The Lunacy of Capitalism: Eliminate as Many Jobs as Possible

A commenter notes:

This is good stuff. I think you are right on: capitalism is not working for the middle class, what’s left of it.
I heard an interesting interpretation of capitalism the other day by Andrew McAfee, a technology guru at MIT. He says, contrary to public opinion, that capitalism is “very successful,” it has greatly expanded output of technology and other consumer goods and increasingly does so with less and less labor. That is what capitalism is supposed to do.
But he goes on to say because of this high return to capital and low return to labor, the middle class is going south. He suggests “a living wage” for everybody. It was hard to tell whether he meant only people with “jobs,” or the entire society.
Indeed, we should do that through government regulation. One of the functions of government, which we forget, is the goal of “full employment.” It is not, and never has been, a goal of capitalism.
Whether we will ever be able to do that politically is doubtful. One can always hope.
George DeMarse
The Sage of Wake Forest

Thank you. I would add that what this guy praises about capitalism is what is so insane about it:
He says, contrary to public opinion, that capitalism is “very successful,” it has greatly expanded output of technology and other consumer goods and increasingly does so with less and less labor. That is what capitalism is supposed to do.
So capitalism works because every year, it needs fewer and fewer workers to output its goods. Ok, what that means is that at some time, capitalism will not be able to provide enough jobs for everyone who wants one. The strategy of every year, trying to eliminate as many jobs as possible seems like a suicide strategy for the capitalists. If you keep eliminating jobs, you keep eliminating workers. If there are fewer and fewer workers with jobs and more and more unemployed, who in God’s name is going to have enough money to buy your stuff, capitalists?
Furthermore, what is wrong with full employment. Any decent society has an obligation to at least offer a job to everyone who wants one, and to provide support for those to whom capitalism can offer any work. We do not do that. There are 4-5 job seekers for each job opening.
Capitalism actually operates on the insane theory of “the necessity of unemployment.” If you go to Business school, they will actually teach you this. They will teach you that full employment is a catastrophe and that a reserve army of labor, preferably a large one, is necessary to discipline the labor market, lest workers get to greedy and demanding.
Indeed, under Clinton when unemployment started to get “too low” (around 4%) the business class around the Wall Street completely flipped out and stock prices started crashing. Alan Greenspan came to the rescue and immediately began raising interest rates higher and higher to satisfy the stock market. As the unemployment rate rose, stock prices climbed higher and higher seemingly in celebration.
That’s insane. A stock market that tanks when too many people have jobs is a crazy institution. A stock market that heads upwards as more and more are thrown out of work is ridiculous. A system that necessitates a certain level of permanent unemployment to ward off the catastrophe of full employment is a lunatic system.
And you guys wonder why we socialists blast capitalism so much.

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0 thoughts on “The Lunacy of Capitalism: Eliminate as Many Jobs as Possible”

  1. When I studied economics, there is this theory call Phillips Curve, used to justify at a society must put at lest 4-5% of people on unemployment to prevent inflation, and that is the goal of every government in western world today.
    A mild unemployment is essential for exploitation of labor by capital. If everyone are employed, then capital will bid up labour.
    All western countries have already solve the problem of unemployment in 50-60s. Today, western government come back tell people that due to technology advancement and globalization, many people must put into unemployment. That is a lie.
    I ask many western people why USA can achieve full employment in 50s and 60s but not now. I am appalled that many of them are so brainwashed. They told me full employment were achieved then because of post war rebuilding. I told them in that case, if we evacuate and nuke New York, then rebuild it, we will have full employment and prosperity.
    The real reason of western prosperity in 50s and 60s was the existence USSR for western utopia. The existence of USSR compelled the western elites to bribe the people. With USSR gone, capital will do whatever means to exploit people. There is no way of going back. I predict there will be civil war and revolution.

    1. Immigration had been mostly halted since the 30s, and most married women didn’t work. Capitalism has joined the worst element of Leftism, in claiming that Mexicans and Indians have just as much right to an American job as our sons and daughters do. We need a radical political center based on a capitalism that’s pro-American-worker.

