Tuesday, May 22, 2012

Who Creates Jobs

Yesterday, my son sent me a copy of this TED lecture. It features Nick Hanauer, an American venture capitalist, and is less than six minutes long. Hanauer did not turn my world upside down. He merely confirmed what I already believed. But his exposition was as clear as a Manitoba sky in summer.

Economically, we have been living in a Ptolemaic universe for the last thirty years. John Maynard Keynes was our Copernicus. What is truly remarkable is that Milton Friedman and his disciples helped re-establish the Flat Earth Society.

View the clip and judge for yourselves.


Anonymous said...

I couldn't access the six minutes. What's it's main point?

Owen Gray said...

Hanauer says that consumers create jobs. Employers only add jobs when there is demand for their products and services.

If money is concentrated in fewer and fewer hands, the ordinary people who buy a product or service can't buy anything. And rich people can't consume enough of anything to keep the economy going.

It's simply good business to make sure that wealth is shared more equally.

Tossing Pebbles in the Stream said...

He is a traitor to his "class" by speaking this truth so clearly.

Few really wealthy people create jobs or start businesses which create items or services that benefit Society. They are more likely clipping coupons or investing in businesses that others put their sweat and effort into.

Owen Gray said...

The late John Kenneth Galbraith used to say that the prevailing economic theory was called "trickle down" because it was the economic equivalent of what came out of the back end of a cow.

You're right, Philip. A financialized society creates coupons -- not jobs.

Anonymous said...

"He is a traitor to his "class" by speaking this truth so clearly."

His class may think so. But what he said was fully compatible with him making more money. Think: trickle up economics.

Owen Gray said...

Hanauer recommends the same policy Henry Ford followed when he radically improved his workers' wages.

Ford knew that, if they earned enough, they would buy the Model T's they produced.