Conservative economists and politicians generally argue that unemployment and inflation in Australia are the result of changes in the international economy, and that Australia has to adapt to those changes or things will get even worse.  They say government economic policies must promote more rapid economic growth by stimulating profits and investment at the expense of real wages and social welfare.

Labour movement opponents of the current Liberal government have proposed a series of sometimes contradictory arguments in opposition to this line. 

Explicitly or by implication they suggest that unemployment is at least made worse by the present government's economic policy, and could be improved if different policies were followed. 

Various proposals are advanced - such as: 

• for shorter working hours
• redistribution of wealth from the rich
• protection of Australian industry
• limitations on technological change
• nationalisation
• government job creation schemes
• improvements in the lot of the unemployed
• measures to stimulate economic growth without attacking living standards

and so on.

These proposals have had little impact on public opinion.  Given the manifest failure of its economic policies,  there has been nothing like the mobilisation against the government that might be expected.   

The reason is that these proposals do not make sense.  They ignore fundamental facts about how capitalism works, and about recent economic and political history. 

The capitalist system is not capable of restoring full employment in any of the ways suggested from the labour movement, and it is silly to pretend that it can. 

The only alternative to conservative policies will be communist revolution.  That alternative must be made realistic. 

Introduction

Before deciding what could  - and what could not - reduce unemployment, we first need to look at what causes unemployment.  

I am not very clear on that myself, but I still feel confident enough to reject various commonly accepted views on the subject. 

I will state my own provisional understanding rather baldly.  Others can then point out its inadequacies, and we can go on from there.

This paper is thus a preliminary attempt, necessarily half-baked, and partly written for the purpose of self-clarification. 

It examines an issue that really needs to be considered in close connection with many other economic and social questions. 

It would have been better to have provided more facts and figures, examples and other evidence for the assertions below, as well as more  explicit reference to other views.  But we have to start somewhere. 

Hopefully feedback will result in refinements and modifications of the arguments. 

Please do send comments.

Part 1 emphasises that unemployment is specifically a problem connected with market economies.  Then it gets slightly distracted to talk about science fiction and jellyfish. 

Parts 2, and 3 analyse the economic mechanisms that regulate "normal" unemployment,  in order to explain the conservative arguments for "wage restraint" and why such arguments  are wrong. 

Part 4 examines "technological" unemployment and shows that the increased unemployment now is not "technological". 

Part 5 attempts an explanation of "overproduction" and "cyclical" unemployment (without great success). 

Part 6 considers various "solutions" from the labour movements, in the light of the earlier analysis, and rejects them all, but cheerfully, in view of part 7. 

Part 7 tries to give some concrete content to the idea that "the only solution is revolution". 

next section