Posted on by Art Powell

We have unemployment because our agricultural surplus is such that we don’t need for everyone to be “working”. More important issues are who decides how to use the surplus and how is it distributed.

This post was prompted by a question on Reddit asking why we have unemployment. It’s an important question because unemployment can be devastating.

The agricultural surplus is the food produced by workers which exceeds their own needs. This surplus means some/many people can do things other than produce food. In our society we have used this surplus to produce a wide range of goods and services which have themselves become a part of the surplus. Unemployment is an indicator of how rich we are.

Think of a small group of hunters/fishers and gathers on a small island where the living is so easy food and shelter requires only and hour or two a day. By our terms these people would have a high unemployment rate. Distribution of food would probably not be a problem as they would probably share their produce but they would have to decide what to do with all the spare time.

This model could get complicated if they had lots of children and increased their population to the limits of the available food. It would still take only an hour or two a day to harvest the food even though there wasn’t enough for everybody.

In such a small society distribution of food would be by sharing. I know an anthropologist who did his field work in such a society and he said you could not buy food there. Whatever one needed was shared. What to do with the “free” time would probably be up to individuals with collective activities partly by consensus.

Modern technology, especially that applied to agriculture, gives us the same magnitude of surplus. We too could be approaching the limits of our ability to produce food.

We too have to decide how to share the produce and what to do with the time. So far these decisions have been influenced by our commitment to the work ethic. Everyone should spend most of their time working and their share of the surplus should come in the form of wages.

As our exchange of goods and services is facilitated by money the decision-making goes with the money. To the extent that a person has money one can decide how the surplus will be used. So the more equally money is distributed the more decision-making will equal. The ancient Egyptians did not use money and it appears the pharaohs decided the surplus would be used to build burial chambers.

In the industrial economies we do not need full employment but we do need a more equitable way of distributing the surplus. With the ups and downs of the economy full employment may not be a realistic goal. There are lots of things people could do that would be satisfying but which do not contribute to gross national product.

I believe a universal income scheme would give us a more equitable distribution of the agricultural surplus. If we are approaching the limit of our ability to produce food, it might provide a more equitable way of dealing with shortages. It would also spread the decision-making among more people.

Unemployment can be financially and psychologically devastating for the people who experience it. But it is not the real problem. The urgent problems are an equitable distribution of the agricultural surplus and how it is to be used.

If you liked this post your are invited to comment, press the like button and/or click one of the share buttons. If you disagree you are invited to say why in a comment. While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

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Filed under: Economics | Tagged: agricultural surplus, decision making, Economics, food, full employment, goods and services, money, overpopulation, surplus, time, Unemployment |