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Wednesday, 4 January 2012

Have world governments given up on full employment

Full employment seems to be a mystery to many and a fantasy for others. Did we ever have full employment in the United Kingdom and will we ever see this again ?
In todays Britain we currently have 2.6 million unemployed people at present with over a million of those being
16-24 without a job. or in any form of training

But has there ever been full employment? That depends, like a lot of economics, on one's definition of the term.

"Full employment never meant zero unemployment," says Christopher Pissarides, professor of economics at the London School of Economics.

As long as most people were in work it was seen by the majority of people that it didn't matter if rather a lot of other people, albeit a minority, were not. So unemployment lost its profile as an issue”
End Quote
Historian David Kynaston
Instead there is what the free market capitalist economist Milton Friedman termed a "natural rate" of unemployment, where nobody stays out of work for long, unemployment fluctuates between 5% and 6% with jobless workers quickly being hired in growth sectors of the economy.

Other economists argue this is too high. William Beveridge, the man who inspired Britain's post-war welfare state, said full employment meant a figure of under 3%.

Before the world became industrialised, nearly everyone outside the ruling rich elite would have had to work to survive, usually in the fields. After industrialisation all that changed. Mechanisation offered people work in the factories but also brought huge spikes in employment and an intensification of economic boom and bust which is built into capitalism like night and day. Due to its various contradictions which i have detailed in the past on this blog.

Pissarides argues that full employment was a reality in the US in the 1990s under Bill Clinton and from 1997-2007 in Britain, and in modern day China.

Other economists say it's not fair to compare democracies with autocratic societies. Children learn in history lessons about the mass mobilisation of men in Hitler's Germany for armaments production and public works programmes. "Conscripting people over the barrel of the gun in totalitarian societies is not full employment as economists understand the term," says economic historian Tim Leunig.

In 1955 unemployment was very low indeed So has genuine full employment ever been achieved in the post industrial world? "Of course we've had it," says the economist Lord Skidelsky. "Between 1950 and 1973 unemployment averaged 2% and was always well under one million."

This was the golden age for jobs in Britain. Also the biggest period of growth for capitalism ever. The high point came in July 1955 - shortly after Anthony Eden had taken over from Winston Churchill as prime minister - when unemployment reached a post-war low of 215,800, a mere 1% unthinkable today.

So what happened to full employment? Ian Brinkley, director of think tank the Work Foundation, says the term went out of fashion in the 1970s as unemployment passed one million.
This is the period which the ruling class gave up on the idea of full employment and focused far more on growth and making profits in other ways.
In the 1980s, Margaret Thatcher pursued a different approach, which economists characterised as the prioritising of tackling inflation. The concept of full employment was dead, says Brinkley.

Unemployment climbed above the symbolically important three million figure, and stayed relatively high even still today.

So will full employment ever be achieved again ?

I dont think so under capitalism this will ever happen. As Karl Marx wonderfully explained the ruling class in their desire to divide and rule discovered the idea of keeping a army of reserve workers as Marx put it which enabled the ruling class and the boss's to hold wages down with the threat of unemployed workers coming in to do their job for the same or for less if a worker demanded more wages.

Today this is one of the capitalists most powerful weapons the threat of unemployment hangs over many of us still today as the ruling class looks to make the workers pay for the mistakes of a ecnomic system they have no say in running.

The only way i feel we will see full employment again allowing for the debate if it ever was will be a socialist ordering of society. Where the blind drive for profit will have gone and people can and will i'm sure want to work for society. Working for the needs of society and for others will bring out workers full potential. For many people this will be the first time they may enjoy work when they are not having to work for their boss's profits but for their own society, based on human needs.

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