We Are All Job Creators

One thing that really irks me, and that has become a major feature of this election, is the silly phrase ‘job creators’. It speaks to an ideological view of the economy unsupported by the facts.

We often hear right wing economists and politicians talking about the need to encourage investment and hence growth by reducing the ‘burden’ on entrepreneurs, businesses, and sundry others who apparently are the ‘engine’ of our growth. Thus the need for deregulation. Thus the need for lower taxes. Thus the need to prioritize growth over the environment, social safety, and other hinderances. The entire ability of an economy to generate jobs is connected, in this narrative, to the unfettering of the entrepreneurial spirit which is so sensitive and weak that it will wither at the first sight of constraint. Particularly constraint by the government.

This is the supply side story and they are sticking with it. Apparently we ought all be in the thrall of the job creators and count ourselves lucky that they pursue riches and fame despite the manifold roadblocks the government throws in their way.

Rubbish.

There is another narrative. One that makes more sense. We are all job creators. All of us. That is to say that every time we spend we facilitate business. Our demand for goods and services is what encourages and allows entrepreneurship. It is because we go out and buy what they have to offer that they make profits and employ people. When we stop buying and retrench in order to pay off debt, or when we stop simply because we have run out of cash because we are unemployed or because we are underpaid, no amount of entrepreneurial spirit or elan can make up the difference. Without demand, business stalls.

This ought to be simple to understand. But it obviously isn’t. The problem is that it conflicts with the right wing vision of heroic business fighting to survive amid competition. Right wingers fixate on all the details of market competition. They tell tales of rugged entrepreneurs struggling to make a fortune in the teeth of ferocious opposition. Those entrepreneurs that survive are then elevated in right wing lore to lofty status. They are, we are told, the engine that we all rely upon for our good fortune. Allow them to persevere and we will all be lifted too.

But most entrepreneurs fail. Miserably. Why? They misjudge not the competition, but the demand.

The existence of demand validates the entrepreneur’s vision. Steve Jobs looks like a visionary in retrospect. His series of novel products are a triumph of entrepreneurial vision. But he would have been nothing were his products not bought. He met demand. Demand did not meet him. There was prior existing demand that he was both savvy and bold enough to go after and profit from. His risk taking was sensible only when we think of it after that fact. He could not have possibly known, in any concrete definition of knowing, whether his risks would pay of. They were risks. Indeed in a more demanding explanation of economic reality, one where uncertainty is endemic, his risks weren’t even risks. They were outright guesses. Shrewd maybe, but guesses nonetheless. He mitigated the uncertainty in every way he could. He advertised. He limited his exposure. He researched. He dug out as much fact as he could so as to avoid going too far out on a limb. He employed experts to give him advice. He produced products that were within his range of personal expertise. In many ways he was the exact antithesis of the rugged entrepreneur so revered by right wingers. He was cautious to a fault. Until he plumbed the depth of demand. At which point he went fill bore.

He neither created a market nor created demand. He unlocked it. He intermediated. His activity expanded the actual economy further into its potential space. This is an act of creativity. It is an act of learning. It fits perfectly within a narrative of an economy as a constant learning activity. But it is a collective learning. There would have been no point in launching the iPhone in an era without electricity. It would have been inconceivable. Modern products and inventions make sense only in the context of a modern economy. That modern economy consist of us. All of us. With our current levels of education and current expectations, preferences, and other manifestations of accumulated knowledge and experience. That accumulation of knowledge and experience is a social act. It is entirely context dependent. It is shared.

This is not to belittle the individual creative act. Not at all. But it is to fit that creative act into its rightful, and well earned spot. Yes, creativity is essential. It is ceaseless creation that drives the economy to produce more wealth. But that creation only pays off, and is only rewarded, by the collective validation we call, rather vaguely, demand.

Thus, Steve Jobs and his ilk are not job creators. The people who buy products are.

We are all job creators.