The number of workers required to supply a good or service is not a benefit of that good or service; it\’s a cost. Societies become more prosperous only as they succeed in using fewer workers and other inputs to supply any given amount of output. Only then are inputs made available to produce outputs that otherwise could not be produced.
This seems to have got people arguing with each other and with me in the comments section.
So, let me try to make this clear.
Jobs are a cost, not a benefit of a particular scheme.
For example, we\’ve had Caroline Lucas recently insisting that renewable technologies are better precisely because they use more labour per x amount of energy produced than non renewable systems.
I argue that they are worse for exactly the same reason.
For, and this is the important part, the cost of something is determined by the opportunity cost: what are we giving up to get this thing or service?
When we have two technologies, one labour intensive, one not so (leave aside all the rest about capital intensive etc) then what is it that we give up if we decide to use the labour intensive one?
That\’s right, all those other things that labour could have done if it was not working on this specific scheme. Wiping babies\’ bottoms, finding the cure for cancer, creating mixed artistic forms celebrating the production from the Stakhanovite Workers\’ Collective.
The price to us of this labour being employed in our pet scheme is all the things the labour could have been doing otherwise: jobs are a cost, not a benefit.
It\’s still entirely possible that jobs are a cost that we\’re happy to pay. We may well have places where people can work and their output is of greater value than the opportunity cost of their employment. We\’ve even got a method we try to use to work out where these jobs might be: it\’s called a market.
Yes, there are even times when there are things not included in the market pricing (externalities) which, when we include them (via taxes perhaps, or regulation) will change which jobs do indeed cover their opportunity costs. Fine, price them into the market.
Some might even say that this might be true but isn\’t if there are unemployed workers. This is again, I\’m afraid, false. For there are always opportunity costs. The unemployed are not doing nothing, they are just not working officially for cash. They are wiping babies\’ bottoms, engaging in home production (an allotment perhaps?) and so on.
Again, it may well be true that these are costs we are delighted to pay, the loss of these things, in order to get the production from our pet scheme that is going to put this labour to an alternative use. And in a lot of cases it will be.
But only if we remember that jobs themselves are a cost, not a benefit.