Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

What’s wrong with Full Employment?

Americans might be witnessing the death of the “jobs economy” first hand and not realize it. The United States is discovering that full employment is not utopia.

Tellingly, the USA achieved one of the major goals of modern economics and few people noticed. America’s nonfarm payroll unemployment rate fell to 4% in June, the US Bureau of Labor Statistics trumpeted on July.

That means the United States has theoretically achieved full employment. In layman’s terms, full employment means 98% to 99% of the people who want jobs have them.

Shit Jobs for Everybody

This does not mean the jobs will pay a decent wage or be desirable. It means there is now plenty of work flipping burgers and mopping floors for minimum wage.

SAN FRANCISCO, CA – JULY 22: A worker cleans a sidewalk outside of a McDonald’s restaurant on July 22, 2013 in San Francisco, California.

Most of the open job positions are in fields like retail, restaurants, and healthcare. Historically those are positions offer low pay, few benefits, and long hours. A disproportionate number of those jobs are temporary or part time.

That means most of the new jobs will offer no benefits and horrible working conditions. America is generating vast numbers of what Millennials affectionately call “shit jobs.”

The Fantasy Economics of Full Employment

This is why no politician has celebrated the full employment “milestone.” Neither Republicans nor Democrats want to admit that their fantasy economics has failed.

Tellingly, the nation’s most prominent politician; President Donald J. Trump (R-New York), is ignoring full employment. In his constant campaigning for Republican Congressional candidates, Trump only talks about trade and immigration.

The Donald intrinsically understands that mentioning full employment will only hurt Republicans. The President obviously knows jobs are easy to find – it is high wages that are scarce.

Democrats are equally silent because their prescriptions of increased union membership and increased spending are just as futile. Contrary to liberal mythology, a union card does not automatically increase pay or improve working conditions.

More government spending will benefit public employees and contractors. A few lucky people get higher incomes, most citizens receive higher taxes.

The current situation in the United States is exposing full employment as a fantasy. Full employment’s failure is calling the whole project of the “jobs economy” into question.

The Disturbing Secret History of Full Employment

Full employment’s failure should have been apparent from its history. Disturbingly, full employment was never intended to benefit average people.

The idea of full employment arose in the 1930s and 1940s because elitists were scared of the common people. During the 1920s and 30s, vast numbers of unemployed men became the foot soldiers of Fascism, Nazism, and Communism.

Events like Mussolini’s “March on Rome;” in which the Duce mobilized a large force of armed thugs to seize power, scared elitists. An obvious answer was to give the unemployed something to do through labor. The hope was that men would be too tired from or too busy from labor to revolt.

Elitist intellectuals like John Maynard Keynes seized on full employment as a means of controlling the mob. Disturbingly, dictators like Hitler followed suit. Once in power, the Nazis quickly implemented a large number of make work projects to control the people.

Working-class Germans were forced to work on projects like the autobahn superhighways after Hitler came to power. Hitler’s support for the autobahn was based on the large number of “jobs” it created.

Nazis, Communists and Full Employment

Various Communist states such as the Soviet Union employed a similar tactic.

Communist propaganda often boasted of forced labor and the joys of work. Everybody was to forced work, which discouraged revolution by distracting the mob.

A frightening aspect of full employment was the phrase “Arbeit macht frei” (“Work sets you free”) found on the gates of many Nazi concentration camps. Like the Communists, the Nazis were firm believers in “full employment” and social control through labor.

President Franklin D. Roosevelt (D-New York) followed suit in the United States with his New Deal. Fortunately, forced labor was not part of the New Deal. Although some Civilian Concentration Corps work camps were turned into internment camps for Japanese Americans during World War II.

Other states that achieved full employment should also scare us. A prime example in American History was the Confederacy. During the Civil War, the Confederacy achieved “full employment” for African Americans (slavery). “Full employment” was also achieved for white men in the form of impressment into the Confederate Army.

History Proves Full Employment does not Work

Given full employment’s disturbing history we should be leery of it. Simply creating vast numbers of crappy jobs does not achieve social or political stability.

Communist states such as the Soviet Union achieved full employment. That did not prevent total economic and political collapse. Indeed, full employment hastened the collapse by wasting vast amounts of resources in “job creation.”

Efforts to artificially create large numbers of high-paying jobs such as the Democrats’ jobs guarantee will fail. A likely outcome will be that the guarantee jobs quickly disappear, when the money runs out.

The Jobs Economy is a Failure

The sorry reality of full employment, demonstrates that the jobs economy is a failure. Simply providing individuals with a “job” does not improve lifestyles or achieve social stability.

Creating large numbers of shit jobs will generate social and political unrest. Bored workers in crappy jobs will be more likely to engage in violence or civil disobedience. Individuals that get little or nothing for their time and labor will quit or revolt.

The failure of full employment should convince us to look for alternatives to the jobs economy. The best such alternative to the jobs economy in today’s world is the Basic Income.

It is time to give up on the jobs economy and seek alternatives. If we do not we will face civil and political unrest on a vast scale.

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