Government jobs don’t create wealth.
The high living standard that people enjoy in America — and the rest of the world, for that matter — is a result of the hard-earned work performed by our forefathers; most of them spent a lifetime of blood, sweat and tears, creating the wealth that makes all of our lives so much easier today. That’s not to say wealth isn’t continuing to be generated today; it most certainly is — and more than ever before.
There’s No Such Thing as a Free Lunch
Unfortunately, that high standard of living has led America and most of the Western world to become dangerously complacent — not to mention economically ignorant. Just as there is no such thing as a free lunch — despite promises to the contrary from ubiquitous socialist politicians — you also can’t create wealth by getting people to borrow more money to buy things. Why? Because increasing consumer debt to buy more stuff only manages to consume wealth; sadly, we’ve been consuming it faster than we create it for many years now.
Despite what most Americans think today, wealth can’t be generated by printing fiat currency out of thin air either. In fact, it can only come from one of three places: labor, innovation, and/or natural resources. That’s it.
Here is a quick summary of how all three sources work in concert to improve everyone’s living standards:
Labor. Labor is a commodity that creates wealth by taking natural resources and basic goods and then creating more-complex products of higher value. Think: farming, mining, carpentry, and manufacturing.
Innovation. Innovation is essential for productivity and wealth generation. Think: engineering. Innovation leverages human brainpower to increase quality and make things more efficient, thereby raising productivity, which ultimately helps make things less expensive so more people are able to direct more of their time and money elsewhere.
Natural resources. Natural resources are a gift bestowed upon the countries that own them. As a result, they’re geographically dependent. Think: oil, timber, iron ore and silver.
Government Jobs Don’t Create Wealth – They Consume It
On the other hand, government and service industry jobs do nothing to increase societal wealth; they only serve to circulate money in the system that has already been created by those who actually do generate wealth. Likewise for the financial industry; bankers don’t create anything that raises our standard of living. They simply skim cash from everyone’s earnings. If a banker’s job sounds parasitic, well … it is.
And while those words will surely irritate a lot of people, it’s the truth. Think about it: If everybody was a banker, waiter, window washer, or bureaucrat, who would grow our food? Or build the myriad products we use every day that we need to survive?
That’s not to say that service jobs are bad; they’re not. Most service jobs do make life more convenient — but they can’t create wealth. After all, a window washer can’t have a job if there aren’t any window manufacturers in the first place.
And that, dear friends, is why economic growth cannot be built upon a foundation of service industry, banking and government workers. Rather, it depends on farming, mining, engineering and manufacturing — real wealth creating jobs.
Unfortunately for all of us, as those jobs continue to be replaced by waiters, bartenders, WalMart greeters, and government employees, our current high standard of living has only one way to go from here: down.
Photo Credit: Ryan Vaarsi