Can The Government 'Create Products' For Business Owners?

Politicians love to promise "job creation" when campaigning in elections. "We will create jobs" is the cry. I have analyzed this idea, and it makes absolutely no sense to me. I'll try to demonstrate how absurd it is:

1) The relationship between and employee and his employer is like the relationship between a businessman and his customers. Money flows in one direction and value flows in the other direction. In other words, an employer is an employee's customer. Employees are serve their employers in other to make money, in the same way that businessmen serve their customers in order to make money.

2) A "job" is what an employer pays an employee for. Similarly, a "product" is what a customer pays a business for.

3) So when a politician says, "I will create jobs for the unemployed" it is just like saying "I will create products for businesses that have nothing valuable to sell". Isn't that absurd? Isn't that the duty of a business?

In the same way, I believe that it is a duty of every individual to create a job for himself by making himself useful to others. This may involve applying for a job, or it may involve starting your own tiny business. It is absurd make this the duty of the government. It is like asking the government to create products for businessmen. How absurd!

Wait a minute, I won't be surprised if "product creation policy" becomes a hot topic during the next elections.

there are ways the government can provide jobs

1. Maintenance of the road network
2. Contruction contracts
3. Reduction of import duties
4. Providing better security
5. Providing electricity.
6. Improving the health system.


The above tasks are not achieved by using a magic wand but by using the human resources available.
Point no. 3 would encourage more economic activities and more entrepreneurs.

Can you explain in detail how the actions listed above amount to job creation so we can carry the discussion forward?

Posted by Seun:

In the same way, I believe that it is a duty of every individual to create a job for himself by making himself useful to others. This may involve applying for a job, or it may involve starting your own tiny business. It is absurd make this the duty of the government. It is like asking the government to create products for businessmen. How absurd!

First, this is a very good point, but at the same time you must realize that fingers are not the same. Some people just don't have creativity sense, while others just don't have the opportunity and the rest just don't have the skill to put business together, it doesn't matter how tiny the business may be.
And just because these people don't have this token doesn't necessarily mean they are stupid.

This is why it is still one of the most important duty of the government to create job opportunities; either by assisting potential business owners or by creating an economy environment that is business friendly.

Hence, don't let us get carried away just because some of us have the skill, the support and the opportunity to take it to the next level.

Government's responsibility is to serve the citizens of the country.

If the Government do not creat jop opportunities

and or creat conducive enviroment for business men

and manufacturers to manufacture and producer to produce

there there is no amount of creative abilities that you have or

the number of application letters you distribute like Newspaper

vendor that will do you anu good.

Government's responsibility is to serve the citizens of the country.

Many of the citizens of this country are small businessmen. Should the government 'create bestselling products' for them? You might argue that businessmen are a minority, but aren't unemployed graduates also a minority? How many people are have the privilege of attending a higher institution and then sitting at home after graduating? Few!

You totally missed the point.

So, what is the responsibility of the government in regard to jobs and businesses?

Without a solid foundation and economy stability I'm not sure if many businesses will succeed.
I don't care how much you have, it is still the responsibility of the government to lay the foundation and establish an economy environment that embraces business owners and business activity.

Example: if there is a deadly election riot that government resfuses to control for about 9 months straight, inflation for about 9 years, kidnapping for about 2 years, universities close down for about 15 months, importation and exportation subside for about 15 years because of embargo and finally murderers and robbers walking around the country freely;

Could you please tell me how a business owner could effectively function in this kind of environment? What will happen to investors?

You need a government or leader who is clearly competent to prevent such calamities from happening. And this why Politicians will continue to promise "job creation" and "security for the citizens" during their campaigns for elections.
It is very very important, make no mistake about it.

My man, you're a good man and a bright businessman, but business is much deeper than what you think, government's support or assistance is absolutely required for many businesses to be profitable enormously.

The responsibility of the government is to provide you with the tools to get you started, we all must try and utilize our brain to the fullest ability.  No one is going to give you a degree. if you want MBA or a house you have to be proactive, get up in the morning and make the necessary steps in achieving your goals, so in essence we should all get up and be creative.
government can encourage people by giving tax breaks

Its is the "job" of a responsible government to create a conducive environment, where businesses can thrive.  This include all the points listed above by Stranger12. For each of the points you will see that a robust government policy would drive the economy.  

The government many not necessarily be involved in running these busineses, however, their is always a multiplier effect when a sound policy is properly implemented.  

