There is one mistake I keep seeing over and over again, in the media, by politicians, by laymen, etc. I feel it is my duty as an economist to correct this mistake.
Not all resources are equally productive. The purpose of economic activity is to maximize benefit (output) while minimizing costs (input).* However, not all mix of factors of production will get you there. In short, when discussing economic activity, we must be sure to stress productive factors of production.
Consider the following: A nation has an army of ditch diggers (assume ditches are a useful output). Each is employed with steam shovels. Then something happens, and the steam shovels are replaced by an equal number of spoons. What would happen? The productiveness of the ditch diggers would fall, thus reducing the value of each ditch digger. This is true even though the numerical amount of capital in the nation (its capital stock) has remained unchanged. Why? The productive capital has been replaced with less productive capital. The value of the capital has been reduced.
Of course, it is possible to maintain the same level of output by adding in more ditch diggers, but since resources are scarce this would mean less laborers for other outputs.
Why do I bring this up now? Well, a common mantra heard throughout this election is that “jobs are good.” The US needs protectionist tariffs and closed borders to maintain jobs here in the United States. But no one asks the important question: are the jobs being “lost” unproductive compared to alternative use of the resources? A job program is easy: just ban all labor-saving devices: eliminate electric fans, washing machines, automobiles, elevators, computers, construction machinery, light-bulbs etc etc etc. You’d easily create millions of jobs overnight. But these jobs wouldn’t be productive! Indeed, I predict one would see standards of living fall considerably should these measures be implemented.
The goal of economic activity is to maximize benefits, not maximize efforts.
*Not everyone constantly operates in this “profit-maximization” fashion, but that doesn’t mean it’s an unreasonable assumption. Consider this: if you were offered two identical cars, one was $10k and the other was $5k, which would you choose?