James d. Gwartney

Creating Government Jobs
Because people tend to think of jobs as ends rather than means, they are easily fooled
into supporting government programs on grounds that jobs will be created. We have all heard
people argue in favor of military bases, highway construction, and environmental regulations
on business on these grounds. To justify spending, government agencies commonly perform
benefit/cost studies in which the jobs created are counted as benefits. This is like counting the

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hours you work to earn enough money to buy a car as one of the car’s benefits. The jobs
created by a government project represent a cost of the project: the opportunity cost. The
workers employed in government activities could be producing value doing something else.
The relevant question is not whether a government project creates jobs, but whether the
workers in those jobs will create more wealth than they would in other jobs. This is a question
advocates of government programs don’t want asked. If it were, there would be far fewer low-
productivity government jobs and far more high-productivity private-sector jobs.
Concluding question: If we want to achieve a high standard of living, which is more
important the creation of jobs or the creation of wealth? What is the difference?
Return to Element 1.9
"Creating Jobs vs. Creating Wealth" by Dwight Lee, is under copyright. For more information about reprinting or distribution,
contact the [e-mail].

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Return to Element 1.12
What Is Seen and What Is Not Seen
The following article is a condensed version of Frederic Bastiat’ “What Is Seen and What Is
Not Seen.”
(1)
 Bastiat was an economist who was also a member of the French parliament in
the middle of the nineteenth century. Interestingly, the issues he raises are as valid today as
they were over 150 years ago.
In the economic sphere an act, a habit, an institution, a law p roduces not only one
effect, but a series of effects. Of these effects, the first alone is immediate; it appears
simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are
not seen; we are fortunate if we foresee them.
There is only one difference between a bad economist and a good one: the bad
economist confines himself to the visible effect; the good economist takes into account both
the effect that can be seen and those effects that must be foreseen.
Yet this difference is tremendous; for it almost always happens that when the
immediate consequence is favorable, the later consequences are disastrous, and vice versa.
Whence it follows that the bad economist pursues a small present good that will be followed
by a great evil to come, while the good economist pursues a great good to come, at the risk of a
small present evil.