CAN UNEMPLOYMENT BE PREVENTED?

New Zealand Listener, Volume 9, Issue 228, 5 November 1943, Page 4

CAN UNEMPLOYMENT BE

PREVENTED?

Sir William Beveridge Thinks Kt Can-and Says Why In This Talk for the BBC

ASS _ unemployment is like war. There’s no remedy for it. The only thing that can be done with mass unemployment is to abolish it. Can that be done? Well, I believe it can be done if we decide that we will do it and will go the right way about it: if we adopt as a fundamental policy a policy of full employment of our labour and other productive resources in meeting our needs. Full employment doesn’t mean no unemployment. It means that though on any one day there may be someone unemployed, there are always more vacant jobs when there are unemployed men, so that every man who says his job comes to an end for any reason, can find fresh employment without delay. Full employment doesn’t mean the end of competition, initiative, adventure, change, and risks in life. It means a strong, sustained demand for labour. If for any reason what a particular man has been doing is no longer wanted, there is something for which he is wanted. So that unemployment is never more than a short interval in passing from job to job. Full employment means fresh opportunity always. It means making manpower an asset, not a liability. Full employment again does not mean faked employmentdigging holes and filling them, employ‘ment for the sake of employment. It means employment in producing things that are needed. It means that technical skill improves methods for meeting old needs more fully and more eagerly, discovering new needs and meeting them, raising the standard of life. Finally, full employment of Britons does not mean the employment of slaves directed to jobs by a totalitarian dictator at wages fixed by him. A full employment policy for Britain must be consistent with the keeping of our essential liberty of speech, of association, of political action and choice of occupation. By « policy of full employment I mean full productive employment in a free progressive society. That should be our aim. As I’ve said already, I believe that to be a possible aim. Not just crying for the moon, but something which we can get in Britain after the war if we go the right way about it. "There is a Solution" I hope you will not be disappointed or all tune off at once if I say now that to-night I’m not going to explain just everything that we have to do to get it. I’m at a very early stage of making an investigation of this problem. I want to talk over my ideas and other peoples’ ideas before I set out any form of employment plan to speak of. I may be able to do so in six months or so. What I can do to-night is first to name some of the things that won’t help us to solve the problem of unemployment. Second,

to suggest in general terms the direction in which we ought to look for a solution. Third, to convince you just why I am certain that there is a solution. First, it’s no remedy for unemployment to reduce the supply or the productivity of labour. Raising the school age, making pensioners retire from work, reducing the hours of labour, may be good things in themselves-personally,

I think Labour is doing all these things-but they are not contributions to obtaining full employment. All these matters reduce production by the person whose hours are short-

ened or who is withdrawn trom work, and they reduce thereby his power of giving employment to others. After the first world war, we had in Britain a general reduction of the hours of labour, an hour less of work each day for nearly everybody — a reform excellent for other reasons-but with it we had more unemployment than ever. All measures to cut down production are restrictionist devices. They can’t expand employment. Some of them, such as those I’ve named already, may be good for other reasons--some are merely bad, like ploughing in cotton, when millions are without stocks; like burning coffee and stopping trade. We had our fill and more of such devices between the two wars; let’s turn away from them. It Depends On Spending Second, thanks largely to the works of J. M. Keynes, we have a clearer idea to-day of how mass unemployment may come about, and therefore, of what must be done to prevent it. In the simplest terms, the economics of the problem boils down to this. The level of employment is determined by the level of spending. If employment has fallen off from one month to another, that means that someone, for whatever reason, has been spending less than in the month before. If employment rises, that means that someone is spending more. This process is cumulative. Maintaining full employment means somehow maintaining an adequate, steady flow of spending to absorb all the productive resources of the community in meeting needs. Spending, of course, is of many different kinds: by consumers buying food and clothes and other perishable goods; by consumers buying durable goods like houses or furniture; by businesses setting up factories, ordering machinery or material; by governments and local authorities providing defence, drains, roads, schools

