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Aleksandar Krzavac

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Employment vs. Economic Growth
Wednesday, November 30, 2011  11:43:00 PM

by Aleksandar Krzavac

Shall we, really. have higher employment rates in future

Positive economic growth forecasts for 2010 could make wrong predictions in connection with employment rise. Media, experts, politicians, scientists and analysts, by purpose or accidentally doesn’t matter, arouse vain hopes in public that employment will have growth too. The only expectations of average ordinary people are to get good and stable jobs. For sure, they are not interested in positive or higher percentage of economic growth, gross domestic product or higher output if it will not mean new working places.

Namely, there are two basic aspects of real outcome of economic growth. First, most frequent in common use in media and modern life is statistical. More goods & commodities produced and more services provided, according to statistical method, are quite enough to be happy about economy.

Yes, it would be valuable indicator of growth in industrial and pre-industrial age of capitalism. Nowadays, when labour is substitued by hi-tech equpment and tools positive figures could lead to wrong conclusions. Participation of labour comparing to capital invested in sophisticated machines is much lower today in postindustrial age than in industrial society.

Once upon a time we live in "labor intensive" economy; today in "capital intensive" with constant rising of domination of capital over labor. Trend is that relative proportion of labor (compared to capital) will be smaller in future. It means that production of new goods & commodities and providing services will need less workers (read human beings) than today.

Besides statistical there is second aspect of growth that is real.
Real aspect allows us to assign Quotation marks to word Growth.
Real aspect take in its consideration impact to real, ordinary people, workers, employees or human beings, doesn`t matter.

Even the most naive optimists, not to mention serious scientists and experts, cannot predict higher part of labor in future. Unfortunately, from the view of ordinary people, that part will be much lower in next decades due to tremendous development of technology.

What is modern absurd, not just in theory but in real life too – is that we can have a many years with positive economic growth without a single worker employed (not to talk on some sharp employment rise). So most media, politicians and famous experts, in some way cheat us with positive digits in year 2010.

Labor, Capital and Government are crucial factors that affect any modern economy. Unfortunately, voting in favor of one or two of mentioned factors has been risk for putting in left (communist) or free market capitalist bloc.

One of the most famous economist of 20th century Milton Friedman opposed government regulation of economy. Among many his “antigovernment” quotes I will cite a striking one
“If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.”

“History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition”.  According to previous quote Friedman-economist has chosen capitalism as optimal system achieved so far.

Government “buffer zone” between necessary opponent factors Labor and Capital, in deep crisis time under the absolute rule of  capitalism becomes “life boat” for the only socio-economic system remained.

Well, at this point we cannot take communist (socialist) system as something we deal with in real world. It is well known worldwide what are attribute of two communist countries remained (Cuba and North Korea). Most people would agree that taking in account such socio-economic system is not decent.

So, what is the way out? Probably, deep changes of global free market capitalism. Some will say that is sliding to the left, even to communism. For sure, that is not responsible acting which desperately needs new redesigned model of globally responsible capitalism.

Open minded people criticizing such neoliberal (no brakes) capitalism protect us from sliding to radical left ideas of state governed economy, one party democracy and banning private property over means of production.

Under high risk of, “quite new revolutionary ideas and so far unseen movements” that have optimal solutions for crisis, are developing countries of third world. In Africa, Asia, or Latin America soon we could face ideas of reducing multiparty system, freedom of speech even total nationalization of complete economy by state, in case we stick to “Bankers Driven Economy«, as Lord given.

French President Nicholas Sarkozy, no doubt, is not far left anarchist or communist but what he said in Davos Forum 2010 is warning to all of us.

"We are not asking ourselves what we will replace capitalism with, but what kind of capitalism we want?" Sarkozy said protecting capitalist model as the very best socio-economic system ever. On the other side French president has said "This capitalism has nothing to do with that we wanted to, so let`s change it".

"We must re-engineer capitalism to restore its moral dimension, its conscience," he said adding "By placing free trade above all else, what we have is a weakening of democracy".

Free trade and absolute power of "Bankers Economy" must be under some control. "There are remuneration packages that will no longer be tolerated because they bear no relation to merit,"Sarkozy said.

Politicians are angry with bankers who were marked as "Crisis Creators". We must have in mind that game is on capitalist politicians and capitalist bankers, so any arisen solutions, no matter how revolutionary are, will not threaten capitalist free market democratic framework.

Common sense shows that bankers have been stronger than politicians so far. Namely, it seems that bankers, not politicians, rule the world. Politicians fight bankers` bonuses blaming them for crisis. It would be perfect if bonuses were the only "crisis factors", the real problem might be deep in global socio-economic infrastructure.

Such focusing on bankers bonuses (if it was perfect in other fields) looks likes politicians` vanity and envy, not real assessment to crisis issue. "Killing Bonuses" method, is rather politicians` flirting with ordinary people in attempt to keep their voters than real solution to crisis issue.

However, deep changes of global capitalism are compulsory if we want to avoid more frequent and more severe economic crisis in future.

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