The Nature Of Employment

The trouble with laissez-faire economics, in other words just letting the free market "go wherever it wants to go", is that it ends up being very wasteful in comparison to what it could have been with some sensible oversight. Put simply, the old saying "An ounce of prevention is worth a pound of cure" most definitely applies with regard to getting the most productivity out of the work force, and you do not need to have that old saying converted into metric to know what it means.

Basically, it is much better to prevent a problem from happening in the first place than it is to react to it after it has developed. A pure free market is completely reactionary, it makes no effort to prevent trouble from developing but only reacts to it afterward. This is it's great weakness.

A lot of people work in the health industry, helping people to overcome health issues. But the industry could make do with many fewer people, who could then do some other productive work, if those health issues could have been prevented in the first place.

Many are employed in the auto industry in various capacities. But this is only because cars have been allowed to become a practical necessity. If this had not been the case, a lot of these people would be freed to do some other productive work.

So many people are employed in the prison and security industries. But wouldn't it be better if we could reduce crime to begin with so that as many of them as possible could do some other productive work?

A major employer is the various social programs which assist needy families. But if the wealth disparity had not been allowed to become so extreme, and the wealth of society was a little bit more evenly distributed, but not enough to damage incentive in any way, many of these programs would be unnecessary and those employed in them could engage in some other productive work.

If the financial and legal industries had not been allowed to become so complex, many employed there would be freed to do some other kind of productive work.

The trouble with making society more work-efficient is, of course, that if all of these workers were freed to do some other productive work, there wouldn't be much work for them to do. This is the problem with employment: We have made production so efficient that we can make what we need with fewer workers than we have, but then the lack of consumer spending by the unemployed holds us back from producing all that we can.

Factories are built to produce products. But factories do not only produce products, they also produce jobs so that the people with those jobs will be able to afford to buy the products. The trouble with factories relocating offshore to be able to produce their products more cheaply, in order to increase profit, is that the workers back home will then not have the well-paying jobs that formerly enabled them to buy those products. Supply-side economists just do not grasp this.

There have been protests across the western countries recently against the wealthy few who have used their power to set things up to suit themselves so that more money flows their way, and it leaves everything else near-broke. While I very much sympathize with them, there is more to it than that.

The global economy is undergoing an east-west shift. Basically, as I warned about in the book "The Commoner Syndrome", according to the Law of Supply and Demand if we in the west are doing the same type of jobs with the same skill level as workers in Asia, there is no economic justification for us to live any better than they do. There is now high unemployment rates in the higher-wage west, even as eastern economies are booming.

One thing that I notice in the U.S. is that, in contrast to a couple of decades ago, there seems to be low-cost and budget stores everywhere, even in the more affluent neighborhoods. America's Wal-Mart and Germany's Aldi seem to be the heralds of this downscaling of the west.

As I have pointed out on my progress blog, http://www.markmeekprogress.blogspot.com/ in the posting "The Idea Curve", the increase of productive efficiency usually means making it possible to accomplish the same task with fewer workers. But then what are the redundant workers to do so that their lack of spending does not slow the economy down? It doesn't make much sense to make products more efficiently if doing so reduces the number who will be able to afford to buy those products.

What it all comes down to is new ideas for production. If we increase efficiency at a faster pace than we employ workers producing new products and in new industries, we end up with the economy tied down by unemployment and the resulting lack of consumer spending. This relationship is what I have termed "The Idea Curve".

Industries die over time, but new industries take their place. Millions used to be employed as blacksmiths, Pony Express Riders and as telegraph, telephone and Morse Code operators. The reason for today's unemployment is that we are falling behind on the Idea Curve.

Recessions and economic downturns actually only speed up the process of job and industry extinction. We are simply not coming up with new products and industries fast enough to replace the ones that have fallen by the wayside, or require many fewer workers, and the result is unemployment. This unemployment creates a vicious cycle because the resulting lack of consumer spending is what hinders the development that we need to bring in the new products and industries.

My plan to create jobs is simple. We need entire new industries in the west to replace the good jobs that are unlikely to return.

What is it that the west does better than the rest of the world? The answer is very simple, no other part of the world can compete with the west in coming up with breakthrough new ideas. So why don't we concentrate on what we are best at? Our niche in this now much more competitive world will be the generator of new ideas. I have done what I could to promote this with the book "The Patterns Of New Ideas" and my progress blog.

People out there have ideas. I remember one co-worker who operated a machine in a factory years ago who showed me about half a dozen ways in which the design of the machine could be improved. The trouble with new ideas is that patenting an idea is expensive and time-consuming. Besides, I remember reading once that only about one in ten patents actually ever earns any money.

Society often does not treat the people who come up with new ideas very well. I live not far from the town of LeRoy, New York. In fact, it used to be my sales territory. LeRoy is the birthplace of the globally popular dessert known as Jello. But the man who invented it only made a few hundred dollars from it.

What if someone could come up with a worthwhile idea and get a few hundred, or maybe a few thousand (dollars, euros, pounds, etc.) within a reaonable period of time? They would be given money for their ideas instead of having to pay the usual fees to apply for a patent. There would be a flood of new ideas. The government would manage a vast bank of patents, and anyone could license or buy a patent, at minimal cost, and begin production.

If an idea ended up making a lot of money, a fair share would be given to the one who originally came up with the idea. Wouldn't this be better than playing the lottery? If someone came up with a patentable idea which was questionable, they would not be given any money at the time but would if the idea later entered production and earned money.

This would turn the population into an "idea farm", and I am certain that from it would emerge the new products and industries that we need to carry us into the future.