By Dan Kervick
Paul Krugman is justifiably appalled at what he calls the “war on the unemployed”, the accelerating right-wing campaign to subdue, discipline and pauperize the jobless. Yet there is nothing new in this campaign. Economic conservatives and market fundamentalists have always tended to believe that the private enterprise system is both self-correcting and stringently just, and that unemployment results from a misguided combination of indulgent maternal do-gooding and inept government interference with the austere and efficient rectitude of market operations. The fundamentalists believe unemployment happens because artificial minimum wage laws prevent wages from falling as far as they need to fall to clear the labor market, and that unemployment insurance compounds the problem by seducing potential workers into an unsustainable, dead-end limbo on the dole when they should be swallowing their strong laissez faire medicines and the bitter wages that go with them. After all, if these dregs and flops were worth more handsome wages, then the Invisible Hand would have already dispensed those wages to them, right?
John Maynard Keynes wrote a great book dedicated to refuting this and related fallacies. In Chapter 19 of the General Theory Employment, Interest and Money, he summarized some of the consequences of his theory for wage policies, and concluded:
There is, therefore, no ground for the belief that a flexible wage policy is capable of maintaining a state of continuous full employment; — any more than for the belief than an open-market monetary policy is capable, unaided, of achieving this result. The economic system cannot be made self-adjusting along these lines.
But Keynes’s name is mud in conservative circles, and as Krugman despondently notes, “The people out to punish the unemployed won’t be dissuaded by rational argument; they know what they know, and no amount of evidence will change their views.” Still, I think we should look deeper to see whether there is something that even less rigid and more open-hearted people might be doing inadvertently to contribute to the ongoing problem of mass unemployment.
I would suggest that one reason the unemployed are both potentially ignorable and actually ignored is that even some of our more liberally-minded contemporaries have accepted policies and attitudes toward unemployment that locate the ultimate cause of joblessness in individual failure and inferiority, even if they think the correct response to these individual failures is charitable liberality. Consider the very term “safety net”. A safety net is something that catches those who have failed and who have done something they were not supposed to do: the acrobat who has fallen off the trapeze was not supposed to fall; the construction worker who has slipped off the girder was not supposed to slip. The fact that they have tumbled into the safety net connotes a deficiency in their performance.
Thinking about unemployment policy – and several other social and economic policies for that matter – in terms of “safety nets” encourages us to think, however subtly, and with however kindly a spirit we might breathe, that there is something wrong with the unemployed. Even where such attitudes are coupled with generous and compassionate social assistance programs, these programs stigmatize the unemployed in the very process of aiding them. Now, if the choice is between a ruthless punitive conservatism and a compassionate liberalism, we should choose the latter. But perhaps we should recognize that charity-state welfare liberalism with its high-minded pity and condescending denigration of the unemployed, unintentional though this denigration may be, contributes to the problem even while helpfully ameliorating some of its effects.
Perhaps also, then, we should stop thinking in terms of safety nets. We should recognize that systemic mass unemployment is a routine, normal and eminently expected consequence of American-style capitalism, and its persistence is a natural consequence of our misguided over-reliance on the churning, choppy creative destruction of private enterprise and free markets as the delivery systems for progress and prosperity. Private enterprise operating alone has repeatedly demonstrated itself incapable of generating labor opportunities in sufficient numbers both to assure that we are achieving all we can achieve as a society, and to guarantee the dignity and right to full social participation of all our citizens.
It’s time to look once again to thinkers like Hyman Minsky who have offered a social vision and policy agenda aiming at a genuine full employment society. To achieve full employment, full social potential and maximum human dignity, private enterprise needs more assistance from public enterprise. We need to build a more active, dynamic and flexible system of public enterprise that is always in action to organize and fund the endless varieties of work that can be done, should be done and need to be done to maximize the public good, but which private enterprise routinely fails to deliver. If the private enterprise system sheds workers, the public enterprise system must stand ready to take those workers up and employ them in the innumerable tasks that we are always wishing could be done, but which establishment pundits stubbornly claim are “unaffordable”. These pleas of public poverty are as wrong as can be. We afford things with our resources, and languishing armies of unemployed workers represent a massive waste of resources. We can’t afford not to employ every person who is willing and able to work.
Mark Thoma usefully cites some of the recent work on unemployment is a post entitled “The Unemployed Need and Deserve Our Help”. He’s right. But here’s my suggestion: instead of framing this issue entirely in terms of some sad and forlorn others who need our help, maybe we should consider emphasizing some of the following points:
1.We need the help of the unemployed, most of whom are ready and able to help us build a more prosperous 21st century society, but who are not being offered the work and income opportunities needed to secure their useful participation in that social project. We especially need the contributions of the young, who are full of the energy, ambition and fiery hopefulness that humanity always relies on to regenerate and improve itself. And yet a whole generation is being laid waste by the feckless and avaricious elites that control the developed world in 2013.
2. The private sector needs help from government and the public sector in order to play its most effective and appropriate role in the great task of building a country, a world, and a humane and prosperous democratic society – a task that the private sector can never successfully accomplish on its own. Determined and energetic public enterprise can lend valuable organization, coherence and strategic direction to the motley private business projects that otherwise degenerate into the mere haphazard and unfocused satisfaction of whimsical and sometimes wasteful consumer needs.
3. The unemployed are not a gang of pitiable dregs and n’er-do-wells in need only of compassion and alms from the fortunate and the superior. Unemployment is our collective fault, a consequence of making poor social decisions about the function and design of our employment system. The existence of mass unemployment shows that we have failed to assemble the right combination of public and private enterprises to mobilize and organize the labors of our citizens.
We should certainly have compassion for the unemployed, as we should have compassion for all of those who have been treated unjustly. But the compassion should be based on the recognition that the unemployed haven’t fallen, failed and dropped out. They have been locked out. And we are all responsible for locking them out. We have created a political and social culture that believes in casting aside those whom the adventitious owners of private enterprises deign not to employ. It’s a bad system.