Tuesday, June 1, 2010

Job Creation

Lord Krishna with cows “O son of Kunti, all that you do, all that you eat, all that you offer and give away, as well as all austerities that you may perform, should be done as an offering unto Me.” (Lord Krishna, Bhagavad-gita, 9.27)

There has been much focus lately on the issue of jobs. Actually this is a perennial issue, as all political campaigns try to drive home the importance of economic development and the creation of “good paying jobs” for the citizens. The promises from the politicians are always the same. “I will create such and such number of jobs. I will jumpstart the economy today.” Some politicians now even take to claiming that they can save x number of jobs and thereby keep companies in business. The Vedas, the ancient scriptures of India, tell us that jobs actually come about through desire, something which inherently exists inside of every living entity. The system of prescribed work is known as karma and it takes care of providing full employment for everyone. Lord Krishna, or God, is the supreme governor of this world, including the system of karma, so if anyone deserves thanks for creating jobs, it’s Him.

Lord Krishna To give us a clearer understanding of this concept, let us study how a job is created. This is where many of the politicians and economic analysts go wrong. They believe that government action, through either the modification of tax policy or the distribution of hand-outs to various companies, creates or saves jobs. If we look at how jobs are initially created, we see that the government has little to no role. To understand job creation, we have to remove ourselves from the current political and economic situations. Let’s pretend that we are in a brand new country, city, or state which doesn’t have any existing jobs. People have just settled in to live in the area. In any society, there will be people who will desire to further their economic condition. The Sanskrit term for economic development is artha. Along with dharma and kama, artha is considered one of the highest material rewards that one can receive.

To act out their desire for economic development, a person may decide to start a business. This business will sell a particular product, though businesses can actually sell anything, from money to services. The business owner wants to sell his product for a profit, meaning that the cost incurred to a customer to buy the product will be more than the cost incurred to the business owner to create the product. This is the simplest form of business, and it is enough to generate a profit for the business owner. The actual nature of the product is not that important. In this example, let’s say that a land owner has produced an abundance of food and wants to sell the surplus for a profit. The business starts out fine, with modest profits coming in from a small number of sales. Issues arise, however, when the business owner wants to expand his business and sell more products. Now he needs a way to create more inventory, handle the demands of the customers, and manage the day-to-day affairs of the business. To help him meet these demands, the business owner will hire workers, i.e. he will create jobs.

Since the business owner’s primary objective is to turn a profit, he won’t want to pay his employees a salary. A salary, after all, will cut into the profit margins since it will increase the cost to operate the business, thereby increasing the cost to produce the products that the business sells. Workers don’t come cheap though. No one will be willing to work hard for the businessman without receiving some sort of compensation in return. In this regard, we see that the employee is also after a type of profit, i.e. a return on the investment of the time and energy they give to the employer.

Money Since people won’t work for free, the businessman decides to pay his employees. Now, will this salary be high or low? Well, the businessman will only pay his employees just enough to get them to work. Again, his central focus is to turn a profit, so he wants to limit his expenses as much as possible. This is where some people might be turned off. “So he basically wants to exploit his workers? He wants to hoard as much of the profits for himself and pay his workers as little as possible? This is evil.” This may seem like a sinister plot on the part of the businessman, but he is just doing his job. The business only came into being due to the desire to turn a profit.

If we stopped at this point, we’d see that the wages paid to the employees would be very little. Workers would be exploited and the businessman would reap windfall profits. There is a catch however. This businessman is not the only person who gets to act out his desire for economic development. We are all living entities after all, meaning we all have an equal right to pursue our personal interests. What follows is that another businessman, seeing the profit made by the first businessman, decides to start his own business. Again, he will have to hire workers. In order to lure people to his company, this businessman will decide to pay his workers more than what the other company is paying. Now people start to get “good-paying” jobs.

Assembly line Based on this example, we see that competition is the driving force behind economic improvement. Not only is there competition for workers, but there is competition for sales. This means that companies will constantly work harder to innovate and create new and better products that people will want to buy. As long as there is a desire for profit, and competition to achieve that profit, jobs will always be available. In this whole scenario, we haven’t once discussed the issue of the government or the idea of a central planner making moral judgments as to whether someone is earning too much money or not paying enough in salaries. Not a single congressman, governor, or president has intervened to this point.

