The Cause of Unemployment

With the advent of automation in the 19th century, and of computers, microchips, robots and all sorts of wonderful labour-saving devices in the 20th century, we have thankfully developed technology to such an extent that automated machines are now capable of doing most of the work. Production is achieved by people and by machines, however, today, machines have many advantages and very often are better able to do the work; they can work faster, longer, and generally speaking more accurately, but most importantly they do not have to be paid, and so, not only are the machines better able to do the work, they also cost less. The result is that to produce a given quantity of goods, companies are progressively employing more machines and fewer people.

To visualise the extent of the above problem, let's take an imaginary company producing cheese, coal, cars or whatever, and let's suppose that fifty years ago it had an annual turnover of €22 million, and a work-force of 450 people. If we calculate that it had an annual 3% increase in turnover, and a reduction of the same percentage in the number of people employed, then the annual turnover is increasing while the number of people involved in producing it, is decreasing. This means that the Number of People Employed relative to the turnover is decreasing at an extremely rapid pace.

The continuous decrease in the number of people employed, relative to one million euro turnover, becomes obvious from a glance at the table or graph below. In our theoretical company, over a fifty year period, the ratio has dropped from 20.5 people employed per one million euro turnover to only 1 person.

Graph 1

In our hypothetical company fifty years ago there were 20.5 people employed per million euro turnover, today that figure is down to 1. These figures serve only to illustrate the dramatic decrease in the Ratio between the Turnover and the Number of People involved in producing it. The number of people employed in relation to the turnover is decreasing year after year. If we, the international community, do not control it, next year fewer people will be required, each following year the number will be smaller. Our failure to respond to this Decreasing Ratio is responsible for the unemployment situation. For us to ignore this economic reality is insane, it simply perpetuates the necessity for us to continue the process of replacing people with machines, thus creating an endless downward vortex of unemployment, of a reduction in the world market, and of the need to compete even more fiercely, to survive. We do not have to allow the world's work-force to continue shrinking, we can, and it would be infinitely better to reverse the situation simply by increasing the ratio which is presently decreasing. If we do this it creates only three "difficulties" and all three are easily overcome. In other words, we can create full employment without creating any problems.

Because of the way the world economy has evolved in an uncontrolled way, most government ministers and company directors are "forced" to view the world market is a shrinking pie, to be fought over. It is possible to expand the market, and in a way that will secure full employment, co-operation and prosperity. No individual, company or country can be economically secure so long as those who manage the economy are "forced" to go on employing fewer, and moving to geographical areas where the work-force has no alternative other than to work for survival wages. The solution to our world's economic situation is not to continue to employ fewer and fewer people and to find new areas where human beings are forced to work for smaller and smaller amounts of money. Lack of organisation at an international level "forces" today's managers to involve themselves in the business of exploiting those who are economically the world's poorest and most underprivileged people. The proposed solution will guarantee that such exploitation will come to an end.

Our intelligence and imagination have enabled us to design these extraordinary tools of mass
production. We now have a proposal that is fundamentally simple which will ensure that every individual, company and government in the world will be extremely well served by this automation.
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