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Jobs Are A Cost, Not A Benefit, Honey

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We have that insistence that we should have a green economy again. Well, perhaps we should at that, nice to be able to see beyond your nose even if the facemask is now against a different type of pollution. But the insistence that we should have a green economy because it produces more jobs is an error. It’s actually a sin against basic economic logic – jobs are a cost, not a benefit.

Thus this from Fiona Harvey fails and fails badly:

That question has a clear answer: a green recovery can produce higher returns on public spending and create more jobs in both the short term and the long term, compared to the alternative of pouring stimulus cash into the fossil fuel economy.

Human labour is an economic resource. We live in a world of scarce resources. The art of becoming richer is to reduce resource use while increasing output from the use of them. This applies to human labour – a scarce resource – as it does to any other. Thus this is silly:

The renewable energy industry has progressed in the last decade, making home solar installation cheap and offshore wind farms viable. All of these are labour intensive

Why do we want to increase our use of a scarce resource?

If governments get it right, the structural changes needed to bring emissions to net zero in the next 30 years will come with a gain in jobs and security.

More jobs eh?

So, start from the beginning again. Just for those who are not au fait with the very basics of economic logic.

We humans have infinite desires and needs. We face a universe of scarce resources with which to try and sate them. We therefore become richer by using fewer resources to satiate any single one of those desires and or wants. For by being economical – and the source of that meaning of that word should show you how at the heart of the subject it is – with resource use we have resources left over with which we can sate some other desire, need or want.

This is as true of human labour as it is of any other such scarce resource. Say, for example, that we’ve got 7.5 billion people. Are all wants and needs that can be sated by human labour currently sated? Nope. So, human labour is a scarce resource then. Thus any labour that we use to do one thing means we cannot have that other thing that could be supplied by human labour. For example, if we used 3 people to provide the energy desires of all humans we’d have 7.5 billion people minus 3 to produce other goods and services which humans might want. If we need to use 1 billion people to supply that energy then we’d have 6.5 billion people to work at all of the other things that humans desire. We’d have fewer things plus the energy in the second case, we would be poorer.

Now, it might be that we desire to use those more labour intensive methods because they don’t have that unfortunate effect of boiling our grandchildren, or upsetting the whales. Or because air pollution is a bad thing and so on. We are, after all, going to get our energy from somewhere, we are going to miss out on some things as a result of our using all the available human labour to do this that or the other. It’s even possible that the parcel of things we get with renewables is the set which makes us as rich as we can be given our constraints.

But what is absolutely not true is that renewables are desirable solely because they require more human labour, because they create more jobs. That is a cost of having renewables, not a benefit.

Fiona Harvey is the Guardian’s environment correspondent

Such a pity she knows absolutely nothing at all about the economics of the environment. Further, that little bit she thinks she does know is wrong. For jobs are a cost, not a benefit.

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