Capitalism and unemployment

BY:Art Perlo| January 27, 2012

Mass unemployment has been a feature of capitalism since it emerged as the dominant social system in 17th century England and spread throughout the world. It is also an essential part of the system — the misery of the unemployed and underemployed fuels the profits, which keep the capitalist economy going.

That’s not what we hear from big business economists and their Republican congressmen. They call the wealthy class “job creators” and claim that if rich people and corporations are freed from taxes and regulation, there will be plenty of jobs. History shows they are wrong. The Great Depression followed, a decade of low taxes and unregulated capitalism, with government at all level supporting the interests of business against workers and farmers. Just like the depression we are now experiencing.

Why can’t we rely on the wealthy “job creators” to create jobs?

Capitalists as a class — the people who own the banks and the big corporations (the 1% in today’s language) — are not in business to create jobs. They are in business to make profits. When they are unable to meet the demand for whatever they produce, they hire more workers so they can increase output. When they can’t find buyers for their products or services, they cut back and lay off workers.

There are some who argue that full employment would be good for business. After all, full employment would mean a booming economy and lots of customers. So you would think the Chamber of Commerce, the Wall Street Journal and Fox News would all be calling for passage of President Obama’s American Jobs Act. But you’d be wrong.

Capitalists and the economists, and politicians who work for them, don’t like full employment. When there are plenty of job openings, workers can say, “If I don’t like the pay or the conditions or the boss, I can quit and find another job.” A former factory worker explained it this way: “I never had trouble finding a job in my life until now. I was laid off, and my unemployment benefits ran out at the start of 2009. I lost my house, I have so many bills I can’t pay including hospital bills. I’ve looked for industrial work and even tried door-to-door sales. Anything looks good now — which is probably where business likes it. Everyone’s so desperate they’ll take anything.”

Read the full article at peoplesworld.org




    Art Perlo lives in New Haven, Conn., where he is active in labor and community struggles. He does research and writing on economic issues in Connecticut, including work with the Coaltion to End Child Poverty in Connecticut which helped pave the way for the movement for progressive tax reform in the state. He writes on national economic issues for the People's World, and is a member of the CPUSA Economic Commission.




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