Dave does a good job of setting the stage, but I have a feeling anyone with the question of the OP would feel unsatisfied.
To answer the question directly, the way you distinguish between the two is by who is behind the job and how they “created” it. Yes, it’s true, there are limited resources in the world, and economics is all about how, when, and why those resources get used. And yes, in a technical sense, any job utilizes resources that could have gone to something else. In other words, everything has opportunity cost. The point is what is the “best” use of those resources? “Best” being determined by efficiency, demand, and supply.
Any time coercion is involved, human preferences are being disregarded, and someone is being exploited (that is, one person is gaining by another person losing). We know this to be true because if the arrangement were truly the desire of the exploited man, coercion wouldn’t be necessary, and he wouldn’t be considered exploited. When you voluntarily buy a small carton of milk for a dollar, you win, because you gave away something and got something you wanted more in return…you wanted the milk more than the dollar (otherwise you wouldn’t have made the trade) The store owner wins as well…because he wanted the dollar more than the milk. Trade is made of win. That’s why you get the strange double “thank you” when a transaction takes place…you tell the store owner “thank you” when he hands you the milk, and he tells you the same as you leave. (h/t John Stossel)
The point of any job is (supposed to be) to maximize wealth…not to “have a job”. It is wealth that is of importance…not employment.
One of the main problems people have with understanding the world is the fallacy of looking at employment as an ends instead of a means. Hazlitt covers this very well in chapter 10 of Economics in One Lesson. (It’s less than 700 words. Definitely read it.) Coincidentally, it was a Henry Hazlitt Memorial Lecture in which Peter Schiff said “what good are jobs without ‘stuff’? That’s slavery!” The point is most people don’t work a job because that’s what they’d most like to be doing. They do it so that they might acquire things they desire (either directly through producing them themselves, or indirectly through trade). In other words the whole point of a “job” is the end product it results in…not the job itself. But as Hazlitt points out: “Everywhere the means is erected into the end, and the end itself is forgotten.”
If someone created a pill that made everyone immune to every possible disease, illness, and infection…that would eliminate a lot of work for doctors. In fact, a lot of doctors, most nurses, and every worker in the pharmaceutical industry would be out of a job. Does that mean we shouldn’t invent such a pill? Does that mean if such an invention were created, we should keep it off the market? The luddites would say “yes”…because they look at employment as an ends in itself. They are too short sighted to see the big picture.
The same argument could be made for police. If everyone obeyed the law, every policeman would be out of job. So really, criminals are doing a public service. (Just like the hoodlum who breaks windows.) Maybe we should encourage more crime?
The point is you perform a job to get a certain desired result. If the result can be created without devoting as much (or any) resources to it, what is the point of the job? Again, as Hazlitt says: “The economic goal of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor.”
In the case of “what produces a net gain of jobs”, the real answer is, almost anything can do that. The point of the broken window fallacy is not to claim that some job was destroyed so that a glazier could have one. The point is to illustrate gains or losses in production…in desired stuff in existence. When the hooligan broke the window and the man had to spend resources to replace it, the point is without the vandalism, the man would have had a window and a suit. But now he only has a window.
When the government coerces resources away from one area, and puts them into another, it automatically means that those resources are not being utilized to their highest and best use. (Again, as determined by efficiency, demand, and supply.) This probably means there actually are more jobs destroyed than those that are created, thus creating a net job loss (which, as we can see is the case with the stimulus, where millions of dollars were spent to create only a few thousand (and sometimes only a few hundred) jobs. As you can see, this means more money was spent and less people were employed. Kind of like how with an average of $300k per classroom, a lot more than one teacher could be hired…but obviously, there’s only one. And she certainly doesn’t get $300k.)
But even supposing the coercion “created” just as many jobs as it destroyed, it still means the world is poorer overall, because again, it necessarily means that resources have been taken away from their preferred use, and diverted to something else…meaning wealth has been destroyed.
Right now we’re at almost 17% U-6 unemployment. That’s a lot of people without full time jobs. We could clear that up really quick. Let’s have a bunch of men with guns take money from everyone they can, and then offer to pay anyone who doesn’t already have a job to…count grains of sand on the beach. Bam. Virtually 0% unemployment. Problem solved, right? (You know, we actually tried this last year. Except it wasn’t grains of sand they were counting, it was other Americans.)
Again, it’s not about net jobs…the focus needs to be on net production. What is being produced, and how much. If you can answer that, then you’ll see which arrangement offers better conditions.