"Brethren, you must club together to find me work at your own price." This is the right to work, i.e. elementary socialism of the first degree.
"Brethren, you must club together to find me work at my own price." This is the right to profit; i.e. refined socialism, or socialism of the second degree.
The first statement regarding the "right to work", carries with it several important implications. The first is that the individual making statement is unemployed, which should be obvious enough, since employed individuals are not likely to implore their brethren to find them work. The second is that the employers have thus far determined that this persons skills and abilities would not provide sufficient benefit to justify the cost of employing them. This persons labor is essential useless to them. Finally, like so many errors in political economics, this statement sees only those effects that are immediate, without foreseeing the unintended consequences.
It should be noted here that "useless" here is not meant as a pejoritive or critical term, but merely as an objective statement regarding current employment. While an individual may have skills that are, arguably, inherently useful, if the employers that person has applied to have no need of these skills, then that person's labor is without use, in other words, useless. A CPA may possess all the skills that an accounting firm would find valuable, but if that firm has no need of another accountant, then that CPA's labor would be useless to the firm.
Advocates of government intervention to supply jobs to this useless labor are guilty of paying attention only to those effects which are seen (a person employed with taxpayer dollars) while ignoring those effects that are not seen (the employment destroyed when taxpayers' dollars are taken). Bastiat notes that when these two faces of this policy become clear, public opinion will turn against it.
Every dollar that the government spends to "create a job" is a dollar that the private sector is unable to use to create a job. This transference from the private to the public sector is especially egregious because, while the private sector would have employed useful, desired labor, the labor created by government fiat to replace it is inherently useless. When a store owner purchases a pair of shoes, he employs the shoemaker for something useful. When the government takes his shoe money as taxes to employ a laborer to dig and refill holes in the ground, the shoemaker gives up something useful for something useless.
The second statement, which Bastiat calls "refined socialism", is a sentiment still in vogue with protectionists and labor unions. It is the sentiment that not only is employment a right, but it is a right that this employment should be lucrative. Its modus operandi is to intermix useful and useless labor. If an employer would hire a worker for $7 an hour, but the government or union or whoever requires him to pay $10 an hour, he is essentially paying $7 for useful labor and $3 for useless labor. The gain to the laborer is the loss to the employer. The $3 difference would have been used by the employer and created employment elsewhere in the economy, but since this effect is not seen, advocates of labor fail to take this into their calculation, and proclaim a gain for labor when in fact the calculation is a wash. Furthermore, not only has labor failed to gain, but the employer suffers an injustice.
Bastiat closes his essay "That which is seen, and that which is not seen" with this quote from Chateaubriand's Posthumous Memoirs:
...two consequences in history; an immediate one, which is instantly recognized, and one in the distance, which is not at first perceived. These consequences often contradict each other; the former are the results of our own limited wisdom, the latter, those of that wisdom which endures. The providential event appears after the human event. God rises up behind men. Deny, if you will, the supreme counsel; disown its actions; dispute about words; designate, by the term, force of circumstances, or reason, what the vulgar call Providence; but look to the end of an accomplished fact, and you will see that it has always produced the contrary of what was expected from it, if it was not established at first upon morality and justice.
Read the previous article, Frugality and Luxury, or return to the Intro.
More Info: That Which is Seen and That Which is Not Seen, also available in the Bastiat Collection.
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