Jonathan Porritt

So I just hope all the environmental NGOs can rally the troops in London in a pro-Ken campaign, even if they can’t come out and explicitly endorse him.

No, of course they can\’t explicitly endorse him: that would be illegal, wouldn\’t it? But mytrue venom is reserved for this idiotic statement.

Wouldn’t it be great, just once, to hear a senior Labour Politician (other than Ken) enthusing in similar terms about the hundreds of thousands of real jobs that would be created were we ever to get serious about energy efficiency?

Wouldn\’t it be great, just once, to hear a senior Greenie admitting that the "creation" of hundreds of thousands of jobs is a cost, not a benefit of such schemes?

Or is such basic economics beyond their fevered imaginations?

10 thoughts on “Jonathan Porritt”

  1. Genuine question, since you’ve made the same point many times and I am quite ignorant about economics.

    Yes, employment is a cost, I see that – but how does wealth get shared around if not through employment? Am I missing something? I have a feeling I’m being a bit thick…

    Tim adds: No, not thick. It’s something of a subtle point which is greatly underappreciated.

    So, we’ve got X number of people working, who currently do all sorts of different things. Fine, now we decide (or you decide, or they decide, whatever) that some portion of these people might be better employed doing something else. Like, creating a low carbon economy. OK, fine. Now what we need to do is work out whether the costs of creating this low carbon economy (or any other similar change in the employment of the nation’s workforce. It’s exactly the same calculation you have to make whether you’re suggesting they should all watch TV as a job, create a low carbon economy or become monks in the Church of Worstall.) are smaller than, greater than or the same as the benefits that we will receive from our new economy.

    That is, we need to perform a cost benefit analysis. Now, please, I really really want to emphasise that this is absolutely nothing to do with the validity or not of the goal being described here: it’s not my hatred of idiot greens coming through: I made exactly the same point about John Hutton’s comments on going nuclear, for he made the same mistake.

    When we perform a cost benefit analysis we of course need to be very careful about what we define as a cost and what we define as a benefit. The benefits of a low carbon world….well, as claimed, at least. Lower pollution over all perhaps, a greater sense of community possibly, lower risks from climate change, OK, put those into the pot. Add others as you wish. Similarly, we have things which are clearly costs: the investment necessary to make the change, the higher energy costs in the future. Add more again, as you wish.

    Now, those 100,000 jobs: are they a benefit or a cost? They’re a cost, aren’t they? First, and most obviously, we’ve got to pay the people to do these jobs, money flowing out of the account to other people is clearly an accounting cost. But secondly, we’ve also deprived ourselves of whatever else it was that these people would have done if they hadn’t been building our pet scheme. This is closely linked to the economic idea of opportunity cost. You can only use a resource to do one thing at a time and the cost of your doing so is the value of the other things (or, in more detail, the one thing most valuable as an alternative) that you have to forgo by doing what you are doing. (Just to emphasise this: there’s a field next door to my house. I’m likely to buy it and divide it into a larger garden and then get planning permission on the rest of it. Now, I can get planning permission for more houses at the cost of a smaller garden or a larger garden at the cost of fewer houses. The cost to me of a very large garden is no houses at all: a very high cost.)

    So, creating jobs is a cost of such schemes.

    And no, it doesn’t matter whether everyone who takes such a job is unemployed, or whether they’re entirely out of the workforce (ie, economically inactive by choice) or that you’re drafting every merchant banker in the Kingdom to do this. It might vary by how much, but not the basic logical point, that the creation of such jobs is a cost of the scheme, not a benefit of it.

    No, that doesn’t mean that the scheme is a bad idea: I’m not arguing at all (in this instance at least) that a low carbon world is undesirable, or that it doesn’t pass a cost benefit test. I am arguing one point and one point only.

    Those who push such schemes (the jobs created by recycling, the jobs created by a green economy, the jobs created by nuclear, the jobs created by taxpayer handouts, the jobs created by….) always wave as a great big banner that the creation of jobs is a benefit: but it isn’t, it’s a cost.

    That there are schemes proposed which pass our cost benefit analysis, even when we treat the jobs created as a cost (ie correctly) is obvious: it’s the source of all human advancement, that people move (just as with any other productive resource) from a lower value to a higher value use is the very thing that makes wealth itself.

    My point is simply that we have to regard jobs created as being upon the costs side of our ledger, not the benefits.

  2. “Wouldn’t it be great, just once, to hear a senior Greenie admitting that the ‘creation’ of hundreds of thousands of jobs is a cost, not a benefit of such schemes?”

    I agree but we should notice that many environmental policy proposals are advanced with strident claims that thousands of extra jobs would be created.

    What’s so curious is that UK employment is already running at record levels so we ought to worry about overheated labour markets.

    What motivates these claims, I suspect, is an undisclosed hope or belief that the thousands of extra jobs are those unskilled manual jobs which are rapidly going out of fashion, jobs like laying loft insulations and fitting double glazing for better home energy efficiency.

    In fact, it is becoming impossibility difficult to recruit indigenous British workers to work at many unskilled manual jobs, which is why employers have become so dependent on migrant workers – as this recent BBC report shows:
    http://news.bbc.co.uk/1/hi/magazine/7288430.stm

    And the nightmare prospect facing employers is that the Poles are going back home as job prospects there get better:
    http://news.bbc.co.uk/1/hi/business/7282923.stm

    Question: I wonder how many of the extra environmental jobs would be suitable for the million or so that the government is trying to get off incapacity benefit?

