October 23, 2017

The ecology of unemployment (extended version)

This essay explains how the industrial system we live under not only creates unemployment, but created the very idea of unemployment.

A shorter version of this article was published in The Ecologist Vol. 4 No. 2, February 1974, then in Everyman’s of 9 February 1975 (India). This revised and extended version later appeared in 1988 as Chapter 3 of The Great U-Turn, published by Green Books in 1988.

Chronic unemployment has become a feature of our socio-economic life, and a growing concern of governments throughout the world. The only method our society provides for dealing with this problem however is to stimulate economic growth. That this does not provide a real solution is clear. Economic growth has been the overriding aim of government policy for decades and unemployment has continued to rise, particularly in the case of the Third World, to ever more dramatic levels. [1]

This trend is largely the result of population growth, urbanisation and the increased capital-intensity of industry, which inevitably accompany the spread of western influence. As these trends occur, so more and more people are brought within the compass of the cash economy.

In the early stages of industrialisation it is largely the men who take up employment, the women tending to stay at home. As development proceeds, however, and the material requisites for survival in an urban setting correspondingly increase, so does it become necessary for women to take up employment as well, increasing further the demand for jobs.

Let us look a little more closely at the reasons why economic growth cannot, in the long term, solve the unemployment problem.

One of its basic requirements is that industry be competitive, hence machines must constantly be substituted for labour. This is ‘economic’ because the non-renewable resources and in particular the energy required by these machines are charged, or at least have been up till now, at a ridiculously low price, one that in no way represents their true cost, thereby rationalising capital-intensity.

By doing this we are continually increasing the need for more capital investment. Also work, by becoming more capital-intensive and hence more ‘productive’ can be increasingly well remunerated. This is necessary to compensate people for the growing deterioration of their physical and social environment and the increasing monotony of their work.

It is also necessary to increase their purchasing capacity, as industrial society can only function if producers are also consumers. In this way, effective demand continues to grow, thereby stimulating further production. The inevitable concomitant of this process is a reduction in the number of people employed for a given amount of capital-investment and for a given level of economic activity.

The capital-intensity of industry, in the meantime, is increasing faster than GNP, which means that every unit of GNP will provide an ever-smaller number of jobs. Consider the British chemical industry. It employed 407,000 people in 1961 for a turnover of 4,875 million dollars. In 1967 it employed slightly fewer people, 406,000, for a turnover of $7,589 million.

Looked at slightly differently, sales were 55 percent less efficient in providing jobs. If we assume an average reduction in efficiency of 7 percent per annum then, in this industry, turnover must double every seven years to ensure the same level of employment – which we know to be very unlikely indeed.

In the British textile industry, the number of people employed fell from 719,000 to 584,900 between 1961 and 1968 and this in spite of a marginal increase in investment (from $257 million to $271 million). Employment thus fell by 3 percent per annum, while investment rose by 0.5 percent. [2] At that rate, by the year 2106, investment will have doubled while employment will have fallen as low as 18,000.

Since this chapter was written a report by Dr Brian John estimates the cost of constructing a PWR nuclear power station at Trawsfynydd at £1.2 billion. It would employ roughly 300 people to operate it. To quote Dr John,

“That works out at £4 million a job, compared with the £20,000 widely accepted as the cost for providing a job in light industry.”

The construction of such capital-intensive projects can thereby only lead to further unemployment since it reduces the amount of capital available to finance labour-intensive projects. As Dr John notes:

“since 1971, total CEGB manpower has declined by 20,287, and 108 power stations have been closed.” [3]

It follows that the rate of economic growth required to maintain a reasonable level of employment has correspondingly increased and has now reached a level which we cannot hope to achieve.

An OECD study shows how this must be so in the Third World. [4] It takes as its starting point the average situation in Third World countries: a manufacturing sector employing 20 percent of the labour force,unemployment and under-employment totalling 25 percent and an assumed increase in labour productivity of 2.5 percent per year (the rate achieved in the period 1955-63).

On this basis, it is calculated that the growth rate in industrial production necessary to absorb an increase in the labour force of 3 percent a year (the present rate is 4 percent per year) would be an annual 18 percent – as compared with 15 percent as the best growth rate so far achieved in the Third World.

