Economic Objectives (I)

CONTINUED FROM LAST WEEK

New labour-saving machines or devices are from time to time being put on the market or introduced, which not only render some existing techniques obsolescent but also make it possible for one or two men to do, even more competently, the jobs hitherto performed by a team of ten or more workers. There may be compulsive changes in the location of industries with consequent movement of labour from one place to another. There also may be trade disputes leading to strikes and lockouts and some people may just prefer to remain idle, while others may be willing to work but are physically incapacitated from doing so efficiently.

In the face of all these factors, the maintenance of an exact and permanent equality between vacant jobs and unemployed persons would as we have said, be almost impossible of achievement. It would mean, in practice, not only a complete enumeration of all those who are unemployed as well as of their individual skill or lack of it, but also the immediate provision of jobs for them in exact accordance with their skills. It would necessarily imply a perfect geographical, vertical, and horizontal mobility on the part of workers, or their regimentation into any kind of job regardless of their individual skill, all of which is not at all easy of attainment in a free socialist State.

In this state of affairs it is possible that there may be more or fewer vacancies than there are unemployed persons able and willing to fill them. The duty of the government is to see to it that there are more, not fewer, vacancies than there are unemployed persons. For self-respecting persons able and willing to work, a long period of unemployment, even when it is accompanied by the payment of unemployment relief, brings nothing but frustration, demoralisation, and humiliation. And this is precisely what would happen if there is a permanent state of fewer jobs than there are people able and willing to fill them. Whereas, when there are more jobs than there are unemployed persons, the period of waiting, such as is necessary to move workers from one place to another, or to retrain them to acquire new skills or techniques for the purpose of changing from one kind of job to another, will be one of enthusiasm and healthy expectation.

Both Keynes and Beveridge agree that, in order to maintain full employment, a constant state of effective demand for the services of those who are able and willing to work must be sustained. This, in my view, is possible only if demand is constantly ahead of the supply of labour, but not too much ahead of it to involve injudicious and misdirected investments, or to lead to run-away inflation.

It is for all these reasons that I prefer Beveridge’s definition of full employment, which is a state of affairs in which there are always more vacant jobs than unemployed men.

The need for full employment should be obvious. It is elementary that without the labour of man, that is, the employment of his energy, even the fruits which grow wild, ripen, and fall to the ground of their own accord, cannot be picked for human consumption.

Man has to work even for bare existence. For a full and happy life for himself and for his family or other dependants who are not able to fend for themselves, which is the aim of the people’s republic of Nigeria, he needs to employ his energy to the full, compatible with physical and mental health. As his children grow older and older, their needs for a full and happy life become greater and greater. A stage is reached when the children too must employ their energies to the full, if the standard of living in the family must be raised, or even maintained at the same level as before. The alternative is that the children would become a liability and a dead-weight on the father, with inescapable frustration and despondency amongst the members of the family as a whole.

From this simple illustration, it is clear that full employment is not only an economic, but also a social, psychological, and political ideal. The needs and wants of all the members of society, their health and happiness, are satisfied to the utmost possible limit when there is full employment. To the extent, therefore, that a society falls below the ideal of full employment, even so much is its standard of living and hence its health and happiness diminished. Furthermore, past and present events in Nigeria, and in other parts of the world, do show, convincingly, that nothing generates communal disharmony and inter-ethnic strife and hatred more profusely than secular unemployment and its aftendant poverty and misery. All policymakers must bear it in mind always that, so long as only four bones are available for six dogs, it is idle and futile to expect any kind of quiet or concord inside the kennel.

In all the developed countries of the world, full employment is now an accepted cardinal policy of action. It is true that in none of the countries of the so-called western bloc is this policy permanently fulfilled. The reason for this is not far to seek. Keynes himself, who is the messiah of full employment in a capitalist economy, has laid down the rule for full employment. ‘Employment can only increase pari passu with an increase in investment.’ (Ibid. p. 98). That is to say, to attain to full employment, it is necessary to make adequate investment for the purpose. But in a capitalist economy, the volume of investment, at any given time, depends on the prevailing rate of interest and on what Keynes calls marginal efficiency of capital-that is, marginal profit. In this connection, we must recall that in his definition of involuntary unemployment, Keynes clearly implies that full employment is possible only when the price of wage-goods goes up sufficiently to induce producers to employ all the available labour, allowance being made for frictional, structural, and seasonal unemployment. Such a rise in price as this will automatically lead to a rise in marginal profit, leading to expansion of productive activities on the part of existing producers as well as possibly inducing those who, before such a rise, had not been able to take part in such productive activities. A state of affairs such as this brings more profit into the pockets of the more efficient producer, and attracts the less efficient and sub-marginal producer into the field of productive activities.

CONTINUES NEXT WEEK

ALSO READ FROM NIGERIAN TRIBUNE