Politics motivates many job programs

Carlos Alberto Montaner

President Obama says he wants to spur the creation of jobs. He thinks the recession won't really end so long as almost all of the employable population without jobs cannot find a way to make a living.

In the United States, unemployment is up to about 10 percent. In Spain, the percentage is twice that, and the government sinks as gradually as if it were standing on quicksand. Both Obama and Prime Minister José Luis Rodríguez Zapatero are thinking about using public funds to jump start the economy.

George W. Bush did that earlier, sending each American a $200 check, a measure that was closer to populist demagoguery than to a serious economic policy. All that is lamentable.

About 40 years ago, a Venezuelan presidential candidate promised during his campaign that he would create thousands of jobs shortly after assuming power. True to his word, he issued a decree whereby a person should be hired to press the buttons in each and every elevator in the country.

A grateful society applauded, without realizing that the measure was the equivalent of creating false, unnecessary jobs that neither augmented the production of wealth nor improved productivity.

A little later, the new president took up the issue again. He ordered that every public toilet should have a janitor. Tens of thousands of jobs were created with a snap of the fingers.

The world is full of similar examples. In Andalucía, in southern Spain, jobless people are paid to sweep the parks in what appears to be a peculiar transfer of dirt from one place to another. In Argentina ``picketeers'' are subsidized so they won't create disturbances or so they'll stage demonstrations against the government's adversaries.

Controlling farm prices

Both in the United States and the European Union large sums of public money are given to certain farmers or ranchers so they will produce less, as if the function of the government were to keep some prices high.

All that is usually counterproductive. To keep unemployment at low levels -- as is done in Switzerland, where joblessness remains below 4.5 percent -- the only formula is to have thousands of efficient companies that compete fiercely and struggle to produce more with fewer resources, i.e., boosting productivity and generating benefits that allow them to save, invest and grow, a process that leads to new job opportunities.

If a state wishes to reduce or end unemployment, it must encourage competition, eliminate trade obstacles, reduce taxes and facilitate hiring, which also means simplifying firing, so businesses can expand during favorable cycles yet not go under when the lean cows come home.

And if a state really wishes to raise wages, the way to do it is to foster the creation of private companies. This could well include cooperatives or other forms of collective property, but not in the public sector, because we already know where an entrepreneurial state would lead to: a pit of corruption, waste and technical backwardness.

Those who still think that such behavior turns the state into an accomplice of ``capital'' to the detriment of ``labor'' are still mired in the dangerous superstitions of class struggle.

Generating earnings

The affair is very simple. In a healthy society, all adults must collaborate with their own maintenance and the collective responsibilities, and that can only be achieved if they perform a task that generates earnings or somehow contributes to produce them. (Policemen or judges, for example, do not create profits directly, but, without the tasks they perform, business enterprises surely could not function.)

Unfortunately, for any government the easiest thing to do -- and the action that produces the most votes -- is to hand out money and assign privileges. Almost no one opposes this operation because of a built-in fatal flaw: Those who benefit (the recipients) have names, surnames and faces, but those who are negatively affected (the bill payers) constitute an amorphous mass of taxpayers who don't even realize that someone is rifling through their pockets.

They are innocent victims who pay with their taxes or with inflation (a covert tax) the patronage dispensed by the politicians in charge. It is very difficult to put an end to that perverse way to impoverish nations.

January, 20, 2010

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