and other services for the people. For full employment, the sum total of all these separate spendings must be such as to set up a demand for all the labour and other productive resources of the community. Is there any impossibility in that? Well, it can’t be impossible, because it happens regularly whenever we make total war. We Do it in War Some people say that it’s impossible to abolish mass unemployment. It’s fair to answer that mass unemployment has been abolished in Britain twice in the lifetime of most of us-in the first world war and in the second one. Manpower in Britain to-day is an asset, not a liability. No man or women need rust in idleness, all should find happiness in service. Now that experience with the abolition of mass unemployment in war isn’t, of course, confined to Britain. I’ve just visited the United States again this year for the first time since 1933. Ten years ago, the people of the United States were at peace, but they were worried and frustrated in a depression, and suffering. poverty without parallel. This year they’re at war. They may not be happy, but at least with unemployment all but gone, nearly every one of them has the sense of being valued. This sort of experience isn’t confined to war. The Nazis got rid of a great deal of their unemployment in preparing for war from 1933 to 1939. The Soviet Government got rid of theirs in bringing about the industrial revolution that has served them and us so well in this war. In all these cases if you ask how unemployment came to be conquered, you'll find there’s a fundamental reason: that the government of each country set before it an objective of things to be done requiring all the manpower of the country, and they spent money, or were sure that money was spent, in (continued on next page)

WORK FOR ALL

(continued from previous page) directing manpower and other sources, to that objective. Of course I’m not suggesting that we * should reproduce in peace all the conditions of war. The rationing of food, clothing, and other good things, is the result of our having to devote so much energy to making bad things for the enemy instead of making good things for ourselves. It needn’t continue after peace has become so settled that we can replace shortage by plenty. Restrictions on Freedom Again, the restriction on freedomsuch as taking or leaving jobs, the blackout, the separation of families, the overcrowding, the waste and waiting about for things to happen in war-all those have no relevance to our problem, and needn’t continue once peace is established. Nor do we want to spend money in peace on the same things as in war, because our needs are different. Again, in war we are taxed heavily, and urge individuals to save because most of spending has to be done by the State. In peace in a free country, spending can be done much more by the individual and less by the State. It’s what the State and the individual together spend that has to add up to giving full employment, Finally, one doesn’t want just employ-ment-but productive employment. That

requires not merely spending, but wise spending. That raises many difficult technical problems in the management of money to take the middle course between deflation and inflation. We have to solve all those technical problems and many more. But why shouldn’t we? Peace and war, thank goodness, are different in many ways, but we want peace to be much more than having no mass unemployment. But to most of us, one main lesson of the war is relevant: that we get food and employment by making a list of needs in order of priority, and by seeing that there is enough purchasing power to meet them. That lesson is relevant because the needs of peace, though they are different from those of war, are unlimited. Private and National Interest Now the second lesson from war: and it is hardly less important. In war we have been able to do tremendous things in production as well as in fighting, because we have subordinated private interest to the national interest. We haven’t insisted on working in the "places we wanted or in the jobs we were used to, and we haven’t objected to new ways of working or training. We've relaxed many customs and rules which might have prevented the full use of manpower. We’ve been ready to do what was wanted, whether we’ve been used to it before or not. We’ve been willing to let anyone able to do work that was wanted, come in to do it

on fair terms, whether’ he’d been working at that trade before or not, All that was possible because we were not afraid of unemployment. It has also been one of the things that has made it possible to have no unemployment. The needs of peace are as unlimited as those of war, but they are different. We're not in sight yet of having all the good things for everybody that we’d like in Britain. Even then, when we do get all the material good things we'd like, well, we'll want more leisure. Leisure for spiritual things-for the pleasures of the mind, for study, travel, recreation. If we’re to meet the needs of peace, and use our manpower in meeting them instead of wasting it in unemployment, we must be ready for change-adven-turous, not hide-bound. Full employment, always more vacant jobs than men looking for jobs. There’s a thing worth having! Don’t you think so? Like everything else worth having, full employment has its price. We’re going all out now in war for one objective: to keep Britain free, and to make the world free of Hitler. For peace I suggest that we should take for our objective making Britain as free as is humanly possible of the five giant evils; of want; of disease; of ignorance; of squalor, by which I mean the dirt, congestion, bad housing and discomfort which comes from the unplanned growth of cities; and idleness, by which I mean idleness enforced by mass unemployment.