The Green Jobs Fallacy

by Julie Walsh on May 8, 2008

From Planet Gore, National Review Online

The NRDC has a full-page ad in the New York Times today hailing "The Economic Stimulus Plan that can Save the World."  This miracle piece of legislation is none other than the Lieberman-Warner global warming bill.  NRDC's premise is put quite simply in the ad — Jobs! Jobs! Jobs!  In other words, shifting over from old-energy technology to new-energy technology will create jobs aplenty.

This is hooey, of course.  Don't take my word for it, here's resource economist Billy Pizer:

"As an economist, I am skeptical that [dealing with climate change] is going to make money. You'll have new industries, but they'll be doing what old industries did but a higher net cost…. You'll be depleting other industries."

As James Pethokoukis points out in the surrounding commentary, the Jobs! Jobs! Jobs! hype is just a re-run of Bastiat's obviously-not-famous-enough Broken Windows Fallacy — by breaking a window, I am contributing to the economy by providing work for a glazier! (Of course, all you've done is cost the economy one window). By this reasoning, the devastation in Myanmar is a boon for its economy. Note furthermore this interpretation of the parable:

Austrian economists, and Bastiat himself, apply the parable of the broken window in a more subtle way. If we consider the parable again, we notice that the little boy is seen as a public benefactor. Suppose it was discovered that the little boy was actually hired by the glazier, and paid a franc for every window he broke. Suddenly the same act would be regarded as theft: the glazier was breaking windows in order to force people to hire his services. Yet the facts observed by the onlookers remain true: the glazier benefits from the business at the expense of the baker, the cobbler, and so on. Bastiat demonstrates that people actually do endorse activities which are morally equivalent to the glazier hiring a boy to break windows for him.

This is close to what NRDC is lobbying for. They are urging Congress to break windows to advance their own policy goals.

At least they don't go quite as far along this line of argument as Barack Obama:

Barack Obama also believes the transition to a clean energy economy holds special promise for low-income communities and families, which are poised to shoulder a disproportionate share of the burden of global climate change. To combat this problem, Obama will create an energy-focused youth jobs program to invest in disconnected and disadvantaged youth. This program will provide youth participants with energy efficiency and environmental service opportunities to improve the energy efficiency of homes and buildings in their communities, while also providing them with practical skills and experience in important career fields of expected high-growth employment.

Yes, he's going to train disaffected youngsters who could have gone into the steel mills or auto plants to change twisty lightbulbs for people.


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