The Problem of the Unemployed (Routledge Revivals)

An Enquiry and an Economic Policy

J. Hobson

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135117764
• Edition: 1
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

First published in 1896, this seminal work considers the Question of the Unemployed at the height of imperialist capitalism. Hobson proposes a controversial theory of social progress, which argues that unemployment is a natural and necessary result of the mal-distribution of consumption power. In a comprehensive assessment of the practicalities of capitalism, The Problem of the Unemployed considers the root causes and meaning of unemployment and possible solutions to the issue.

THE PROBLEM OF THE UNEMPLOYED

AN ENQUIRY AND AN ECONOMIC POLICY

________

CHAPTER I

THE MEANING OF “UNEMPLOYMENT”

§ 1. Unemployment as Waste of Labour-Power

“UNEMPLOYMENT” is perhaps the most illusive term which confronts the student of modern industrial society. This illusiveness exposes the subject to grave abuses. Well-meaning but somewhat hasty social reformers stretch the term and bloat it out to gigantic proportions; professional economists and statisticians, provoked by this unwarranted exaggeration, are tempted to a corresponding excess of extenuation, and are almost driven to deny the reality of any “unemployed” question, over and above that of the mere temporary leakages and displacements due to the character of certain trades, and to the changes of industrial methods.

In order to get some clear understanding of the nature and size of the industrial malady of unemployment, we must, I think, set aside for the present the personal aspects of the subject which appeal most powerfully to human interest, and try to relate “unemployment” to waste of labour-power regarded from the social point of view. This method has the advantage of strict accord with the position held by Mr. Charles Booth, who urges that “the total number of the superfluous is the true measure of the unemployed.”

Let us first try to ascertain how far the various classes of those who at any given time would be found to be “off work” can be reckoned as “superfluous” or as waste of labour-power.

Many workers, especially in employments which severely tax the muscular energy, prefer at times to earn their weekly wages by hard labour during four or five days in the week rather than spread their energy more evenly over the six days. This voluntary “play” of the miner or the gas-stoker clearly cannot rank as “unemployment”, nor does it, if confined within reasonable limits, involve any waste of labour-power. On the other hand, when “short time” is either forced upon employees, or accepted by them as an alternative to a reduction in the number of employed, such off-time will rightly rank as “unemployment”, and implies waste of labour-power.

§ 2. Leakage in “Season” Trades.

Season trades with short engagements usually involve a certain “leakage,” as in the intervals between “jobs” in the building trades. A census of “unemployed,” taken on a given day, would be apt to include a certain number of masons, bricklayers, etc., who were at leisure for this reason. Yet, so far as this leakage belongs to an irregularity inherent in the trade, it cannot rank as “waste”, nor could the labour thus temporarily displaced be regarded as “superfluous.” But a strict limit must be assigned to this “necessary” leakage. If the building trade is slack, not only will a smaller number of workers be employed, but the intervals between jobs will be longer. Here there exists a genuine waste of labour-power, which would rightly rank as unemployment. A period of brisk trade in which intervals are smallest must be taken as the right measure of necessary leakage, and even then, if the leakage is due to inadequate organisation in the trade, it implies some waste. In various trades improved intelligence, cheaper travelling, travelling benefits of trade unions, have reduced what would formerly have been considered “necessary” leakage due to natural conditions of the trade.

§ 3. Is Winter Slackness Unemployment? Official View.

How far can this view of necessary leakage be extended to the longer intervals of leisure in the building trades and other trades whose irregularity is due to natural causes? The recent Report of the Labour Department upon the Unemployed is disposed to rule out all “unemployment” in the building trades in the winter months.

“A certain amount of time will be lost almost every year during frost. Are the men thus thrown out of work really ‘ unemployed’? The loss of time may be considered as one of the ordinary trade risks; it recurs more or less every year; it may be supposed to be discounted in the rates of pay earned by members of these trades when fully at work. The bricklayers idle during frost are in no sense ‘superfluous,’ if the whole year be taken as a unit; were they emigrated or planted in farm colonies, or otherwise lifted permanently off the labour-market, the building trades would presently suffer from a deficiency of men. Nor are they necessarily insufficiently employed. There may be work enough for all, but the trade is such that the work it offers has to be concentrated in certain parts of the year.”

