I think most people who say "it would be rational to pay people to dig holes and refill them" say it only as a prelude to saying "and therefore, paying people to build useful infrastructure is surely even more efficient"

In the 1700s UK and Ireland, many rich people thought charity in the form of hand-outs was a bad idea and reward without labour was bad for character [1]. So some rich people who wanted to help the poor would hire them for things like building 'follies', extravagant decorative buildings and roads to nowhere. Having famine victims earn food with hard labour went about as well as you would imagine.

[1] https://www.amusingplanet.com/2017/10/irelands-famine-follie...

Yes, OR instead of rich self-righteous sociopaths, you could let the government help out (gasp, grimace, faint, yes, I know right?) and then instead of "follies" you end up with great public works like our National Park system [1] or electricity for entire regions of the country [2] (regions that now hate the Federal govt more than anyone).

[1] https://en.wikipedia.org/wiki/Civilian_Conservation_Corps

[2] https://en.m.wikipedia.org/wiki/Tennessee_Valley_Authority

The assumption you make is that people extract more value from their lives from receiving "free" money than "earning" it from doing "useless" work,

> The assumption you make is that people extract more value from their lives from receiving "free" money than "earning" it from doing "useless" work

But of course they do, because if they didn't then they could just take the "free" money and still volunteer to do the useless work. Maybe some people like digging holes and filling them back in -- it's good exercise.

But anybody who can think of anything more productive to do with their time is then given the option to choose that instead.

>But of course they do, because if they didn't then they could just take the "free" money and still volunteer to do the useless work. Maybe some people like digging holes and filling them back in -- it's good exercise.

This is happening in practice. There are lots of popular jobs where people will put up with anything to get the job. Game developers routinely have "crunch time" but they don't quit as a result. Some even think it's a bonus because they get to spend more time at their dream job.

The assumption you make is that they do not - and that folks have ever had a true choice in the matter.

The digging holes thing was a facetious example in a textbook where he said burying cash in old mines would theoretically stimulate the economy. He didn't mean that the government should literally do that and the government never did. It was intended to provoke thinking about how mandating jobs during times of extraordinarily high unemployment can stimulate a depressed economy. People who hate the government on principle more than they like facts then purposefully conflate that pedagogical example with real government initiatives of the time like the CCC (https://en.m.wikipedia.org/wiki/Civilian_Conservation_Corps) which was one of the most celebrated government programs of all time that built and repaired tons of important civic infrastructure mainly in our national park system, which became arguably the greatest on earth, saved thousands from poverty and involuntary idleness, helped stimulate the depressed economy, and gave desparate, disenfranchised young men a sense of patriotic purpose.

But this just becomes "zomg govt so dumb pays ppl to dig holes lol, communism fail".