Daniel Kuehn writes a short criticism of what he deems a poorly reasoned article (and, I am in complete agreement with this assessment) by Timothy Noah, at the New Republic (“Steve Jobs, Jobs-Creator“). But, he tries to link job creation by part of Steve Jobs (which was both direct and indirect) to that of the Obama administration and the stimulus program. This inspires me to emphasize a tangential point. You cannot judge the two on the same metric, because while Jobs preformed wealth creation Obama is pursuing capital consumption.
In the case of Obama, it is not about jobs created versus jobs saved. It is about opportunity cost. And, neither is it about whether or not Obama can create a short-run positive increase in employment. For the sake of simplicity, less us assume that private investment is zero for a period of six months. If government redistributes this capital from entrepreneurs to the public sector and then invests it in some form of public work there will likely be net job creation during that period of time. But, if we were to judge this in terms of benefit to the economy as a whole we would be mistaken to correlate job creation with economic growth.
The point I try to make in my article “Government Spending is Bad Economics” (that government cannot economize) is lost here. It is not about job creation. It is whether or not the job creation that comes from government spending, if any, is worth the loss which is represented by what could have been had that capital not be redistributed towards less preferred ends.
The calculation debate is not just about socialism, it is about calculation in a capitalist economy. Steve Jobs was not just a job creator. He positively contributed to adding to the world’s stock of wealth. Obama may be a job creator in the short-run, but he is negatively contributing to the world’s stock of wealth.
For those who have not read these pieces, but are interested in the topic of calculation, I suggest these two articles in this order: “The Foremost Austrian Contribution to Economic Science” & “Government Spending is Bad Economics“.
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