THE FALLACY OF UNEMPLOYMENT: Dr. Arthur Lerman

The idea of unemployment is that there is nothing that the unemployed individual can do for the society—or anyone in the society—worth paying for.

But that clearly is false. In a society with unemployment, beyond those who are simply between jobs, there are myriad needs which are not being met. (Indeed, in a society with full employment, there are still myriad needs not being met.)

Is it really better, to have people capable of teaching on an unemployment line, while classrooms are overcrowded?

Is it really better to have people capable of repairing/upgrading roads and bridges on an unemployment line, while roads and bridges remain inadequate and in disrepair?

Is it really better to have people capable of researching ways to prevent or cure cancer—or capable of being trained to do such research—on an unemployment line, when adequate prevention and cures are not yet available?

The list is endless.

(And if all such imaginable needs are met, and there really is nothing left over to do—or more realistically, less urgent things left over to do—how about dividing the work that is left among all employables—leaving everyone more time for vacations and retirement?)

So why, when there is so much need, those capable of fulfilling at least some of these needs, remain idle?

There is a concept that unemployment is necessary. Too much employment is bad for the economy. If everyone is employed, labor becomes a scarce resource. It becomes too expensive. Prices become too high, businesses and consumers suffer.

Given this idea, the unemployed are actually contributing value to the economy by not working—keeping costs and prices down. But then, they are actually doing something worth paying for, no? Unemployment is a service they are providing. So there is something they are doing for the society. So, is it not just that they be paid for it.

(Indeed, perhaps this is a strong case for unemployment insurance. It’s not a charity payment for those who cannot support themselves, but a payment for a valuable service—keeping costs and prices down. And maybe even more, for by spending the insurance payments, they are helping to stimulate the economy—creating business as customers for business products.)

Of course, this idea of “positive unemployment” does go against the idea that people paid to do nothing doesn’t seem as good as actually addressing social needs. Is it really better for the economy to pay people to do nothing than to have them working to fulfill real social needs?

Certainly not. To accept unemployment, to allow social needs to go unaddressed, is clearly a failure of the economy—or, to state this in another way, our failure to organize our economy in the most socially helpful way.

Again, there is the counter (conservative Burkean) argument. It is better to allow the economy to follow its natural course than to interfere with it. All human intervention will make things worse—with unintended consequences, some perhaps very hurtful. This is generally the attack on socialism—the example of the command economy, making unwearable shoes, cars that fall apart and farmland soil denuded of nutrients, with water tables dried up.

Yet, the counter argument is stronger—human interference in the natural working of the economy—when based on past economic experience and careful research—has a long history of correcting the “natural economy,” which, by its nature, has a tendency to run out of control—leaving devastated individuals, communities and nations. (Can refer to the New Deal, and such books as Michael Grunwald’s The New New Deal and Steven Conn’s To Promote the General Welfare: The Case for Big Government.)

So the challenge is indeed to interfere in the economy—to some way organize the economy so that needs are addressed, using all available manpower—i.e., no unemployment.

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