writeups.co.nz/2008/08/25/job-losses-arent-a-failing/

The Alliance party’s Victor Billot says that the loss of jobs at the Cadbury factory in Dunedin is representative of a failure of the system.

Despite trumpeting his lack of economic nous with such a foolhardy statement, what it does do is highlight the idiocy of those who believe that firms laying off workers is a sign that something is wrong with our system.

Nothing could be further from the truth. In our market economy, private firms fortunes wax and wane in tune with the economic conditions they face. What we have in New Zealand though, are many barriers that mean that firms are handicapped from increasing their production when conditions are going good due to heavy regulation and high levels of taxation that make it difficult to hire workers, build factories and increase productivity.

Private firms are further handicapped in downturns where they have to jump through hoops and the bleating of the unions in order to rationalise their workforces and production levels. So what happens is that when the forces of supply and demand attempt to work in New Zealand, the high levels of government intervention that every business, both large and small, is operating at a level that is entirely suboptimal.

The loss of jobs at the Cadbury factory in Dunedin does not indicate a failure of the system, instead it highlights the brilliance of the system when it is allowed to function: the market responds to changes in supply and demand and the market solution will always be the most efficient.

When the Alliance, a motley collection of bludgers and bleaters, says things like businesses should serve the needs of all society instead of maximising profits for shareholders, we need only laugh at their idiocy.

For profit when derived from free market operations is the most moral end point, compared with the immoral theft that the Alliance and other parties of their ilk promote through their calls for more jobs to be created to ’secure employment’.

The market will decide whether or not new jobs are needed, there is no need for politicians to create new jobs - businesses will create them when they need to.