Thursday, July 30, 2009

To employ or not to employ; that is the question!

Not being an economist I could be completely off the mark ... but I don't think so.

I think that the time is coming when economists as well as politicians are going to have to come to terms with the unfortunate specter of high and permanent unemployment of segments of their populations. Unfortunately it also seems that high unemployment in the midst of wealth is a sure way to a rise in crime and that isn't something that anyone wants; other than the criminals that is and even then, they don't really want too much competition and not enough prey.

It seems to me that as technology has improved and globalisation has taken place fewer and fewer people are required to make, manage and run what is required for each person in the world to live but as long as consumption keeps on going up it keeps on creating more and more jobs and everyone is happy; sort of.

There are two issues which I think are going to break this cycle, the first is consumption and the second is our "potential skills ability" for lack of a better phrase.
I think that is a limit to consumption, one can only eat so much, be entertained so much, learn so much, spend so much. Consumption is not an ever increasing appetite that can be satiated, there is a point where enough is enough even if more is available. The major way that consumption increases is through people that weren't satiated, consuming more or, failing that, there are simply more people consuming. As everyone is finding out, resources to sustain this consumption are not unlimited and whether one likes it or not consumption is going to plateau, either because people simply can't or don't want to consume anymore than they already do or there simply aren't enough resources to make what people would consume if it were available.
Skills potential
Each and every person in this world has the potential to perform many different jobs but, obviously, can only do one thing at a time. Some people may aspire to being a scientist but are just plain incapable of becoming one even given the opportunity while scientists mostly don't aspire to being road crew even though it should be well within their potential to be one. What I am driving at is that there is an asymmetry, some people have the potential to perform many jobs while others have fewer potential jobs from which to choose; all other things being equal. This is important because, before the industrial revolution, there was relatively little mechanisation and most jobs required a large amount of raw physical labour - something just about everyone was capable of. With the introduction of mechanisation some of the jobs requiring the raw manual labour disappeared and those that were previously employed in them had to 'skill up' to take advantage of the jobs that were available to those with higher skills. This has more or less worked, at least in the first world, but at some time, I'm not sure if it has happened or is happening or is about to happen, we are going to go past a turning point. This turning point is the point at which there are going to be jobs available but the majority of people will not have the potential to perform them, all other things being equal of course.

So what to do?
Going back a bit in history, during the age of the british empire the first child would inherit the estate of the parents, the second would go to the army and the third would enter the church. Inequitable as these practices were they did do an interesting thing; The second and third children and particularly the third would be employed in a industry in which there is no visible output. Yes, they were occupied full-time in their career and yes, they received a salary and yes, they believed and sometimes actually were doing some good but at the end of the day; what did they actually produce - an ephemeral product. So, in some ways entering the church acted as a sponge, a labour sponge as it were, and occupied and employed people and we need something similar, something which will have some benefit to society but it doesn't necessarily produce anything or if it does it may not be anything that people would normally willingly pay for.

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