# News Capitalist unemployment

1. Nov 2, 2005

### alexandra

Where is your proof? I find it difficult to believe that 90% of people who are unemployed are at fault for their own unemployment! Capitalism has something called 'structural unemployment', and even bourgeois (capitalist) economists acknowledge this. Without unemployment, capitalism wouldn't work: how would you depress wages? But back to the point - I disagree with your statistic, but you could convince me if you provided convincing evidence that 90% of people who are unemployed are at fault for being in this situation.

2. Nov 2, 2005

### loseyourname

Staff Emeritus
Are you sure that capitalism is the problem?

http://www.techcentralstation.com/010405D.html

http://www.nationalreview.com/nrof_luskin/luskin200508020828.asp [Broken]

http://www.dallasfed.org/research/swe/2001/swe0105.html [Broken]

That last part is something brought up often around here. Due to very generous unemployment benefits, some French people actually have a financial disincentive to work, as their total income does not increase. They do seem to still seek work, though. I wonder what Russ and patty will make of that.

This one considers alternative answers, but seems to end up coming to the same conclusion:

http://pages.stern.nyu.edu/~nroubini/Emu/fn6955.html

http://www.justlanded.com/english/france/tools/just_landed_guide/jobs/the_job_market

The above piece is interesting, from a guide on how to find employment in France. It suggests that socialistic policies have actually created, or at least exacerbated, animosity between the labor and capitalist classes. Does this suggest that Marxism might be a little self-fulfilling for any country that pursues some limited form?

http://www.time.com/time/europe/timetrails/france/ [Broken]

The above piece from Time suggests that maybe France has learned its lesson, though it doesn't seem to be the case that unemployment has plunged or growth has surged, not given what I've read elsewhere and the riots currently taking place. This piece might be a little outdated. Perhaps France did not, in fact, learn its lesson.

Here is a very detailed analysis from the Journal of Applied Economics (lest we should take the bloggers too seriously). The abstract:

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3. Nov 4, 2005

### Art

I don't believe France's problems can be easily tied to any particular economic model. France abandoned her (disastrous) experiment with socialism in 1983 under Finance Minister Delors and Prime Minister Mauroy so for 22 years they have been following largely monetarist policies and yet their problems remain. Also in contrast to comments made in one of your quotes above, economic growth actually rose whilst unemployment fell following the reduction in the working week from 39 to 35 hours in 2000. Also the 13 hours permissable overtime is a result of EU legislation not national legislation as falsely stated in the same article.
It seems that the 'spirit of the revolution' is still alive and well in France and so if their government adopts policies or passes legislation they do not like they forcibally resist it by striking or through violent protest. Perhaps it is this 'culture' that is at the root of their economic woes??

Here's a mainline source for Smurf reporting on the current riots; http://www.sky.com/skynews/article/0,,30200-13457760,00.html [Broken]

It doesn't mention the source of the current unrest but it seems to have started in high immigrant areas following the deaths of two youngsters.

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4. Nov 4, 2005

### alexandra

Well, yes, LYN, I’m sure capitalism is the problem. I have been worrying about this particular problem for many years now, and reading about its causes, and reading about its effects, and witnessing the changes that have happened over the years. There is absolutely no doubt in my mind that capitalism is the problem. Despite all the propaganda to the contrary, which has certainly picked up phenomenally over the past ten years or so, I still trust my own analysis. I won’t let the media do my thinking for me – nor the post-modernists, nor anyone else.

And I guess you’re convinced capitalism isn’t the problem – that, indeed, capitalism is the ‘cure’ for all society’s ills.

But it doesn’t really matter what either you or I think about it – what matters is how people experience capitalism in their lives and how they react to it. We can argue forever on these boards, and it won’t make the slightest bit of difference to whether or not people will put up with the kind of life capitalism has to offer ‘the masses’, or how they will decide to react to their constantly eroding living conditions. I suspect that many people writing on these boards come from a relatively (perhaps even extremely) privileged sector of the population whose lives are not being completely rubbished by the present system. I believe that the Paris unrest is going to be quelled by the police/military, very quickly – well, this round of it will. But people will learn from their experiences and they will organise themselves, and it won’t be possible to control them forever.

First point: Jospin is in no way ‘left wing’, whatever he may call himself. As the article you quoted (http://www.techcentralstation.com/010405D.html) states, Jospin was “a former Marxist of Trotskyite vintage”. By the way, this article is totally biased in my opinion: it takes the usual opportunity to denigrate one of the greatest humanitarians of all time, Leon Trotsky. Trotsky was the uncompromising leader of the Left Opposition to Josef Stalin’s totalitarianism and was assassinated by the KGB on Stalin’s orders, but he’s habitually presented by right-wingers as a ‘loony’ and ‘evil’. If he was so ‘mad’ and so ‘bad’, then how come he stood up against the dictator, Stalin (at great personal cost not only to himself but to his entire family)?

