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Oh How I Wish that Julian Simon Were Still Alive

Here’s a letter to the Wall Street Journal:

In “America’s Dazzling Tech Boom Has a Downside: Not Enough Jobs” (Oct. 13) you complain that America’s tech companies use too few resources to produce the remarkable abundance of goods and services that these firms make available to consumers worldwide.  You write as if it’s undesirable for firms to produce as much output as possible using as few scarce resources as possible – specifically, in this case, using what you somehow divine are too few human resources.

Would you, though, complain if these companies increase their output while using less rather than more petroleum, coal, or natural gas?  Site their factories on less rather than more land?  Produce their goods with less rather than more bauxite, copper, and tungsten?  Dispose of their industrial wastes using less rather than more air and water?

If you’d laud and not lament these resource savings, why do you lament the tech-sector’s success at producing more output using fewer human resources?  Is human labor not scarce?  Do human workers produce value only by working in the tech sector?  Are workers in the tech sector so lacking flexibility and talent that they literally can do nothing of economic value other than work in the tech sector?

You commit the ages-old fallacy of judging the worth of firms and industries according to how many workers they employ rather than according to how well they enhance human well-being by increasing the production of consumer goods and services.  If your standard were the appropriate one, there’s an easy solution to the problem that you diagnose: you and others who share your view can hire workers to sit around idly, doing nothing of value.  If you are unwilling to pay people to perform such ‘work,’ you’ve no cause to complain that firms in tech sector do not effectively do the same.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

It’s endlessly amazing to me that so many people today worry themselves sick that free markets will cause us to struggle to get by with ever-declining availabilities of petroleum, land, housing, food, medical care, child care, and education, and yet worry also that the only resource that is currently superabundant and is destined to remain so is human labor.