For example, think about the telecomunications industry in Nigeria now.  By alllowing GSM and all those operators, can you imagine the number of people who are involved in the chain? A recent statistic said its over 1m people involved: employees of the companies, employees of 3rd party companies, retaliers on the street etc etc

From that example, how has government created jobs? Simply by granting licenses and allowing those companies to operate.  Still on that same example, even more jobs can be created when for example, electricity becomes stable.  It has been suggested that each of the gsm companies have at least 2 generators at each of their base stations and installations.  If you factor in the cost of maintenance of these generators (mechanical maintenance, diesel/petrol etc), you can imagine how much is spent on power generation.  If we all use our individual experiences with cost of generating power vs cost of PHCN power, you can imagine the potential savings.  Now if these companies are able to make these savings, what do they do? They declare huge dividends for share holders (this increase disposable power), they invest more in there business for growth.  When they grow, they employ more and so it goes,

Still on electricity, look at the typical welder down the road, he probably spends not more than 2hours a day working, because he can not afford the kind of generators to power his heavy duty equipment, and nepa don go!  Ofcourse, when he is idle, he is not earning money, if he doesn't earn, he cannot buy goods and services provided by other businesses and those other businesses cannot grow to employ more people.  So its not only the welder than may soon be out of business, but even others around.

In summary, every action (or in-action) taken by government has an exponential effect on the economy.  Think of the effects good security will have, good health care delivery etc etc

A proper analysis of each point raised by stranger12 goes beyond the people/business involved in each sector (which employs people anyway, and which has capacity to employ more when there is growth), but the fact that the the economy is a system and we must have an holistic view of it.

@Mamajama:
You partially missed the point too; hey, but it's only MAMAJAMA and one shouldn't expect much. lol

Big B1 there you go with the insult again, When will you stay out of the box and look at other peoples point of view?

why don't you ask the government to feed you as well since its their responsibility to create jobs. What was Leonado De Vinci known for?

you have to maximize your brain get out there and take risk and maybe you will thrive. we expect too much from government instead of taking the initiative to try new things that will benefit the society.

@MAMAJAM:
First, you need to calm down; that was just a joke.

Second, I look at people's point and never scared to give kudos when it is required.

And finally, a good government still plays an important role when it comes to running a successful business effectively or creating jobs for the citizens.


MAMAJAM, smile, it's not that serious.

Seun:

Can you explain in detail how the actions listed above amount to job creation so we can carry the discussion forward?

The projects I mentioned are capital intensive as well as people instensive.
dont think I really need to spell it out but I will drop a line or three.

The labourers that help in construction are employed by a construction company.
Doctors/Nurses/cleaners get jobs in hospitals because you will require all these people if you want to improve the health sector.
To improve the security force, you will employ more police and buy more cars and get sofisticated gadges (IT professionals will benefit too).

Need I say more?

Seun,

Govt controls the economic activities using 2 basic tools: fiscal and monetary policies. Fiscal policies are about taxes, goods and services while monetary policies are about the money market, liquidity in the market and velocity of money.

The govt can create jobs, cause job losses, make economy stagnant by using the 2 policies above. Govt is an indirect player in the mkt in the sense that it does not actually give u the job, it creates the environment required for the job to come. A good example of a fiscal policy implementation in Nigeria that has impacted the populace negatively is the import policies. Because of imports into Nigeria, the textile industry in Nigeria can no longer compete so they lay off people-job loss. Now I agree that there are other factors that may be responsible for why the cost of manufacturing is high in Nigeria, but the import policies is putting oil to the fire.

The govt is all in all when it comes to the economy, bad policy formulation and implementation can lead to disastrous or excellent result. You can be the most creative man in the world but bad policies can render your products and services useless. Let me know if you want to continue this conversation.

my 2cents.

Excellent point.

Bravo!

Thanks, guys, for your well-expressed responses. Unfortunately, I discovered an error in my initial analogy, so I have to start afresh. That analogy is a key to actually saying what I am trying to say. But thanks so much, guys.

@stranger12, why reduction on import duties? just wondering, cuz the buzz for the next administration is on manufacturing anything possible even if it will take nigerian companies to neighboring countries. If the govt goes ahead with their plan to keep increasing import duties and reduce export duties, to me that sounds good. It will force manufacturers in the nation to get better and correct flaws where needed.

If a local industry develops due to the imposition of an importation duty, that industry is not going to be able to survive the lifting of that importation duty in the future without massive job losses. That's why the US is still supporting farmers till this day despite the advent of modern technology. Protectionism is a trap that leads nowhere. if we impose tariffs on imported products from China, Japan, USA, they will impose tariffs on our own exports. It's a fool's game. At the end of the day, we would be miserable and yet still as poor as we are now (though the customs people will be rich).

