Full Employment Is Not Something We Should Strive For

The reason that people work and have jobs is not to make money.  This may seem to be the case on the surface but in reality making money is only a side effect of being employed.  We strive to earn money because we are confident that the money we earn in exchange for our labor will allow us to demand goods and services that we want and need. Ideally we all agree to produce a good or service because someone else demands it.  In reality government involvement in markets causes workers to spend time performing tasks that are wasteful.  Tasks that do not generate a good or service that is being demanded in the real economy.  The reason that governments do this is not because they are malicious, but rather because governments do not operate on a profit/loss mechanism like the private sector does (We shall save this idea for an article in the future).

Thus, full employment is not an indicator of economic prosperity.  For example, the government could use tax dollars to hire thousands of workers to dig holes.  They could then hire thousands more to fill the holes back in.  The workers would receive pay for this, but society as whole would actually be worse off than before the project started. Money and labor has been channeled into a process that is of benefit to noone.

An economy runs best when the most efficient producers of goods and services rise to the top and the least efficient producers are bankrupted due to incompetence and inability to compete.  What we are describing here is capitalism.  If we lived in a more capitalistic economy, humans would progress much faster.

The problem facing our modern economy is primarily government interference in markets.  This interference disrupts our overall efficiency and causes more people to have to work than ever before while at the same time our standard of living continues to decline.  Everyone now needs a job because the currencies of the world are being devalued gradually over time.  At the same time there are more government employees than ever who perform tasks that are of questionable usefulness to the greater good of society.  These 2 factors combined causes more household members on average to have to work (Father, Mother, Children) whereas this was not the case in previous generations in the USA.  But jobs are not what we need.  We need the highest quality goods and services at the lowest prices possible.

Below are steps that we could take to improve our collective standard of living:

     -Free market money (money or moneys chosen by the market, not by official decree and legal tender laws)
     -Absence or minimization of government regulation (businesses would be regulated solely by consumer choice)
     -No bailouts or secret loans from the Fed to businesses in distress
     -No income tax loopholes to benefit one group at the expense of another

If we were able to make those bullet points mentioned above a reality, two things would happen.  First, our standard of living would increase.  Secondly, leisure or "free time" would also increase.   The consequence is that people would not need be concerned about having both mom and dad and the children of a household all employed.  Mom (or Dad) and the children would be able to stay home.  Leisure time would increase as technology improves and performs the tasks faster and more efficiently than humans.  Folks would have to do less work to generate more output.  This is a very important point to remember.  Again I'll restate, the reason we go to work is not because we desire money, its because we desire goods and services that we need.  Somewhere along the way, we collectively decided that money was an end in and of itself which is not the case.  If you were stranded on an island like Tom Hanks in "Castaway" a billion dollars would not help you.  Remember this the next time you hear a government official talk about creating jobs.  This is not something to be desired for all of the reasons stated above.