| Subject: | [socialcredit] Unemployment and Waste | | Date: | Saturday, September 30, 2006 09:36:54 (-0700) | | From: | MODERATOR <socredus @.....com>
|
*The New Age*
June 23, 1921
Unemployment and Waste.
While it is necessary to bear in mind that the object
of industry should not be employment, but rather the
delivery of goods with a minimum expenditure of energy
on their production, it is yet true that at the moment
unemployment does form a practical problem demanding
alleviating treatment. The word is generally used to
indicate labour unemployment, but it is practically
impossible to have any considerable volume of labour
unemployment without a capital unemployment
representing many times the production value of the
idle labour.
To the extent that private capitalism in the old sense
can be said to exist, this is just as great an evil to
the capitalist as to the manual worker, although it
incidence may not be so personal or so immediately
tragic. It penalises his initiative, depletes his
reserves, and finally bankrupts him; and the whole of
the process is eventually an injury distributed over
the community in general, resulting in a deterioration
of morale, as well as in the more material evil of a
rise in prices.
It is particularly important to notice the
wastefulness of the system. A demand backed by money
arises in the community for a particular class of
goods; an enterprising manufacturer puts down a plant
“at his own expense” as the misleading phrase goes (it
is impossible for anyone to put down modern plant at
the expense of other than the general consumer), and
supplies the goods. This man is a public benefactor;
he gives the public what it wants, and he gives it
much quicker than it would be possible to get it by
any other system, because one man can make a decision
quicker than a dozen men, to say nothing of a
Government Department. A Trade slump comes;
unemployment grows like a snowball, since every man
thrown out of work is one man less receiving money,
and therefore one man less in the market to buy goods;
our manufacturer, though still willing and able to
make his product, cannot sell it, and if this state of
affairs continues for any length of time he is ruined.
His business organisation is probably excellent, but
it is broken up and his plant dispersed, and when the
trade revival comes a new plant and a new organisation
has again to be constructed at the expense of the
consumer.
Both the employer and the employed are so familiar
with this cycle that both take steps which they
imagine will protect them against its effects, but
which in fact only make confusion worse confounded.
During times of brisk trade the employer charges the
highest price he can obtain, or in other words
delivers the minimum of goods for the maximum of
money, and embodies his large profits in invisible
reserves, with the result that the consumer is left
without any effective demand (demand backed by money)
as soon as his wages cease. The worker, sensing this,
does in his sphere precisely the same thing--he uses
his Trade combinations to obtain the maximum amount of
money for the minimum amount of production, not
realising that this money simply goes into the cost of
the product, which has to be paid by the community of
which he forms so large a part.
Since, superficially, it seems vital to the interest
of both of them to keep the process moving as long as
possible, the manufacturer is driven to sell, by
advertisement or otherwise, useless or inferior and
quickly worn-out articles where he can not make a
handsome profit on durable and well-finished
production, the life and usefulness of which operate
in the truest sense towards labour-saving.
It is certain that both employers and employed are
willing and able to work on terms; it is demonstrable
without difficulty that the productive capacity of
Industry, with its labour, plant and organisation,
greatly exceeds the consuming capacity of the Nation
unless that consuming capacity is enormously and
viciously inflated by waste, and especially the
culminating waste of War; and yet it is patent that
the needs of the individuals who comprise the
community (whose collective needs are the only reason
and justification for the existence of Industry at
all) are far, and even increasingly far, from being
met.
There is one possible explanation for this
anomaly--the financial system, which ought to be an
effective distributive mechanism for the whole
possible production of Society, is defective--it does
not so arrange the prices of articles produced as to
enable the extant purchasing-power to acquire them.
Now, without, for the moment, discussing the methods
by which this defect can be remedied, let us imagine
the remedy to be applied and consider its immediate
effect on the unemployment problem. There are still
millions of persons wanting goods; the productive
system can make these goods; the persons who want them
can buy them, and those who make them can be paid for
them. It seems obvious that an enormous stimulation to
production would be provided--a stimulation which no
mere propaganda on its desirability has ever succeeded
in evoking; and that the immediate effect of this
would be a radical diminution of unemployment.
Consider now the policy actually being pursued at this
moment by the Government and the financial powers to
deal with the problem. They can be summarised in one
sentence--the reduction of costs, and more especially
labour costs. But labour costs are wages and form by
far the most important item in the total purchasing
power inside the country available for the
distribution of goods. Even supposing that retail
prices were reduced in exact ratio to wage reductions,
which is highly improbable or even impossible, how is
the distribution of goods to people in this country,
which is the true object of British industry, thereby
advantaged? As the prices fall (by this method) so the
amount of money to purchase also falls, and we are as
badly off as before, with the added complication of
the discontent evoked by the reduction of wages.
It would seem, then, that although a reduction of
prices in relation to purchasing power is not only
vital in connection with the more fundamental problems
of Industry and Society, but is the only effective
method of dealing with the immediate problem of
unemployment, we are not as a Nation pursuing this
policy, but rather one which, if not diametrically
opposed to it, is yet wholly inapplicable to the
situation. Is it impossible to obtain adequate
recognition of fundamental remedies, and equally
impossible to rouse the general public to a sense of
the catastrophe towards which its passivity in the
matter is hurrying it so swiftly?
Consider, then, the position at the present time.
C. H. D.
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Unemployment and W
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