Professor Richard Wolff: Capitalism as a system seems incapable of solving its unemployment problem

[marmar]

Capitalism and Unemployment

Friday, 15 November 2013 10:25
By Richard D Wolff, Truthout | News Analysis


Capitalism as a system seems incapable of solving its unemployment problem. It keeps generating long-term joblessness, punctuated by spikes of recurring short-term extreme joblessness. The system's leaders cannot solve or overcome the problem. Before the latest capitalist crisis hit in 2007, the unemployment rate was near 5 percent. In 2013, it is near 7.5 percent. That is 50 percent higher despite the last six years of so-called "effective policies to address unemployment."

Capitalism makes employment depend chiefly on capitalists' decisions to undertake production, and those decisions depend on profits. If capitalists expect profits high enough to satisfy them, they hire. If capitalists don't, we get unemployment. Capitalism requires the unemployed, their families and their communities to live with firing decisions made by capitalists even though they are excluded from participating in those decisions. The United States revolted against Britain partly because it rejected being victimized by tax decisions from which it was excluded. Yet employment decisions are at least as important as tax decisions.

Unemployment has three dimensions that often escape public discussion, perhaps because they raise such fundamental questions about the capitalist system. The first dimension concerns the immense losses for society from the kind of unemployment capitalism reproduces and that we suffer today. According to the Bureau of Labor Statistics, the sum of unemployed people, "marginal" workers (those who stopped looking for work), and involuntarily part-time workers (the "underemployed&quot is roughly 14 per cent of the labor force. That is 20 million of our fellow citizens. Alongside that statistic, the Federal Reserve reports that 20 percent of our "industrial capacity" (tools, equipment, raw materials, floor space in factories, offices and stores, etc.) is sitting idle, wasted, not being used to produce goods and services. Capitalists make the decisions to not hire those millions of workers and to not buy, lease, or use all that industrial capacity.

Capitalists make those decisions based on what is privately profitable for them, not on what is lost to society. And that loss is huge. A simple calculation based on the numbers above proves the point. We as a nation forego about 15 percent of extra output of goods and services because of unemployed people and idled tools, equipment, etc. That comes to roughly $2 trillion per year. Yes, you read that correctly. We could produce an annual extra output far greater than the government's budget deficit ever was. We could use that extra to reduce global poverty by more than what has been done by all advanced industrial nations for decades. In short, we have taken staggering losses for our planet from being entrapped within an economic system that permits employment decisions to be held hostage to capitalists' profit calculations. ..............................(more)

The complete piece is at: http://truth-out.org/news/item/20015-capitalism-and-unemployment

[Wounded Bear]

1. For capitalism, unemployment is not a problem...

It's a benefit.

[Fumesucker]

3. Indeed

[rhett o rick]

5. Agree. Capitalism exploits unemployment. The ultimate employment condition that capitalism

relishes, is slavery.

[leftstreet]

8. +1

[OnyxCollie]

2. Economic Update is my new favorite show.

http://rdwolff.com/articles/audio

[RainDog]

4. k&r n/t

[Orsino]

6. Capitalism doesn't see unemployment as a problem. n/t

[ananda]

7. Capitalism, now corporate fascism, doesn't WANT to solve unemployment.

It's a gift. It keeps people working more for less.