Friday, March 18, 2011

Government Jobs

So, what is a job? defines it as (among other things): "a piece of work, especially a specific task done as part of the routine of one's occupation or for an agreed price".

That sounds great, but what does it mean when you hear discussions about "unemployment", "job growth", "layoffs", "new jobs", "private sector jobs", "public sector jobs", etc. in the news nearly every day?  I think it's important to ensure that we're all speaking the same language.  In order to make my point, I need to back up a bit . . .

What increases the value of something?  What turns a tree into a log cabin?  What turns a chair, scissors, and various other instruments into a hair cut?  What makes an idea a reality?  The answer is: LABOR!  Without labor, nothing happens.  Unless someone performs an action, the greatest ideas of mankind die with the person that thought them up and are never realized.  This mean that there are two modes of operation for humans; 1) Provider and 2) Consumer.  If you're not performing labor and you're not dead, you're using resources that someone else is providing to you.

Now, the beautiful part is that it's not an "either/or" relationship.  In fact, most people are both.  We each bring some unique set of skills and ideas with us every day of our lives.  Whether we were born with a certain skill or have gained it through hard work, studying, practice, and/or determination, we each have a capability portfolio.  Whether one chooses to use their talents is a different matter.

The concept of money arose when direct bartering became cumbersome.  Imagine trying to buy car insurance with eggs from your chickens!  It also allowed us to overcome the problem with time differences between the various desires/needs involved.  For instance, if my crop is ready today but I won't need milk and bread until the winter, I can sell my crops while they're still good and wait with my money until I need the food.   It also allowed us to separate the exchange into any number of people.  No longer did the hairstylist have nothing to offer the bald car salesman.  They could sell their labor to anyone that desired it and be free to spend their income on their own wants/needs whenever they chose.

However, no matter how convenient the transaction became, the entering argument was always that each person had something to offer and, as previously established, there is no value increase unless there is labor.  This meant (and still means today) that someone needed to perform labor in order to increase the value of their goods or services so that the added value could be sold to a consumer.  In other words, without a "job", or performing a service for payment, a person becomes simply a consumer and what they consume must be provided to them by another.

This is simply a fact, not a statement about society.  The greatest thing about mankind is that we tend to give freely of our excess.  We embrace holidays that involve gift exchanges (Christmas, Birthdays, etc.) and find enjoyment in the act of giving.  Whenever there is a tragedy or disaster, people give of their time, money, goods, and services to complete strangers without any hope of repayment.  But what happens when the "excess" runs out . . .?

How many of you believe that you would continue to give the fruits of your labor to a complete stranger, regardless of their situation, if it meant hurting your family?  If your son or daughter would have to go without food, would you give your food away to others?  Perhaps you would, but I would argue that there are two competing interests involved and, when taken to extremes, it's easy to see my point.  The two interests and two extremes result in a total of four combinations.  Let's analyze:

Your Family
  1. You have infinite resources at your disposal
  2. You have nothing
  1. They have nothing and will die without your help
  2. They have everything they want and are completely self-sufficient
Now, the extremes are easy to analyze.  If you have nothing and they have everything, you're probably going to hope that they give some to you, but you're not going to be giving them anything.  If you have everything and they have nothing, you're going to be much more likely to help.  If you're both well-off, neither of you will probably even notice the other and, if you both have nothing, you're only hoping that there's at least a third person in your society.  What happens as the lines begin to blur?  Each person's threshold occurs at a different point.  Where your threshold is will be dependent on who you are and what you consider important.  I cannot make that determination for you . . . and neither should anyone else!

If I give you $100, how much money do you receive?  If I hire a courier and pay the delivery man $25,  you get $75 from me.  Now, what if you needed the $100 to pay your electric bill?  Your lights still go off unless I send you $125 via the courier.  So, in order to meet your needs from my excess, I have to send you more than you needed just to pay for delivery.  What if I only had $100 excess?  Will I still send you $125?  Maybe, but is it more or less likely?

