Dogma Premise # 27

Government does not create jobs; only business creates jobs.

This absurd claim is particularly easy to source because it is repeated so frequently and so precisely (e.g., here, here, and here).

A job is created when someone pays someone else to do something.  It makes no difference where the money comes from, who pays, or who gets paid.  Paying someone to do something is the definition of a job.

Obviously, postal workers have real, permanent jobs, as do people who make coins at the United States Mint.  So do soldiers in the military.  And when the government outsources its military work to Blackwater mercenary soldiers or mega construction firms like Bechtel, that is once again an example of jobs created by the government, even if the jobs are funded by the public sector and are managed by the private sector.

If the government spends money to build a bridge, or if a private business decides to build a bridge, it’s the same jobs -- and indeed, the same firms, workers, and equipment may be hired in either case.  Government expenditures create jobs in exactly the same way as private expenditures.

The only difference between government and private job creation is that the government has a legal obligation to publicize and seek out bids, and to not award jobs based on cronyism.  Private firms have incentives not to do so, but they may have competing incentives to in fact do so, and, unlike government contracts, private firms are perfectly free to award a big contract to the boss’s nephew if it suits them.

Once it is realized that all spending on all projects always creates jobs, then it becomes clear that the proper question is not WHETHER a project creates jobs, but WHAT jobs are created, and what social value, if any, remains after the project is completed?

For example, a private firm may purchase a fleet of yachts or executive jets.  A government may spend the exact same money to build a library or a concert hall.  In this example, approximately the same number of jobs or the amount of wages will be created in either case, although the private expenditure would create more of the jobs in manufacturing, whereas the public expenditure would create more jobs in construction.  But that’s not the big difference.  The big difference is that when the project was completed, in the public case society would be wealthier because there would be a library or a concert hall that everyone could use, whereas in the private case the residue of the expenditure would be yachts or jets available only to the wealthy, not to the public.

So the fact that an expenditure creates a certain number of jobs does not matter much.  The fact that an expenditure is private or governmental matters hardly at all.  What really matters is (1) whether the jobs are good, high-paying jobs that help local economies or instead be jobs sent overseas, and (2) whether the substance of the completed project makes us collectively wealthier (e.g., a park, college, recreation facility, public transit, solar plant, etc.), or not wealthier (unneeded infrastructure, a private facility, or a frivolous expenditure).

The mere counting of the jobs created by a project misses the point, and the suggestion that government doesn’t create jobs, or creates fewer or worse jobs than private firms is absolutely false.

Dogma Premise 28

All Dogma Premises