[PEN-L:27344] capitalism & unemployment

["Devine, James" <jdevine@xxxxxxx>]

Title: capitalism & unemployment

[was: RE: [PEN-L:27340] Re: Re: Re: LTV and income disparity]

Carrol writes: >Unemployment is a _necessary_ property of capitalism, not understandable except as it is related to capital.<

I don't agree.

I'd say instead that the necessary property of capitalism is the large-scale separation of the direct producers from the means of production ("capital goods" and natural inputs) and the means of subistence ("consumer goods"). This implies that the workers must work for the capitalists -- who monopolize the means of production and thus the production of the means of subsistence -- in order to survive.

_Normally_, this implies the existence of (involuntary) unemployment. But there are at least three options that can replace unemployment as usually defined (people without paid jobs but looking for new ones). Each of them has other ways of motivating workers to work under dominated and alienating conditions.

1. the "third world" option: because of the non-existence of a significant welfare state (unemployment insurance, etc.), the unemployed are forced to immediately take jobs in the so-called informal sector, selling gum and the like on the streets, hustling to survive. The large gap between the wage or salary in the formal sector working for capitalists or the state and the pittance earned as "entrepreneurs" or underlings in the informal sector motivates the workers in the former to work hard. It also keeps wages down.

(To some extent, workers can survive while being unemployed by living off of family and communal organizations (informal unemployment insurance). But not only are there severe limits to this, but it tends to destroy families and communities. Better is to go back to the land (including farming in the city) to work by scratching out crops from the land that the commercial farmers haven't grabbed, likely because it's the worst land. But that's not being unemployed.)

2. the "fascist" option: as with Italy or Germany during World War II, the war economy abolishes unemployment, but workers are forced by the secret police, etc. Slave labor camps play a big role, too.

3. the "social democratic" option: workers in the main industries and the government sector are not motivated by unemployment as much as by the spirit of national unity to compete and win in the world market-place, shored up by the benefits provided by paternalistic welfare-state and a general sense that there's an equality of gains and sacrifices. Collective bargaining between the centralized unions and the centralized employers' federation sets wages, conditions, etc. Unemployment exists, but only outside the country: when the business cycle turns down, the guest workers are exported. Because of this last point, it's not really a zero-unemployment situation under capitalism. Further, history has shown that social-democratic "deals" are temporary, undermined by capitalist profit seeking (e.g., mobility to other countries) when the unity and militancy of the unions' and social democratic party's roots fades away, so that the unions and the party can become bureaucratic discipline-imposers.

The above list ignores "hidden unemployment" of the sort seen in the old Soviet Union, where people with jobs didn't work ("we pretend to work and they pretend to pay us") except to the extent that waiting in line to get goods in short supply is work. I know that most people (including myself) don't consider the old SU to have been capitalist, but some of this exists under capitalism too.

Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine