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The economy does not create jobs. The government does not help the economy create jobs. These abstractions do not reveal anything to us about what we must do or where we must go.

A job is nothing more than an employment contract between two people. Under current business law, one of those people is likely a corporation. The economy doesn’t create these contracts. People do. The only assistance the government can offer here is to stop interfering with the formation of employment contracts. Government imposes heavy taxes and super-abundant regulations on employment contracts. Remove the duties on work, repeal the rules that interfere with it, and you will see more people at work, more prosperity than you ever thought could happen.

You can call these contracts jobs if you like, but don’t forget what’s at stake. We want to remove obstacles to the formation of employment contracts. We know how to do that, but to this point we have not wanted to introduce greater freedom in the labor market. In fact, we still talk about more rules that constrain, such as an increase in the minimum wage. That’s an excellent example of a fixed price, a rule that prevents individuals from forming employment contracts. If you want to put people to work, let people have a say about their compensation. If you want to idle people at home, unemployed, fix the price of their labor too high.

We still welcome government’s involvement in the labor market, but government’s involvement explains why the labor market has so many problems! When someone comes into your house to improve it, and leaves your home in worse shape, do you want to continue to do business with that person?