Tuesday, November 17, 2009

The Ditch-Digger's Fallacy

A few generations ago, in order to help during a job shortage our government felt that we could help solve this problem by giving people jobs. If we made jobs for people, they would spend money and make jobs for other people. What sort of work would be made. Well, we couldn't have them building bridges or tunnels as this would take away work from unemployed union members. It was decided that these unemployed men (our society was still sexist at the time) would be sent to work digging ditches. Many brilliant people showed that this was a brilliant idea. And, as one can't have ditches all over the place, other people were given jobs filling them back in. As many people were unemployed, many ditches were dug and filled.

It was a great success. Thousands of diggers and fillers were hired. Shovels, backhoes and dumptrucks were bought, thus giving jobs to shovel, backhoe and truck manufacturers. Supervisors, pension fund administrators and payroll people were hired. Buildings were raised for the new workforce. It was agreed among the consultants, and lauded by progressive academics and congressmen, that this was the best way to put people back to work. Huge circular ditches, miles in diameter, were dug, re-filled and paved before being dug-up again. Economists, academics and news personnel reported on the success of the new plan. Everyone knew that as each new digger was hired and paid, he spent his money on clothes, food and paid taxes. Society benefited greatly from this new public works program.

A few callous, unkind people, probably lackeys of the rich, questioned the value in digging ditches, arguing that the money used to pay for the diggers, fillers and administrators came from the taxpayers. They emphasized that this government program did not create wealth, but instead did nothing more than redistribute it. "What did the taxpayers get for their taxes," they asked? " Nothing but thrice emptied and filled ditches." In response to the criticism the digger's union, academics, administrators and politicians angrily replied that it was "cruel and mean-spirited to give tax-breaks to the rich and throw these good people out of work." "We must think of people first, before profits, before taxes," they said.

Anytime one mentions that a government department ought to be cut or eliminated, the final argument used to combat the cut is that by doing so we would throw people out of work. We would then have to pay unemployment benefits for people who moments before were income earning, tax-paying citizens. Thus we not only would be hurting them, but ourselves as well. This is a faulty argument. Anytime one eliminates a non-productive job one is helping, not hurting society. To argue that eliminating patronage and make-work jobs exacerbates the jobless situation, and injures society, is to fall into "The Ditch-Diggers Fallacy."

As ridiculous as it sounds, many people hold strongly to the Ditch-Diggers Fallacy. In doing so they make it nearly impossible to alter the status quo. Programs and old job descriptions become entrenched, even when better ways are available. There are many examples to choose from. A simple example concerns highway and bridge toll booths. We could raise money for our bridges and roads solely from a gas tax and eliminate toll booths, thus saving motorists time and headaches; saving truckers and consumers money; as well as reducing air pollution by eliminating congestion. In addition we would save taxpayers hundred of millions of dollars a year by eliminating toll booth collection.

One of the key reasons that we don't eliminate toll booths is that many people believe that by doing so we would cost toll collectors, supervisors, accountants, and auditors their jobs. "What about all those people being thrown out of work?" "We wouldn't save any money," people would say. "All the savings would go towards paying them unemployment and welfare." "Not only that," others would say, "but it would be cruel to throw good people out of work to save a few dollars." These people have fallen for The Ditch-Digger's Fallacy. If it makes sense to keep toll booth collectors and their supervisors, doing an unnecessary, wasteful job then it makes sense to give people jobs to dig and fill ditches.

There are only two ways of creating wealth: producing something or increasing the efficiency of the economic system: distribution, administration, and finance. Labor is not the source of wealth. If it was then digging huge ditches and filling them back in would be the panacea so many are looking for. All over the world people would be digging and filling ditches, and we would all have everything we need


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