Creating Jobs

Today’s guest post is by Paul LaScola.

People or companies that require production assistance and are able to pay for it, create jobs.

What is a job anyway? A job is an intellectual or manual activity that makes possible the production of a product or development of a service (in part or in whole). Within the context of the Natural Market commonly known as the free market, a job is the implementation of a precedent idea, generally by the undertaking of an entrepreneur (whose intention is to profit from the tangible expression of the idea), thereby bringing the idea from the abstract into the marketplace.

Most ideas, and the entrepreneurial engines that drive them, often require segmentation of a process spectrum spanning from concept to fruition, each segment of which is definable as a job.

Today employers typically contract with individuals for these jobs, a legacy of the Industrial Revolution. This whole notion of employment is antiquated and plays into the socialist notion of creating classes, a nonexistent distinction in a free society. Ever more frequently, we see employment moving away from this paradigm, with jobs being filled through subcontracting, outsourcing and consultancy. This results in reducing the capital costs of plants and employee benefit programs, and also reduces interference by labor unions with employment contracts between employer and employee.

The beneficial results of this new paradigm are reduced production costs, morphing of employees into independent professionals (contractors), and the expansion of the intellectual property of these newly-minted professionals through innovations of their own (allowing them to thereby create increasing market demand for their services). Certainly, it is understood that cost reductions make a given product more competitive.

Fundamentally, the goal of producers is not to create jobs; rather, they require them out of necessity. The real goal of producers is to optimize the profit resulting from their efforts.

So from where does this notion of ‘job creation’ derive? You guessed it, right? It is a political concept. The idea being that, Congress, the President, or some candidate for government office can influence the economy in such a way that they will create more jobs. Of course, all political interference, however well-intentioned, can only frustrate the economy, which is the physical expression of the Natural Market. As it is with any of the laws of nature, meddling with the Natural Market, itself a Natural Law, will result in predictable and catastrophic consequences.

Political government does have the power, through armed force, to tax. A tax is the confiscation of one’s property. All state operations are financed from the profit of producers through taxation under whatever guise (e.g., a tax, tariff, fee or fine). Government operations require what? Yes, employees. Politicians at last are vindicated. Now they can rightly and properly keep their arrogant promises to “create jobs” out of whole cloth: as many as may be required.

It is perhaps worth noting that none of these government jobs, nor those of politicians, members of the justice system, or bureaucrats, result in increased production or the creation of new wealth. Rather, they are an additional burden — financially, intellectually and most certainly motivationally — on real producers. This same distinction applies equally to all those professions whose practices exist primarily to support and serve the dictates of the state, even though they function privately. These often include attorneys, accountants, investigators, paralegals, process servers, payroll services, smog testing shops, and even engineers and scientists (when their work is required to test the effects of, or discover the results of mandated regulations).

Further, no state — including the U.S. government — produces anything. It is simply a broker between the funder (taxed producers) and those with whom it contracts or employs. It has taken its marketing inspiration and adopted its present model from one refined by an early twentieth century private competitor: the Mafia. More fascinating, it brackets its benefactor (producers) in a financial squeeze of regulation on the production side and taxation on the profit side, reducing the very profit the state would otherwise have the opportunity to plunder, and discounting completely the production and innovation that is never seen (because it never happens).

More importantly, this intrusion by the state into the mechanisms of commercial enterprise is a kind of nationalization of the sort practiced by dictators the world over. Wage controls, regulation of working hours, sick and pregnancy leave, and vacation requirements are not the province of enforced third party intrusion. All employment decisions are by authority of the owner and a part of any negotiated employment agreement. State mandates wrest decisions away from both contractual participants. Wage controls, such as a minimum wage, are an embargo on employment, thereby generally reducing employment opportunities. Regulation of working hours and leave result in an increase in costs and a decrease in production. These regulations are simply a hidden tax put upon employers for the audacious sin of hiring job seeking applicants. If the state insists on imposing such demands upon employers (a kind of specialized welfare subsidy), it is incumbent upon the state to reimburse the employer for these added financial burdens.

Worse still, the idea of claiming that it is ‘just’ to seize the property of another, regardless of a purported good, is simply justifying theft. Considered in another context, it is immoral. Regular old slavery, different marketing, with the state as the new master.

Isn’t this only medieval feudalism revisited? You know: kings, noblemen, and the producers of their day (peasants). Didn’t the Enlightenment and the intellectual revolution that became manifest as America solve that misadventure? As descendants of that lofty Declaration which recognizes that all are independent individuals, I hope we will not let this stand: the insanity of continued reiterations of failed models of governance. Particularly, because the libertarian model of personal (individual) governance, by voluntary contractual relationships, is consistent with natural law, God’s Law, and is proven daily with the occurrence of millions of small and large voluntary transactions within the marketplace.