    2. @Creaders: Maintaining unemployment to reduce inflation is certainly insane. Low inflation is of minimal value if you can barely afford to live in the first place- the usual result of unemployment.
      I think technology and globalisation are factors, though- the problem is how they are used by capitalists as justification for their own ends.
      Technology, if used right, could be said to make work easier, perhaps reduce the amount of effort that needs to go into work and maybe imply reduced hours, but instead it’s simply used to eliminate jobs. Globalisation is used as an excuse to outsource overseas, where workers can be hired for much lower pay and poorer working conditions. The excuse being it benefits them, as they’re better off than they would have been… yeah, not much, and it’s taking advantage of them. Then they claim that Western workers are unproductive, and if Western labour is going to become competitive again, we’re going to have to work for lower wages, and lose our hard-fought-for rights and benefits. But if you treated foreign workers the same as Western workers, the problem would not even exist.

  2. Capitalism used to do this by reducing the standard work week from 60 hours in 1900 to 40 by 1940. Obamacare might reduce it to 28. Then we’ll have full employment, but have to buy our health insurance privately. [Which might turn out for the best, after some kinks are worked out.]

    1. To add to what Mark said up there, Capitalism isn’t the problem per se, it’s a generally corrupt socio/political environment that has allowed avarice to run rampant. Capitalism served America well after ww2 by creating a lot of jobs and generally improving the American standard of living. The problem is neoliberalism and its globalist agenda. Globalization absolutely wrecks the dynamics of a free market and the only safeguard against its effects is protectionism. The government NEEDS to stifle outsourcing. Americans and Canadians should be guaranteed employment and those with additional intelligence and initiative should be guaranteed some capital.

  3. People,.
    Vote for Republicans to end the current shipwreck of the economy. Stop the liberalism and other horse shit policies . It wont work in any countries and do not pay heed to the liberalists they are monsters destructors of today’s economy….We need to stop this impasse. People better react…

    1. HS policies aren’t going to stop by electing Republicans. IMO there two primary bi-partisan institutional problems:
      1. It’s too easy to accept deficits because their consequence horizon is beyond the career length of the politicians, and to a lesser extent, the taxpaying lifespan of the electorate.
      2. The premise of capitalism is that a person or business can help the economy by looking out for its own self-interest. The failure of pure communism shows this is largely correct. But now that the entire business community is focused on wage reduction, the customer base has been impoverished.

    2. LOL
      (ideal) Left wing motto: build shit here, export goods and share the revenue
      Right wing bullshit: export dollars and import lots of goods. Then we’ll get fat, export more dollars and import more shit.
      Little chinaman dick already in your ass. After he’s done, you can wipe with the new 100 dollar bill.

  4. Look at supermarkets. First they put the local shops out of business by selling everything in a single place and more cheaply. I’ve seen this dramatically on a site near mine- there was a parade of local small businesses, been there for years. Eviction notices were served, shops bulldozed, supermarket being built in its place.
    Now they are starting to replace the minimum wage workforce with machines. Seen those checkout machines that have appeared in every supermarket in recent years? You got those in America too?

        1. …and tell you what to do when your shit doesn’t scan and you have ‘unexpected items in the bagging area’.

        2. Libraries doubly so. They are at least supposed to be a public service- i.e. one where the profit motive isn’t even an excuse. And of course, they’re there to be a community hub- but with no people, what community? Interacting with the library staff, you get to know them, and it becomes part of the human touch, the face of the service.

    1. I’m sure a lot of agricultural laborers complained when farmers started using tractors. ATMs have reduced the need for bank tellers. Internet has cut jobs for stockbrokers and travel agents. Replacing people with better-performing technology isn’t the kind of job destruction that concerns me.
      It’s having our clothes made by slaves in China. Jefferson Davis defended slavery by pointing out the efficiency of Southern agriculture. Having slaves do our labor isn’t capitalist or American.

      1. Do you fathom that at some point automation, robots and computers may wipe out you job, or in 20 years maybe 50% of all jobs?
        You cannot just keep on wiping out more and more jobs in pursuit of higher and higher profits, which is all this crap is anyway. At some point obviously so many human jobs will be replaced by robots, computers and automation that there will not be enough jobs left for all the humans who want to work?
        Can you fathom that?