Does this mean that government should lay off and not bother anyone? Actually government does have an important role in all of this. When a businessman hires a worker, there is an inherent contract that is agreed to. The worker will provide a fixed number of hours of labor and the businessman agrees to provide compensation for that work. If either party breaks their end of the deal, the government certainly should intervene and ensure that the original contract is being followed. The same issue holds true with sales, for a company must be held to account if it takes money from customers and does not deliver the promised goods. The government must ensure that force does not play a role in any of these transactions. A worker should never be forced to work anywhere, a customer should never be forced to buy a product or service, nor should a business be required to sell their product to anyone.

Now let’s analyze the situation today. Governments certainly go far beyond their prescribed duties when it comes to regulating businesses. What happens today is that business leaders spend millions of dollars lobbying political candidates so that they will grant favors to them. A person need only look at the Federal tax code in the United States to see the results of such lobbying. There are all sorts of tax breaks for various activities. The Federal budget is also filled with hundreds of earmarks designed to help certain businesses. In a fair system, no business would be favored over another because no one person’s desires are any more valuable than another’s.

Aside from handing out corporate welfare, governments tackle the issue of fairness. They say that people deserve a “decent, living wage”. Based on the principles of economics as described above, we see that wages have nothing to do with “fairness” or a person’s living conditions. A wage is an agreement between an employer and an employee. An employee agrees to do a certain amount of work and the employer agrees to pay a certain amount for the performance of said work. Arbitrary fairness has nothing to do with it, for both parties are benefitted in a voluntary transaction.  If there was no benefit to be gained, neither party would enter into the agreement.

Lord Krishna's universal form Government leaders will always try to tackle the jobs issue by implementing flawed strategies, but we see that there is actually no need for their intervention. Jobs are created out of desire. The Vedas tell us that this desire exists naturally, for that is how the material world operates. Lord Krishna is the Supreme Personality of Godhead, thus He is the creator of the world that we live in. This world is intended to act as a sort of playground for the living entities who want to imitate God. This playground has a set of governing rules known as the laws of karma. Fruitive activity, or plain work, is known as karma, and since we all have an equal right to perform karma, there must be a system of fairness maintained that ensures that no one person’s desires are favored over another’s.

The beautiful system of economics, including how it deals with desire and competition, was created by Lord Krishna so as to help the living entities achieve God consciousness. This may seem strange because how can economic development relate to religion? The Vedas tell us that the aim of human life is to understand that God is the original proprietor of everything, our dear friend, and the supreme object of pleasure. As living entities, we require the bare necessities of life (food, water, clothing, and shelter) in order to maintain our lives. Economics is the system that seeks to meet the demands of the body. If a person has a stable occupation, they hopefully will be at peace and thus have more time for cultivating spiritual knowledge.

The Vedas tell us that we can achieve perfection in life by dedicating all of our activities to God. This discipline is known as bhakti-yoga, or devotional service. To this end, we see that even by performing our occupational duties, we can serve the Supreme Lord. How do we do this? First, we must regularly chant the Lord’s names, “Hare Krishna Hare Krishna, Krishna Krishna, Hare Hare, Hare Rama Hare Rama, Rama Rama, Hare Hare”. Then we should sacrifice our hard-earned money to the Lord. This can be done by purchasing nice flowers to offer to His deity, preparing nice food to be offered and eaten, and also by donating money to construct temples, etc. In this way, we can make the most out of our economic condition.

“Since the Lord is the supreme enjoyer of everything in or outside the universe, it is happiness to be employed by Him. Once engaged in the supreme governmental service of the Lord, no living being wishes to be relieved from the engagement.” (Shrila Prabhupada, Shrimad Bhagavatam, 1.11.33 Purport)

Prabhupada worked tirelessly for Krishna Krishna is the ultimate job creator. Not only did He create the system of karma for the human beings, but He made sure to provide enough food, water, and shelter for the animal kingdom. Birds, aquatics, mammals, etc. don’t require any planning commissions or government bailouts. All of their necessities are provided by nature, which is merely a manifestation of one of Krishna’s energies. By the same token, we human beings can have all of our needs taken care of simply by serving the Supreme Lord. Governments can promise that they will create or maintain jobs, but no one can create desire. That already exists inside of us. At most, a government can create an environment where our desires can be more easily acted upon, but even then, life doesn’t stop once we have a good job. We need to go one step further by using our stable lifestyle to increase our attachment to God. If we make Krishna the supreme object of our desire, we can be guaranteed of a permanent job in the spiritual sky as His loving servant.