Here’s a letter that I sent today to the Boston Globe. In it, I try (however feebly) to undermine the absurd notion that the economic worth of any project is measured by the number of jobs required to complete it.
Dear Editor:
Derrick Z. Jackson reasons that among mass transit’s benefits is the fact that, dollar for dollar, its provision requires more workers than do investments in the auto, oil, coal, and gas industries (“The transformation of transportation,” Feb. 24). Mr. Jackson’s reasoning is flawed.
The number of workers required to supply a good or service is not a benefit of that good or service; it’s a cost. Societies become more prosperous only as they succeed in using fewer workers and other inputs to supply any given amount of output. Only then are inputs made available to produce outputs that otherwise could not be produced. If Mr. Jackson were correct that a project’s benefits rise with the number of jobs it creates, then an even better system of public transportation would be rickshaws, for they require one worker for every passenger-ride.
Sincerely,
Donald J. Boudreaux
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Ah, the old make-work fallacy strikes again.
Sorry professor. Too much logic, not enough Keynes. Nobody will listen. Thank you for your ceaseless effort, though.
this whole jobs thing is out of control.
the "American People" that politicians love to talk about, could have gotten like a fifty percent discount on this whole stimulus thing if they just gave 4 million unemployed a check for a hundred grand to go.
But no. There has to a (much less paying) job involved otherwise they'd be just like "The Rich" who make all this money doing nothing while "Workers" suffer and as we all know, that's not "Fair".
Dr. Boudreaux,
You pull your punches. The better argument that I see is that transit operating revenues only cover 40% of mass transit expenses in NY, 20% to 30% in most other large cities and 10% to 20% in medium and small metro markets. For each dollar spent the ROI is negative 70 cents. Adding in consideration for capital costs it would be easy to get -0.85.
Now since your opponents clearly believe in the multiplier effect it seems reasonable to apply transit subsidy proponent's multiplier to the -0.85 so lets just say 2.5 times -0.8 for $-2 for each dollar spent.
Think of how many more jobs would be created with those resources redirected.
These statements don't mean that there is not appropriate transit. It just comes in a form where the users pay for the service. As for the pollution externalities, I say bring them on. As soon as the transit agencies start charging for their carbon externalities, then I am ready to sign up the cars. Until then the transit proponents trump up false hope that transit provides competitive market solutions to reduce pollution and/or carbon foot prints.
Or, let's chop down the largest tree in the forest using only a hering! Oh, wait that's an obscure pop cultural reference not an economic stimulus program. Sometimes it's hard to tell the difference.
I did see another economist blog recommend we use our stimulus money to build 3 giant pyramids in the middle of nowhere. I guess we'd have something to show for it that would last thousands of years.
Don, you are too simple.
Keynes would explain that SOMEONE has to MAKE all those spoons.
You need people to mine the bauxite…
You need people to forge the spoonmolds…
You need people to imprint the bowls…
You need artisans to engrave the handles…
You need people to package the spoons…
You need people to count the spoons…
You need people to ship the spoons…
…and of course, you need a Federal Spoon Inspector from the newly-augmented OSHA to ensure the spoons are up to code for digging.
You Austrians are so short-sighted.
(i wish i could afford a handful of rice)
Don,
Keep beating that horse!
Sorry to say that your words are lost (but greatly appreciated by many of us here) on a majority of the country because POTUS just sold the public that those under 250K will not pay taxes and that the rich will foot the bill.
Class warfare sold to the ignorant; it's working and it's scary.
Better yet, let everyone walk and pay themselves a dollar.
Don, I understand the point – but isn't there a broader fact: that paid work is the most significant means by which we distribute wealth? I feel I'm being a bit dim here…