Will the coming new technology, like driverless cars, destroy millions of jobs in the U.S.? How should we think about this kind of innovation and job loss through a biblical lens? Should the government get involved by creating new jobs, or by other means of supporting the economy (i.e., Universal Basic Income)?
The video below helps us understand that there is a significant difference between creating value, which leads to wealth accumulation, and creating jobs, which may actually destroy wealth and create dependencies.
It’s easy to be persuaded to support a government job-creation program to solve the real need for jobs. However, these jobs come at a cost and often put an overwhelming burden on the private sector. This actually costs us future jobs and opportunities.
Wealth is the accumulation of capital. It gives us command over resources that we can use to improve living—make tasks easier, make people healthier, and provide goods and services to more people.
Wealth is different from income. Income is the monetary return on labor or investments. One can potentially have a high level of income without having much wealth. For example, someone who has a large monthly salary but has excessive debt is not wealthy.
Economist Henry Hazlitt says,
[Wealth] consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in. It is railways and roads and motor cars; ships and planes and factories; schools and churches and theaters; pianos, paintings and books. Yet so powerful is the verbal ambiguity that confuses money with wealth, that even those who at times recognize the confusion will slide back into it in the course of their reasoning.
We accumulate capital by making smart investments. First and foremost, these include investments of time, but they also include resource and monetary investment returns. In a market setting, we can only create wealth by creating value for others.
The parable of the talents helps us to understand that God expects us to increase what he gives us. Matthew 25:29-30 reminds us that heavenly rewards await those who have been faithful stewards of God’s resources:
His master said to him, “Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.”
We are not to hoard what we are given (like the servant given one talent), even if we don’t think what we have is valuable or are afraid of “losing” what little we have. All good things are from God. The gifts, talents, and skills that he gave us are the raw materials that we must steward and “risk” in order to grow his creation and reap any benefit ourselves.
It is easy to get caught up in the hype when government programs tout how many jobs they are creating. It’s important to remember, though, that governments can’t create wealth.
The government is not a business that sells things. The goods and services the government “provides” are paid for through taxation and currency inflation. This imposes a tradeoff; the cost is opportunities that would have been available to the taxpayer if the government had not chosen to use that money for the good or service.
When a business does not provide goods or services that people demand at the price they are willing to pay, it incurs losses. These losses, while difficult to endure, are important feedback mechanisms. They help correct inefficient behavior, allowing the business to better steward scarce resources.
Governments do not operate under profits and losses, so it is difficult for them to know whether they are being effective stewards of our scarce resources.
Economist Dwight Lee explains it this way:
Because people tend to think of jobs as ends rather than means, they are easily fooled into supporting government programs on grounds that jobs will be created. We have all heard people argue in favor of military bases, highway construction, and environmental regulations on business on these grounds…The relevant question is not whether a government project creates jobs, but whether the workers in those jobs will create more wealth than they would in other jobs.
Think of the massive growth that has occurred in the United States over the past two hundred years. That growth came because we had a robust market that fostered value creation and wealth accumulation.
Markets bring jobs, new specialties, and fields of expertise that didn’t exist even a century ago. Jobs created through market competition are much more likely than government jobs to foster entrepreneurial thinking, discoveries, and the products and services that make people’s lives better at increasingly lower costs. This is not because government jobs are filled with bad or lazy people, but because the government does not operate under the self-correction mechanism that profits and losses provide.
The market works well when we strive to create value for others through our work and do our jobs well. As Christians we should rejoice in the order God established for good stewardship of his creation. The more we seek to serve the needs of others, the better we will be at creating jobs that are fulfilling for people and provide value for others.
Editor’s note: Learn more about stewardship and economic thinking in Be Fruitful and Multiply: Why Economics is Necessary for Making God-Pleasing Decisions.
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