At one point Aberhart discovered that instead of heavy equipment being used at a government airport project, workers were given shovels and picks. That way the project could be deliberately lengthened, and the men kept busy for a longer period of time. Aberhart pointed out that if the objective was to create jobs rather than effectively create value through jobs, then the work crews should have been provided with forks and spoons rather than shovels and picks.

The thing some people fail to understand about capitalism and free markets is that their purpose is not to create jobs, but to create value. There’s an important distinction between these two ideas. People and politicians who don’t acknowledge that difference not only misunderstand the point and purpose of capitalism and markets, they misunderstand the point and purpose of work. This is pointed out by Tom Parker in his introduction to the downloadable book, The Morality of Capitalism.*

In response, Friedman said, “Oh, I thought you were trying to build a canal.” Then he suggested if it was jobs they wanted, they should take away the shovels, replace them with spoons, and create even more jobs.

Alberta Premier William Aberhart made a similar observation during the depression of the 1930s. At one point Aberhart discovered that instead of heavy equipment being used at a government airport project, workers were given shovels and picks. That way the project could be deliberately lengthened, and the men kept busy for a longer period of time. Aberhart pointed out that if the objective was to create jobs rather than create value through jobs, the work crews should have been provided with forks and spoons rather than shovels and picks.

Former bank president, Jerry Jordan, further explained the difference between creating employment and creating value through employment, when he said: “Prior to the 1930’s, the notion that government ought to be responsible for creating jobs would have seemed absurd. Today, however, we commonly hear aspiring politicians declare that their number-one objective would be to increase employment.”

Jordan says the difference between creating work and creating value through work, can easily be seen when a natural disaster occurs. On the heels of storms, hurricanes, and earthquakes, all kinds of work needs to be done—meaning jobs. But that kind of work doesn’t create new value no matter how many thousands of people are kept busy. Natural disasters destroy value. The work that needs doing in their wake is merely an attempt to recover value, not create new value or new wealth.

Jordan’s point is that every time a politician or labour union focuses on creating employment rather than creating value and new wealth through employment, they miss the point of work, and even lay the ground work for fiscal calamities.

Paying people to do work that doesn’t need to be done, or paying too many people to perform a task that can more easily be achieved through technology doesn’t add value to society anymore than natural disasters, or a soviet-style government farm manager who thinks there’s economic virtue in leaving tractors and combines sit idle, while workers plant and and harvest by hand.

* For a thorough explanation of morality and capitalism, and of unproductive employment versus employment that creates wealth and value, see: The Introduction to Morality and Capitalism by Dr. Tom G. Palmer.

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