So, by now some of you may be wondering, "what does this have to do with government jobs"?  Well, I'll tell you.  The economics of a society is not a "zero-sum" game, contrary to what some politicians would have you believe.  What that means is that just because you are successful, I don't have to fail.  We can all be successful together!  I'm always amazed at this notion that we have to demonize "the rich" or "corporations".  If labor increases value, then doesn't it follow that the overall value of a society would go up faster if more people were performing labor?  If you don't believe me, follow the logical conclusion if we went the other way and 100% of people became consumers overnight but didn't lift a finger as a provider.  We'd all die.

What makes a person perform labor?  There are many forms of motivation but each of them is, well, a "motivation".  It could be fear of failure or death, it could be as simple as wanting to buy a new television or car.  Whatever it is, it will always be tied to a need or desire.  If I asked you to work for me 40 hours per week but I wasn't going to pay you anything, would you say "yes" or "no"?  What if I was holding your family hostage and said I would kill them if you didn't work 40 hours per week?  Would your answer be the same?  I use this example simply to point out that you were getting something in the second case and so most rational people would work.  But was your compensation mine to give?  What gives me the right to hold your family hostage for your labor?  Who the hell do I think I am?!?

I was able to change your actions based upon establishing a condition that I had no right to impose on you in a free society.  You were suddenly less free to choose.  I took away your freedom and then forced you to perform labor for my personal gain by pretending you were getting something back when, in reality, it should have been yours all along.  The lives of your family were never mine to give you back!

What makes a job?  I'm going to make it simple:  getting compensated for your labor.  That's really all there is to it.  Now you can pick that apart if you want but in nearly every case, that's what it boils down to.  Who provides that compensation?  Well, let's call them your employer.  What are the responsibilities of an employer in this relationship?  They provide the compensation for your labor - in other words, they provide the job.  So, who can be an employer?  It seems that the only way to provide compensation for labor is to have an excess from which to draw.  I can't pay you if I don't have money.  I can't give you a job if I'm poor!!!  You can't feed your family if I don't have extra money to pay you for performing labor on my behalf.  How do I get that excess money?  I perform labor and sell something to a consumer.

So, your labor increases the value of my business which allows me to provide a service to a consumer and I compensate you with a share of my success.  I've used your skills, possibly skills that I did not possess myself, to bridge the gap between supply and demand.  I've become the "middle-man".  I've taken some of your labor for myself to ensure that I can provide for my family . . . I've consumed some of your labor, performed some of my own, and passed some on to other consumers.  The beautiful part is that, as long as our arrangement gets you the proper compensation, you are free to take your money and become a consumer yourself.  We are all providing a service and getting compensated for it.  We add value through our labor and we benefit from the freedom to choose how to spend our compensation.

What about the government? ("it's about time - get to the point!")

Well, here it is.  The government doesn't have any money.  Every time you hear someone say "the government is paying for this" or "the government spent money on that", I want you to scream out:  "You mean, the taxpayers are paying for this" or "the taxpayers spent money on that".  Then ask yourself, "is that where I would have spent my money?"

Who are the consumers?  Who are the providers?  Do you have the freedom to choose?  Are they giving you back something that they didn't have the right to take in the first place?  Since the government does not have any excess from which to provide compensation for labor, they cannot be an employer.  They force you, through threats of imprisonment, to give money to them, then reduce the value of that money by paying for themselves (they become the consumer and you become the employer), but you don't have a choice except on whether or not to provide your labor.  So, the incentive becomes a bit confusing.  If someone's salary is completely paid by money taken from other people's excess, but those people get no compensation for the labor it took to generate that money, that person is not performing a service, they are not performing labor, they do not have a job!  They are not increasing the value of society, they are a consumer, stealing from some to give to another and skimming off the top in the process.

The Government can't fix the economy by creating more government jobs - those jobs are an illusion because they have no value-added.  They are consumers.  If you want to get out of a bad economy, reduce the number of public-sector (taxpayer funded) jobs and provide jobs in the private sector where everyone wins and you have freedom of choice and rewards for hard work.  Stop letting them lie to you about "unemployment" and "job growth" when the "new jobs" are all worthless and the small businessmen of our society are all going out of business....

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