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'Creating Jobs' - Examined in Detail

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Old 26 March 2011, 06:47 PM
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GlesgaKiss
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Default 'Creating Jobs' - Examined in Detail

I thought with all the talk of cuts and the economy on here lately this would be an interesting read for some people. A look from an angle you don't see in the papers every day.

It's an excerpt from "Economic Sophisms" by Frédéric Bastiat.

It's called "Obstacle and Cause".


To regard the obstacle as the cause—to mistake scarcity for abundance—is to be guilty of the same sophism in another guise. It deserves to be studied in all its forms.

Man in the primitive state is destitute of everything.

Between his destitution and the satisfaction of his wants there is a multitude of obstacles, which it is the goal of labor to surmount. It is curious to inquire how and why these very obstacles to his well-being have come to be mistaken for its cause.

Suppose I need to travel to a point a hundred leagues away. But between the point of departure and my destination are mountains, rivers, swamps, impenetrable forests, and highwaymen—in short, obstacles; and, to surmount these obstacles, I must exert myself vigorously, or—what comes to the same thing—others must exert themselves on my behalf and charge the for doing so. Is it not clear that under these circumstances I should have been better off if these obstacles did not exist in the first place?

To go through the long journey of life from the cradle to the grave, man must ingest a vast quantity of food, protect himself from the inclemency of the weather, and guard against or cure himself of a host of diseases. Hunger, thirst, sickness, heat, and cold are just so many obstacles strewn along his part. In a state of isolation he would have to overcome all of them by hunting, fishing, farming, spinning, weaving, and building; and it is clear that it would be better for him if these obstacles were fewer in number, and better still if they did not exist at all. In society, he does not personally attack each of these obstacles, but others do so for him; and he in turn removes one of the obstacles confronting his fellow men.

It is also clear that, all things considered, it would be better for all mankind, or for society, if obstacles were as easy to overcome and as infrequent as possible.

But if one scrutinizes social phenomena in detail and the attitudes of men as they have been modified by exchange, one soon sees how men have come to confuse wants with wealth and obstacle with cause.

The division of labor, which results from the opportunity to engage in exchange, makes it possible for each man, instead of struggling on his own behalf to overcome all the obstacles that stand in his way, to struggle against only one, not solely on his own account, but for the benefit of his fellow men, who in turn perform the same service for him.

Now, the result is that each man sees the immediate cause of his prosperity in the obstacle that he makes it his business to struggle against for the benefit of others. The larger the obstacle, the more important and more intensely felt it is, then the more his fellow men are disposed to pay him for having overcome it, that is, the readier they are to remove on his behalf the obstacles that stand in his way.

A physician, for instance, does not occupy himself with baking his own bread, making ins own instruments, or weaving or tailoring his own clothes. Others do these things for him, and, in return, he treats the diseases that afflict his patients. The more frequent, severe, and numerous these diseases are, the more willing people are—indeed, the more they are obliged—to work for his personal benefit. From his point of view, illness—which is a general obstacle to human well-being—is a cause of his individual well-being. All producers, with respect to their particular field of operation, reason in the same manner. The shipowner derives his profits from the obstacle called distance; the farmer, from that called hunger; the textile manufacturer, from that called cold; the teacher lives on ignorance; the jeweler, on vanity; the lawyer, on greed; the notary, on possible bad faith, just as the physician lives on the illnesses of mankind. It is therefore quite true that each profession has an immediate interest in the continuation, even the extension, of the particular obstacle that is the object of its efforts.

Seeing this, theorists attempt to found a system on the basis of these attitudes on the part of individuals and declare that need is wealth, that labor is wealth, and that the obstacle to well-being is well-being itself. To multiply obstacles is, in their eyes, to encourage industry.

Then the statesmen take over. They hold the power of the government in their hands; and what is more natural than to put it to use in increasing and spreading obstacles, since this is the same as increasing and spreading wealth? They say, for example: "If we prevent iron from coming from the places where it is abundant, we create in our own country an obstacle to obtaining it. This obstacle, when it is felt acutely, will induce people to pay in order to get rid of it. A certain number of our fellow citizens will devote themselves to struggling against it, and this obstacle will make their fortune. The greater it is, that is, the scarcer, the more inaccessible, the more difficult to transport, the more remote from the blast furnaces the ore is, the more manpower all the branches of this industry will employ. Hence, let us bar foreign iron ore; let us create the obstacle, so as to create the need for labor to struggle against it."

The same reasoning leads to the proscription of machinery.

