There is no part of capitalism that is more perverse, more absurd, or more grotesque than unemployment. You can understand the perversity of it simply by thinking about what unemployment means. Unemployment ultimately means death – the loss of human life. Prior to death, unemployment means poverty and squalor and deprivation.
This is the conversation that billions of fellow human beings have with capitalism every day:
Human: “I am starving. I need food today of I will die.”
Capitalism: “Give me money and I will give you food.”
Human: “I have no money. How do I get money?”
Capitalism: “Get a good job. You can earn money, and then I will give you food.”
Human: “Great! Give me a job.”
Capitalism: “There are no good jobs available.”
Human: “I will do anything. I must do ANYTHING. Without money, I will starve to death.”
Capitalism: “It turns out there are billions of people like you. By the law of ‘supply and demand’, it means you are worth very little. Here, take this sweatshop job paying 50 cents an hour.”
Human: “But… with 50 cents an hour, I can buy hardly any food at all. And there is no money left for all of the other things I need as a human – clothing, housing, medicine. How will I obtain these necessities?”
Capitalism: “It’s 50 cents an hour or starvation. Take it or leave it.”
Billions of people face this absurd problem. Simply look at the situation in a poor country like Bangladesh (population 160 million) to see how perverse and pervasive poverty can be, notable in this article, featured in a major Western magazine called Fortune:
“And that’s why the demand for a €260 a month living wage just isn’t going to go anywhere. The average wage in Bangladesh is about $60 a month. That’s a little old so I’ve upgraded it a bit for growth. And £54 is, even at current exchange rates, rather more than $60. Not a lot but still more.
However, the claim about the living wage is that in fact a Bangladeshi needs €260 a month to enjoy that minimal standard of living the campaigners think should be available.” [ref]
This author is arguing that $60 * 12 = $720 per year is what Bangledesh citizens should make. The perversity of a system like this – a system this cruel and demonic – is impossible to describe. A human being says, “I am standing right here, I am ready and willing to work, and work hard. I am happy to do anything necessary to earn the money that I must have in order to purchase the food, clothing, housing, etc. I need in order to survive.” And then capitalism basically laughs in this person’s face. Capitalism provides no job, or provides a job paying 50 cents an hour. What kind of response is this? Why would human beings tolerate such an absurd economic system? This is a horrific way to run an economy – it is a form of torture really, for billions of people. This is capitalism.
The Threat of Starvation
Read an article like this one [ref] and notice the huge corporations hiring people in Bangladesh at these ridiculously low wages:
- J.C. Penny
The workers in Bangledesh – millions of them – are contributing their human time to a system that gives them so little, and they are doing it because the rules of capitalism force them into this situation using the threat of starvation.
Imagine what the reality of unemployment means for the society we live inside of. We have created a system where, in the very best case, the threat of death and the threat of intense poverty is used as a weapon against everyone everyday. And for more than half of the citizens of the planet, the poverty that capitalism creates is so intense as to be a form of daily torture. Imagine trying to live a life on $720 a year, as in Bangladesh. Through unemployment and incredibly low wages, we create hell on Earth for billions of people. Hell on Earth is a natural, completely normal outcome of the rules of capitalism.
There is no possible way that an ethical species could make something this grotesque a central feature of the economic systems used planet-wide. And yet here we are. To an unbiased observer, the existence of unemployment – and the daily threat of death that it manifests – marks our species as insane.
Here is how the insanity of unemployment manifests itself in the daily lives of billions of people on the planet, in a few simple steps:
- There are 7.5 billion people on the planet.
- Every one of these human beings needs food to eat, water to drink, a home to live in, health care, etc. every single day.
- The only way to obtain water, food, shelter, etc. in capitalism is with money.
- For the billions and billions of normal, non-wealthy people on the planet, the only way to obtain money is to have a job.
- But there is a gigantic shortfall in the number of good jobs created by capitalism. There are less than half a billion good jobs in a world that contains 7.5 billion people.
- Therefore, billions of people on planet Earth live in intense poverty.
- Even in a more developed country like the United States, more than half of the population is unable to meet all of their basic needs because of the rules of capitalism. As we saw in Chapter 5, an individual human being in the United States needs $52,000 per year to live a normal, middle-class life. A family of four needs $170,000. Yet half of the jobs in the U.S. pay less than $32,000.
The fact that this is the natural state of capitalism, that humanity not only tolerates but celebrates an economic system this grotesque, is indescribably cruel.
How would we design a better economy? We would design the economy from the very start so that it delivers what every human needs to live life at a decent, modern standard of living (calculated in Chapter 5 to be $52,000 for an American middle class lifestyle for a single adult). Such an economic system would understand that every human being must have food, water, shelter, clothing, health care, electricity, transportation, communication, education, etc. every day, and then it would deliver all of these needs to every human every day. The fact that capitalism often does the opposite of this – is in fact concentrates wealth and creates poverty by design in many cases – makes capitalism an economic system that must be replaced.