The next article you quote denigrates Paul Krugman for mounting an “absurd defence of the failing French economy”. Prior to the coup of the neo-cons, Krugman was a much-respected American economist (and he is currently a professor of Economics and International Affairs at Princeton University, which I always thought was one of the ‘better’ US universities – but I may be wrong?). Since daring to critique the neo-con agenda, his economic analysis becomes ‘absurd’… hmmm… This makes one think, doesn’t it?
I know what I make of that – as I’ve always stated on these boards, people don’t just work for financial reward. Work is what defines human beings; they need to feel like they’re doing something useful. This links to the many arguments we have had over the months about whether or not people would just be ‘lazy’ and do nothing and live off the state in a socialist society. It seems not.

Now this quote I found very, very interesting:
This is how workers experience capitalism: they can either starve on low minimum wages or they can starve on unemployment. This is precisely what is wrong with capitalism (capitalists must, after all, make their obscene profits) and this is what I predict people will not accept in the long term. And so what we have seen in Paris over the past nine days is just the beginning…

A question (just because I’m curious) – so neo-cons believe that the minimum wage should get to as low as the ‘free market’ can get it, then? So how low should it get? Should workers be paid $5 an hour?$1? \$0.50? And no social security? Should there be none at all? And should there be no taxation? No schools, hospitals, universities, etc? Tax the poor only, of course, to support the military adventures, Halliburton, Lockheed Martin, etc… Those who cannot afford medical cover or an education should simply… what? Die? And do you really think people will not stand up for themselves when they are cornered like that? Perhaps not – but if they don’t, then they deserve their fate. In the end, it does not matter what we think and say – what matters is how people experience capitalism and what they decide to do about it.

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5. Nov 4, 2005

### Art

Good post Alex. Although not a left wing socialist like you I agree there is an 'unacceptable face of capitalism' which if left unchecked will lead to disillusionment and eventually civil disorder and so I agree with your analysis of where unchecked capitalism will take us.

6. Nov 5, 2005

### Zlex

I'd have to agree with both Art, and Alex on the long running perversion of capitilism.

Cozy little arrangements between the guns of government and 'capitalists' is anything but 'capitalism.' The concept of corporations exists because of only one reason; the tax code and the guns behind it, and efforts to mingle economic incentives/controls/social engineering with capitalism.

A total bastardization. One just needs to look at the unsightly free-for-all, the CronyFest on the Potomac, to see how this cozy little arrangement has created an out of control, graceless mess.

A million yearly tradeoffs, a little freedom for a little power, a little sell-out for a little short term advantage. Naked sweaty apes to the hilt.

"C" Corp... "S" Corp...."Partnership" ...."Sole Proprietorship" ... "Employee"... and juggling itself in the middle of all of those games are the glad handing plumbers with the guns, endlessly trading off favors/penalties for one group against another.

How a business -- a voluntary association of one or more individuals cooperatively doing what they legally may in freedom to offer goods and services, create jobs, and make livings-- choose to organize for the purposes of avoiding the looters and moochers and favor givers and favor takers -- has nothing to do with capitalism, other than when it is folks voluntarily trying to react to the constructivist game built by others. But, too often, it is folks embracing the guns of the game for advantage that has nothing to do with their creative effort in delivering wants and needs to folks who want and need things, like goods, jobs, and services.

And yet, that game of organization, and the abuse thereof, is what dominates our perception of 'capitalism,' not the key foundational idea of capitalism, which is;

Each of us was born with exactly one skin, one mote of heat and light and time and talent, and it is ours to dispose of, not our neighbors, or thier neighbors, or any hundred of their neighbors, each of which was born with their one skin. You own disposition of the crass residue that results from the exertion of that finite mote of heat and light and time and talent, as you choose, as you see fit, and to benefit whom you see fit-- to value.

To negate that basic human right(ie, to self direct the results of the exertion of your own mote of skin, heat, light, talent, and time), you must introduce coercion; some skins are more deserving than others, 'voluntary' self direction by the occupiers of these individual skins cannot be tolerated 'by some', to be determined by force 'by some,' for the benefit of those that 'some' determine are worthy. ie, slavery to the individual worldview of the 'some.'

The fundamental idea of capitalism is, self ownership of your own mote of skin, heat, light, talent, and time, along with the crass aftermath of the finite exertions thereof. Every other aspect of capitalism follows from that fundamental idea. Every perversion of capitalism and humanity in general abuses that fundamental idea, and it usually starts with, "Yes, but, for a really, really good cause(mine), we should do this with our skins..."