      2. @WmarkW: The genie might seem to be out of the bottle here, but what happens when humans become all but obsolete, because machines do everything? Or, how do those people whose jobs are lost find a means of making a living? And how many of those jobs are really done much better (in terms of the service they provide) than humans?
        The only way out of this, are for us either to a. re-evaluate what we mean by “work” (must it be for other people in exchange for pay?) and maybe introduce something like a guaranteed minimum income (there’s a guy called Marshall Brain who suggests this) or b. ensure job creation happens in spite of technological progress, which I think can’t really be done with the current focus on shareholder-model capitalism (i.e. shareholders or owners of capital benefit, and the aim is to maximise profits at any cost) as opposed to the stakeholder model (everybody with an interest in the business is meant to benefit, including employees and others), unless somehow the system can manage to create enough jobs that all people can also actually do.
        As for “slaves” in China? Well, for all the arguments that say Chinese (or insert country here) workers are better off because of the investment and new jobs, it is quite right to say that the much lower pay that is demanded can be seen as exploitation- especially when those workers have few other rights to go with it too. If Chinese and other developing nation workers had the same rights and pay as Western workers, there wouldn’t be any reason to outsource. Or, if China could develop on its own terms, there would be no need for Western jobs to be replaced so easily, thereby consigning whole communities to depravation and decline.

    2. Said machines are the perfect example of where machines replacing people is a *really* bad idea. They seem to be designed to be as user-unfriendly and counter-intuitive as possible. You *have* to put your item in the bag, or you shouldn’t. It won’t take your cash when you try to insert it. There was a reason why trained checkout operators existed- they know how to work the machines. And you can chat to them if they’re not too busy (or chat them up…?)

  5. Thinking about it (if I am now allowed to comment again):
    1. There seem to be two overlapping issues. Firstly, that due to the way capitalism (or at least, much of capitalism today) operates, it tends to maximise profit and minimise costs, even at the expense of workers who might depend on their jobs. Secondly, the fact that new technology is able to automate processes and tasks so as to make it that humans don’t need to worry about them. Where they overlap, is the use of new technologies in order to cut down on labour, so as to save costs, and in doing so screw the ordinary employee.
    2. The issue then becomes, how do you make it so that you maximise the benefits of technology without rendering people and jobs obsolete? One way might be to ensure jobs are created that benefit from newer technologies, but that doesn’t always help low-skilled workers- many of the new jobs require technical expertise. Another solution is to reduce working hours, perhaps introduce job-sharing where possible, so more people have the chance of getting a job. Question is, how do you do that without exploitation- simply reducing hours without increasing the rate of pay? (This happens a lot in the UK).
    3. Or, do you make it so that full employment need not be an issue anymore? To do this you’d have to essentially remove the link between the need to live and the need for employment, perhaps with a guaranteed minimum income- and those who want to work still able to work, perhaps in some area they actually want to be in instead of “any old job”.
    4. There are obvious areas where there is simply no argument for removing people. Any roles involving people interacting with other people for one. Machines simply cannot (yet) replace humans in providing all services, and removing human beings form the equation removes the need for social interaction. Before long we won’t be interacting with anyone at all, just machines.

    1. A very good example is the help you used to get over the phone. wait times of more than 30 minutes seem to be acceptable. Wait times for cable seem to be monopolized and unchanged no matter what the customer thinks about being away from his own 8 dollar job. In all this streamlining jobs away from people it seams that only profits matter as both of these examples have been unchanged.

      1. Indeed. And on the subject of phones, there are also the dreaded automated systems which have replaced people, and which are a good example of why that is a bad idea for the customer. You have to wait ages whilst it goes through the options, any other mandatory spiel they force it to give out, will barely recognise what you tell it when voice recognition systems are used, and by the time you have got frustrated, refers you to a call centre in India where they can pay less wages, where the person on the other end speaks such a thick accent as to be unintelligible, and they can’t understand yours either…
        Proof positive that cutting costs only benefits the shareholders, certainly not customers or employees. And that machines can’t replace people, and why outsourcing often isn’t a good idea.

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