Thursday, February 19, 2009

The Problem of Make-Work

Many eminent economists and most legislators think that a dollar spent creates jobs, creates wealth. But, 'creating jobs' is easy, entropy does that. The problem is creating jobs where the outputs are worth more than the inputs. If we create federal projects, and through Davis-Bacon and other contrivances (the endless auto bailouts), create a new bunch of unionized sectors and government employees dependent on the Federal Government, pretty soon people lose the ability to 'economize', to make more with less, to evaluate projects on a 'cost-benefit' basis, and productivity growth stalls.

Consider the Angler Fish. The smaller male is born with a huge olfactory system, and once he has developed some gonads, smells around for a gigantic female. When he finds her, he bites into her skin and releases an enzyme that digests the skin of his mouth and her body, fusing the pair down to the blood-vessel level. He is then fed by, and has his waste removed by, the female's blood supply, as the male is basically turned into a parasite. However, he is a welcomed parasite, because the female needs his sperm. What happens to a welcomed parasite? Other than his gonads, his organs simply disappear, because all that remains is all that is needed. No eyes, no jaw, no BRAIN. What you don't need, you don't use, and eventually you lose what you don't use.

So in our Brave New World bureaucrats create jobs where workers get paid by seniority, can't get fired, and have a million rights. People are guaranteed jobs, for life, merely by passing some simple criteria (eg, teachers unions, flag wavers on highways ($25/hour)). What is needed by their willing host? A vote, that is all.

It seems nice, but no responsible parent would do this to their kids. That is, no one would give their children unconditional privileges regardless of their schoolwork, how late they stay out, etc. Giving your kid unconditional support is a great way to create a lousy adult. Give people privileges for 'showing up' and not distinguish between levels of performance (as is customary in unions and government, paying by seniority only), and you squeeze the benefits of a capitalist economy out of the system, creating the lax work effort many West Germans discovered in their East German countrymen in the early 1990's.

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