Hacker News Reader

Comment by codex | Hacker News Reader

Job creation is the wrong metric. One could employ a million people digging ditches and then filling them up again, and ultimately nothing will have been accomplished save for some wealth redistribution.

Wealth creation is the key metric. While harder to measure, it's what actually moves society forward.

View on HN

> One could employ a million people digging ditches and then filling them up again, and ultimately nothing will have been accomplished save for some wealth redistribution.

This is kind of obviously wrong. Just substitute "entertainment" for the ditch digging and it should become apparent why. Those people might have made their money in a silly way, but much of it will be spent, and that is important.

Wealth is goods and services people want. People want entertainment. People do not want ditches dug, then filled in again. Entertainers are generating wealth; a soft, fuzzy sort of wealth centered on meeting needs very high up the Maslow hierarchy, but wealth nonetheless, a luxury good. The ditch diggers and fillers are not.

I think the key thing (arguing the nuance re: wealth is hugely boring and unimportant) is that codex was arguing about "what actually moves society forward." His hypothetical ditch-diggers, unless they BURN the money they earn, will end up moving things forward when they spend their money.

(unless we're talking about a hypothetical society consisting entirely of hypothetical ditch diggers. again, boring)

No, that's looking at the wrong place. Yes, the ditch diggers may make money and that may go on to generate wealth, but at the point where we're paying the ditch diggers, we're burning wealth. We could either have gotten something for that money, or nothing, and we chose nothing. There's opportunity cost there. Quite significant, in fact.

A lot of people make this mistake, including the government and even it seems to me many economists, always looking to the next transaction and failing to think about this one. But this one is the one that counts right now. The mere fact that the dollar wasn't "destroyed" doesn't mean that it did anything good, and it certainly could have.

There's a discussion to be had about the "velocity of money" but this isn't really the place for it. The point is that if an economy is hydrolocked and nobody is spending, "throwing away" money can benefit everyone if it unlocks things.

The important metric is wealth creation beyond the wages the immigrants themselves capture. The picture right now is that immigrants to the USA clearly do produce wealth, however they capture all the benefits for themselves and it winds up a wash or net loss to the society at large.

Reply on news.ycombinator.com