Rather than all that nonsense, we should import the things we are not particularly good at producing and export the things that we are naturally good at producing - like cassava, oil, IT services and other things coming up.

@Seun

If you go back and read some of my reponses in the past you will probably see where I mentioned that it is not the duty of the government to create employment. Their only obligation to the citizens and foreigners are simply put protection of life, rights, and creating and managing basic necessities such like roads, sewage, parks and recreational grounds, libraries, schools etc.

It is the responsibilities of the public sector to create employments. That was why late president J.F kennedy said to Amricans that the question is not "what can your country do for you, it's what can you do for your country"?

@Rlst84sale: yes, I admire you because I think you have the mind of a true businessman who loves free markets.

@seun, we should encourage free trade and competition but increase traiffs when needed, i mean nigerians import just about everything and don't want tarrifs added, the truth is dat it cannot remain stagnant. If we increase traiffs and assist local manufacturers by waiving some procedures and encouraging them to be the best, they will drive the price of that same good imported down. And who told you that other countries especially western countries respect free trade not to talk about giving nigeria the chances and allowance they get.

Tariffs are not needed. Free trade benefits everybody. You get what you want, they get what they want.

Tariffs only benefit the people collecting them - customs officials, government officials, the government in general.

By employing government officials, the government creates jobs. Government owned transport services, health care and the works, y'getwahmean

@Nosa

We are talking about free enterprise. Which govt in their good governance should be competeing with her citizens over market share?. They should leave that to china, and ussr.

i wish these self proclaimed "business gurus" would go to places like zimbabwe to prove their skills.
i wonder what kind of business or investment you can groom in an economy with 3000% inflation rate. whoever takes an exception from Big B1's submission on this matter is either inexperience or unexposed. shikena

The thread asked how the government could create jobs and i replied

naijaway:

@stranger12, why reduction on import duties? just wondering, because the buzz for the next administration is on manufacturing anything possible even if it will take nigerian companies to neighboring countries. If the govt goes ahead with their plan to keep increasing import duties and reduce export duties, to me that sounds good. It will force manufacturers in the nation to get better and correct flaws where needed.

No, it will make them lazy and produce crapy products.

which is better? To strive to build a plane or to build a bicycle?
Leave the easy stuffs to others and do the hard stuffs. In due time, you become a force to reckon with.

Besides, I could simply import a plane production plant (if there are no import duties)

No, it will make them lazy and produce crappy products.

That's one thing I was trying to say, but couldn't quite find the words. It sounds uncompassionate, but it's the truth.

Seun,

Seun:

If a local industry develops due to the imposition of an importation duty, that industry is not going to be able to survive the lifting of that importation duty in the future without massive job losses. That's why the US is still supporting farmers till this day despite the advent of modern technology. Protectionism is a trap that leads nowhere. if we impose tariffs on imported products from China, Japan, USA, they will impose tariffs on our own exports. It's a fool's game. At the end of the day, we would be miserable and yet still as poor as we are now (though the customs people will be rich).

Rather than all that nonsense, we should import the things we are not particularly good at producing and export the things that we are naturally good at producing - like cassava, oil, IT services and other things coming up.

We have a fundamental problem in Nigeria: we have refused to grow. We are still the same age we were donkey years ago. Now you don't throw a baby into a fight with grown ups, it is very obvious who will lose. One of the main goal of any govt is to protect the present and future well being of its people. Countries have done this in many ways: fixed currencies, capital flow restrictions, tariffs, etc. The whole objective is to grow the local industry to a stage where they can compete globally then open them up to the global mkt. Most industries in Nig can still not compete at a global level, the job of the govt at this stage will be to protect and nurture them.

Now with that said, we have peculiar problems in Nigeria: corruption and infrastructures issues. We cannot even grow this industries with the peculiar problems. We used to be strong in Cash crops before: cocoa, cashew, groundnut, etc but where are we today in those industries? Nigeria reason for free trade is different from that of most other countries and it is where politics, govt and businesses meet.

Every country has practiced protectionism to some extent in its history, case in point, the US of A. US is known for its unilateralism (myself only and I don't care what happens to anyone else). I do not have the time to go into how protectionism works in the US but the farmer case you mentioned is not because of protectionism. The govt has to subsidize the farmers because they don't want the price of food to be uncontrolled because they know that if you can control that, you can control practically everything else.

I think the way forward in Nigeria is to provide a helping hand to those industries by ensuring that the price of imported good are not less than that of the locally produced goods, as competition increases, the local prices will come down and these industries will then be able to compete with others.

FLT

Protectionism is a way of not growing up. It means refusing to face the realities of the global economy.