In today’s society, we think that dealing with unemployment is natural. There are very few countries around the world that report unemployment rates below 2%, the majority of the countries fall in the 5-10% range, but there is also a significant quarter of the planet showing alarming rates above 10%.
We also have to keep in mind that the problem of “not finding a job” is heavily underestimated in the percentages above. The reason why is hidden behind the definition of this dysfunction: “Unemployment occurs when a person who is ACTIVELY SEARCHING for employment is unable to find work”. So, what if a person loses hope or interest in finding an occupation and decides to stop looking? There are plenty of cases similar to this, and we are sure that everyone knows someone directly and/or indirectly who falls into this category. Also keep in mind that these statistics are usually only numbers that are registered within each country’s department of labor, therefore, lots of unregistered people are not accounted for.
For many decades, dealing with structural unemployment has been and is still a part of our daily lives; hence the majority of the people assume that it is normal, as with the sun and the air, or any other natural elements. Indeed, some economists have convinced most of us that unemployment is not only usual but even necessary. We see phrases like: “High rates of unemployment are a signal of economic distress, but extremely low rates of unemployment may signal an overheated economy ”, or “Unemployment can be classified as frictional, cyclical, structural, etc.” In other words, we should be alarmed by low unemployment rates – which implies that a minimum unemployment percentage would be necessary –, and we should understand that unemployment is also structural – which means “natural”.
Don’t get misled, and remember: economics is NOT a science, it’s a collection of theories, often translated into math models, that try to explain how current human behavior on economic facts unfolds. Therefore, when economists talk about “natural”, “normal”, “structural”, they omit to stress a fundamental element: IN THE CURRENT SYSTEM. Economists also provide many recipes on how to reduce the lack of jobs, deceiving some to hope that this dysfunction could be wiped out completely. Unfortunately, that’s not the case. The current system – the set of rules that characterizes it – needs unemployment to run. Some prefer to invert this reasoning and state that unemployment is an irrevocable by-product of the current system, but even using this fuzzy definition the end result doesn’t change.
Even if we’ve clarified that unemployment is natural in today’s system, this does NOT mean that this issue is natural in absolute terms. Therefore, we can try to eliminate it, but to achieve this result it’s clear at this point that we need to define a new set of rules. The good news is: it’s possible and much easier than you can imagine. Moreover, we can achieve this great result without changing our current social mechanisms too much, but rather by inspiring ourselves to the positive aspects of today’s life-style to design the next evolution.
The book Project Humanity 7.0 explains new and feasible “rules of the game”, and helps its readers to vicariously experience the proposed model through daily life in the visionary world Crystal, where these rules are set. On unemployment specifically, we can find an interesting dialog between Alex – the main character of this book – and his friend Jasmine who, by using a very simple example, explains to him how things work on Crystal. If you are not familiar with its system, keep in mind that on Crystal one of the key organizational pillars is that goods and services are measured using time (work-hours), which then becomes also the basis for commercial exchanges. Here is the piece we are referring to:
Alex: “Are we really sure that, here on Crystal, everything functions without any risk of disequilibrium?” Jasmine: “Yes, Alex…certainly… It’s mathematical…! Do you want a school example to wipe away all your doubts?” Alex: “For sure!” Jasmine: “Ok…but I’m warning you, it’s very simplified because, to go in depth, we would need much more time…” Alex: “No worries…” Jasmine: “So, how does the mechanism operate for us…? Let’s suppose that, here on Crystal, there were a hundred people… Each person would be free to define what he or she needs, the limits being the amount of resources given by nature and including the human limit of time that each person can or desires to dedicate to work. Let’s suppose, then – even if it’s a pretty extreme case for us – that every one of these individuals wish to purchase goods and services that require forty hours of work on a weekly basis. Then, let’s assume, for the sake of simplicity, that everyone wants goods and services that require exactly 160 work-hours per month to be produced… Thus, everyone will have to contribute 160 work-hours on a monthly basis. By doing so, it will be mathematically impossible to have even the most remote possibility of unemployment, because the work-hours injected in the system through work and the ones withdrawn to buy goods and services would balance out perfectly.”
Other cases, more adhering to reality, are also given throughout the book. However, often, it is more effective to start with simple examples to drive a conceptual switch and unlock a new mindset.
We are hopeful that a debate on these ideas will arise, so that – collectively – we can use it as a basis to build a better world.