In order to wipe out within a decade the existing unemployment and under-employment, the necessary rate of growth would be 30-35 percent per year. In fact, industrial output must increase by 3 percent per year simply to keep pace with improvements in productivity – that is, simply to avoid a reduction in the number of manufacturing jobs available. The report concludes that the “eradication of general under-employment through the development of industrial employment is a practical impossibility in the medium term”.

Various ILO studies have repeatedly stressed that

“there is not the remotest hope that Western Technology, with its capital-intensive bias, can create the basis for ensuring employment to the over 184 million additional job seekers in India during the next 27 years leading up to 2000 AD.” [5]

Robert McNamara of the World Bank agreed with this conclusion. He pointed out that, whereas an increase in urban employment in the Third World of 45 percent per year would be “a tremendous achievement, beyond anything that has been achieved in the past”, it would correspond to an increase in the total rural and urban labour force of 1.3 percent, or approximately half of the increase anticipated. [6]

A World Bank review agreed, stressing that the only solution lay in rural development, i.e. in shifting people back to the villages:

“No imaginable rate of increase in industrial and service output can absorb the expected supply of workers. . . . Progress towards full employment is clearly impossible in the 1970s without a substantial expansion of employment in the rural areas. Integrated rural development as a major priority can be justified almost entirely on the sole basis that it can produce large increases in rural employment. We do not know that it can, but there seems to be no other promising alternative.” [7]

Of course the opposite has been done. The introduction of the Green Revolution in many places has ruined small families and forced more people to move to the nearest large conurbation.

The automation race

The tendency towards automation is accentuated by competition between companies and, as the scale of economic activity increases, between countries. Such competition is increasingly taking the form of an automation race, which has much in common with the arms race.

Thus, even if it had been seen as undesirable to introduce containerisation into the Port of London, which meant reducing very considerably the number of dockers employed, there would have been very little choice, since the alternative was to give another port, such as Rotterdam, an advantage which would have enabled it to capture business which would otherwise have gone to London.

This, of course, would have had the effect of reducing employment still further. As in the case of the arms race, the automation race can only make matters worse, since whether we win the race or lose it, unemployment can only continue to rise. It is very much a ‘heads you win, tails I lose’ situation.

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Dependence on the technosphere

In theoretical terms, of course, the basic feature of economic growth is that it involves creating a totally new organisation of matter; the technosphere, which is in competition with – and is systematically made to replace – the biosphere of which we are an indissociable part. This substitution has serious implications. For instance, it means that humans are systematically isolated from the natural environment to which they have been adapted by millions of years of evolution, and which has always been capable of satisfying their basic biological and social needs.

Until the Industrial Revolution, people probably never had any difficulty in obtaining food and fresh water, nor in finding the material with which to build a shelter; but now they are made to live in vast built-up areas and spend the better part of their day in a factory contributing in someway towards the manufacture of objects unrelated to their personal needs or to those of the family. They are, in fact, forced into the unenviable situation of having to depend on paid employment in order to purchase the necessities of life, which were previously free for the taking.

The same is true of social needs. People previously lived as members of a family and community and these provided the optimum social environment; that which best satisfied basic social needs. In industrial society however, everything conspires to destroy the family unit as well as the community. Thus, the state largely usurps the functions normally fulfilled by parents. It provides children with free education for instance and a free health service, correspondingly reducing parental responsibilities.

Large companies usurp the mother’s functions, since most of the things that a woman would normally have to make for her family – clothes, bread and other staple foods – are now available at the supermarket, while functions that would normally be fulfilled by the children, such as helping in the house and washing up, have largely been taken over by domestic appliances. The family in industrial society has thus lost many of its traditional functions and has correspondingly disintegrated.

The community fares scarcely better. Mobility is normally such that people are rarely in the same place long enough for strong communal bonds to be established. They usually live in housing estates or residential areas, which are not real communities, since people work elsewhere, often at a considerable distance from their homes. To a large extent, the company a person works for provides him / her with a surrogate communal environment. At work s/he has an identity, which s/he lacks elsewhere.

Work also provides an individual with a goal-structure, a sense of accomplishment and a corresponding measure of self-esteem. It is for this reason that unemployment is so intolerable. Even if social security prevents an unemployed person from suffering serious material deprivation, they are nevertheless deprived of that essential, albeit surrogate, social environment which a job previously provided.

