“WIN, WIN, WIN, WIN” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 164

Policies.” In case the message wasn't clear, it concluded that “Spanish
policy shows that green dreams like renewable energy are achievable
only through massive transfers of money from productive sectors to
those seeking to get rich quick thanks to government mandates.” h e
National Review , a conservative political magazine, gleefully calculated
that if U.S. government schemes managed to create i ve million green
jobs—a number Barack Obama had bandied about—the Spanish study
implied that they would also kill at least eleven million jobs elsewhere
in the economy. In an economy that employs somewhere around 150
million people, this is a massive number: by implication, unemploy-
ment could jump more than i ve percentage points as the result of a
clean energy drive.
Yet this research was deeply l awed. Calzada's logic was straight-
forward. He started by estimating that the Spanish government had
spent 571,138 euros for every green job created. h en he observed
that the total Spanish “capital stock”—the sum of all machines, equip-
ment, knowledge, and so forth workers were using to produce goods
and services—amounted to 259,143 euros for each worker. Each euro
directed toward renewable energy, he argued, was a “forcible loss of
resources” that no longer could be employed toward those other
ends. Dividing one number by the other brought Calzada quickly to
his conclusion: 2.2 jobs would be lost for every green job that was
created.
But there was a massive problem with this argument: the value of a
country's capital stock—its sum of machines, skills, and the like—has
nothing to do with the number of jobs it supports. China has a much
smaller capital stock than the United States, yet it employs several
times the number of people that the United States does. Spanish capi-
tal stock is several times what it was in 1980, yet the number of people
employed has barely changed. Capital accumulation mat ers—it lets
each worker produce more with his or her time and therefore become
wealthier—but it doesn't have any long-term impact on the total num-
ber of people employed.
Nor is there reason, in any case, to believe that subsidies to renew-
able energy translate directly into lost money for other sectors. Some
of the money directed toward renewables ends up boosting salaries and