policy, which include reduced margins to businesses that might otherwise grow (and hire more people).
In other words, if you take off the bottom two rungs of the income ladder, many will never climb it. That’s the effect of the minimum wage. The more cynical side of me says that’s how many politicians and the overpaid teamsters want it.
See Also
What people forget is that there are plenty of people who work that don’t need to support anyone, not even themselves. Many of these people work because sitting at home is boring or because they would like some extra spending money or because they want to help make a difference in someone’s life and don’t necessarily need the money.
A lot of these people live in a household that has other income earners that completely support and help sustain their lifestyles regardless if they work and contribute or not.
The minimum wage already requires us to pay them a minimum wage determined by the price floor, increasing the minimum wage for others would also require us to pay these people more.
The minimum wage isn’t for someone who is trying to support a family, it’s this grand illusion that politicians and union reps have constructed so that they can claim that they are doing something to help the people.
I’ll save my stark commentary about unskilled low wage workers and starting a family for another time.
(via anarcho-alowisney)
![thedailywhat:
[death+taxes]](http://24.media.tumblr.com/tumblr_m8gi8mNqRP1qzpwi0o1_500.jpg)
Source: Bureau of Labor Statistics
Attn Obama opponents: WHERE ARE THE JOBS? BLS Chart 2008 – 2011
Note for the Grand Ol’ Teaparty: Red = bad. Green = better.
“Republicans, aided and abetted by many conservative policy intellectuals, are fixated on a view about what’s blocking job creation that fits their prejudices and serves the interests of their wealthy backers, but bears no relationship to reality.” — Paul Krugman