It is almost certainly the psychological effects of unemployment that render so many people in the ghettos of the larger American conurbations incapable of fulfilling their family functions, establishing permanent relationships and taking the responsibility for the upbringing of their children.

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Employment in primitive societies

It is important to realise that this dependence on paid employment was unknown among our Palaeolithic forebears, who, let us not forget, are more than 90 percent of all the people who have ever lived. The reason is simple. Contrary to what is generally supposed, hunter-gatherers were not normally short of food. On the contrary, it appears that they never actually consumed more than about a third of available food supplies very much as do insect populations. Also the amount of work required to satisfy their material requirements was minimal, a few hours a day at the most; the rest of the day being spent in such pursuits as gambling, gossiping and visiting friends.

It is not surprising that the very concept of work was unknown to hunter-gatherer societies and that in their various languages one finds no word for it. The gathering of roots and berries and the hunting of wild animals were simply part of a day’s routine, not to be distinguished from other ways of passing the time, and almost certainly equally enjoyable. [8]

Among tribal societies that have given up the hunter-gatherer way of life in favour of pastoralism or subsistence agriculture, very much the same is true. However by advancing that far along the road to ‘progress’, the amount of work they must do to keep alive increases correspondingly. Animals must be penned and fed, when previously they went free and fed themselves. Fields must be tilled and their produce harvested, when previously food plants grew profusely without human intervention. As Sahlins suggests the amount of leisure decreases as society ‘advances’. [9]

Among such societies, trade was as much to reinforce social ties by creating dependencies and obligations, as to satisfy material requirements. People produced essentials for themselves and traded largely what was to them superfluous. Economic activity took place at the level of the family – the basic economic unit – and occasionally families would co-operate to undertake special projects at a communal level. Wage labour did not, and could not, exist.

“Nowhere in the uninfluenced primitive society do we find labour associated with the idea of payment.” [10]

Under such conditions, there can be no unemployment in our sense of the term. What can happen, however, is that a population can grow to that point where it can no longer be usefully employed on the land, which would cause surplus people to drift to the cities in search of work. This is in fact what is happening today throughout Africa but only because of western influence, which has led to the introduction of labour-saving devices into agriculture, and also to the suppression of those cultural controls which previously maintained a check on population growth.

It is important to realise that, with the absorption of tribal peoples into the cash economy, they are now not only at the mercy of the vagaries of nature but also of those of the market economy, which our most learned economists are increasingly at a loss to predict, still more to control.

It is also interesting to consider that wage labour only appears in a society where, in the words of Maine, ‘contract’ has replaced ‘status’ as the basis of economic obligations. [11] Contract provides a very flimsy basis on which to build a lasting structure, status a very much stronger one.

Status depends on tradition and is associated with mutual obligations. Thus a person could not be deprived of their means of livelihood unless they committed what was regarded as a sufficient crime against society to justify their being ostracised: the direst penalty imposed on tribal members and this was only possible with the concurrence of the tribe as a whole. To break a contract with an anonymous member of a mass society is far easier. A skilful lawyer is all that is needed.

The manorial system, though much maligned, was also based on status rather than contract. It was very much a system of mutual obligations. The serf could not leave his land but neither in practice could the lord eject him. It is true that the system was open to abuse since the lord was in a stronger position than the chief – let alone the Council of Elders – of a tribal society. For this and other reasons, it was undoubtedly less perfect a social system than the traditional tribe; far more perfect, however, than the type of society that replaced it.

It was probably during the 13th century that the manorial system broke down in Western Europe. This was caused by the development of markets, which in Pirenne’s view had been prevented for along time by the Arab stranglehold on the Mediterranean. [12]

This had the most serious consequences. The ecological advantage of the manorial system was that the manor produced for itself only and did not over-produce and thereby impose too great an impact on the environment, as there was no market where surplus produce could be sold. With the development of markets, production increased dramatically, with consequent deforestation, soil erosion and general environmental degradation.

Society too, was reorganised to satisfy the requirements of production and consumption with the resulting urbanisation and social disintegration. Polanyi regards the switch from a subsistence to a market economy as one of the greatest calamities to have befallen western civilization. [13]

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Resistance to wage-labour

As we have already noted, one of the principal pretexts for establishing industrial enterprises in areas that have so far escaped their ravages is the provision of employment. It is ironic to note just how strongly people living in a traditional society have always resisted being transformed into units of wage-labour.

