By Reese Palley
Unemployment is like the weather: Everyone complains about it, but no one seems able to do anything about it.
Our present level of joblessness is being blamed on the recent recession, and, in attempting to climb out of that ditch, we concentrate on spending cuts, which simply means putting even more folk out of work. What we are discovering is that there is no deus ex machina that will miraculously re-create jobs that, due to the efficient workings of our capitalist system, are no longer there.
Capitalism was invented to replace human labor with machines. For 200 years that process has been sucking up human jobs and for 200 years the increased efficiency of our machines has led to a vast expansion of economic activity that has created new jobs to replace those lost to capital expansion.
But now, especially in the industrialized world, expansion has slowed in job creation, and our ever more clever machines are winning the race. The losers are our growing number of unemployed.
A recent study of industry investment reports that businesses are spending more and more on capital equipment and less and less on new jobs. This is true throughout both the first and third worlds. Huge international corporations are intent on ridding themselves of the bother of human labor, which requires health care as well as retirement plans. These are very expensive, and as a result the urge to move from people to machines is irresistible in a freely competitive capitalist economy whose core tenets are efficiency and cost-cutting.
The underlying problem is that in the past our unemployment pool was made up of people moving from one job to another. That is expressed in an unemployment level of 5 percent. Our present level is approaching 10 percent and it is beginning to look like the pool has become a stagnant and expanding lake of permanently unemployed.
There is no reason to believe that some magical process will appear to reverse the increasing lack of work for people to do. A growing class of permanently unemployed people bodes ill for the future of a humane society that serves all of its citizens. Indeed, at some point the imbalance of the number of workers to available work will become so large as to threaten the very existence of our free capitalist economy.