Fundamentals of Scarcity

Over this past week, the name George Reisman and the title of his treatise, Capitalism,has been thrown around quite a bit on this blog.  Reisman is a brilliant man, even if I may not agree with everything he has to say about economics, and Capitalism is the colossal written manifestation of his brilliance.

Amongst other things, Reisman discusses unemployment and human labor, concluding that the last thing anyone ought to worry about is employing those seeking to sell their labor.  Writes Reisman,

Man’s limitless need for wealth, combined with the respective natures of desires and goods, is responsible for the fact that the desire to consume always far outstrips the ability to produce.  Desires are mental phenomena, based on thoughts and concepts.  Goods are physical phenomena, requiring for their existence the performance of human labor.  For all practical purposes, the referents of concepts are limitless; and to desire, one need do hardly more than imagine.  But goods are always specific concretes, and each must be produced, requiring labor and effort.  In essence, our desires outstrip our ability to produce by virtue of the limitless range of the mental in comparison with the physical and thus by virtue of the fact that the range of our imaginations is always incomparably greater than the power of our arms. (p. 54)

Given the fact that there is no dearth of what can be potentially produced, given the existence of the required factors of production — the existence of which is also predicated from the availability of human labor —, we must conclude that mass unemployment stems from the artificial interventions of the state which put a halt to the possible productive processes of the market.

This also suggests that employment for employment’s sake should not be an end sought by economic policy, because employment is a necessary precondition of productivity.  Employment is a means to an end.  The task of setting ends should be given back to the individual, because the accomplishment of these ends will invariably require the input of human labor.  No less, the availability of human labor decides the general level of productivity of society, or the division of labor — the more labor available, the more productive society can be.