Adam Gurri in a post titled Create Value, Not Jobs, writes

Certainly technology can and is disrupting human labor markets–but that isn’t going to “further weaken the global economy”. It is going to increase our productivity, make it easier to provide consumers value for cheaper. It will make it hard for people replaced by machines to figure out how they can create additional value, for a time.

But we need to get our priorities straight; what we want to do is help people create value. Unless giving someone a job will enable them to create more value than it costs, the existence of that job is counterproductive.

Economists like to say this type of thing. Its counterintuitive, which always fun. And, it helps highlight why certain policies are in fact a bad idea.

The only problem is that as a general statement, its wrong.

Or, more precisely, its either trivially true or false.

If value is simply, that thing which our ideal social objective function maximizes, then its true. But, literally by construction and hence trivially so.

For example, one could just as accurately say

  • Unless freeing millions of people from slavery creates more value than it costs, its counterproductive
  • Unless preventing the mass rape and murder of innocent children creates more value that it costs, its counterproductive
  • Unless asking Hannibal the Cannibal to refrain from devouring all humans on earth and then committing suicide for want of another person to eat creates more value than it costs, its counterproductive

While these statements are all true they are not particularly useful as a guide to policy.

On the other hand, if what you mean is that unless giving someone job on net increases the total value of goods and services produced within the economy, its counterproductive, then this is not true.

First, its not true because of the simple fact that jobs are a means of distributing income and distributing income is not, generically, costless. If we were to levy a tax and use that tax to redistribute income to those without a job this would almost certainly have some Hicksian deadweight loss.

In addition you are going to need some administrative authority to manage this redistribution policy and you have to worry about designing the system so that it does not encourage people to seek joblessness.

All of these things have welfare losses even if they have small or zero losses in terms of the total value of goods and services produced.

Second, people value having a job. They value the narrative that they are taking actions on a daily basis which enrich society, even if they are not actually doing this.

Now I am the first to point out that people can take this way too far. And, you have to balance the value of allowing folks to engage in an extended fiction about their role in the global economy against the material consumption of other human beings. Nonetheless, the value of the fiction is not zero.

If for a total material cost of $1 we could allow 100 Million people to persist in the belief that they are expanding the global pie, even if they are not, this would be a price well worth paying.

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