TAKING STOCK: Should government ‘protect’ jobs? Is it the government’s job to ‘protect’ jobs? Should the government intervene to subsidise loss-making enterprises - public or private, to prevent jobs being lost? Should the government enact labour laws to prevent layoffs and ‘protect’ workers? Should the government ‘protect’ the farmers and support them by fertilizer subsidies? No. There should be no protection. All progress depends on ‘creative destruction.’ As old jobs are lost, new ones are created. Let us go back to the beginning of human history. Every­body had a job: survival. To survive meant to hunt and forage for food. This was a full-time activity. There was no unemployment. Even today any government could usher in full employment by returning us to prehistoric times. Ban transport and millions will be transporting goods. Ban electricity, modern labour-saving devices, and all of us would be employ-ed in our strug­gle to exist. We would live like animals and life expectancy would plummet back to below 30, as it was in the Stone Age. Humankind’s history has been one of job losses as we progressed from prehistoric times to the modem age. Did we suffer? No. Even as our population incre-ased from 10,000 to 6 billion, there was an unimaginable improvement in our living standards. All this would not have happened without a change or ‘churn’ in the nature of work we do. One study in America concluded that an average American entering the job market would eventually hold five jobs, four of which may not even exist today. This is good for US, since more of its people will be employed in better, more profitable tasks enhancing their own and the nation’s wealth. During the 1990s millions of Americans found themselves out of work. News regarding job losses made headlines on TV and in newspapers for days, together: 74,000 jobs cut at General Motors, 60,000 at IBM, 50,000 at Sears, 40,000 at ATT and like. However, little reported was the fact that new jobs were being created much faster than the old ones were being lost. Even as Sears struggled, Wal-Mart stores added 624,000 jobs between 1985 and 1996. Overall, retail jobs went up by 1.9 million. When IBM was suffering a regression, EDS, a leader in data processing, added 60,000 workers to their payrolls, similarly, Microsoft increased its employees by 19,500. While ATT downsized, other telecommunication giants like MCI and Sprint added 80,000 to their payrolls. General Motors cut down on its workforce but over 400,000 new jobs were created by Honda, Toyota and other automobiles’ opening plants and appointing dealers, signifi­cantly, all in the US. There is no harm done, if certain jobs vanish forever. It is a sig­nal by a free market that society’s finite resources are not needed to produce something which is no longer desired by consumers. We are better off by the shift of these resources to new, more valued uses. In 1800, 95 per cent of Americans were farmers, today it just takes three per cent to do a better job and produce history’s greatest agricultural abundance. In 1900, 40 out of every 100 Americans worked on farms. In absolute terms the numbers employed on farms went down from 11 million in 1900 to less than 0.8 million today. Was this bad? No, it was great for America. Even as employment in agriculture de­clined and professions such as carriage and harness makers, telegraph operators, cobblers and blacksmiths were eliminated, new jobs which did not exist in 1900 were created: Airplane pilots, auto mechanics, professional athletes, computer programmers, web-designers and internet specialists. America’s total employment swelled from 29 million in 1900 to 130 million in 1997. This ‘churn’ made America incredibly wealthy beyond the imagination of those living in 1900 let alone those alive in 1800. This growth would have halted if America had frozen employment and the government had prevented job losses by law. What are the lessons for Nepal? Let the free market decide what jobs will be created and what will be destroyed. ‘Protecting’ workers by labour laws and prohibiting closures and layoffs causes the biggest harm to workers by misallocating capital and scaring off investors. If Nepal is to create jobs, it must free its labour markets and let private investment from all over the wo-rld create employment opportunities for its people. contacted at: everest@mos.com.np)