Responsibility and Nullification

It was a difficult decision to choose between Independence and Responsibility for this title. Responsibility was selected because Responsibility encompasses Independence and Accountability in its’ practice. On the other edge of the sword is Nullification, a term and practice we Americans have been hearing a great deal about lately. Put them together and we can…

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What is a Job?

by Tom Mullen

The usual chatter has begun following President Obama’s Sept. 8 call for a $417 billion government spending package designed to stimulate economic growth and create jobs while improving the nation’s crumbling infrastructure. As always, the commentary, both pro and con, focuses on speculation about the results of the program. Will this latest stimulus money actually reach “shovel-ready projects,” or will it again disappear down the black hole of state subsidies for Medicaid and education? How many jobs will the program actually create and what happens to those jobs when the program is over?

There is never any clear winner in debates of this nature. While the future is still unknown, Republicans will predict failure while Democrats will predict success. Once the program is over, Republicans will pronounce failure while Democrats will declare victory. The retrospective debate about the results of the program will go on until the media moves on to something else, only to be resurrected again at election time when Republicans will characterize the program as another “bridge to nowhere” while the Democrats will claim that it saved the economy.

There is rarely a definitive answer to questions about the results of government action, even after the fact. This may be one reason why most government programs never really end once they’re started. The answers are much less ambiguous and elusive when the discussion is shifted from results to rights. However, before exploring how this program affects the rights of the various parties involved, we must answer a previous question.

What is a job?

One might assume that everyone knows the answer to this apparently simple question, but I doubt that’s true. In fact, judging by what politicians, media, and even friends and neighbors have to say about jobs and unemployment, I’m convinced that almost no one in America today understands what a job really is.

As I’ve said before, a job is a transaction between a buyer and a seller. The employer is the buyer and the employee the seller, selling his services to the employer for a mutually agreed upon price. This is a voluntary transaction for both parties, just like the buying and selling of lawn mowers or breakfast cereal. The buyer offers to purchase services at the price he can afford and the seller decides whether to accept those terms or not. Both parties are free to decide not to go through with the sale at any time, including after the employment contract has been consummated and the employee has begun work.

There is only one way in which a purchaser of services can continue to employ people on an ongoing basis. The services provided by the sellers must produce products that make a profit. If the firm loses money, then the employer must increase his sales or lower his operating costs. The latter solution most often means purchasing fewer services (layoffs).

The voluntary association between buyer and seller of services (the employment contract) depends upon another voluntary association between the firm and its customers. The firm’s customers must choose to pay more for the firms products than the cost of producing them, including labor, material, rent, administration, and all other costs of production. It is that choice by customers that creates a market value for the products, for the market value is merely the amount of money the highest bidder will voluntarily pay. If no one was willing to buy the firm’s products at any price, then those products would have a market value of zero.

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