This view of compensation forcibly recalls the “economic man” of the old economists, with his infinite capacity for calculating chances, an absolute freedom to select his employment, and a full power to extort from his employer a higher wage to balance any specific disadvantage attending his work. Such a man, being in our present case a bricklayer, might be supposed to obtain such earnings, and so to regulate his expenditure as to hibernate comfortably during the annual period of slackness. The actual bricklayer, though he doubtless can make some provision against the idle season, is not economically strong enough to fully discount in his earnings the irregularity incident to his trade, still less is the bricklayer's labourer able to do so.

If the a priori reasoning in the Board of Trade view be accepted, it may be pushed so far as to show that all workers are able to discount all “ordinary trade risks” and to obtain wages adequate to support them during such portion of the year as trade statistics show to represent the average “unemployment” in that trade.

The casual docker, the fur-puller, and all the workers in “season” trades, whose irregularity can be foreseen, ought, according to this theory, to be able to make adequate provision against the “off” period, however long it may be; and since the work of all of them is necessary for the season, their idleness in the off period must not rank as “unemployment”, or be regarded as a waste of labour-power.

§ 4. The Social Estimate of “Waste” Labour.

We are not here, however, concerned to discuss how far workers in season trades might or ought to make provision against the times when they are unable to earn wages, but whether the labour-power in such periods is to be reckoned “superfluous” or “waste”. Of the literal “superfluity” there can be no question, but is there “waste” from the social point of view? Surely there is. The case is not on all fours with the irregular distribution of work within the week. No true economy of human forces is able to compensate for a winter's idleness by excessive work in the spring and summer months. This “waste” may be due to inherent irregularities of trade, but it is not the less waste. The “unemployment” of the painter during the winter months is not rightly classed with the “leakage” between jobs. In the first place, a good deal of the seasonal unemployment in the building, dock, and many other trades is not necessary or inherent in the nature of the trade, but is attributable to the very existence of a chronic over-supply of labour. If there were not so large a “margin” of labour to make sudden calls upon, the irregularity of many trades would be largely modified. Climatic and other natural causes will doubtless impose a certain amount of irregularity, but a far more regular distribution of employment, even in the building trades, would be possible, if it became necessary; and such readjustment would not imply a waste but ultimately an economy of labour-power, since it would prevent the degradation of morale and industrial efficiency which every irregularity of trade produces. Just as in the case of the docks, the recent readjustment of methods of employment has squeezed out and exhibited as “superfluous” a large mass of casual labour which formerly would have ranked as a necessary margin for occasional absorption, so in the building and other trades a similar pressure, modifying methods of work, would expose a like superfluity or “waste” of labour-power. But even if it be held that the distribution of employment throughout the year in these trades cannot be materially altered, it should be admitted that the necessary working of these trades involves a great waste of labour-power by reason of its irregularity. The bricklayers idle during frost clearly represent a superfluity of labour, though not necessarily of bricklaying labour. The earnest desire expressed by some to provide these season workers with an alternative craft is a virtual admission of the present waste of labour-power.

§ 5. The “Unemployed” by Trade Depression.

A very large majority of the skilled workers who are “out of work” at a time like the present owe their unemployment, not to short leakages or seasonal fluctuations, but to great depressions in the manufacturing trade of the country. This, one might imagine, would be at once admitted to imply a superfluity and a waste of labour-power. But the Report on the Unemployed is disposed to think quite otherwise:

“In a period of contraction like the present there are many men who are out of work. They are industrially ‘superfluous’ if so short a period as a year be taken as the unit, but over a period of seven years—which for shipbuilding appears to be about the period of the cycle—they are necessary, and were they lifted off the labour-market in slack years there would not be enough men to execute the work when trade revived.”