This quote bears repeating here, so that we can fully understand the scope of the problem that capitalism has created:
Two billion of the world’s seven billion people live on less than $2 a day, below the poverty line, Rosling said. And only one billion live about the “Air line,” the term Rosling uses for those who spend more than $80 a day and whose lives are filled with gadgets, including airplanes. But how many live above the “Wash line?” Rosling asked. How many of the world’s seven billion have access to a washing machine? Only two billion. These people live on $40 a day or more. Everyone else — about five billion people around the world — still washes their clothes by hand. [ref]
Why do 2 billion people live on less than $2 a day (and half of humanity lives on less than $3 a day)? Because the idea of terrible wages and unemployment is baked into capitalism. Just think through the enormity of poverty seen on planet Earth:
- You can easily imagine one person living in poverty. Picture an adult human being who is gaunt from lack of food, who is suffering from untreated parasites and diseases due to lack of healthcare and clean water, who is smelly from an inability to bathe, who is sleeping on a dirt floor in a shack made from old pieces of cardboard and plastic. This is how half of the people on planet Earth are living. Just imagine that.
- Now multiply that imagine by 1,000, and imagine a thousand of these people. A typical high school in the United States has a thousand students, and they can all fit in a typical high school gymnasium. It’s a lot of people. The smell would be unbearable. You might be unwilling to enter the building because you would have to look at and be with a thousand people who are hungry, diseased, barefoot, dirty, and smelly. You would be staring a thousand dying humans in the face. And keep in mind that this situation is not their fault. They would all love to have a good job so that they could lift themselves out of the horrible situations they all face.
- Now multiply by 20. Imagine 20,000 of these people. The typical indoor basketball arena in the United States, when packed to capacity, holds about 20,000 people.
- Now multiply by 5 and imagine 100,000 of these people. The very largest outdoor football stadiums can hold 100,000 people if packed to maximum capacity.
- Now multiply by 10 and try to imagine a million of these people. This starts to get difficult, because chances are you have never witnessed one million people in one place at one time, where you could see them all at once. People only rarely assemble in these numbers because the number is too big. But to put it into perspective, the entire population of the city of San Francisco, if everyone in the city assembled in one big field, would only be 800,000 people. The entire population of the city of Boston or Las Vegas would only be 600,000 or so people.
- Now take your concept of one million people, and multiply it by 330. This is a huge number. 330 million people. This is all of the people in the United States. If we could somehow take every single person in the U.S. and assemble them on a field, where every human in the United States has a 3-foot by 3-foot box of ground to stand in, you would need about 100 square miles of land (a square measuring 10 miles by 10 miles) to hold them all. If you got in a jet airplane and flew to 30,000 feet, you might, on a very clear day, be able to see them all. Maybe.
- Now multiply that immense, utterly gigantic number of people by 11. The total is 3.6 billion people. This is how many people on the planet are trying to survive in this world on less than $3 a day.
Low wages and unemployment are baked right into capitalism. In fact, they are defining features of capitalism. Capitalism is a system where billions and billions of your fellow human beings are living in desperate poverty.
Depressions and Recessions
There is one other place where unemployment raises its ugly head in capitalism. It occurs every time that capitalism decides to bring on a recession or a depression.
For example, take the 2008-2009 recession in the United States. The economy lost more than 8 million jobs. In other words, approximately 8.6 million people became unemployed between February of 2008 and February of 2010 [ref]. 8 million people became unemployed and began to stare homelessness in the face. Millions did lose their homes during this period, as waves of foreclosures unfolded. Trillions of dollars in real estate equity was lost as house prices plummeted across the country
This is a remarkable feature of capitalism – this ability for an economy to suddenly decide to purge millions of people from their jobs. Because, if you think about it, nothing changed. The population did not decline by millions of people – the population of the U.S. continues growing. Everyone in the United States still needed food, clothing, housing, health care, and so on in the same quantities they did before. And yet “the economy” – the capitalistic economy in the United States – decided that 8.6 million people would no longer be able to earn the money that they needed to survive. From a human perspective, the whole idea of a recession is insanity if you think about it.
Recessions are an inherent feature of capitalism, and recessions cause a gigantic amount of human suffering. Yet capitalism is the dominant economic system used across planet Earth today. Why? As you look back over the last 10 chapters, think about all of the problems with capitalism that we have discussed, and the many other problems we have not touched on, such as:
- The gigantic inefficiency seen when you find a Home Depot located across the street from a Lowe’s, or you see an intersection with 4 different gas stations on each corner, or you notice a CVS, Walgreens, Rite Aid and a Harris Teeter pharmacy (all selling exactly the same drugs and products) located within a few hundred feet of each other.
- The way that large incumbents in capitalistic economies can work to completely stifle competition and innovation.
- The way that “supply and demand” can be used as a device to crush consumers, creating prices that have no relationship at all with the cost of production.
- The way that recessions and depressions can be used by the wealthy to vacuum up assets at greatly reduced prices.
- The way that inflation can devour savings.
- And so on…
All of these deep-seated problems embedded inside of capitalism work consistently and tirelessly to make life miserable for billions of people around the world.
It is time for humanity to work together to create a new economic system to replace capitalism. This new system should be designed to be much better for everyone on the planet.