Friday, November 15, 2013

Richard D Wolff — Capitalism and Unemployment

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....
Capitalists make those decisions based on what is privately profitable for them, not on what is lost to society. And that loss is huge....
The second dimension of unemployment is the actual costs it imposes on society, costs not borne entirely, or even chiefly, by the capitalists whose decisions determine unemployment....
Capitalism socializes unemployment's immense costs.... [negative externality]The third dimension of unemployment concerns how capitalism distributes unemployment among workers....
Capitalists defend their "right" to hire and fire as an "entitlement" that cannot be questioned. Yet it surely should be challenged on grounds of its undemocratic nature and its perverse social results.
Not to mention the immense cost of socializing the consequences of unemployment, which constitutes a public subsidy to the ownership class that externalizes the cost to society as a whole and saves the subsidy. For example, Walmart is complaining that its profits are falling due to food stamp cuts. It's also clear from the data that the deficit spending stimulus is approximately equal to corporate gains.

Truthout
Capitalism and Unemployment
Richard D Wolff | Professor of Economics Emeritus, University of Massachusetts, Amherst

2 comments:

Ralph Musgrave said...

Wolff’s article is pure, 100%, undiluted drivel. The solution he advocates for unemployment is one that was demolished long ago and is held in contempt by most of the economics profession: he advocates shorter working hours, so that those “unworked hours” can be allocated to the unemployed.

That so called “solution” is just one example of a family of cures for unemployment which have long been popular with economic illiterates and which are sometimes referred to collectively as “labour supply reduction” cures for unemployment. That family includes early retirement, delayed entry into the labour force for youths, longer holildays, etc etc etc. The list is a long and dreary one.

The central idea is: reduce hours worked by those currently in work, and lo and behold that on the face of it leaves “work hours” which the unemployed can fill. I hope I don’t need to spell out the flaw in the idea. But I can if anyone wants.

Peter Pan said...

Reduce hours while keeping the same income? Works for me!