That is to say, when trade is good a large body of men are wanted to work, when trade is bad they are wanted to wait in case it may get better. While they wait their labour-power is not to be considered “waste”, because, in the words of Mr. Booth, “our modern system of industry will not work without some unemployed margin, some reserve of labour.” “They also serve who only stand and wait,” Milton has told us, but this specific application of the truth has seldom been made clear. My chief criticism of the judgment made in the Report is that it begs the entire question with an almost humorous effrontery. As an alternative to the suggestion that without this unhappy margin of “waiters” “there would not be enough men to execute the work when trade revived,” I would put the following question: “May not the existence under normal conditions of an average margin of 5 per cent, ‘unemployed’ in the skilled trades, and possibly a larger margin in the ‘unskilled’ trades, be a cause, as it is certainly a condition, of the fluctuations which make this year ‘good’ and that year ‘bad’?” If there did not exist this “margin,” it is evident trade would not “revive” to the extent it does in such a year as 1889; but, on the other hand, is it not conceivable, that it might not decline so deeply as in 1887? In other words, is it not possible that the fluctuations would be less violent if there did not under normal conditions exist an average “reserve” force of labour to “play with”? The subject is, of course, far too large for parenthetic treatment here, but I cannot forbear to raise this question in protest against the placid assumption in the Unemployed Report that there is no “superfluity” of labour, because the “superfluity,” is sometimes for a brief period mopped up.

But whatever may be the explanation of trade depression to which we may incline, there can be no question but that “depression” is directly responsible for a vast amount of unemployment. Even the Unemployed Report admits that it would be a “strain of ordinary language to refuse to these men during slack years the title of ‘unemployed’.” I further claim that this “unemployment” represents “superfluous,” or waste labour-power, whether the trade depression from which they suffer be accounted the cause or the effect of the “superfluity.”

§ 6. Summary of the Official View of “Unemployment”

If I correctly understand the Unemployed Report, the only “superfluity” or waste of labour-power which it admits consists of the following two classes:

“Those members of various trades who are economically superfluous, because there is not enough work in those trades to furnish a fair amount to all who try to earn a livelihood at them.”

“Those who cannot get work because they are below the standard of efficiency usual in their trades, or because their personal defects are such that no one will employ them.”

These classes are represented by a small fringe of the “skilled” trades who even in fairly good trade fail to get sufficient employment, and who represent a genuine over-supply of labour-power, and by a large mass of low-skilled inefficient labour of the towns, that superfluous mass which Mr. Booth reckoned in East London to amount to 100,000.

Although the Report confines “superfluity” of labour-power to these narrow limits, the question of “the un-employed” admittedly includes others—viz., all that labour whose temporary displacement is due to changes in methods of industry, changes of fashion, changes in the field of employment, or other causes, which are unforeseen and cannot be reasonably discounted or provided against by the workers.

The Unemployment Report thus narrows down “unemployment” by refusing to include not only “leakages” in employment but seasonal idleness, and it still further limits superfluity or waste of labour-power by excluding the large body of “unemployed” whose condition is due to trade depressions.

§ 7. A Wider Meaning of Unemployed is Legitimate.

I claim to have shown prima facie reasons for a wider application of the term “unemployment” than commends itself to the official mind, by the inclusion of all forms of involuntary leisure suffered by the working classes. This connotation has the advantage of being in closest accord with the general usage of “unemployed,” and in this sense I shall continue to apply the term. The more scientific definition would, however, identify un-employment with the total quantity of human labour-power not employed in the production of social wealth, which would rank, under present conditions, as superfluity or waste. This latter, it can be clearly shown, is not narrower but far wider than the official unemployment.

CHAPTER II

THE MEASURE OF UNEMPLOYMENT

§ 1. Defective General Statistics.

EXACT statistical measurement of “the unemployed”, or even a close estimate of the total number of those “out of work” at any given time is impossible at present. The miserably defective character of our statistical machinery forms an adequate basis of ignorance upon which to form discreet official answers to awkward questions. But though we cannot directly measure the magnitude of the evil, we are able to show that it is very great.

The only official figure relating to the general quantity of “unemployment” is that percentage calculated by the Board of Trade from the returns furnished to it by trade union officials. The official figure represents the average percentage of members of certain unions who are reported at a given date to be in receipt of...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Preface
• Table of Contents
• Chapter I The Meaning of “Unemployment”
• Chapter II The Measure of Unemployment
• Chapter III Does Unemployment Grow?
• Chapter IV Minor Causes of Unemployment
• Chapter V The Root-Cause of Unemployment
• Chapter VI The Economic Remedy
• Chapter VII Bimetallism and Trade Depression
• Chapter VIII Palliatives of Unemployment
• Index