One sentence

If educators allowed me to add one sentence to school textbooks I would add one about jobs. Whenever the text got to the subject of businesses, I would add that sentence.

I would add it because a lot of smart and educated people ought to have learned what that sentence reveals. Apparently they did not. Not if we go by what so many columnists and commentators and bobbing heads on TV tell us.

Lately they tell us big companies are making lots of profit. And that because they make lots of profit they should be creating jobs. No less than columnist Bob Herbert argued this in the New York Times recently. Another guy, in The Boston Globe wondered why the profits that slosh around big company coffers are not prompting those companies to start hiring again.

Someone should put him out of his pain with an injection of reality. That is that big companies do not create a lot of new jobs. Small companies do.



And they both need to paste this simple sentence atop their computer screens: Businesses do not exist to create jobs.

Now you and these guys may believe they do. But they do not. It is not the purpose of any business to create jobs.

Suppose you pore over mission statements from thousands of companies. And you paw through minutes from board meetings. And you study corporate memos and reports line by line. And you read the speeches of armies of corporate leaders.

You will not find that any of them suggest it is the purpose of businesses to create jobs. It is not a goal of any business. It is not a plan of any business.

A company may plan to open new branches. Or new factories. It may plan to create a new division or two. These, obviously, may create jobs along the way. However, creating jobs is not the intent of the company. If the company could create a totally automated factory employing nobody, it would.

Companies have a few basic missions. One is to continue to operate. Another is to garner respectable returns from the money they invest in branches, factories, products, etc. To reach these goals they may add jobs. They may slash jobs. Whether they do either is determined by how they conduct their businesses.

Now, some idealists disagree. They believe companies have a duty to create jobs. Idealists in communist countries put their beliefs into action. And thus wrecked their economies. Idealists in Sweden wrote laws that forbid companies to close plants. Soon, Sweden became the only industrialized country in the world to go backward in production. That is, it produced less at the end of a decade than it did at the beginning.

I wonder if Bob Herbert has created a company to market his writings. Many columnists have done so. If he has such a company, I imagine it shows profits. Do you suppose Bob would feel it is his duty to use those profits to create a job or two for others? How do you suppose he would react if you told him he had such a duty?

Bob, you used to believe in Santa Claus and sugar plum fairies. Now you  believe businesses have a duty to create jobs. You grew beyond one of those beliefs. Here is your opportunity to put the other fairy tale behind you.

From Tom ... as in Morgan.

For more columns, for Tom’s radio shows and new TV show (and to write to Tom): tomasinmorgan.com.

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