SPECULATION, INVESTMENT, AND THE MYTH OF JOB CREATION

From the Santiago Stock Exchange, foreign investment, and pension assets, here is compared the immense scale of secondary-market transactions with investment in the productive economy. How employment responds principally to demand, not to the wishes of business owners, and considers French subsidies as evidence that public incentives do not necessarily produce new jobs.

If you look up data on the Santiago Stock Exchange, you can’t help but be amazed.

The Santiago Stock Exchange comprises various markets that currently trade more than 2 billion dollars daily in stocks, fixed-income instruments...

If you consider 240 trading days per year, the total value of transactions on the Santiago Stock Exchange amounts to a respectable US$480,000,000,000.

This figure does not specify which portion corresponds to the “primary” market and which to the “secondary” market. However, data from other stock exchanges around the world provide some insight. The statistics available from the CMF are not much more informative and are prone to confusion, given that the same column includes amounts in dollars (January 2024, Soquimich, issuance of US$1,100,000,000) and in pesos. These figures are monthly, and there is no annual summary or adjustment for “constant” peso values. Some kicks in the butt just go unnoticed…

It is worth comparing the amount of stock market transactions with the total foreign investment, which in 2024 reached US$15,319 million—that is, 3.30% of speculative transactions on the Santiago Stock Exchange.

It is also worth comparing that figure with total pension “assets,” which in 2014 amounted to US$186,405,000,000 (Superintendency of Pensions).

The term “assets” refers to the fact that this money has been placed in the Chilean “secondary” market and, above all, exported to other foreign “secondary” markets (we export our misery).

Be that as it may, the “savings” announced by the neo-fascist candidates—who have yet to publish any platform, in keeping with the adage “verba volant, scripta manent”—cite the figure of US$6 billion, achieved by further shrinking an already emaciated state and relegating the poor to the category of the destitute. This, in turn, is supposed to lead to “job creation.”

The myth that business owners create jobs is a meme that no one disputes, even though it is nothing more than a tautology devoid of any basis.

Any damn business owner knows that what dictates their decisions is the level of demand. Adjusting the level of production to meet actual demand doesn’t require the level of understanding demanded by the concept of quantum entanglement… Even Mario Marcel knows that.

However, demand does not depend on the business owner’s will. It is a factor beyond their control, dependent on elements far beyond their decision-making capacity. So much so that many countries have a legal provision allowing companies to fire—excuse me—“terminate” one or more employees under a very convenient pretext: “business needs.”

Destroying jobs… That, however, does depend on the employer, and layoffs are often the “penicillin” that allows them to mitigate the consequences of their own lack of foresight and poor decisions. Since I’ve already mentioned France, I’d like to point out that a weak-willed president (and this isn’t exclusive to Chile) decided a few years ago to subsidize employment in private companies with billions of euros. The result was that companies collected the subsidy and didn’t create a single job!

In 2019, the Carrefour Group was sued by the General Confederation of Labor (CGT), which accused it of claiming hundreds of millions of euros in the Competitiveness and Employment Tax Credit (CICE) while cutting nearly 2,000 jobs in France between 2013 and 2017.

The same is now happening with Emmanuel Macron, and Senators Olivier Rietmann and Fabien Gay are leading the Senate committee investigating fraud.