High unemployment is an indication of unjust economy

High unemployment is an indication of unjust economy

By Fred M’membe

We are back again to the issue of unemployment – jobs, jobs, jobs!

Socialists are for scientific and technological advances; they are not against high-tech and machines. That would be pushing humanity back to the stone age and not progressive!

Socialists are fully in support of developing advanced technologies: replacing labor with machinery; producing more wealth for society with less work; and reducing the hours of the working day.

In the science fiction of the past writers imagined a future utopia in which the biggest problem facing humanity would be what to do with all our leisure time whilst machines did all the work! Such a society has been made entirely possible by capitalism, which played a most revolutionary and progressive role in the past in terms of its development of the productive forces. But now capitalism is unable to use these productive forces and has become an absolute fetter on further progress. Rather than realizing the dream of a life of leisure for all, millions are consigned to forced idleness by a system that has serious problems creating jobs, whilst millions of others work round the clock in order to feed themselves and their families. What’s more, those increases in living standards that have been seen under capitalism – of better incomes and increased leisure time – have not been benevolently or graciously granted by the capitalists, but have been struggled for by the workers. The welfare state and the minimum wage; the weekend and the eight-hour working day; healthcare and education: all of these were fought for by the working class, and are now under attack from the capitalists due to the crisis of their system.

The potential for a society of superabundance is more real now than ever. One only has to look at the official economic statistics of the capitalists to see what would be possible with a socialist plan of production.

It’s real or a fact that in Zambia today machines have taken up our people’s jobs in the mines, on commercial farms, construction sites, the banks and so on and so forth. But our people need jobs to survive! Where are the jobs going to come from for the so many young people leaving school, college and university and indeed those who are being retrenched? We have to answer this question and solve the issue of jobs. We can’t get tired of talking about ‘Jobs, Jobs, Jobs’ until the solution is found. How else can our people survive without jobs?

One of the main reasons for our high rates of poverty is the failure of the economy to provide sufficient jobs.
In order to derive benefit from an economy, people must be able to participate in it; and for most people, the primary means of economic participation is through work.

Where there is high unemployment we have an indication of an unjust economy.

And it’s not only we socialists who are worried about this problem. Now even the serious capitalists are worried; not only because of the social turmoil caused by this inequality and unemployment, which increasingly threatens their own privileged position within this system, but also because of evidence of a longer term inability for this same system to provide growth, jobs, and a decent standard of living – that is, to develop the productive forces. Every winter they go to Davos in Switzerland for the World Economic Forum to discuss, mainly, the ceaselessly growing inequality and unemployment in the world. The main cause of this growing inequality and unemployment is not because the world is today less capitalist or is producing less goods and services. How more capitalist does one want the United States, Europe and indeed the whole world to be? For last 27 years Zambia has been on an unbridled neoliberal capitalist path – privatizing and commercializing everything, including land, but the net result is what we see: unceaselessly growing inequality and unemployment!

This worry, fear exists among capitalists as well: the worry, fear that rapid technological progress in the modern age could potentially lead to mass unemployment, with machines replacing workers in a vast range of jobs in terms of both manual and mental labor, particularly with the advent of advanced computing techniques, such as machine learning and voice recognition. As The Economist (May 25, 2013) commented: “There is a good chance that technology may destroy more jobs than it creates. There is an even greater chance that it will continue to widen inequalities. Technology is creating ever more markets in which innovators, investors and consumers – not workers – get the lion’s share of the gains.”

Again, we socialists are not the only ones worried about this phenomenon, the capitalists are also increasingly expressing bewilderment.

This worry has been expressed within recent books such as “Race Against the Machine” by two academics from MIT’s Sloan Business School. The authors, Erik Brynjolfsson and Andrew McAfee state: “It may seem paradoxical that faster progress can hurt wages and jobs for millions of people, but we argue that is what has been happening…How can so much value creation and so much economic misfortune coexist? How can technologies accelerate while incomes stagnate?”

Clearly, high-tech and increase in productivity that accompany it, rather than improving living standards, have actually lowered them for the vast majority, creating stagnant wages and permanent structural unemployment. As Brynjolfsson and McAfee point out: “There have been trillions of dollars of wealth created in recent decades, but most of it went to a relatively small share of the population… over 100 per cent of all the wealth increase in America between 1983 and 2009 accrued to the top 20 per cent of households. The other four-fifths of the population saw a net decrease in wealth over nearly 30 years…There has been no stagnation in technological progress or aggregate wealth creation as is sometimes claimed. Instead, the stagnation of median incomes primarily reflects a fundamental change in how the economy apportions income and wealth. The median worker is losing the race against the machine.”
All of these are a clear symptom of the current crisis and the inability of capitalism to provide a future for the vast majority of workers and youth across the world.

