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Source link: http://archive.mises.org/11571/how-to-fix-the-jobs-problem/

How to Fix the Jobs Problem

January 29, 2010 by

All this talk of unemployment is preposterous. Think of it. We live in a world with lots of imperfections, things that need to be done. It has always been so and always will be so. That means that there is always work to be done, and therefore, always jobs. The problem of unemployment is a problem of disconnect between those who would work and those who would hire. FULL ARTICLE by Lew Rockwell

{ 20 comments }

Cory Brickner January 29, 2010 at 3:47 pm

Lew, you’re too logical! If we could solve these issues without Government, what would all those in the public sector do? How could they work 30 hours a week making $150,000 a year and have $1,000,000 pensions? Certainly you wouldn’t want to stop subsidizing them with your taxes!

bob January 29, 2010 at 4:07 pm

There’s an even easier way. Rather than considering people filling out unemployment claims as unemployed, we should consider them employed to fill out said claims. Then you’ll find the unemployment rate is quite low.

Mitchell Powell January 29, 2010 at 5:41 pm

I know a man works as an unemployment “Customer Service Rep” (although I suppose it is only with a redefinition of the standard notion of “customer” that the recipient of government unemployment can be called a customer). He was told not long ago by an angry man, when he lawfully denied an unemployment claim, that “If you take away my unemployment, then I’ll just have to go get a job.”

The standard pro-government reply will surely be that we must regulate the process to only give unemployment to those who really want work, but this only leads to more difficult problems and an increase in the size of the regulatory apparatus.

Hard Rain January 29, 2010 at 6:21 pm

How much does it cost to keep someone locked up in prison? Surely more than one would make in a year on the minimum wage. Perhaps we should consider all prisoners as being “employed” by the state.

Keynesianism can then find some more “aggregate demand” if the government just arrests more people >:P

Libertario January 29, 2010 at 6:41 pm

Dear Mr. Rockwell,

A little mistake to correct in your writing:

“There is no voluntary unemployment in a free market, because there is always work to be done in this world. It is all a matter of making the deal.”

voluntary should be replaced by involuntary.

Reply to Hard Rain:

“Keynesianism can then find some more “aggregate demand” if the government just arrests more people >:P”

HA HA HA HA !!!

Geoff. January 30, 2010 at 12:54 am

Interesting article, but does it work in practice?

Consider any 3rd world country. Many of them have basically no laws, or at least they’re not enforced enough to stop people from negotiating an employment contract under the table.There’s plenty of work that can be done, but there also seems to be high rates of unemployment.

Take for example Nepal, 20 million odd people, plenty of work that could be done, estimated unemployment of 46% in 2009 (data from 2008). That’s 3 years after the end of their civil war, so it should be sufficiently stable to conduct business.

Now I’m sure there are lots of people who work on the side, and still get counted as unemployed, but there’s also lots of people looking for work as laborers, guides, porters and even begging on the street, (though I guess you could call that a form of self employment). Then there’s the issue of crime, which is more common in such countries (though again, I guess you could consider that to be a form of self employment too).

What’s my point? Not sure. It’s just an observation.

Walter Dubyna January 30, 2010 at 8:55 am

I’m in the process of defining “conflict of interest” as it pertains to any state employee, one who receives wages, salary, pensions from the taxpayer, whether at a state, county or municipal level and who also owns their own business and competes for contracts, business services against those same taxpayers. In my state we just elected a new governor. He is looking for ways to reduce our deficit budget. My thought is that if “state” employees were not competing with private companies, were not allowed to work for “state” and also own their own company, there would be more availability or work for private businesses. Am I saying more regulations? I mean to be saying more opportunity for businesses to compete freely and fairly. Anyone, please offer comments on my conflict of interest conflict. Thanks

Bruce Koerber January 30, 2010 at 9:33 am

Clear and logical so what is the problem? Of course it is ideological, which also explains the problems in the developing countires.

The ideological shift necessary has to do with the recognition that the State is destructive of human civilization and thereby stands in the way of advancement. In the developing nations the ideological shift would require private property and protection of private property. Without that shift the absence of labor market regulations still does little to solve the unemployment problem.

prettyskin January 30, 2010 at 11:49 am

Geoff, good call.