There lies the perversion of capitalism; the unsightly clawing of the 'some' along the Potomac--with the guns, alternately handing out penalties and favors by the few for the few, paid for by the many, for the 'really, really good idea' visions of the few.

A guaranteed occurrence of imperfect human beings. We have our share of cheaters, short cut takers, free ride takers, slackers. In "C" Corps...in unions....as employees....and in government, wielding guns. And, ultimately, the biggest drooling beast in the Jungle(the mob/tribe)exerts itself, no matter what ideals exist.

So, whether we embrace totalitarian nightmare constructivist folly, or pay lip service to freedom, we will implement that which we embrace using imperfect naked apes, no matter what, guaranteed. But, on it spurely theoretical basis, and not on the basis of its inevitable abuses which its enemies inevitably concentrate on, its foundation is what distinguishes it from its alternatives.

Does your skin belong to you, or to the tribe and the high priests that speak for the tribe? That is the fundamental political question in which capitalism is a key and never purely realized ingredient, because the answer is forever and inevitably "partly," due to one and only one reason: the drooling brute force of numbers.

7. Nov 6, 2005

### TheStatutoryApe

Alex, can you point out to me why these problems lay at the feet of capitalism? When ever I have seen you argue against capitalism you have always pointed out those things that are the twisted byproduct of greedy humans influencing and perverting the system. Capitalism in the raw does not support the majority of those elements you ascribe to the system just as communism/socialism in the raw does not support the elements that have manifested in it's wake.
There are greedy people out there. They take advantage of their wealth power and influence to get what they want which generally speaking is more wealth power and influence. The Capitalist system does not perscribe this any more than Socialism or Communism does. These greedy people build loopholes and special rules into the capitalist system to benefit themselves while no one is looking or sometimes right in front of every one assuring us all that it's for the common good. If you change the system those people will still exist and they will still do everything within their power to get what they want. They will create loopholes and special rules in a communist system that will benefit them and help them to retain their wealth and power. If they can't manipulate the system legally they will do so illegally.
It's not the system that is flawed, they are the people who participate in it that are flawed.

8. Nov 7, 2005

### Smurf

I see no difference between asserting that the system is flawed, and asserting that a system is corrupted by flawed people.

If a system, after being established, allows it's self to be exploited and changed by flawed people, it is, as far as I can see, as flawed as the people exploiting it.

9. Nov 7, 2005

### Smasherman

When a body uses physical force to gain something from another body, they must either kill or subvert. Killing is the most guaranteed because a subverted body can rise up and strike back. Whatever body has the most power at the beginning is most likely to win. If a body initiates the gain attempt by surprise, it gains some advantage.

When a body uses economic force to gain something from another body, they must either impoverish or subvert. Impoverishing is the most guaranteed because a subverted body can rise up and strike back. Whatever body has the most power at the beginning is most likely to win. If a body initiates the gain attempt by surprise, it gains some advantage.

Does Might make Right?

10. Nov 7, 2005

### Staff: Mentor

I'll let the statistic go because I don't know how close it is, but....
As I say every time you mention capitalism, capitalism's greatest strength is that it feeds on human nature, it doesn't fight it like other systems. Yes, capitalism requires some unemployment. But that's ok because a certain percentage of the population is unemployable, anyway. And I'm sure you've noticed - if you've ever been to a McDonalds - just because someone has a job, doesn't mean they aren't still unemployable. Some utterly useless people still manage to find jobs - but regardless, unemployment helps motivate the workforce to be more employable.

Also, you may not have considered it before, but there is more than one reason for unemployment, and not all reasons are "bad". Job flux is a good reason for unemployment: it means that people are free to quit their jobs (and become unemployed by choice) and find a better one. That job flux is high (and it is high by historical standards) increases unemployment, but it is also a sign of a health labor market.

11. Nov 7, 2005

### Astronuc

Staff Emeritus
and perhaps, also its greatest weakness.

12. Nov 7, 2005

### Staff: Mentor

Well, I'm sure you already know what I think of that. I will say, though, that this is a thin-spot in my knowledge. My opinions are based on the basics of market economics, and while it is easy to see what market economics would predict for a given set of conditions, I hadn't actually read an article confirming it before. Thanks, though.
Well, it said "most" - but was that what you were really looking for a comment on? Well.... In a system designed to have personal gain as the primary motivation for working, we can't forget that A: you can't get a promotion unless you have a job, so taking a job that doesn't pay more than unemployment still provides a potential for personal gain and B: money isn't the only thing you gain by working.

