Forum Post: Responsibility to create jobs?

Whose responsibility is it to create jobs? The government? Small businesses? Those big greedy corporations? A job is created when there is a need to provide a service. That could be a nurse to care for the sick, an engineer to design a new product, someone to harvest fruit from the orchard, or a quantitative analysit to design derivatives. The job is created because it adds value for the job creator.

If I am a plumber and the demands for my services exceed what I can do myself, I might hire a second person to help. I take risk by bringing on an employee, and a multitude or regulations and new taxes that I must pay to offset the margin that I might earn from having an employee.

Now what if I’m a solo plumber with some money in the bank, but there is no additional need for my service? Should I hire a second plumber anyway? Of course not. But isn’t that selfish? Greedy? I have some money in the bank? What is there is a need for ½ of a second plumbers time, but there is talk about a plumbers tax? Should I hire someone hoping that there will be enough work to cover my extra costs? And what is the new tax is different than what I expect? So I wait.

It is not the government’s responsibility to create jobs. It is not the corporations either. Jobs are created when there is demand for a service, and a growing economy with stable regulations and fair tax policy creates such an environment. The government’s job is to create sound political, moral, fiscal and economic policy, and for the courts to legislate according to jobs on the books. Capital markets are the best arbiter of capital allocation, and they function well, given an environment to do so. Socialism and planned economies do not work. Governments should not be allocating capital, or picking winners and losers (see Solyndra).