IX. The Real Cause of Unemployment

CHAPTER IX THE REAL CAUSE OF UNEMPLOYMENT UNEMPLOYMENT has taken the place in politics left vacant by the disappearance of the Irish problem, and unless we acquire a better understanding of the matter than is evident at the moment, it may like the Irish question remain an ever growing trouble for generations to come. There is no greater scourge associated with modern civilisation than the curse of unemployment. It is a terrible thing for the individual affected by it and a disgraceful thing from the point of view of society. I can conceive of no horror to equal that of the capable hard-working man unable, owing to circumstances over which he has no control, to find employment. But we can agree about that without agreeing as to causes and cures. We are far too prone to hold up both hands in support of any scheme proposed by any politician if only the pro posal is labelled "unemployment." In point of fact we have created a great deal of unemployment by the measures that we have taken nominally to cure the evil, and so long as we go along on present political lines the chances are that we shall have more and more, instead of less and less, unemploy ment. Since the war, alone, three governments, Coalition, Labour and Conservative has exhausted the possibilities of State. action with the direct result that year by year the amount of employment avail able for our people has steadily diminished.

Unemployment is an unnatural state of affairs which arises from an unnatural way of looking at 1°3 104 The Return to Laisser Faire things. In theory there can never be unemploy ment. So long as there is a want in the world there is work to be done, and as there will always be wants there will, therefore, always be work. But we have created an unnatural position by concentrating all our thoughts on the work instead of on the wants. We seem to think that there is some virtue in the work as work and give little or no thought to the wants which are, of course, the only conceivable excuse for the work at all. We have, in fact, got the picture upside down. We are looking through the wrong end of the telescope, and as long as we continue to do that the trouble will get worse and worse, and all hope of improvement will disappear. If a wide view is taken, the problem of work and employment, looked at as a whole, is really very simple. Most big problems are simple; it is in the details that the difficulties arise. The whole world to-day may be said to be suffering from a surplus of labour and a shortage of wealth. There is a great deal of labour ·that is not utilised, and there is too little wealth to satisfy the legitimate desires of humanity. A surplus of labour and a shortage of wealth sums up, therefore, the whole situation.

In these circumstances the whole world-· for the trouble is by no means confined to this country or this Empire-seems to be engaged in doing the wrong things. So thoroughly has the Socialist germ permeated society as a whole that all Govern ~ents, all authorities, all (or almost all) unions, associations and other Collectivist bodies, are busy all the time inventing new restraints, new restricThe Real Cause of Unemployment lOS tions, new prohibitions, limiting, if indeed they do not prevent, the making and the distribution of wealth. We ourselves pass two Acts of Parliament a week; every Government in the world follows our exam.pIe; every trade union is day by day making new rules; every trade association devising new schemes, all of them arranging that something shall not be done. The whole world, being, as I think, quite mad in these matters, seems to be engaged in a determined effort to limit production. Everybody is seeking to make wealth out of scarcity.

If it were possible for these ideas to be discarded to-morrow, and for the whole world to agree that prosperity can only be secured out of .production, a very short time, certain! y not more than six months, would be required to reverse the economic position everywhere and to produce a state of affairs in which there would be a shortage of labour and a surplus of wealth. Then, as I have already shown in the chapter on money, labour could secure almost any price it cared to ask, and the return on capital would be reduced to a mere fraction of the present rate of interest. But the unemployment problem cannot, unfortunately, be tackled in that broad and general way; we can only strive to put public opinion right, and public opinion will in .time put the problem right. To-day, however, we have to do something, or, maybe, have to undo some thing, in order to relieve the smaller and immediate troubles which we find on our own doorstep.

There is another big general consideration which must be noted in passing. Unemployment is a very 106 The Return to Laisser Faire valuable political asset. I shudder to contemplate the plight of anyone of our political parties if by some miracle we could wipe out unemploy.ment from amongst us. Politicians, in my view, are between them mainly responsible for such unem ploymentas we have; but that does not prevent them from mounting their respective platforms and blaming the unfortunate business man, the Capitalist system, or anybody or anything but the real culprits and the real causes. The politicians, therefore, will always make the most of unemploy ment; that is in the nature of things. There is to-day a most sinister attempt on the part of seekers after the sweets of office to develop an unemploy ment problem in America. Many people are still under the impression that there are more than a million persons who in former, normal, ordinary times were properly em ployed, butwho now, owing to the war, to the state of the world, to the breakdown of Capitalism, or to other causes glibly explained by the politicians, can not find work.