After my first post, there, I was reminded of a point that, iirc, selfAdjoint has made: artificial intelligence and automation may radically change the job-pool distribution. A whole class of workers could be made obsolete by the next Roomba. Not to mention, the low-end manufacturing jobs we lose to automation and outsourcing. So far, that hasn't been a problem because the workforce has improved as the job market has changed. But it could become a problem. The only way around it that I see is to ensure that the workforce continues to become more skillful.

13. Nov 7, 2005

### Smurf

I have never actually heard a good argument to support this statement.

14. Nov 7, 2005

### Staff: Mentor

You will, no doubt, keep saying that conditions continue to deteriorate, and I will, no doubt, keep pointing out that you are factually wrong about that. Whether you look at the US or the world, over the past 10 years, or 50, conditions are not deteriorating, they are improving.
Well, you probably don't literally mean "starve", but lets take it literally (or close to it) anyway. In the US, the number of people who starve to death each year due to poverty can usually be counted on the fingers of one hand. Centrally controlled economies, on the other hand, typically have anywhere from bad (USSR) to catastrophic (North Korea) problems with feeding their populaces.

Capitalism isn't perfect, but as the saying goes, it's the worst system except for all the others. And it does keep getting better.
I'm not a neocon, but people have asked this question of me before, so I'll answer it: no, a pragmatic capitalist does not think there should be no minimum wage. And what we discussed above should make it clear why: if the minimum typical wage is below what welfare provides, it removes the incentive to work. I say "typical" because I don't want people to get the impression that I think the minimum wage is meant to be a "living" wage. It's just the floor, and it pushes up the wages for *real* jobs.
Tricky question. It's well established that a prudent person can get more from a 401k or IRA than from Socal Security, so for me personally - I don't want Social Security. But what about the people who are not prudent and don't save? Part of me says screw -em: if they aren't going to be responsible, why should I have to fix their mistakes? But I realize that that isn't practical - I'm going to have to fix their mistakes either way.

So I think we need to reform social security to enable responsible people to profit more from it, while protecting the irresponsible from themselves.
I don't know where you'd get the idea that that is part of anyone's ideology, except, perhaps, an capito-anarchists (I made that up, but that's what it sounds like). You are way, way off in your understanding of what you are arguing against.
Yes. And in the end [of the year], the people....are going Christmas shopping, and capitalism will prove it's worth once again.
The problem is that (from the quote two quotes up) that "unchecked capitalism" is a strawman argument. It makes capitalism sound like anarchy and that simply isn't what capitalism is or what capitalists want it to be.

One small example - no capitalist in their right mind would ever want to do away with the Sherman Act.

Last edited: Nov 7, 2005
15. Nov 7, 2005

### Staff: Mentor

Well, tell me what it is about my argument that you don't consider "good".

16. Nov 7, 2005

### Staff: Mentor

I agree with one caveat: communism/socialism in practice may not have matched Marx's vision, but what has happened is all that has been proven can happen. Without even a successful test, it can't even be called a theory, just a failed hypothesis.

And while alexandra, Smurf, et al. argue against their vision of what capitalism is, that vision isn't a reality. At the same time, they argue for their vision of what communism/socialism/anarchism, etc. is, that vision isn't a reality either. They are arguing against one fantasy in order to argue for another fantasy. It just isn't the real world that they are talking about.

17. Nov 7, 2005

### Entropy

If you don't like capitalism then what do you want, communism? Look there is no agruing that communism, in the real world, works better than capitalism. It just doesn't, period. If you don't believe me, then lets run another test in Russia and see if the government doesn't deteriorate into a corrupt oligarchy that causes the deaths of millions of people.

18. Nov 7, 2005

### Smurf

Well for starts it's not an argument. You made a statement "capitalism's greatest strength is that it feeds on human nature, it doesn't fight it like other systems."

As far as I'm aware the rest of your post didn't address that, it was an off-hand remark.

I'm asking you to support that statement with evidence.

19. Nov 7, 2005

### Smurf

What on Earth is that? If I start a dictatorship in Zimbabwe and call it democracy and then slowly watch it get overthrown over 4 decades that does not mean that democracy doesn't work.

Soviet Russia was not communist. It never was. The fact that they called it that for a few decades is completely irrelevant to the point that no one is advocating a system even remotely like it.*

*I admit ignorance to what exactly everyone is advocating. Some might actually have a few similarities.

Alexandra and I constantly cite examples of systems similar to our so-called "visions". You're choice to ignore them or pretend they "won't work on a large scale" or "arn't really anarchist" (ho! ho! the irony!) is only your own ignorance and little more.

As an off-hand remark I'm getting really sick of these conservative's massive over-simplifications to try to make it seem like Capitalism is not only the best choice, but the only one that's possible. Which is just stupid.

20. Nov 7, 2005

### pi-r8

I would. I say get rid of that along with taxes, welfare, social security, and all the other socialist BS that we put up with.