Chapter 5: Unemployment

Submitted by libcom on January 4, 2006

I am glad your friend asked the question, for every workingman realises how important this matter of unemployment is to him. You know what your life is when you are out of work; and when you do have a job, how the fear of losing it hangs over you. You are also aware what a danger the standing army of unemployed is to you when you are out on strike for better conditions. You know that strikebreakers are enlisted from the unemployed whom capitalism always keeps on hand, to help break your strike.

'How does capitalism keep the unemployed on hand?' you ask.

Simply by compelling you to work long hours and as hard as possible, so as to produce the greatest amount. All the modern schemes of 'efficiency', the Taylor and other systems of 'economy' and 'rationalization' serve only to squeeze greater profits out of the worker. It is economy in the interest of the employer only. But as concerns you, the worker, this 'economy' spells the greatest expenditure of your effort and energy, a fatal waste of your vitality.

It pays the employer to use up and exploit your strength and ability at the highest tension. True, it ruins your health and breaks down your nervous system, makes you a prey to illness and disease (there are even special proletarian diseases), cripples you and brings you to an early grave - but what does your boss care? Are there not thousands of unemployed waiting for your job and ready to take it the moment you are disabled or dead?

That is why it is to the profit of the capitalist to keep an army of unemployed ready at hand. It is part and parcel of the wage system, a necessary and inevitable characteristic of it.

It is in the interest of the people that there should be no unemployed, that all should have an opportunity to work and earn their living; that all should help, each according to his ability and strength, to increase the wealth of the country, so that each should be able to have a greater share of it.

But capitalism is not interested in the welfare of the people. Capitalism, as I have shown before, is interested only in profits. By employing less people and working them long hours larger profits can be made than by giving work to more people at shorter hours. That is why it is to the interest of your employer, for instance, to have 100 people work 10 hours daily rather than to employ 200 at 5 hours. He would need more room for 200 than for 100 persons - a larger factory, more tools and machinery, and so on. That is, he would require a greater investment of capital. The employment of a larger force at less hours would bring less profits, and that is why your boss will not run his factory or shop on such a plan. Which means that a system of profit-making is not compatible with considerations of humanity and the well-being of the workers. On the contrary, the harder and more 'efficiently' you work and the longer hours you stay at it, the better for your employer and the greater his profits.

You can therefore see that capitalism is not interested in employing all those who want and are able to work. On the contrary: a minimum of 'hands' and a maximum of effort is the principle and the profit of the capitalist system. This is the whole secret of all 'rationalization' schemes. And that is why you will find thousands of people in every capitalist country willing and anxious to work, yet unable to get employment. This army of unemployed is a constant threat to your standard of living. They are ready to take your place at lower pay, because necessity compels them to it. That is, of course, very advantageous to the boss: it is a whip in his hands constantly held over you, so you will slave hard for him and 'behave' yourself.

You can see for yourself how dangerous and degrading such a situation is for the worker, not to speak of the other evils of the system.

'Then why not do away with unemployment?' you demand.

Yes, it would be fine to do away with it. But it could be accomplished only by doing away with the capitalist system and its wage slavery. As long as you have capitalism - or any other system of labor exploitation and profit- making - you will have unemployment. Capitalism can't exist without it: it is inherent in the wage system. It is the fundamental condition of successful capitalist production


Because the capitalist industrial system does not produce for the needs of the people; it produces for profit. Manufacturers do not produce commodities because the people want them and as much of them as is required. They produce what they expect to sell, and sell at a profit.

If we had a sensible system, we would produce the things which the people want and the quantity they need. Suppose the inhabitants of a certain locality needed 1,000 pairs of shoes; and suppose we'd have 50 shoemakers for the job. Then in 20 hours work those shoemakers would produce the shoes our community needs.

But the shoemaker of to-day does not know and does not care how many pairs of shoes are needed. Thousands of people may need new shoes in your city, but they cannot afford to buy them. So what good is it to the manufacturer to know who needs shoes? What he wants to know is who can buy the shoes he makes: how many pairs he can sell at a profit.

What happens? Well, he will manufacture about as many pairs of shoes as he thinks he will be able to sell. He will try his best to produce them as cheaply and sell them as dearly as he can, so as to make a good profit. He will therefore employ as few workers as possible to manufacture the quantity of shoes he wants, and he will have them work as 'efficiently' and hard as he can compel them to.

You see that production for profit means longer hours and fewer persons employed than would be the case if production were for use.

Capitalism is the system of production for profit, and that is why capitalism always must have unemployed.

But look further into this system of production for profit and you will see how its basic evil works a hundred other evils.

Let us follow the shoe manufacturer of your city. He has no way of knowing, as I have already pointed out, who will or will not be able to buy his shoes. He makes a rough guess, he 'estimates', and he decides to manufacture, let us say, 50,000 pairs. Then he puts his product on the market. That is, the wholesaler, the jobber, and the storekeeper put them up for sale.

Suppose only 30,000 pairs were sold; 20,000 pairs remain on hand. Our manufacturer, unable to sell the balance in his own city, will try to dispose of it, in some other part of the country. But the shoe manufacturers there have also had the same experience. They also can't sell all they have produced. The supply of shoes is greater than the demand for them, they tell you. They have to cut down production. That means the discharge of some of their employees, thus increasing the army of the unemployed.

'Over-production' this is called. But in truth it is not over-production at all. It is under-consumption, because there are many people who need new shoes, but they can't afford to buy them.

The result? The warehouses are stocked with the shoes the people want but cannot buy, shops and factories close because of the 'oversupply'. The same things happen in other industries. You are told that there is a 'crisis' and your wages must be reduced.

Your wages are cut; you are put on part time or you lose your work altogether Thousands of men and women are thrown out of employment in that manner. Their wages stop and they cannot buy the food and other things they need. Are those things not to be had? No, on the contrary; the warehouses and stores are filled with them, there is too much of them there's 'over-production'.

So the capitalist system of production for profit results in this crazy situation:

(1) people have to starve - not because there is not enough food but
because there is too much of it; they have to do without the things they need, because there is too much of those things on hand;
(2) because there is too much, manufacture is cut down, throwing
thousands out of work;
(3) being out of work and therefore not earning, those thousands lose
their buying capacity. The grocer, the butcher, the tailor all s, as a result. That means increased unemployment all around, the crisis gets worse.

Under capitalism this happens in every industry.

Such crises are inevitable in a system of production for profit. 1 come from time to time; they return periodically, always getting worse. They deprive thousands and hundreds of thousands of employment causing poverty, distress, and untold misery. They result in bankruptcy and bank failures, which swallow up whatever little the worker have saved in time of 'prosperity'. They cause want and need, d people to despair and crime, to suicide and insanity.

Such are the results of production for profit; such the fruits of system of capitalism.

Yet that is not all. There is another result of this system, are even worse than all the others combined.

That is War.