Could you guys please point out the flaws in this article?
Fwiw, a business doesn't really have a say in regards to full employment. Businesses are subject to competition. Human labor is the fundamental economic scarcity, and so as long as there labor available there is room for some business to expand productivity.
So why is there unemployment then? There's labor available, why aren't businesses expanding productivity?
"This is not to say that government does not contribute to unemployment, but rather they intentionally adopt policies that increase unemployment because that's what businesses unions want." This is now correct.
"This is not to say that government does not contribute to unemployment, but rather they intentionally adopt policies that increase unemployment because that's what businesses unions want."
This is now correct.
Most unions today are pro-business, pro-capitalist bureaucracies. Essentially, they are a business. So I'd agree that they probably want it as well.
Low investment, because of high uncertainty.
we're talking about businesses preferring unemployment to full employment, not about them preferring to have an employee working at their company rather than at a competitor's.
*sigh - I said I believe my employer would prefer to have me on the payroll even if I do not contribute to their bottom-line in any way because if I wasn't employed there, I myself could be a competitor as an independent contractor, not work for a competitor. In other words, the largest companies have an interest in "soaking up" potential contractors at some relatively modest salary rather than have those people going out into the marketplace, starting their own businesses which could eventually end up as new competitors in the market driving down prices. Anyone who's ever worked a job where it didn't seem like their existence even mattered (to the company) should know what I'm talking about.
In Kalecki's view (as I see it), unemployment serves as a form of punishment for laborers demanding too much.
Yes, just like non-purchase of any good or service from a would-be seller of that good or service punishes him. This is precisely what "market discipline" means... produce what buyers want at a price they are willing to pay or else no money for you!
In a free market of labor, the marketplace can clear reductions in demand for labor just fine. Read this. Keynesianism crashes and burns on this point alone.
Clayton -
Uncertainty that employing the labor would be profitable. This is compatible with Kalecki's position where higher employment can lead to higher uncertainty--will I be able to keep my employees in order, will there be a socialist revolution?
But the cause of unemployment in Kalecki's view is not merely people not doing something for the unemployed (a negative). It also entails the (positive) use of force. It seems natural to me that an unemployed person would start working unused resources to employ himself. But when this happens in capitalism, someone else almost invariably uses force to prevent him from working such idle resources. So people are literally forced to be unemployed. The reason this force is used, IMO, is not due to a merely abstract principle of property, but because if it were not, the whole capitalist system would collapse. It is a desire for profits, not a desire to abide by a principle. And this is the ultimate purpose of the state, I think, to maintain capitalism and to increase the profits of the capitalists.
I'll read that later.
Uncertainty that employing the labor would be profitable.
So it should be employed regardless? A laborer's wage is a function of his or her discounted marginal value product (DMVP), which in turn is a function of said loberer's marginal productivity and the additional revenue gained by the firm from his or her employment (MPxMR) and the natural rate of interest. It is unprofitable to hire a worker when a laborer demands a wage rate higher than his or her DMVP or when his or her DMVP is below the market wage rate.
Why it is "punishing" workers to not hire them when they will be unproductive and waste scarce resources is totally beyond me.
This is compatible with Kalecki's position where higher employment can lead to higher uncertainty--will I be able to keep my employees in order, will there be a socialist revolution?
There is no praxeological law which states that increased unemployment will or will not cause uncertainty. But we know from experience that during recessions bussinesses have continued to expand and labor has been employed.
But the cause of unemployment in Kalecki's view is not merely people not doing something for the unemployed (a negative). It also entails the (positive) use of force.
Either you are misrepresenting Kalecki or Kalecki is a hack. A business does not "force" someone into unemployment when they choose not to continue to pay them. No property rights are being violated in this scenario.
It seems natural to me that an unemployed person would start working unused resources to employ himself. But when this happens in capitalism, someone else almost invariably uses force to prevent him from working such idle resources. So people are literally forced to be unemployed.
Under corporatism or socialism perhaps, but under capitalism violating someone's property rights to keep them unemployed (e.g. destroying factors of production) would be illegal.
The reason this force is used, IMO, is not due to a merely abstract principle of property,
Considering how well-defined property is by libertarians, to call it "abstract" is a laughable misuse of the term.
The reason this force is used, IMO, is not due to a merely abstract principle of property, but because if it were not, the whole capitalist system would collapse.
Every government across the globe pursues full employment as an ideal. Do you deny that this is the case?
It is a desire for profits, not a desire to abide by a principle.
This is just a platitude.
And this is the ultimate purpose of the state, I think, to maintain capitalism and to increase the profits of the capitalists.
It's good to know that the fallacious idea of a caste system in capitalism hasn't died out yet. Centuries-old Marxist talking points are always amusing.
I didn't say not paying them was a use of force, I said that keeping them from using the means of production constitutes a use of force. They're preventing them from being self-employed. Imagine a "socialist" country where the government "owns" everything. If the government doesn't give people jobs and won't let them use any resources, would you not say that the government is forcing them to be unemployed?
under capitalism violating someone's property rights to keep them unemployed (e.g. destroying factors of production) would be illegal.
Agreed.
Perhaps I should've said that they aren't following a deontological principle. They aren't following categorical imperatives for the sake of following categorical imperatives. Rather their actions are determined based upon what consequences they wish to achieve in a given case.
Yes. Most people here seem to believe that minimum wage laws cause unemployment. So it seems that you're in a minority if you think all governments pursue full employment. Additionally, some governments have openly followed monetarist policies, which hypothesize a "natural" unemployment rate.
Unions now are what they always were: labour cartels. That never has and never will change. All professional vocational organizations are cartels. They go by an assortment of euphemisms, such as: association, society, union. Their first priority is to minimize the number of other people that can work in the same positions. Large employers want a big pool of workers. However, what unions do to cause unemployment restricts the utilization of that pool. Random Business does not benefit from a 100% unemployment pool caused by HR management costs.