This weekend I was on a long road trip, and while I drove, I decided to listen to the Daily Wire’s Sunday Special with Ben Shapiro. Shapiro hosts a different guest every week to discuss various political and social issues, and his guests have included people on both the political left and political right. This week, Shapiro’s guest was Fox News host Tucker Carlson.
Many conservatives love Carlson’s commentary, and to be fair, I’ve liked how he’s approached some recent political issues. For example, he was one of the only mainstream news commentators that I know of who actually questioned whether or not Assad was responsible for a chemical attack in Syria this past April. None the less, I was extremely disappointed with what Carlson had to say on the Sunday Special.
While Carlson claims to be a proponent of capitalism (around the 30:07 mark in the interview he says capitalism is the best economic system he can think of), he openly advocated for one of the most non-free market practices known to history. Carlson actually thinks the government should outlaw technological advancements in order to “save” the jobs of Americans.
About 29 minutes into the interview, Shapiro asked Carlson about a concern that Carlson raised regarding the prospect of self-driving vehicles in his recent book Ship of Fools. It’s no secret that from taxi cabs to eighteen wheelers, many Americans drive vehicles for a living. However, assuming technology continues to advance and artificial intelligence becomes proficient enough, it’s not difficult to see that self-driving vehicles could rapidly replace these drivers on the road.
Shapiro asked if Carlson believes that the government should introduce regulations to prevent this automation from happening, and Carlson said that he would do so without hesitation. In particular he said,
“In a second. In a second. In other words, if I were President would I say to DOT, Department of Transportation, we’re not letting driver-less trucks on the road. Period. Why? Really Simple. Driving for a living is the single most common job for high school educated men in this country in all 50 states. By the way, that’s the same group whose wages have gone down by 11% over the past 30 years. The social cost of eliminating their jobs in a 10-year span, 5-year span, 30-year span is so high that it’s not sustainable” (29:27-29:59 in interview).
While I understand this concern in principle, this is yet another example of how neo-conservative economic policies are anything but capitalist and are grounded in the same economic misunderstandings that plague progressives. To understand why, one must ask the question of how wealth is created in the free market, and why it is that people seek jobs in the free market at all.
So what is the answer to how wealth is created? In the simplest sense, one could say wealth is created when a person expends time combining labor with resources to produce something useful. When our ancestors spent their days putting seeds in the ground by hand and then watering those seeds, they did so in order to grow produce that was useful for survival. By choosing to farm, they demonstrated that they believed that time spent farming was better spent than time spent sitting and doing nothing, and I don’t believe they were incorrect in this assessment.
However, farming by hand took a great deal of time, and producing enough food to feed a large family required that everyone had to pitch in. A single storm could ruin your crop, not to mention all the insects and other animals that would seek to deprive you of it. Without modern conveniences such as tractors and pesticides, farming took a great deal of work, far more than it takes today.
But how did tractors, pesticides, and other modern conveniences become a reality? From the simplest hand tools to the most technologically advanced machines, modern conveniences were also the result of people expending time combining labor with resources. Someone had to have an idea for how to create something, and then they had to decide that spending time making that idea a reality was worth more than using their time to do something else.
However, with this type of innovation there’s always a measure of risk. When our ancestors who farmed by hand expended time trying to create tools, that was time that they weren’t spending farming. The risk was always there that their idea wouldn’t work, and they’d never get that time and those expended resources back. For this reason, they would be more inclined to experiment with new ideas in times of abundance when the resources they needed to survive were plentiful and required less time and labor.
It’s here that we realize that there’s more to creating wealth than simply expending time combining labor with resources. What truly creates wealth is not simply a combination of time, labor, and resources but rather finding ways to achieve your desired ends without expending as much capital as you did before. When a new technology allows one worker to accomplish what it previously took five to accomplish, you can still achieve your desired end, but now you have time, labor, and resources freed up to be used for new endeavors.
Now, on to the question as to why people seek out jobs in a free market. When a person takes a job, they are choosing to exchange their time and labor for a particular compensation that leaves them better off. As we just discussed, they’ve decided that the time they spend working is better spent than using that time to do something else. Given this, it seems intuitive that having more jobs is better than having less, and for this reason, people like Tucker Carlson sometimes advocate that government regulations should be used to maintain conditions where more people are required to accomplish a task than less.
But what this type of thinking doesn’t account for is what new endeavors will become feasible once capital has been freed up. Returning again to an age of primitive farming, imagine if a farm hand had come to a man working on a new farm tool and said, “Stop that. If your invention works, we won’t need as many people working in the fields every day. Don’t you care about the jobs of hard-working farm hands?”
Now, jump ahead to the age of the first automobiles. Imagine a rancher coming to Henry Ford and saying, “Quit working on that Model T. Don’t you know how many people make a living raising horses, making saddles, and building wagons? If your invention works, thousands of people will find themselves without jobs!”
The list of examples could go on, but a search of history will not reveal a period of time where thousands of former employees starved to death due to technology taking their jobs away. Instead, what we see is that as their time was freed up and they sought new ways to make a living, entirely new industries emerged that no one had even dreamed of as much as a decade earlier. Do you think farm hands would have been nearly as concerned about the prospect of losing their jobs if they could look into the future and see the internet, smart phones, and drive through restaurants?
A recent example of how increased economic efficiency helps everyone can be seen in the discussions about the effects of international trade with countries like China. Some people point to the correlation between Chinese imports and the loss of American manufacturing jobs as evidence that the government should intervene with trade restrictions, such as tariffs, to save American jobs. However, research conducted by the Federal Reserve Bank of Saint Louis found,
“Increased import competition from China leads workers to relocate to other sectors; thus, the share of employment in services, wholesale and retail, and construction increases. The role of intermediate inputs and sectoral linkages is crucial to understanding these relocation effects. Import competition from China leads to decreased production among U.S. manufacturing sectors that compete with China, but it also affords the U.S. economy access to cheaper intermediate goods from China that are used as inputs in non-manufacturing sectors. Production and employment increase in the non-manufacturing sectors as a result. As an example, we found that in the long run, about 50 thousand jobs are created in construction as a result of the China shock” (Caliendo, Dvorkin & Parro, 2018, p. 28).
Admittedly, the prospect of losing one’s job isn’t fun. There’s always a measure of uncertainty about the future, and many people would like for the government to make that uncertainty go away. However, if and when it does, it only forces employers to do business in a less efficient manner, preventing the freeing up of capital for other purposes.
Tucker Carlson may believe that government intervention like what he proposes saves jobs, but it actually prevents the creation of newer ones that make better use of the labor. In the short term, self-driving vehicles may lead to the layoff of many professional drivers, but as the costs of transportation go down and therefore the prices that customers must pay to use those transportation services, there will be more money in the pockets of Americans who pay for transportation and a large pool of workers available to provide labor in new sectors. This is a recipe for innovation and an improved standard of living for everyone.
Bottom line, don’t discourage innovation with government regulation Tucker. Embrace it and watch as our society reaches heights we never thought possible.
And that is my 2 cents. Take it for what it’s worth.
Caliendo, L., Dvorkin, M. A. & Parro, F. (2018, September 26). Trade and labor market dynamics: General equilibrium analysis of the China trade shock. Federal Reserve Bank of Saint Louis, Working Paper 2015-009F. doi: https://doi.org/10.20955/wp.2015.009
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