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Quotation of the Day…

… is from page 54 of the 2008 Third Edition of the late Vincent Ostrom’s 1973 book, The Intellectual Crisis in American Public Administration:

Producer efficiency in the absence of consumer utility is without economic meaning.

DBx: The truth of this point was emphasized as far back as Adam Smith, yet it remains elusive. There abound today politicians and pundits who, fancying themselves to possess a fuller understanding of human nature than is possessed by economists, point out that people find dignity in work. These politicians and pundits offer this observation as if they are nobly informing the public of a reality that economists naively deny or dismiss as irrelevant.

But of course no serious economist either denies that people find dignity in work or dismisses this fact as irrelevant.

What serious economists do deny is that jobs that exist only because the state obstructs voluntary and peaceful consumer expenditure choices are jobs that workers can justly find dignity in holding. Serious economists understand that “to produce” means “to use labor and materials to satisfy as well and as fully as possible the demands of consumers.”

The reason there is dignity in work is that work is productive in this sense. The productive worker not only supports himself or herself and his or her family, but also contributes to the material prosperity of fellow human beings – that is, of society. In contrast, there is no dignity – or should be no dignity – in toiling in ways that harm fellow human beings. A successful burglar might well work creatively and hard and, as a result, provide a good living for himself and his family. But if this burglar were to inform us that he finds dignity in his occupation, we’d conclude not only that he’s unethical because of his deeds, but also deluded about the true meaning and nature of dignity. The burglar drains society of wealth; he doesn’t add to it. The burglar has no business feeling dignified. He should instead feel shame.

And so it is with workers whose jobs are supported by tariffs or subsidies. These interventions allow some people to toil at tasks for which they get paid, but the interventions that enable payment for this toil are a net drain on society’s wealth.

Why should Sam and Sarah find dignity in holding jobs that exist only because their fellow citizens are coerced into supporting those jobs? Sam and Sarah should be embarrassed – indeed, ashamed or even mortified – to hold such jobs.

We can, alas, forgive Sam and Sarah. They likely know no economics and so are easily gulled by politicians and pundits who mistakenly assure them that the protectionist policies that are alone responsible for their jobs are a net benefit, rather than a net cost, to their fellow citizens. But regardless of Sam’s and Sarah’s – or the politicians’ and pundits’ – economic and ethical ignorance of this matter, the underlying reality doesn’t change: Jobs that exist because of protectionist policies represent plunder of fellow citizens. Sam and Sarah should derive no more dignity from holding such jobs than burglars derive from holding theirs.