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Having Cake And Eating It: Creative Destruction

Good old Alexandria Ocasio-Cortez – she’s doing for America what Jeremy Corbyn has done for Britain. Much to the dismay of the secret socialists now entrenched in the Democrat Party, she is stripping away the protective layer of bulls**t that socialism normally has to rely upon to keep people from understanding its inherent failings, and is thus laying it bare before the world.

Because she is too ignorant to understand them – she actually believes in socialism, and thinks that if only it is adequately explained to the rest of us, we will love it as she does.

She doesn’t know enough history to know that everyone over the age of forty has seen socialism tried a dozen times in their lifetimes. Her sales pitch is wasted on us – we’ve seen the results before.

So when she told Amazon that their particular brand of crony capitalism was not welcome in New York, she genuinely thought people would admire her.

Instead, even the crony capitalists on the Democrat side of the aisle (i.e those who understand how the game is really played) are very upset with her – she has driven away 25,000 jobs and all the votes economic benefits that would have flowed from them.

All because she thinks Amazon should pay more corporation tax.

Now we can talk about whether we care about corporation tax more than we care about jobs. Or we can talk about how jobs are a cost of getting something done, not a benefit. Or we can talk about the incidence of corporation tax and how the burden of it tends to fall mostly on the workforce in the form of suppressed wages. Or we can talk about all the lovely economic benefits that a large employer will bring to an area. We could even talk about how AOC thought that giving Amazon a tax break was spending taxpayer money badly – she genuinely seemed to believe that allowing Amazon to keep a few million quid rather than paying it in tax was actually spending taxpayers money, rather than merely failing to collect it. In the same way that Labour thinks that giving people less money in housing benefit is a bedroom tax, or Richard Murphy thinks (or pretends to believe) that not taxing rich people more is the same as actually writing them cheques.

All of which depends on the most common of progressive delusions – imagining that all money belongs to the State, and allowing the taxpayer to keep some of it is the same as actually giving them money. If you think that 100% of my earnings belong to you, it’s understandable that allowing me to keep 46% of them feels like you’ve given me something, rather than merely not taken it.

But we digress – back to those lost Amazon jobs.

When asked about what the people who might have aspired to those jobs would do, now the employer in charge had decided to not create them in New York, she claimed that jobs were not lost to those people, because they would simply work elsewhere.

An employer therefore does not create jobs so much as merely redistribute them – people doing a job that is lost just………..get a different job.

But of course this perspective is at odds with another progressive trope – the idea that when entrepreneurs get tired of the minimum wage agitation they reach a point where their spreadsheets tell them the tipping point has been reached and it will be cheaper and less hassle to automate. Shelf stackers in the Amazon warehouse demand $8 an hour, and then $9, and then $12, and at $15 the alarm bells ring and all warehouse stackers get sacked in favour of the ShelfBot.

But wait.

Which is it?

Do businesses create jobs, or not?

If they do, entrepreneurs are vital to our economy. If they don’t, the shelf stacker will just go work elsewhere when his job gets automated away?

Of course it’s both, even though this is creative destruction forced onto an economy by fiat – the government makes labour artificially expensive and that hastens the Age of the ShelfBot, which frees the shelf stackers to go and do something else that needs doing.

Like flip burgers.

Er………….never mind.

Whereas entrepreneurs who come up with new ideas actually DO create jobs, because their new ideas require stuff to be done that wasn’t being done before.

We used to call this progress. You’d think Progressives would like it.

But AOC wants to have her cake and eat it – she wants to claim that jobs will not be lost to New York if she prevents Amazon from coming there, but that jobs will be destroyed if Amazon automate their factories.

Like all socialists, she’s wrong about both.

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5 years ago

Ocasio-Cortez drove away no one at all – she doesn’t have the power to do that. She was just elected to the US Congress and is not sitting on the New York State committee that would have determined the final outcome of the Amazon situation. The vote on whether or not the tax breaks would be given to Amazon wasn’t scheduled until 2020. No one took away any of the incentives. Amazon walked away. It seems that you’re not in New York City as I am, but you have access to the same facts as I do. If your goal… Read more »

5 years ago

Jobs are a cost. Yeah right. I first played Monopoly when I was about six years old. I learned that hotels are a cost to the player who lands on that square and a benefit to the player who owns it.

5 years ago

Alex … this is a very important subject and much bigger than @AOC and the Amazon expansion into New York (Queens). It deserves thoughtful analysis because it is complex and goes to the heart of where we are in the world today. Amazon is one of the most valuable companies in the world today … based on the price of its stock, much of which is owned by Jeff Bezos, the Founder / CEO. The Amazon business model has emphasized disruption at which it excels. When you look at Amazon on its own, there is valuadd, but when you look… Read more »

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