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Politicians to Business Owners: Drop Dead

Business owner

Tags Big GovernmentU.S. Economy

12/04/2014Peter St. Onge

Senator Ted Stevens once explained that the Internet is a “series of tubes” and “not a big truck.” Steven’s comments made me a little sad, since I worried we’d never again hear such idiocy from a senior government official. Had we reached peak stupid on Capitol Hill?

There was a ray of hope a few years back when Congressman Hank Johnson shared, in Committee, his fears that if too many people move to Guam it might “tip over and capsize.”

Johnson is a well-known fool, though, so I was cautious yet. Maybe we just got lucky. Maybe stupid really was over.

So imagine my sheer joy when another well-known DC fixture, one Hillary Clinton, addressed her considerable analytic talents to the question of job creation during 2014’s election cycle.

Speaking at a Boston rally, Clinton opined, “Don’t let anybody tell you it’s corporations and businesses create jobs. You know that old theory, ‘trickle-down economics’. That has been tried, that has failed. It has failed rather spectacularly.”

Strictly speaking, “trickle-down economics” is a specific type of economic policy identified with Reaganomics in the 1980s. But given the context of her speech, it’s clear that Clinton was using the phrase to invoke the broad leftist assertion that any fiscal policy that is relatively kind toward business growth and private wealth accumulation is somehow putting wage earners and other non-business owners at some kind of disadvantage.

Of course, the first response that comes to mind is Rothbard’s, “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science’. But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

While it’s tempting to merely dismiss Clinton as a raving lunatic, I think this kind of statement is not mere stupidity, as Messrs. Stevens and Johnson. Rather, I think Hillary was playing the crowd, pandering to a popular worldview on the left. Worse, I imagine the most educated among her audience — professors, journalists — might even agree the most. So it’s worth deconstructing exactly why this view is wrong.

Let’s start with what, exactly, is a “job”? A “job” happens when an organization hires you to perform services in return for compensation. It must be voluntary, or else we call it “slavery.” And it must be an organization, or else we call it “self-employment.” Which can be freelancing or beggary, but is not a “job.”

So what kinds of organizations make “jobs”? Who hires people to perform services in return for compensation, voluntarily performed and voluntarily funded? Well, we actually have a name for that: business. Whether for-profit or non-profit, businesses provide precisely 100 percent of all jobs that are not government jobs.

And there’s the rub: “not government jobs.” Hillary is expressing a worldview that sees two types of perfectly legitimate jobs in the world: private sector jobs (“business and corporations”) and government jobs. Both are perfectly legitimate, in this view. Separate but equal.

The problem is that government jobs are very different from “business” jobs. Government jobs are funded at gunpoint — do you pay your taxes voluntarily? They are often provided at gunpoint — try opening a competing Post Office in your hometown. Most important, government jobs are parasitic. The government wasn’t born with guns to point at anybody; it bought them with taxes. Seized from people with jobs. At businesses.

Indeed, without the parasitic taxes governments skim from businesses, Hillary Clinton wouldn’t be standing in a grand ballroom with a shiny limo, a helicopter, and armed guards in nice suits. Maybe she’d be running a podcast in her basement, hoping to snag listeners from Rachel Maddow. Or maybe she’d be back in Little Rock working long hours at the Rose Law Firm. Hillary owes it all to businesses and those jobs they create.

In the worldview Hillary voices, we can fleece business because government will be there to give us all jobs. That would, oddly enough, be the exact same government that gets all its resources from ... business. So we don’t need the host because the parasite will be there to pick up the slack. The host may die, but the parasite will always be with us.

Image source: iStockphoto.

Peter St. Onge

Peter St. Onge is a Mises Institute Associated Scholar and an Economic Research Fellow at the Heritage Foundation.  For more content from Dr. St. Onge, subscribe to his newsletter where he writes about Austrian economics and cryptocurrency