Wealth creating jobs

[Peoplesoft bloke]

Most elegantly put, and too good not to steal. I shall take those words and re-use them, many times, thank you.

Sadly I can't claim that as original, but I thought the same when I first read it

[RichardCranium]

Allowing the government to take over your identity and charge you for a licence to use it

Most elegantly put, and too good not to steal. I shall take those words and re-use them, many times, thank you.

[Peoplesoft bloke]

This is a good question, that will probably get nothing but stupid reactions here.

And as if by magic.....

Any new idea e.g. energy saving, id cards scheme generates jobs and hence wealth. Wealth decreasing jobs are jobs that are protected and could be done more efficiently if opened up to competition e.g. barrister, investment banker, politician.

Let's just be 100% clear, because there is no room for doubt in any sane person. ID cards will cost everyone in this country dearly. Allowing the government to take over your identity and charge you for a licence to use it may create a few jobs in the public sector, but it'd be cheaper to increase benefits or reduce taxes and save wasting all the cash on stupid and pointless ID cards - and they are far from a new idea, either.

[expat]

What a simplistic, verging on daft, outlook.

So you're saying that if the Government paid one lot of unemployed people to dig holes, and a second lot to go and fill them in again afterwards, that would be creating wealth for the country or humanity just because the diggers and fillers themselves were being paid?

Also, suppose a genius invented some new technology but was clueless about patent law or how to go about getting funding to develop it. Would you claim a barrister or investment banker who helped realize the idea and create thousands of jobs were *not* indirectly creating wealth?

Not obvious. In the first case, that would indeed increase GDP, and there are sound reasons why this is so. But indeed it is perfectly obvious that no "real" wealth is being created here.

In the second case, "indirectly creating wealth" is quite a subjectve idea. Adam Smith himself stubbornly insisted that someone who does such a thing is not creating wealth. His example was an artisan who makes a machine that allows a farmer to grow more food: he said that the artisan does not create wealth: the farmer creates the wealth. He allowed that the farmer creates more wealth because of the artisan's machine, and so the artisan is being helpful: but he insisted that he is not creating wealth.

As with the definition of GDP, how you assess it depends on what precisely you are trying to measure. Or, as you might say, what axe you have to grind.

[OwlHoot]

Any new idea e.g. energy saving, id cards scheme generates jobs and hence wealth. Wealth decreasing jobs are jobs that are protected and could be done more efficiently if opened up to competition e.g. barrister, investment banker, politician.

What a simplistic, verging on daft, outlook.

So you're saying that if the Government paid one lot of unemployed people to dig holes, and a second lot to go and fill them in again afterwards, that would be creating wealth for the country or humanity just because the diggers and fillers themselves were being paid?

Also, suppose a genius invented some new technology but was clueless about patent law or how to go about getting funding to develop it. Would you claim a barrister or investment banker who helped realize the idea and create thousands of jobs were *not* indirectly creating wealth?

[The Lone Gunman]

It does make sense and does attempt to answer the question, itself no mean feat in this emotive subject. But It doesn't quite ring true.

Do you call a job wealth-creating if it does not itself create any wealth directly but it does help others create wealth? If you do, then you must allow that, say, tourist boards are wealth-creating even if they are public sector. If you do not allow that, then how can you say that a marketing job creates wealth? It doesn't, it just helps others to create wealth.

Either helping others to create wealth is a wealth-creating activity or it is not; and this exists in public and private sector.


I haven't even mentioned agents yet.

I understand what you are saying, but it was in the context of the original thread too.
Someone pointed to a load of jobs that can only be done onshore as they require a physical presence, mostly service or public sector.
What I was trying to point out is that those jobs require customers to service and do not in themselves generate any new money.

I am trying to clarify that rather than get into a discussion of what is a wealth creating job.
Sales and marketing and even tourist boards effectively sell product, even if it is one step removed from direct sales.

[expat]

As it was me who posted the original maybe I should try and explain what I meant.
I am not talking about creating personal wealth. In that case any job is wealth creating to the individual.
Basically what I meant by wealth creation relies on creating stuff to sell or selling other peoples products. People who take nothing, or some raw material and add value with their effort.

Public service jobs do not create wealth (except for the holder of the job). They absorb wealth from the tax system. If there was nobody to pay tax there would be no jobs.
Other service industry jobs rely on the fact that there are customers to be serviced who have wealth creating jobs.

I hope that makes sense and answers the question.

It does make sense and does attempt to answer the question, itself no mean feat in this emotive subject. But It doesn't quite ring true.

Do you call a job wealth-creating if it does not itself create any wealth directly but it does help others create wealth? If you do, then you must allow that, say, tourist boards are wealth-creating even if they are public sector. If you do not allow that, then how can you say that a marketing job creates wealth? It doesn't, it just helps others to create wealth.

Either helping others to create wealth is a wealth-creating activity or it is not; and this exists in public and private sector.


I haven't even mentioned agents yet.

[The Lone Gunman]

As it was me who posted the original maybe I should try and explain what I meant.
I am not talking about creating personal wealth. In that case any job is wealth creating to the individual.
Basically what I meant by wealth creation relies on creating stuff to sell or selling other peoples products. People who take nothing, or some raw material and add value with their effort.

Public service jobs do not create wealth (except for the holder of the job). They absorb wealth from the tax system. If there was nobody to pay tax there would be no jobs.
Other service industry jobs rely on the fact that there are customers to be serviced who have wealth creating jobs.

I hope that makes sense and answers the question.

[edit]And yes expat it is an over simplification because explaining all the (very good) examples you give would take forever though the nit picking of "what about A, B, C" will start accordingly.

[mace]

Any new idea e.g. energy saving, id cards scheme generates jobs and hence wealth. Wealth decreasing jobs are jobs that are protected and could be done more efficiently if opened up to competition e.g. barrister, investment banker, politician.

[expat]

Why aren't public sector jobs not classed as wealth creating industries?

This is a good question, that will probably get nothing but stupid reactions here.

What is wealth-creating? The answer is not nearly as simple as most CUKers. Sorry, I mean not as simple as most CUKers will probably think.

Public sector jobs that encourage trade or tourism? Are they wealth-creating?
Private sector jobs that encourage spending (advertising, for example)? Do they actually create wealth?

How about a private sector job that increases the efficiency of farming or manufacturing? Does that create wealth, or merely help the real creators of wealth? (Note: Adam Smith thought the latter).

Then what about a public sector job that does the same?


Is a job necessarily wealth-creating if it produces a profit and pays taxes? Possibly the profit is not created, but merely taken from somewhere else. And of course paying taxes is no more a wealth-creating activity than is collecting taxes: these activities merely move money around.


So what does create wealth?

[DimPrawn]

Why aren't public sector jobs not classed as wealth creating industries?

Are you having a larf?

[Cyberman]

Private enterprise that makes a profit and pays taxes is wealth-creating, as opposed to the public sector that is a blood-sucking parasite.

[TimberWolf]

Why aren't public sector jobs not classed as wealth creating industries?

[sweetandsour]

This came up on the protectionism thread. Obvious candidates for non-wealth creating jobs would be any public service role, but what about service industries ? How do you define a wealth creating occupation?

I have to add VAT to my invoices so surely I am "adding value" and therefore creating wealth?

[Peoplesoft bloke]

This came up on the protectionism thread. Obvious candidates for non-wealth creating jobs would be any public service role, but what about service industries ? How do you define a wealth creating occupation?