This impression is wholly false, although it is sedulously promoted by the politicians. The word "unemployment" no longer means" absence of work." It would more correctly be defined as "qualification for benefit." The million people about whom the politicians talk are not for the most part people who have lost work which existed before, but are merely people who have fitted them selves into the political arrangements which we have thought well to make in the name of unemployment.

The Real Cause of Unemployment 107 If the State devises benefits and offers them to its citizens it cannot complain if its citizens proceed to put themselves into a position to claim the benefits. So much for general considerations. Now for detail. There is a garage at a well-known seaside resort which in the summer employs fifty men. A holiday-making public pays those fifty men for six or seven months of the year on a generous scale, which is justified, or tolerated, on the theory that a whole year's living has to be picked up ina short holiday season. Prior to the introduction of un.. employment insurance these men either lived upon the earnings of six or seven months' work or else found, for five or six months, casual engineering work to keep them going. The habit of the garage ever since it was established has been to cut its staff down to ten or fifteen men during the winter season.

When I last visited that garage, just after Christ mas, thirty-five members of its staff were drawing the dole. This may be good; it may well be argued that a beneficent State has made arrangements which have removed a social injustice, but that is something very different from what is understood by ordinary people when the word "unemployment" is used. There is here no breakdown of Capitalism, no abnormal circumstance, no bad trade, nothing, in fact, which has not always happened before. When the million unemployed are analysed in this way it will be found that there is in point of fact as much employment to-day as ever there was, and in my view there would be much more employ108 The Return to Laisser Faire ment still, but for the meddling and the muddling of the politicians. The remedy for unemployment· is not to devise new sorts of relief, but to study the causes and remove them. There are, of course, a million people drawing unemployment benefit, but to arrive at a true com parison of the position to-day and the normal posi tion it is impossible to accept the million figure.

Many adjustments must be made in studying this supposed million. To begin with, a very large deduction must be made on account of the women. It is not only a question of the few odd thousand women who are drawing unemployment money. We must also reckon the millions of women who were pushed into industry during the war, who formed no part of the industrial army in the normal times before the war and who are now occupying places which were previously held by men. Then we must deduct· from the million all the juveniles who in normal times were left, and as, I think rightly left, to the c'are of their families, but who are now taught to look to the beneficent State almost from the moment that they leave school. Thirdly, from the million must be subtracted all the seasonal and occasional workers, like the garage hands to whom I have referred. These people are an army in themselves. The worst class that I know so far as this problem is concerned is the sea-faring class. Periods of unemployment are part and parcel of the seaman's life, and, indeed, essential to it. A man puts to sea for a few weeks or a few months in order to enjoy a period of leisure The Real Cause 01 Unemployment 109 on shore, but now our seamen are discharged at the docks with a month or two's wages in their pockets, only to go straight to the Labour Exchange to register as unemployed, and to draw appropriate benefits until in the normal way they see fit to sign on to another ship.

Still larger corrections to the million figure are necessary on account of all those trades which have arranged their affairs so as to fit into the unemploy ment Acts. A flagrant illustration of this class of abuse is the cotton trade. Cotton has always had its periods of short time. The nature of the trade, depending upon a season's crop, has caused the cotton indllstry to be working sometimes at high pressure, sometimes at low pressure, and it is to be presumed that the economics of the cotton trade have been so arranged as to make the industry balance, having regard to these natural circum stances. The cotton trade, howeve'r, was not long in discovering that some slight rearrangement en abled its members to qualify for a Government sub sidy in the form of unemployment pay, and where in normal times six weeks of short time would have been arranged, to-day masters and men conspire together to work three weeks of full time, thus qualifying for three weeks of dole.

These are only illustrations which could be multi plied almost indefinitely, but when the million is adjusted after taking all these matters into con sideration, it is undoubtedly the fact that employ ment, whether it be good or whether it be bad, is to-day better than ever it was before.

110 The Return to Laisser Faire If from the small residue of unemployment which is left when all these adjustments have been made we deduct the special case of coal, we begin to get the problem down to its proper proportions and to see that we ought to be talking about our prosperous condition and not about our impoverishment. Coal is a thing by itself, and the reader should never for get that when talking about coal he is referring to something which consists of 95 per cent .. politics and 5 per cent. coal. For fifty years or more coal has been the favourite diversion of t~e politician. No industry has been subjected to more interferences, more regulation and more legislation. Millbank and Whitehall are full of coal departments. There are more bureaucrats in coal than there are in hous ing. I, therefore, do not hesitate to charge the politicians with the full responsibility for the plight of the coal industry.