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Affluent Christian Investor | October 23, 2020

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Permanent’ Job Destruction Terrifies The New York Times, But It Signals Quick Recovery

It’s not even a revelation anymore to say that “travel blogger” is a job. Amazing is that even the bloggers with limited followings are said to rate free travel, accommodations, and tours once on the road.

Such is life in modern times. With enormous strides in productivity having freed tens of millions from work related to producing life’s necessities (think food, clothing, basic shelter), more and more people can do work that increasingly doesn’t sound like work. For all too many, travel is pleasure. So is the chronicling of the travel experience a joy for millions as evidenced by the nature of Facebook and Instragram posts.

Fascinating is that with so many spending so much time on social media sites like Facebook and Instagram, an industry has grown up around this evolution. Indeed, it’s not just that there are “travel bloggers” earning a little or a lot as they keep a journal of where they go, and what they do when they’re going. Nowadays there are many millions of “influencers” well known and not-so-well-known who make a living by showcasing their specialized knowledge.

Crucial is that “influencer” didn’t officially become a Merriam’s Dictionary word until 2019. Well, of course it didn’t. Before 4G technology and easily accessible WiFi, smartphones that are really just pocket sized supercomputers weren’t in our hands at all times and everywhere. Enhanced technology made information and communication at our fingertips an all-the-time thing, and as a consequence, jobs that past generations could never imagine existing became very real. Imagine then, what’s ahead if 5G lives up even a little to its advance billing. If so, millions of jobs will be destroyed in order to give way to many millions more new, and better ways of earning a paycheck.

To be clear, technology by its very name is all about job destruction. Thanks to persistent automation since the 19th century, what we call “work” has become a moving target. Translated, it gets better and better all the time precisely because the aforementioned automation of so much past effort frees us to specialize more and more, and in specializing, growing numbers of us being able to do for pay what uniquely elevates our specific areas of intelligence.

Exciting about the future is that automation is its own amazing creator of jobs that make growing numbers of us look very smart while at work. Think about it. Automation signals rampant production of abundant resources 24 hours per day, 365 days each year by machines that don’t take vacations, call in sick, or quit. What this means is that the resources entrepreneurs seek when they hire investment bankers to raise money for them will become cheaper and cheaper with each passing day. Brilliant investment bankers raise “money,” but they’re really helping the experimental to attain market goods so that they can transform ideas into something real. Feverish automation of production is a sign that the cost of capital will continue to fall over time as more and more businesses are created.

Which brings us to a recent New York Times headline about jobs that “May Be Gone Forever.” Reporter Patricia Cohen cites economists who think “many of the lost jobs are gone for good.” Cohen specifically quotes Stanford professor Nicholas Bloom, who penned a recent study estimating “42 percent of recent layoffs will result in permanent job loss.”

Of course, left out by Bloom is that well before the imposition of command-and-control by nail biting politicians, it was already true that tens of millions of jobs were going to go the way of the phone booth. About jobs vanishing forever, that they have an historical quality to them is a sign of progress.

More specifically, it’s in the countries where the nature of work is permanent that poverty is the most rampant. For confirmation of this truth, readers need only contemplate some of the Times’ recent coverage of sewer workers in Pakistan. The unclogging of sewers has been passed down by Pakistan’s lowest castes and religions for generations. Where work is permanent, the work itself is brutal and sad. In poor countries, everyone works all the time. It’s about survival.

So while it’s certainly true that panicked politicians hideously put tens of millions out of work, bankrupted millions of businesses, and then extracted $2.9 trillion of private sector wealth to obnoxiously throw at their errors, they won’t permanently consign Americans to unemployment. Cohen’s article creates the impression that permanent destruction of certain jobs amounts to permanent unemployment overall. No. Cohen interviewed the wrong person.

Missed by Bloom is that jobs don’t just exist, nor are they finite. In reality, jobs are a happy consequence of investment. Call it unspent wealth. When entrepreneurs and businesses are able to access the product of abstinence (meaning once again, unspent wealth), they’re able to expand.

Which is why jobs are an always evolving concept so long as there’s production and savings. Neither will ever go away. Both will expand in remarkable fashion in the future. This will be particularly true post lockdown as the economy attains brisk lift.

It will for one, simply because the mindless lockdowns for a variety of reasons fostered more restraint on the part of employed and unemployed alike. This relative parsimony will manifest itself in the form of more investment available to the commercially minded.

For two, the automation previously discussed will, if anything, pick up as businesses in the near term strive to get by with less. In short, resource production will soar on the way to abundant credit at prices that continue to fall.

After that, let’s not forget what happened with the political crack-up over the new coronavirus. Tragic and wasteful as the response was, it was much less damaging economically than the typical political blunder when it’s remembered that this time they didn’t get us into any war that wiped out thousands, or tens of thousands of young Americans who represent our economic future.

So while the contraction foisted on us by never disappointing politicians was and is disastrous, and while the subsequent trillions in spending made a bad situation worse, America’s young remain healthy, and better yet, they’re about to be put back to work by a combination of savings and specialty-elevating automation that will render them more productive than they were going into this policy crack-up.

Basically the recovery will be quick, but please do not attribute it to the politicians. While their ineptitude will be bailed out by the recovery, the only thing they’ll have had to do with it is that it would have been much grander without them.

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is titled They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers. Other books by Tamny include The End of Work, about the exciting growth of jobs more and more of us love, Who Needs the Fed? and Popular Economics. He can be reached at [email protected].

This article originally appeared on RealClearMarkets.

 

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