Jobs are bad

"Surely it is as honorable to create a firm that employs 10,000 people as it is to kill 10,000 people in battle."--American Economic History, Jonathan Hughes and Louis Cain, 4th ed., 1994.

The implication is that employing people is good. I disagree. Employing people is bad.

That doesn't mean it's WRONG to employ people. For example, it might be worth it to employ 10,000 people if that allowed you to produce 5,000 cars. But it would be the 5,000 cars which were the good thing; the 10,000 jobs would be a bad thing, although possibly outweighed by the cars.

Similarly, just because killing people is a bad thing doesn't mean it's wrong to kill people. For example, it might be worth it to kill 10,000 people if it allowed you to win a war. But it would be winning the war which was the good thing; the 10,000 deaths would be a bad thing, although possibly outweighed by the victory.

So, just as killing people is bad, although sometimes worth it if it allows you to win a war, I claim that employing people is bad, although sometimes worth it if it allows you to produce a lot of goods. Here's why.

Compare two entrepreneurs. One ("One") creates a firm that makes and sells 10,000 widgets, employing 10,000 workers. The other ("Two") creates a firm that makes and sells 10,000 widgets, employing 0 workers. (Suppose Two simply finds the 10,000 widgets lying in his basement.)

Which entrepreneur is more honorable?

According to common notions,

One produced 10,000 widgets and 10,000 jobs, while
Two only produced 10,000 widgets.

So One is more honorable.

But that is wrong. Both entrepreneurs have produced the same number of widgets. But One has sucked 10,000 workers from other industries. Say it takes 2 workers to make 1 gadget. Then

One has added 10,000 widgets but subtracted 5,000 gadgets, while
Two has added 10,000 widgets and subtracted NO gadgets

So Two is more honorable.

Unemployment

"But what if the 10,000 workers One employs were previously unemployed?"

Say the 10,000 workers were unemployed. While unemployed, each worker plays solitaire, which he enjoys.

Then,

One has added 10,000 widgets but subtracted 10,000 games of solitaire, while
Two has added 10,000 widgets and subtracted NO games of solitaire

So Two is still more honorable.

"But wait: your analysis implies that employing people makes them worse off (by depriving them of solitaire). But that's absurd, so you must have made a mistake."

Yes, employing people does make them better off; but, no, my analysis does not imply the contrary:

One's employees prefer being employed to playing solitaire--otherwise they wouldn't take the jobs. But it's not the WORK that they prefer, it's the PAY. To hire them, One must pay them enough to outweigh their foregone solitaire games. Thus the cost of the foregone solitaire games is transferred from the workers to One, who will in turn transfer some portion of that cost to his customers.

Thus the analysis is a bit subtle:

One's widget-making process does indeed impose a greater cost on the economy than Two's, namely the workers' foregone solitaire games.
Nevertheless, the workers themselves are better off under One than under Two,
because the cost of the lost solitaire is TRANSFERRED--away from them, and to the entrepreneur and his customers.

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This page maintained by Steven Blatt. Suggestions, comments, questions, and corrections are welcome.