The main cause of this crisis is production for profits and not for the satisfaction of human needs. Scientific and technological advances don’t necessarily need to lead to job losses. They can actually lead to more jobs and less working hours for workers – giving them more time for study, physical and spiritual development and to be more and more with their families.

Karl Marx long ago explained how the laws of capitalism – the anarchic competition between capitalists for greater profits – force each capitalist to try and reduce their costs, in order to sell at a lower price, by increasing productivity through the replacement of labor with machinery. This in turn, creates an “artificial surplus population” of the unemployed: “The fall in prices and the competitive struggle, on the other hand, impel each capitalist to reduce the individual value of his total product below its general value by employing new machinery, new and improved methods of labor and new forms of combination. That is, they impel him to raise the productivity of a given quantity of labor, to reduce the proportion of variable capital [wages] to constant [machinery, tools, equipment, raw materials, etc.] and thereby to dismiss workers, in short to create an artificial surplus population…The same causes that have raised the productivity of labor, increase the mass of commodity products, extended markets, accelerated the accumulation of capital, in terms of both mass and value, and lowered the rate of profit, these same causes have produced, and continue constantly to produce, a relative surplus population, a surplus population of workers who are not employed by this excess capital on account of the low level of exploitation of labor at which they would have to be employed, or at least on account of the low rate of profit they would yield at the given rate exploitation” (Capital, Vol. 3, Chapter 15, p363-364).

And again: “It is capitalist accumulation itself that constantly produces, and produces indeed in direct relation with its own energy and extent a relatively redundant working population, that is, a population which is superfluous to capital’s average requirements for its own valorization, and is therefore a surplus population” (Capital, Vol. 1, Chapter 25, p782).
It is, therefore, not technology itself, but the use of technology under capitalism, implemented in an anarchic and unplanned and greedy way, which leads to mass unemployment, and which in turn places pressure on those still in work to accept lower wages, as competition for the remaining jobs increases.

Alongside the creation of an “artificial surplus population”, therefore, there exists also a super-exploitation of those remaining in work, again in the name of increasing profits for the capitalists. Thus arises the contradiction in which mass unemployment can sit side-by-side with millions who must work 50-60 hours per week or take multiple jobs just in order to scrape by: “The over-work of the employed part of the working class swells the ranks of its reserve, while, conversely the greater pressure that the reserve by its competition exerts on the employed workers forces them to submit to over-work and subjects them to the dictates of capital. The condemnation of one part of the working class to enforced idleness by the over-work of the other part, and vice versa, becomes a means of enriching the individual capitalists, and accelerates at the same time the production of the industrial reserve army on a scale corresponding with the progress of social accumulation” (ibid, p789-790).

The existence of such a contradiction emphasizes the fact that such a surplus population is entirely “artificial”. Those who are unemployed are not “surplus” to the needs of society, but merely “surplus” to the needs of capital. Capitalism is unable to use the human resources available, and instead consigns millions to forced idleness. Big business refuses to invest and factories, shops, and offices lie empty, all because of the already existing excess capacity – that is, overproduction. The productive forces outgrow the “effective demand” of the market; commodities cannot be sold at a profit, or even sold at all; the economy grinds to a halt, not for any lack of “needs” in society, but simply because there is no profit to be made for the capitalists.

In addition, capitalism cannot even use the knowledge and technology that society has discovered and invented over millennia of history: innovation is not realized in any practical application because of the private ownership over ideas themselves, whilst new technologies are not introduced for fear of the further excess capacity, unemployment, and fall in demand that they would generate.

Under capitalism, the individual capitalist introduces technology and improves productivity in order to increase their own individual profit, without any regard for the living standards of workers or the needs of society.

Hence the fear of capitalists, such as the authors of “Race Against the Machine”, that it is technology that is responsible for unemployment and inequality.

Capitalism cannot solve this without ending itself. Actually, for capitalism this will be like trying to square a circle.
Under socialism, the anarchy of competition and the market would be replaced by a rational plan of production, allowing technology to be introduced, and productivity to be raised. The human being and the machine could co-exist in harmony rather than in competition. Rather than generating the contradiction of unemployment alongside extreme toil, work could be shared out equally and the hours of the working day could be reduced for all, with further investment and improvement leading to an ever increasing amount of leisure time.

We see, once again, that it is not technology that is the source of social ills, but the capitalist system itself, and the enormous barrier to progress that this system imposes due to private ownership and production for profit and not for the satisfaction of human needs.

Article by Fred M'membe

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