The Economics of Mass Manipulation

It is not unusual that we hear cries in the media about there not being enough jobs. A standard jobs rant runs something like this; “The government’s plan isn’t creating jobs, it’s destroying jobs! We need a new policy towards creating jobs and stimulating employment!”

This complaint is flawed in that it uses the very general term, “jobs.” What kind of jobs in what sectors? Should they be full-time jobs or part-time jobs? When you say that “We need jobs!” you’re actually creating far more questions than you’re answering.

MarxistMax responded to my piece here, and it is apparent that he entirely missed the point of my last post.

Quote from MarxistMax: “The Conservative Party is funded by the rich, staffed by the rich, and works in the interests of the rich. It was in the interests of the rich to slash the heavy industry of the north, and unleash the monster of the London financial markets. That’s why Thatcher did it.

The Conservative Party destroyed many northern communities in the 80s, and it will take more than a few environmentally destructive, ground shaking, water-supply meddling Fracking wells to revive those communities again.

This is what he started with, and I must confess that I am wholly ignorant to the Thatcher administration. But, I will say this; all of this completely misses the point. The point of my last point was to point out that all of the so-called green jobs, like those jobs such as fracking, have environmental trade-offs. I mentioned the wind-farms upsetting the ecosystem by killing thousands of birds, for instance. So the point is this; the government taking over the energy industry and investing in so-called “green technology” isn’t going to make us safer or healthier, since all of the “green technology” so heavily touted by environmentalists each have their own environmental trade-offs.

Now with regards to it being within the interests of the rich to keep us dependent on fossil fuels, let me ask you this MarxistMax; aren’t there rich people in the “green energy” business who have a massive interest in government funding of “green technology?” You are subsidizing the interests of the “rich” no matter what you do. If you say the government should nationalize the energy industry, then it can only do so in one of two ways; either it must, using public funds, buy the businesses from those businessmen who own said industries, or it must seize them forcefully from those said businessmen. But even if you nationalize the entire energy industry, the government will still have to do business with those parties outside of the energy industry, and the extortionist, backroom deals that will ensue from this will know no bounds and no ends. The interests of the “rich” are once again subsidized.

MarxistMax, right about here, changes direction; he says that the green sector is more “job intensive” than the carbon-based sector (which may or may not be true, I don’t know), and that we need the government to invest in the green sector in order to create jobs.

Quote from MarxistMax: “The fact is that the green sector is more jobs-intensive than the carbon sector. We are in a time of economic crisis. Jobs are needed more than anything. Opening up the fracking wells will introduce some jobs, but not nearly so much as pursuing our carbon targets by investing in green energy.

The argument is often put forward that prices will be lowered due to market competition, because don’t we all want to help the little grannies in the winter time? There is a shed-load of evidence that the economic conditions of the US are not compatible with the UK. If we were to get started on green infrastructure and jobs now we will be in a much better position for the future.

Notice here the massive shift-in-direction that MarxistMax just pulled. In his last post, he was saying that it is imperative to get away from fossil fuels on the basis of environmental concerns. Now he’s saying that we need to invest in the green sector on the basis of job creation.

First and foremost, there is what is seen and what is not seen. What is seen is that, yes, government spends money creating jobs. What is not seen is that when the government takes it’s revenue, it by necessity destroys an employment opportunity for someone else, so the actual net balance of jobs created is zero, if not less than zero.

Let’s say for example that the government imposes an extremely punitive tax of 50% on the consumption of fossil fuels in order to invest in the green sector. If a person on average consumes ~$500 per month in fossil fuels, he will have to pay an additional ~$250 per month as a result of the tax. The result is that he will have to pay a total of ~$750 per month in energy costs. Assuming everyone pays this incredibly punitive tax willingly, the government will use this added revenue to invest in green technology. You will look at this and say, “We’re creating jobs!” but what you don’t see is what the consumer would’ve done with the ~$250 taken away from him through taxation. The ~$250 taken away would’ve created employment for another business at a later date.

The same benefits of “job creation” are present even without the tax. Ah, but you might interject, “We actually don’t want them to pay that punitive fossil fuel tax, we want people to invest in alternative energy on their own and avoid the tax altogether. The tax is just a failsafe to see to it that investments into green technology are made.”

But even in this instance, you’re still not actually creating jobs. If the demand for fossil fuels shifts to alternative energies as a result of the tax, then jobs will disappear in the fossil fuel industry (creating unemployment) as jobs in the new green sector begin to boom. You’re merely transferring jobs from one sector to another sector, and this creates its own set of problems.

When it comes to employment, there is always one extremely important aspect of the economy that is left in the lurch; the structure of production. It is absolutely essential that the structure of production is resting on a sound foundation. If the structure of production is upset through out-right consumer manipulation (the attempt at making consumers invest in green technology so as to not pay an extremely punitive fossil fuel tax for instance), artificial credit expansion via fractional reserve banking, etc., then whatever jobs are “created” will be nothing more than a flash-in-the-pan. They have no substantial future; in a given number of years, those jobs will disappear from the economy altogether and the same people screaming that we need jobs will be back in the media once again screaming the same mantra, “We need jobs!”

There is one final issue to address with the sort of manipulative policies addressed earlier; people are not pawns on a chessboard that you can move at your whim. You’re looking at society as if it were a chessboard and saying, “if only we could get a smarter player to move the pieces. Then we could achieve results X, Y, and Z.” Before you interject and say that this is a strawman, let me remind you of what you wrote.

Quote from MarxistMax: “The energy industry should be nationalized so that the government can take an active hand in guiding the industry from carbon-intensive means of production towards green energy. Only by fully owning and controlling the industry can this be achieved. Only then can we invest properly in wind farms, offshore and onshore, in solar panels, and in geothermal energy.” (my italics)

Since it is not a strawman to say that you hold this view (when you blatantly do), let me now ask you this; how many men throughout history have looked at the whole of mankind with grand visions of regimentation and guided production, and how many people died because those same men tried to implement these grand visions? They believed that they could instill all-around regimentation within the life of man, and the result has always been mass poverty, mass murder, and mass political corruption. They manipulated the world around them as though they were God, they instituted their vision because they thought they were the ones who would save civilization from inevitable collapse, and the people at large are the ones who paid the price.

The last point to be covered with regard to MarxistMax’s post comes to us in the form of a rant about competition.

Quote from MarxistMax: “We must stop this obsession with competitiveness! The US is our economic superior (why?), and will be for the foreseeable future, we simply mustn’t let some childish international race to environmental destruction force our hand in this matter.

You will notice from the question of WHY that I injected into the above quote that he never actually questions the reason the US is economically superior to the UK. Competitiveness makes things better, and cheaper. If you do not have competition, you only have monopoly, and getting rid of competition would only make the super rich even wealthier.


Posted on August 6, 2013, in Economics and tagged , , , , . Bookmark the permalink. Leave a comment.

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