The Incredible Jobs Machine
online.wsj.comHe speaks as if jobs are the point of it all. Jobs are just a means to an end: the goal is to make the world a better place for everyone.
Jobs make the world better because people with jobs are better off than those without, and because employees are being paid to do things that employers and customers want done, making the employers and customers better off too. IOW, the non-zero sum benefits of trade.
But regulations are important. A good regulation perfectly internalizes externalities. I can't burn leaded gasoline in my car because even though it's an effective and cheap form of lubrication, it kills babies.
So maybe there would be more jobs if leaded gasoline was allowed, but the world would be a worse place.
And "every government-mandated low-flow toilet, phosphorous-free dishwasher detergent, CFL light bulb, and carbon-emission regulation" is a government attempt to internalize externalities, an attempt to force companies to pay the true cost of their activities.
It makes the economy function more efficiently, not less.
Granted, the government very rarely does its job perfectly. But the imperfect job it does do is much better than doing no job at all. Help the government do its job better, not worse.
I always like to use the example of the clothes washing machine to people. Why do you use one, instead of hand washing the clothes yourself, or pay someone else to hand wash it for you? Do you rather want to spend the time on something else, or don't want to share your money and create another job for someone else to do this? More importantly, why is it considered greedy when a company chooses to improve productivity in the same way?
The irony is the DARPA research grants of the seventies made much of the technology used to create the internet possible. China's government has recently made large investments in solar and wind energy production. Government investments with no expectation of return help advance private investments. Ignoring that history will be painful for private investors like Mr. Kessler.
The fact that the government funded the research behind ARPANET (the precursor of the modern internet) doesn't imply that it wouldn't have happened without government funding. For example, the early commercial dial-up service providers like AOL or MCI Mail could have evolved into a global network even if there were no ARPANET. Unix systems were exchanging e-mail and net news across the world independently of ARPANET for many years. So were IBM mainframes at universities, via BITNET. The communications infrastructure that the ARPANET used -- leased long-distance phone lines -- was available to anybody who had the money to lease them. There were commercially developed network protocols (e.g., SNA from IBM or DECNET from DEC) and their associated networking hardware that could have been used as alternatives to TCP/IP and IMPs. And the operating systems that ran on the ARPANET hosts were commercially developed (TOPS-20 from DEC, Unix from AT&T, etc.).
Like all good looking, successful, smart and nice smelling people, I'm an ambivalent anarcho-capitalist, but Kessler is wrong on this one: Bain and the rest of the private equity pirates have destroyed far more value than they've helped create, enabled by access to too-cheap capital via the Federal Reserve system.