Milton Friedman said that no system in history has done more to relieve grinding poverty than capitalism. Wise words. Friedman was the foremost exponent for capitalism in the 1970s and his words are as true today as they were then.
In my last post I referred to the fact that wealth creation, and job creation, is not limited. This is a premise of the free market capitalism that made the US economy the most successful in the history of mankind. While this seems controversial to some people, it is a fact of reality. It may be controversial for some who blame capitalism as a system for the results of criminal abuse of the system for personal own gain. In the final analysis the people who suffered were investors and employees of the companies they worked for who lost their investments and retirement funds as a result of those criminal acts. That is not a flaw of capitalism, it is the moral failure of those business leaders. Any system is capable of terrible abuse by those in power.
The main point is that is if we want to see “job creation” we have to tell our representatives in government to stop trying to legislate it into existence through job programs. Government cannot create jobs except by hiring more government workers. Many of the alternative energy technologies have failed to deliver on job creation as promised. Manufacturing of horizontal wind turbines is the result of selling wind farms, which are not economically viable without government subsidy. I know this directly because Teco-Westinghouse was selling 2 megawatt wind turbines in the US and cancelled their planning hiring of manufacturing employees in 2012 when it appeared that the subsidy program would not be renewed that year.
In contrast, new technology that fulfills a market need creates employment. As new land oil drilling technology and higher gasoline prices drive the current oil boom in several states around the US generating 10’s of thousands of jobs in the oil industry. Hotel space in Nebraska is booked for the next three years and developers can’t build new hotels fast enough. Temporary housing and every type of infrastructure is being built as quickly as possible to support the effort. Jobs everywhere.
Compare that with the artificial scarcity that is created when government regulators refuse to grant permits for new power plants and new refineries, when legitimate applications for shale oil refining were refused by the Department of Interior a few years ago. Now we buy the exact same shale oil from Canada, and seemingly can’t even decide to permit a new pipeline to be built to deliver it. All this does is cause the price for electricity and gasoline to rise. Even worse, we choose to buy oil from nations that dislike the US. But they like our money.
More next week.