However, who are considered unemployed in developing countries? Most are taking care of their basic needs through trades and services. The processes do not resemble that of developed countries but the end results are the same.

International charities
only reach a small segment of the population and the rest is done by employment, mostly self-empolyment.

Al January 31, 2010 at 11:33 am

I surmise that Lew was certainly talking about a developed economy that relies upon division of labor to allow for higher (qualitatively & quantitatively) economic production. In third world countries, people are barely scraping by because their is no complex division of labor in order to produce myriad goods and services. It is alarming to think of the resemblance a complex economy could have with a third world economy after the medium of exchange collapses…

David Roemer February 1, 2010 at 5:06 am

You are forgetting that 0% unemployment would be interpreted as a labor shortage. This would increase the pressure for immigration. Increased immigration would lower wage rates.

Ron February 1, 2010 at 11:16 am

@David Roemer: “You are forgetting that 0% unemployment would be interpreted as a labor shortage. This would increase the pressure for immigration. Increased immigration would lower wage rates.”

So? Lower wage rates don’t happen in a vacuum. Lower wages mean lower production costs, which translate to lower consumer prices. Thus, buying power increases as wage rates decrease, ceterus perebus.

Ron February 1, 2010 at 11:17 am

@David Roemer: “You are forgetting that 0% unemployment would be interpreted as a labor shortage. This would increase the pressure for immigration. Increased immigration would lower wage rates.”

So? Lower wage rates don’t happen in a vacuum. Lower wages mean lower production costs, which translate to lower consumer prices. Thus, buying power increases as wage rates decrease, ceterus paribus.

Dagnytg February 1, 2010 at 2:38 pm

Geoff,

The reason countries are third world in the first place is due lack of capital investment. Capital investment is what creates jobs contrary to conventional wisdom that states demands for goods/services create jobs. The concept of capital investment is one of the most unique aspects of Austrian economics.

Due to political instability, corruption, lack of property rights and legally enforceable contracts investment risk is high. You need look no further than Zimbabwe or Venezuela to countries that have thrust themselves backwards due to their ignorance (or arrogance of their leaders) when it comes to fleeing capital.

Today, the situation in this country is similar (though not of the same magnitude). People are not investing due the uncertainty of gov’t policy and henceforth, no job creation.

Dagnytg February 1, 2010 at 2:39 pm

Geoff,

The reason countries are third world in the first place is due lack of capital investment. Capital investment is what creates jobs contrary to conventional wisdom that states demands for goods/services create jobs. The concept of capital investment is one of the most unique aspects of Austrian economics.

Due to political instability, corruption, lack of property rights and legally enforceable contracts investment risk is high. You need look no further than Zimbabwe or Venezuela to countries that have thrust themselves backwards due to their ignorance (or arrogance of their leaders) when it comes to fleeing capital.

Today, the situation in this country is similar (though not of the same magnitude). People are not investing due the uncertainty of gov’t policy and henceforth, no job creation.

billwald February 1, 2010 at 3:30 pm

“Lower wage rates don’t happen in a vacuum. Lower wages mean lower production costs, which translate to lower consumer prices.”

Lower wages “mean” that the scab labor controls the local market and our scabs are competing against Chinese and Indian scabs. The increased profits from increased productivity go to our owners.

Half the US economy is under the table, in part pocketed by people who are collecting “rocking chair” aka unemployment insurance. One way to reduce unemployment is to eliminate cash money and go 100% electronic transfer. Then the income from the dopers and pimps will join the official economy.

JerryMac February 1, 2010 at 4:42 pm

My problem with anything that comes from the libertarians, though I agree with most of it, you guys refuse to give up the nutter issues of pot&prostitution…until you eliminate these from the platform, you will always be a self-marginalizing party

Ironic February 1, 2010 at 7:26 pm

JerryMac

One must be consistent.

And thanks for pointing out one of the reasons I don’t like the Republican Party.

P.M.Lawrence February 2, 2010 at 2:23 am

Since this site blocked my comment, I arranged to have it posted here.

Dale F February 14, 2010 at 6:43 pm

Where have all the jobs gone? Where do we send the Sec of State to borrow money from the profit of the industries that used to be here? China Would 4 million jobs make a difference? Get of of NAFTA

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