"The New Deal has been a success"

 

The New Deal we refer to is the (UK) government's welfare-to-work scheme. The "success" we refer to is in creating new jobs.

The fallacy is that "success" in creating jobs necessarily equates to economic/social success in general – that job creation is necessarily a "good thing".

The New Deal can be seen as an expensive (total cost: £5.2 billion) way to create pointless, subsidised slave-jobs which are of little benefit to anyone. However, the government spent £18 million of taxpayers' money to advertise the New Deal – presumably so we wouldn't have this negative perception.

We had a letter published in the Guardian (15/7/2000) on this theme:

Dear Editor,
The New Deal has created approximately 50,000 jobs which otherwise wouldn’t exist. But it cost £5bn (five billion) to set up. By my calculation, that means each job created cost the taxpayer £100,000.

(Actually, our Guardian letter wasn't completely fair – the government hadn't spent its full budget of over £5bn when it announced the creation of 50,000 jobs. The true cost of each job to the taxpayer was tens of thousands of pounds, not a hundred thousand pounds).

Research by the Employment Policy Institute, Prince’s Trust and the Institute for Personnel & Development, showed widespread abuse of the New Deal by employers. (Under the scheme, companies receive wage subsidies from the government and then often renege on their obligation to provide training).

On the more fundamental fallacy of job creation necessarily being a good thing, we quote the famous US polymath, Buckminster Fuller (from his book Critical Path):

"About 90 percent of all USA employment is engaged in tasks producing no life-support wealth. These non-life-support-producing employees are spending three, four, and more gallons of gasoline daily to go to their non-wealth-producing jobs – ergo, we are completely wasting $3 trillion of cosmic wealth* per day in the USA."

*Fuller estimates the value of gasoline in terms of "cosmic wealth" based on research by oil geologist Francois de Chardenedes which quantifies the cost to nature of producing petroleum – eg in terms of energy employed as heat and pressure.