God is a Capitalist

Tuesday, October 2, 2018

That Study Claiming 30% Of Jobs Are BS Is BS

When a writer calls something BS, he usually means it’s not only worthless but a nuisance. However, I have learned that BS in one person’s eyes is gold in another’s. For example, a club in Ft. Worth used to sell cow patties covered in polyurethane with a tiny cowboy wearing snow skies perched on top and a label that read “Ski Texas!” Many businesses sell cow manure compost for millions of dollars every year.

Still, a few academics want to advertise their arrogance by giving themselves the authority to declare some jobs as BS:
David Graeber of the London School of Economics argues that as much as 30% of all work is performed in “bullsh*t jobs,” which are unnecessary to produce truly valuable goods and services but arise from competition for income and status...
 Numerous jobs fall into that category: cyber criminals and the cyber experts employed by companies to repel their attacks; lawyers (both personal and corporate); much of financial trading and asset management; tax accountants and revenue officials; advertising and marketing to build brand X at the expense of brand Y; rival policy campaigners and think tanks; even teachers seeking to ensure that their students achieve the higher relative grades that underpin future success.
Graeber is an anthropologist, so he might not understand that no one has the wisdom to determine what is valuable or not for everyone. If someone is willing to pay for a product or service, then it is valuable to that person. Price is the only objective criteria of value in the market. Some academics who claim to be economists should know that, but they assume the same arrogant posture in the article:

As Gary Hamel and Michele Zanini point out in a recent Harvard Business Review article, some 17.6% of all US jobs, receiving 30% of all compensation, are in “management and administrative” functions likely to involve significant zero-sum activity. Meanwhile employment in financial and “business services” firms has grown from 15% to 18% of all US jobs in the last 20 years, and from 20% to 24% of measured output... Hamel and Zanini argue that if we could only strip out unnecessary management jobs, productivity could soar.

Few people like to defend lawyers, but the reason the US has so many of them and enjoys so much litigation is that we take individual rights more seriously than any other country in the world. For much of the world, individuals have few rights so they have little need of lawyers. As for accountants, Congress expanded the professions to record levels beginning with Sarbanes-Oxley legislation and increased it further with Dodd-Frank. The state made those jobs necessary.

Asset management and financial trading jobs increase the productivity of those who invest by freeing them from the task. Advertising and marketing are essential functions of entrepreneurship because they inform customers. BTW, socialists have loved to assault advertising and marketing for centuries and the fact that these authors do it is a signal of their political inclinations.

Including teachers and think tanks as BS jobs is odd. It appears these authors want us to only buy stuff and not services. But as the US has become wealthier, we have altered the proportions of stuff to services that we buy. That is why education, healthcare and entertainment take increasingly larger shares of our economy. After all, most people find a limit to the number of refrigerators, microwaves and phones they can use. It would be senseless to keep piling up stuff just to keep productivity figures rising. Today, manufacturing and farming make up about 20% of our economy combined.

The authors are right that financial service jobs have exploded in the past few decades, but that is largely due to Federal Reserve policy. The inflationary policy they pursue creates rivers of new money that enter the system through a handful of large banks and makes the industry more profitable than manufacturing. It takes a lot of workers to process that new money and spread it around the rest of the economy so that it can work like manure on a new lawn. The Fed has created those jobs so that it can do its job.

Achieving productivity increases in services is hard because they’re labor intensive jobs. That’s one reason for our slowing productivity. Another is the fact that it’s hard to really measure it and we may just be doing a poor job of it.

None of the authors mention the job category that I consider as zero sum, or BS, and that’s government jobs. Yes, someone pays people to perform the work, but we don’t do it voluntarily. Imagine how large the US government would be if Uncle Sam accepted only voluntary contributions!

First published at Townhall Finance.

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