In Assam, nothing would persuade the tribal inhabitants to work on the tea plantations, and labourers had to be imported from already over-populated Bihar. In Ceylon, British planters had to introduce Tamils from southern India to work on the plantations. In the West Indies, the Spanish recruited for this purpose the indigenous Caribs. So little, however, were they suited for this soul-destroying work, that it did not take long for the entire race to become extinct. As a result, slaves were imported, as in North America, from Africa.

Akpapa describes the difficulties encountered by the Enugu coal-mining industry in Nigeria in obtaining labour for its mines. Labourers, it appears, had to be press-ganged into working in the mines. Every day, 700 of them disappeared never to reappear, unless they had the misfortune to be ‘grabbed’ again. [14]

Eventually the chiefs were employed to force their subjects into working for the mining company and were paid so much for each wage-labourer they provided. Those who refused to obey their chiefs were originally fined. Eventually, however, it became necessary to sentence them to varying periods of hard labour.

This gives some idea of the difficulties involved in persuading people who are leading a perfectly satisfying, self-fulfilling life, to leave their families and communities in order to indulge in monotonous, soul-destroying work in some large enterprise.

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Conclusion

Indeed, people were perfectly well employed before there was a market economy, before wage labour was ever thought of.

Economic growth is, in fact, not the only means of providing employment but the only means of providing employment of a specific type – capital-intensive employment within the market economy. Though it is probable that such employment is far less agreeable than any other, it does permit, temporarily at least, a higher standard of consumption of manufactured goods. It is only in this way that producers can also be consumers and on a scale sufficient to maintain the industrial machine functioning at the required level.

On the other hand, the only reason why people require these jobs and the material goods which they enable them to procure, is that they live in a particular type of society in which the requisites of life must be purchased; in which people are so far removed from their natural environment that they can no longer produce them for themselves, while their essential social environment has been so degraded that they have become dependent on a surrogate one, one that is provided by a place of work, which is divorced from the realities of their family and social life.

The argument that further economic growth is required to provide further employment is only true if we insist on observing the rules of our industrial system, if we remain intent in further extending the technosphere at the cost of the biosphere and in further increasing the capital-intensity of economic activities.

It would not be true if we rejected these goals and opted out of the automation race. The choice is not simply, as we are told, between unemployment and economic growth (with more unemployment at a later date). There is a third course open to us. It is to develop a work-intensive economy in a real and sustainable society.

Undoubtedly we would as a result be poorer in terms of largely superfluous material goods and technological devices, but we would be incomparably richer in terms of the social, ecological, aesthetic and spiritual benefits, of which, during the industrial era, we have been so cruelly deprived. There is every reason to believe that it is in terms of the latter rather than the former that our true prosperity should be gauged.

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References

1. Jimoh Omo Fadaka, “Poverty and Industrial Growth in the Third World”. The Ecologist Vol. 4 No. 2, 1974.
2. The Chemical Industry, The Textile Industry. OECD, 1969-70 and 1968-69.
3. Brian John, The Guardian, 1 December 1986.
4. OECD, Paris, 1973.
5. F. A. Mehta, Employment, Basic Needs and Growth Strategy for India. ILO, Geneva,1976.
6. Robert McNamara, Development Review. World Bank, Washington DC, November 1972.
7. The World Bank, Development Review, 1972.
8. Richard B. Lee and Irven DeVore eds., Man the Hunter. Aldine, Chicago, 1968.
9. Sahlins, Stone Age Economics. Aldine-Atherton, Chicago, 1972.
10. A. R. Shearer, The Economics of the New Zealand Maori. Government Printer, Wellington, New Zealand, 1972.
11. Sir Henry Maine, Ancient Law. London, 1861.
12. Henri Pirenne, Une Histoire Economique de l’Occident Medieval. Desclee de Brouwer, Brussels, 1951.
13. Karl Polanyi, Primitive, Archaic and Modern Economics. Doubleday, New York, 1968.
14. B. Akpapa, “Problems of initiating industrial labour in a pre-industrial community”. Cahiers d’Etudes Africaines, spring 1973.
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