Imagine then the following (stretchy) scenario: an isolated village on an island.
Now the villagers start digging the hole in the ground. Mind you, digging holes is tough business: they have to eat and someone must pay for the food. If all of them work on the hole, who makes the food? But they are smart and the project manager arranges for some of them to cook the food while the rest of the village digs.
After a week the hole is done and after another few days the hole is filled back.
Now they sit at the campfire and think by themselves what great two weeks those were: they were employed.
>After a week the hole is done and after another few days the hole is filled back.
>Now they sit at the campfire and think by themselves what great two weeks those were: they were employed.
And how is this - or how is the original NASA makework - different to a startup that burns through tens or hundreds of millions and then dies?
I suppose you could argue that the startup might have succeeded, and at least some people believed it would.
Some people believed the tower would be useful. Others knew it wouldn't be, but still thought the cash infusion would be useful - either for them personally, or for their community.
What is the difference? Because if we're going to be asking questions about the utility of makework and the social value of Keynesian welfare, we should perhaps be asking about the actual social and economic utility of most start-ups, and whether the fact that they're private sector boondoggles really does make them any more economically efficient.
The difference is that the tower was built and it exists and can be used for another project if not for the original one.
If you ignore corruption for a second (not that you should), the problem remaining is the original project died without a replacement in the near term. This looks surprisingly like a waste of money, since the tower has no immediate utility. However, it has long term value and that is important.
Doing busywork would have amounted to building the tower and destroying it to recoup the land value.
If corruption was involved, it should be investigated separately. But the tower should not have been scrapped for this reason alone.
Start-ups are started to generate value. They are ventures in a sense that you don't know exactly where they will end and if they end up nowhere there is no real problem.
However, identity function is not a venture. Investing in one makes no sense.
Now compute the Gini coefficient for that island and compare it against the one for a neighbor where all the villagers skilled at cooking have jobs while all those skilled at digging remain idle.
While diggers dig they do not generate income (because a filled hole is not 'income' by itself). And the cooks don't generate income either because their work is not for their utility but for the diggers.
What does that say about the net result?
Think thermodynamics: What is the utility of burning fuel? If you end up where you started, you're just wasting energy and increase universe entropy.
Now the villagers start digging the hole in the ground. Mind you, digging holes is tough business: they have to eat and someone must pay for the food. If all of them work on the hole, who makes the food? But they are smart and the project manager arranges for some of them to cook the food while the rest of the village digs.
After a week the hole is done and after another few days the hole is filled back.
Now they sit at the campfire and think by themselves what great two weeks those were: they were employed.