Here, let us say, are some men who need to store their wine. This is an obstacle; and here are some other men whose job it is to remove the obstacle by making tuns. It is fortunate, then, that the obstacle exists, since it provides employment for a part of the domestic labor force and enriches a certain number of our fellow citizens. But then an ingenious machine is invented that fells the oak, squares it, divides it into staves, assembles them, and transforms them into wine-barrels. The obstacle is greatly diminished, and with it the affluence of coopers. Let us pass a law that will preserve both of them. Let us outlaw the machine.

To get at the root of this sophism, one need only remind oneself that human labor is not an end, but a means. It never remains unemployed. If it removes one obstacle, it turns to another; and mankind is rid of two obstacles by the same amount of labor that used to be needed to remove only one. If the labor of coopers ever becomes useless, it will turn in another direction. But with what, people ask, would it be paid? With exactly what pays for it today; for when a certain amount of labor becomes available as a result of the removal of an obstacle, a corresponding quantity of goods also becomes available for the remuneration of labor. To maintain that the time will ever come when human labor will lack employment, it would he necessary to prove that mankind will cease to encounter obstacles. But in that case labor would not be simply impossible; it would be superfluous. We should no longer have anything to do, far we should be omnipotent; and we should only have to pronounce a fiat to have all our needs and all our desires satisfied.



For anyone interested in reading more, the rest of the book is here: http://www.econlib.org/library/Basti...SophCover.html

Last edited by GlesgaKiss; 26 March 2011 at 06:48 PM.
Old 26 March 2011, 06:52 PM
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cba.
Old 26 March 2011, 07:06 PM
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tony de wonderful
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Sure a big sophism is that spending 'creates' jobs, i.e the rich are virtuous for spending a lot of money and 'providing' employment.
Old 26 March 2011, 08:53 PM
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scud8
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Originally Posted by tony de wonderful
Sure a big sophism is that spending 'creates' jobs, i.e the rich are virtuous for spending a lot of money and 'providing' employment.
Did you read the excerpt? If you did you sure as hell didn't understand it!
Old 26 March 2011, 09:09 PM
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DCI Gene Hunt
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Good read
Old 26 March 2011, 09:34 PM
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tony de wonderful
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Originally Posted by scud8
Did you read the excerpt? If you did you sure as hell didn't understand it!
No you didn't understand it. It's saying human labour is a means not an end, so if you put someone to work digging a ditch for no reason than to provide employment it is pointless.
Old 26 March 2011, 09:45 PM
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GlesgaKiss
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Originally Posted by tony de wonderful
No you didn't understand it. It's saying human labour is a means not an end, so if you put someone to work digging a ditch for no reason than to provide employment it is pointless.
That's not what you said though. Of course anyone who is 'rich' can provide employment. If they want a service from someone and they have something to trade, that person providing the service will benefit from the exchange.
Old 26 March 2011, 09:55 PM
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tony de wonderful
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Originally Posted by GlesgaKiss
That's not what you said though. Of course anyone who is 'rich' can provide employment. If they want a service from someone and they have something to trade, that person providing the service will benefit from the exchange.
And exactly the same could be accomplished by the rich person giving that money instead.

Anyway we live in a world of economic elites, ergo others work so they don't have to. If said elite puts a worker to work cleaning their toilet should the worker feel grateful? It's easier to not work and live a life of leisure.
Old 26 March 2011, 10:02 PM
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-------------------------------------------------------------------------------------------------

^^^^^ Line drawn under the subject.
Old 26 March 2011, 11:56 PM
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JTaylor
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Interesting excerpt, thank you. Did you get hold of Orientalism?
Old 27 March 2011, 12:45 AM
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Originally Posted by DCI Gene Hunt
Good read
+1.
Old 27 March 2011, 09:55 AM
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Thanks
Old 27 March 2011, 10:48 AM
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warrenm2
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see also the broken window fallacy also by Bastiat
Old 29 March 2011, 08:36 AM
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GlesgaKiss
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Originally Posted by JTaylor
Interesting excerpt, thank you. Did you get hold of Orientalism?
Yeah, got hold of it, but got another book at the same time and decided to read that first ("Theory of Moral Sentiments", Adam Smith). Would have been finished that by now, but been very busy with work.
Old 29 March 2011, 02:36 PM
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JTaylor
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Originally Posted by GlesgaKiss
Yeah, got hold of it, but got another book at the same time and decided to read that first ("Theory of Moral Sentiments", Adam Smith). Would have been finished that by now, but been very busy with work.
Nice one. I always feel that you Jocks aren't given sufficient credit when it comes to contributions to Enlightenment thinking - no wonder you resent Europe so much. . Orientalism is so relevant right now if you can get to it.....
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