GREEN JOBS AND BROKEN WINDOWS

A couple weeks ago, the EPA published a report (that the Obama administration tried to suppress), confirming there had been no actual warming of our planet since about the time Donovan McNabb was drafted by the Eagles in 1999. Actually, it has been kind of gauche to even mention “global warming” for a while now since, well, there isn’t any. Instead, we must worry about “climate change,” and we have to be really, really worried about that, and even if we aren’t, we should still shut down all the mines and oil wells and build windmills instead because then we’ll all get lots of green jobs. That was Nancy Pelosi’s final speech on the floor of the House in support of the energy tax bill. “There are four reasons we must pass this bill,” she said. “Jobs, jobs, jobs, jobs.”

Undoubtedly, large government subsidies for windmills and whatnot, along with punitive taxes for the other 95% of the energy-production business, will create jobs in the windmill business. This will occur in the same way that, if the government were buying rabbits, we would all start raising bunnies in our bathtubs. Of course, there is a serious question about whether the jobs created will exceed those jobs lost in coal and oil and natural gas (and businesses that use those forms of energy), but we will assume Pelosi is right and there will be a net gain of jobs---green jobs. What will the overall effect of this be?

Back in 1850, a French economist named Frederic Bastiat wrote the story of a shopkeeper whose window was broken by a boy in the village. At first, his neighbors viewed it as an unfortunate incident for the shopkeeper, but then they noticed that the glazier benefited because he got the job of fixing the window. The glazier took the money he made and spent it at the bakery, and then the baker was able to afford a new pair of shoes, which put money in the cobbler’s pocket and enabled him to buy some new equipment. And so on. Ultimately, the neighbors concluded, the broken window was a great boon to the entire community.

To economists, this gag is known as the “broken windows fallacy,” and it’s a fallacy because it ignores what the shopkeeper might have done with his money if he hadn’t had to spend it on having his window fixed. For all we know, that money might have allowed him to send his son to the university where he would become a brilliant doctor and heal the multitudes. Instead, because of the broken window, the son had to spend his life doing menial labor.

Bastiat’s point was that every act with significant economic consequences has effects that are seen and effects that are unseen, and if we only examine the effects that are seen, we can easily arrive at the wrong conclusions.

Let’s make up some numbers in line with Pelosi’s vision. Let’s say that, as a nation, we spend $5 trillion each year for energy and employ 30 million people fulltime to give it to us. It’s a lot of money and a lot of labor, but we want the lights to go on when we flip that switch. Everything shuts down if we don’t spend that money and use those people.

But now, with Obama’s energy taxes and all the green jobs that are coming, let’s say the $5 trillion becomes $7 trillion and the 30 million people become 35 million people.

What are we getting for those extra expenditures?

Well, nothing. For an additional $2 trillion and an additional five million fulltime employees, we’re getting the same output. The lights will go on just as they did before and the key will still turn in the ignition. In terms of the availability of energy, and how we use it, the only thing that changes is the price we pay. It will be “nice” energy instead of the evil energy we use now---that’s the whole idea---but in the end, we’ll be getting the same thing.

Now, $2 trillion is not nothing. In fact, it used to be considered a lot of money. Instead of using it this way, we could give everybody in America all the free root canals and Viagra they wanted and still have enough left over to sign both Jason Werth and Shane Victorino to long-term contracts. There are a lot of things we could do with $2 trillion rather than spend it on an environmental idea with no effect we can actually see, and which will have no effect on the way we live our lives. In order to evaluate the energy bill, it’s only reasonable to consider what else you might do with the money you’re spending on it.

But more importantly, what about the “jobs, jobs, jobs, jobs?” Five million jobs! That’s a good thing, right? According to the Democrats who don’t really want to talk about global warming anymore, the green jobs are the primary benefit of the energy bill.

Remember the broken window? The green jobs are only the effect that we would see, but let’s think about the effects that are not seen. When you take five million people and put them to work installing solar panels and fixing windmills, what do you lose? Since we get the same amount of energy with 30 million people as we do with 35 million, the labor of those extra five million, in strictly economic terms, is being wasted. What else, as a society, might we use those five million people for?

Pelosi’s unstated assumption is that if we didn’t make these five million people do green jobs, they would do nothing. But that’s absurd, isn’t it? Some of them would be busy, and a few would be very busy and would do some very important things. What are we losing? What inventions won’t be invented, what businesses will never be built, what plays will not be written, how many gifted healers will never find their way to medical school and what diseases won’t they find cures for? Apart from the enormous cost of this program in dollars, the horror of the energy bill is the monumental waste of human resources.

The problem is that, as a society, as a prosperous Western democracy, we don’t want green jobs. They represent a step backward for all of us. Energy must be produced and wheat must be grown and cotton must be turned into clothing, but these are all things we must do, not what we want to do. What we want to do is write poetry and design skyscrapers and play volleyball and make movies and concoct delicious new dishes, but we can only pursue our various wants when the basics of survival (like energy and wheat and cotton) are in place. The measure of our success as a society is that historically, we have been able to devote less and less effort to mere survival. Yet Pelosi would have us spend more time and more resources on the fundamentals of existence, and she would like us to believe this is a good thing.

From the beginning of mankind until about 250 years ago, almost every person on earth had to work fourteen or sixteen hours a day simply to survive the night so he could wake up the next day to do it all over again. Even a hundred years ago, 60% of Americans worked on farms. Today, that number is 2%, but nobody laments the fact 58% of our people no longer have to operate threshing machines, pick cotton and castrate sheep. For some reason, those people (i.e., you) don’t complain about being stockbrokers, aerobics teachers, chemists and caterers.

Today, we live the lives we lead because wheat and cotton and energy are cheap, and we don’t have to spend every waking minute working to obtain them. It’s why we can sit in cafes and redecorate our living rooms and go to the beach---because survival costs us almost nothing.

Green jobs are not a benefit of the energy bill. They are a cost.

Copyright2009MichaelKubacki