Labour markets, employment policies / Why the Government Can’t Create Employment

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The widely held idea that the government ought to create jobs is without economic foundation. What the government can and must do is to foster the creation of wealth. What are commonly defined as employment policies are, more often than not, policies designed to preserve existing jobs, ultimately locking resources in non-efficient or non-optimal uses. The State’s job is to ensure and protect property rights and economic freedoms, an essential condition for entrepreneurial energies to be unfurled to the full. It is also necessary for the central bank to concentrate exclusively on curbing inflation. This is the only way to prevent the destruction of wealth provoked by currency devaluation and thus ensure certain prospects for enterprises.