  3. Genuine question: why is the net increase in the sum of human happiness important in the post below about the contribution of immigrants (even if the benefits to the receiving community are zero), yet increased employment opportunities (surely a contribution to human happiness?) in the face of inevitable climate change (even if some employers face increased costs) not important?

    Tim adds: There’s a longer response a couple of comments up. Increased employment opportunities could indeed be a contribution to human happiness. But so also could the other things that those 100,000 people would/could/might be doing if they weren’t harvesting switch grass to fire the boilers. It’s not an argument (at least this one isn’t, the one I’m making) against creating a low carbon economy. It’s one, very simply, that the creation of jobs is a cost of such a scheme, not a benefit.

  4. Is it a credible excuse if a business were to churn out lots of pollution and then claim to be performing a valuable social service because lots of jobs will be created to clear it up?

    If so, bring on the asbestos.

  5. BlacquesJacquesShellacques

    Tim, you might couple this point with your many points on tax incidence. A state mandated change to an economy is like a tax, perhaps it is a tax, and the rules of tax incidence apply and the consumer, not the bloated plutocrat will pay and for damn sure no politician will pay. Indeed, both the plutocrats will use the money flow pinch point created by a statutory scheme to take more for themselves.

    We bloated plutocrats will have to compete with our fellows and won’t get too much. The politicos and bureaucrats required to govern the madcap scheme will multiply like rats, because the scheme is inherently unstable and will need enforcers.

    The greenies all envision dancing through the green meadow in the golden sunlight drinking ale and eating organic crunchy granola. Point one, if it happens they themselves will pay for it, because the supplier ALWAYS passes on the costs to the consumer. Point two, they will pay for it by losing some of the things they have now – that’s what ‘paying’ means – giving something away.

    Given the huge reduction in efficiency I guess the local yob on the street will lose either time, because he’ll have to work more hours for the same result, or he’ll lose maybe his car or house or all of the above and then some. Our economy has less surplus than some mallards suppose.

    Then pretty soon, because a market distortion actually means giving people what they DO NOT want, yobbo will realize he hates meadows, green or otherwise, he despises dancing, he prefers dark smoky pubs to golden sunshine and rather than a fewkin granola bar he wants a big mac and greasy chips and the ale tastes funny anyway.

    Unless he’s dead because the organic meadow is actually full of shit, being organically fertilized therewith, and bacteria therefrom, likewise the ale and the granola bar, and one of the things he gave up was timely efficient medical care. Oh wait, he gave that up years ago.

    Oh dear, I have strayed a bit. Sorry.

  6. “because the supplier ALWAYS passes on the costs to the consumer.”

    ALWAYS?

    Try this:
    http://www.revisionguru.co.uk/economics/tax.htm

    I first learned that about the incidence of indirect taxes from: Hugh Dalton (1887-1962): Principles of Public Finance (1932).

    In 1940, Hugh Dalton was appointed minister of economic warfare in Churchill’s wartime coalition government, from which he progressed to become Chancellor of the Exchequer (1945-7) in Attlee’s first government.

  7. BlacquesJacquesShellacques

    Bob B:

    You have indeed picked my nit. I should have said the supplier always passes on as much of the cost as he can.

    Nice site you referred me to. Look at the charts for elasticity. I believe demand for green meadows is elastic to the point of absurdity. That is, if yobbo actually must pay a tiny little bit for them, rather than mouth PC platitudes to a pollster, he will refuse to pay. Likewise, I believe supply is elastic – give me enough money and I’ll spray manure in your living room, or mine for that matter, and call it green space. But what are the slopes of the curves? I dunno.

    The result? I’m in business. I see an opportunity to make lots of money for a short time. Lots because for a while, with state support, yobbo will pay near anything for a fad, or to impress some hippie chick, and greeniness is just a passing fad peddled by hippie chicks.

    But eventually our monkeyness will re-assert itself, yobbo will cry out for protein, grease, salt, booze and smokes and my greeny business won’t be worth manure.

    That subjective argument laid before you, perhaps our learned host could tell us about curve slopes, und so weiter, and we could know who will eat the cost, supplier or consumer.

  8. On the “jobs are a cost, not a benefit” question:

    We work to live, we do not live to work. Working is what we do to pay for what we want to do (including day-to-day survival). Doing something because you want to do it and enjoying it is a hobby – not a job. There are fortunate people who make a living from their hobbies – these are called “Lucky Bastards”.

    Should everything be provided without needing to work, the more time is available for leisure, hobbies, spending time with family, travel, etc.
    If you can sustain your lifestyle on a lower level of work (say, if you have a comfortable lifestyle on a forty-hour working week and you are fortunate enough to move to a twenty-hour working week doing exactly the same job, but at no loss in income), it’s a result, right? If you have to work another ten hours per week to sustain your income, it’s a cost.

    The same is true of the overall economy – if the same level of production is maintained with fewer working hours, it’s a plus. If more working hours are needed to sustain the same level, it’s a minus.

  9. Perhaps the reason that so many of these generally left of centre advocates of make work schemes is that they are still in an 1980’s- 3m unemployed (Maggie! Maggie! Maggie! Out! Out! Out!) mindset. Worth remembering, that’s when most of them cut their activist teeth and few of them have had an original idea since.

  10. Pingback: Creating Jobs is a Cost not a Benefit

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