Digging holes and filling them back up again

When someone suggests that the government should just create jobs for the unemployed, you often hear the retort, that this is a bad idea, because the jobs they would create would be of no value, akin to digging holes and filling them back up again. The reference to digging holes comes from (I think a misunderstanding of) something Keynes wrote in the General Theory. He wrote:

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.”

So he is using an example to show that any task (however pointless) that will pay an income is superior to leaving people unemployed and earning nothing, but that we can come up with much more useful things for people to do. So even if the government created some jobs that were akin to digging holes and filling them back up again, that would still be better than unemployment.

I was reminded of this yesterday by Neil Wilson who pointed out that there are however quite a lot of holes that may not need digging, but certainly do need filling up again.

Some joined up thinking needed perhaps?

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6 thoughts on “Digging holes and filling them back up again

  1. More to the point, why is it only objectionable when Governments invent useless jobs? The private sector has created a world of advertisers and management consultants, most of whom do nothing but talk about other people’s jobs. And some of them are paid hundreds of thousands!

  2. The government can create jobs that are not useless. Building homes, schools and hospitals, employing more teachers to reduce class size, police, social care, good quality training and retraining, free education, infrastructure, the list is endless. As long, in fact, as the list of jobs destroyed by the Tories. Socially useful stuff that benefits us all. Just what Brown & Darling did to reflate the economy and avert the social impact of the great depression.

  3. Many firms dig up the roads and fill the holes, only to dig them up again a short time later. Councils have a massive backlog of road repairs, but enough money to waste on paying compensation to drivers for their trashed cars damaged by holes that go the full depth of the road surface.

    The roads in England are as bad as rural Greece, and stay in that state just as long.

    The real waste is on the massive billions spent on benefits admin rising by the billions each year, whilst the money to the starving in or out of work reduces by the billions each year.

    And the old who will be left with NIL STATE PENSION FOR LIFE when this is, for a great many women born from 1953 and men born from 1951, sole food and fuel money in old age, and
    over half of over 60s are within the poor, the below 20 per cent income down to zero, even when early retired as on average on mere 4 per cent income works pension.
    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

  4. This is merely an argument for UBI but phrased differently. Why should someone dig up an amount of money when all you are doing is effectively giving it to him?

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