In a democracy, it is a sign of something peculiar when elections are fought on an unemployment platform. What do the unemployed expect – that employed voterss will promise to consume more, so that more jobs will be created? Perhaps they expect that the Government identify where there is latent need, i.e. demand for which no supply exists because there is no capital or no enterprise, and intervene by setting up public sector enterprises? Or to put them on a dole, which is essentially taking money from the employed and giving it to the unemployed in exchange for – nothing? All three cases are of dubious electoral merit for the employed voter.
I had an interesting conversation with a Danish engineer. He was telling me how in Denmark, the Government has the incredibly ambitious target of ensuing that 60% of all Danish citizens have a tertiary education degree, ie the equivalent of a Bachelors degree. That’s much higher than the US and UK, and much much higher than India.
This sounds really progressive but there’s a problem. Many people use the Government’s largesse to study their ‘dream course’ – for example, art appreciation or literature. And of course, the combination of strong drive and good educatioon makes them excellent in their field.
But there’s no demand. The market can absorb 20000 fine arts grads a year. The universities produce 60000. And on the other hand, there are not enough plumbers and bricklayers in Denmark. Who’d want to finish a Bachelors degree to fix toilets?
And then there’s the Grapes of Wrath situation, where industrialization leads to a sudden loss of millions of jobs. And poverty caused by debt ensures that capital is consolidated in the hands of those who have the most to gain from industrialization and unemployment.
It is an interesting calculation to do: given a certain population, and technology level, what is the ‘net work potential’ of the human race? In other words, suppose all of the human race – 6 billion people – devoted their life to leisure, how many ‘invisible workers’ would be needed to keep them in a condition where all their (reasonable) aspirations are met?
My guess is, much less than 6 billion. Probably about 1 billion. In other words, with 1 billion man-years of labour, we can produce the equivalent of 6 billion man-years of consumption. The rest of humanity is essentially ‘coasting’.
So in an efficient world, employment of 5 in 6 people is probably normal. Or an employment for 1 day per 6 days for all of humanity is probably sufficient to meet our needs.
And yet, we have (only) about 10% unemployment globally, but we think that’s too much.