Common Sense Economics: What Everyone Needs to Know about Wealth and Prosperity
Production of goods and services people value, not just jobs, provides the source of high living standards.
… While employment is often used as a means to create wealth, we must remember that it is not simply more jobs that improve our economic well-being, but rather goods and services people value. When that elementary fact is forgotten, people are often misled into acceptance of programs that reduce wealth rather than create it.
The focus on creating jobs can be extremely misleading, as an apocryphal story about an engineer visiting China illustrates. He came across a large crew of men building a dam with picks and shovels. When the engineer pointed out to the supervisor that the job could be completed in a few days, rather than many months, if the men were given motorized earthmoving equipment, the supervisor said that such equipment would destroy many jobs. “Oh,” the engineer responded, “I thought you were interested in building a dam. If it’s more jobs you want, why don’t you have your men use spoons instead of shovels?”
Listen to Dwight Lee’s: Creating Jobs Versus Creating Wealth
- Who is in the best position to decide whether the goods and services people are producing are valuable? – Consumers, companies that produce them, government officials, or non-profit organizations or their clients? Why?
- To the extent your answer included governments, which governments are best at deciding what is valuable for you (local, state, or federal)? Why?
This reading is an excerpt from Certell’s Common Sense Economics eBook. Certell offers curriculum materials and eBooks free of charge for students and teachers. Click here to download the Common Sense Economics Materials.
10, Sept. 2018, Large Spoon in a field [Digital image]. Retrieved from <google.com>.