Probing the Roots of Unemployment
March 1, 1994 -
How will the drama of democracy be played out in the twenty-first century? Are we citizens of Western democracies, in fact, in the danger zone? The perils facing our democracy are many. They include deepening cynicism, the growth of corrosive forms of individualism and statism, the loss of civil society. Democracy requires laws and constitutional procedures, yes, but it also depends on the everyday actions and spirit of the people. On that groundâwe are in trouble. We have a veritable shopping list of disconcerting facts at our disposal that speaks to cynicism and a turn inward toward the self.Jean Bethke Elshtain (Democracy on Trial, 1993)
Many individuals and families are now experiencing the painful repercussions of unemployment, or underemployment. A host of businesses have disappeared or are struggling to survive. Politicians are wrestling with huge deficits, rising debts and interest rates, and a sinking dollar, forcing them to fundamentally revamp all existing programs and policies.
We are a long way from the heady days of the early 1970s when a government white paper on unemployment insurance painted the following rosy picture of Canada's future:
As Canadians stand on the threshold of the '70s they see on the horizon the outline of many brilliant changes and developmentsdevelopments which indicate we know how to exploit the breakthroughs in technology marking us as a community capable of realizing the full promise of post-industrial eradevelopments which single us out as one of the world's most affluent peoples with a spiralling gross national product and a rising standard of living, (quoted by Arthur Kroeger in Canadian Speeches, January/February, 1994)
How did we move in a relatively short time from such an optimistic outlook to the present mood of pessimism and gloom? No doubt, the main reason is that the Canadian economy is now in serious trouble. And the most socially-destructive symptom of our economic sickness is unemployment.
Recently, the good news was that Canada's unemployment rate (at least the official rate) dropped from 11.1 to 10.6 per cent. But high unemployment remains one of the most persistent problems of a general economic malaise affecting the developed nations. The Geneva-based International Labor Office predicts that by the end of this year more than 35 million people will be out of work in the 24 nations of the Organization for Economic Cooperation and Development (OECD). Some 23 million of that total will be jobless in Western Europe alone. The situation in the former Soviet Union and in the Third World is far worse. There is a growing fear that the large army of jobless may give rise to more crime and severe social and political unrest, even endangering the very basis of society.
The global nature of unemployment means that we can no longer rely on the giants of the world's economies to pull the others in their wake. Furthermore, the danger of trade wars and protectionism is more likely in troubled economic times, which would be especially damaging to Canada because of our heavy dependence on trade. The option of acting in splendid isolation is not a viable onewe are interdependent with other nations. A serious problem, however, is our over-reliance on foreign borrowers to finance our huge and recurring deficits.
Within Canada, the problem of unemployment is exacerbated by political instability created by a strong nationalist movement in Quebec, state interventionism (which, ironically, is accompanied by wide-spread cynicism about politics), and the rise of interest-group politics. Further worsening the situation is an adversarial mentality that inhibits open public debate. Public consensus has become nearly impossible to achieve. The result is political gridlock and impotence and growing disaffection of citizens.
In addition to our fractious politics, unemployment is aggravated by a host of social problems. These include a public education system that is performing poorly, troubled marriages and broken families, and rising lawlessness. Although the problem of unemployment is caused by a poorly functioning economy, it cannot be separated from the social and political environment. To take a few obvious examples, children from dysfunctional families often encounter difficulties in their education, which in turn hamper their employment prospects. Over-reliance on welfare breeds dependency, which is an obstacle to finding and keeping gainful employment.
A major impediment to finding solutions to our social and economic problems is the new concept of victimhood, the idea that society (or the "system"), not the individual, is responsible for people's behaviour. In other words, people are seen as products of their environment, and their behaviour is really a function of their status in society. In this view, irresponsible behaviour and crime are caused by poverty and unemployment.
There is enough of an element of truth in this assumption to give it the appearance of plausibility. It is, nonetheless, a serious error to simplistically rationalize the relationship between crime and poverty, as is now often done. To explain or excuse irresponsible behaviour as a function of one's socio-economic status is an insult to many poor who lead virtuous lives. Furthermore, it amounts to a form of determinism that fosters irresponsible behaviour and deprives people of a sense of their own dignity and responsibility, which is exactly what they need to improve their condition.
The many signs of dysfunction underscore that society is a vast, interdependent mosaic of persons involved in a myriad of social relationships. That's why unemployment is more than an economic problem. Similarly, the economy is more than merely a technical system of production and consumption, operating as if it were a piece of machinery. Unfortunately, this is exactly how it has been viewed. The belief is that the solution lies in the clever manipulation of monetary, fiscal, and social policies by astute technicians.
The economy is not a machine
Treating the economy as an impersonal system assumes that it can be directed by the correct techniques of control and administration (whether from the Right or the Left). But this ignores or underestimates the one truly decisive element, namely, human responsibility. Neglecting the factor of human responsibility has resulted in a tug-of-war between those who have pinned their hope on the invisible hand of the market and those who believe in the visible hand of the state. The outcome is a hybrid kind of welfare state capitalism that amounts to a compromise between the two extremes of Left and Right.
Welfare state capitalism has functioned fairly well in Canada until recently, but it is now in a state of decomposition. It is suffering, on the one hand, from too much government-imposed regimentation (accompanied by the mismanagement of the economy) and, on the other hand, from too much antisocial selfishness and greed. This is not to suggest that the economy does not need a measure of government regulation or, on the other hand, a large area of personal freedom. But the key element in every aspect of the economy is human beings and human relations. Economic life cannot flourish without a deep respect for what it means to be human. In other words, the central question is: How can we live and work responsibly so that we form a wholesome and just society, and not a violent and unjust society?
Where should we start
This question is really about how we make the rules that govern society. It is about determining how we distinguish between right and wrong. We imagine that we can get along quite well without any regard to a higher, God-given, law. The assumption is that we can be good without God, with the inevitable result that we rely more and more on an ever-expanding complex of legal and administrative regulations to direct and control the behaviour of people. This is the deepest reason for our inability to find solutions to our economic problems, our increasing crime rates, and the all too many signs of political and social breakdown. It is what Jean Bethke Elshtain calls "the loss of civil society."
It needs no belabouring that those in control of public policy are at a loss what to do. The old methods no longer work, and we have simply run out of money and ideas. There is a positive side to this, for it offers the possibility of a new start. It is a good thing that public policy makers are becoming more ''realistic" about the limits of government intervention and the need to reduce the state's portion of the economy.
A prime example of a politician who now represents the more "realistic" politics is Lloyd Axworthy, a leading "progressive" member of previous Liberal governments. He now serves as Human Resources Minister and is responsible for overhauling the entire social security system. His admission (quoted earlier) that public policy was formulated without careful thoughtsimply in response to pressures from interest groupsis truly an astounding admission of incompetence and irresponsibility. Can the people responsible for creating the mess in the first place be entrusted with the task of repairing the damage?
The poverty and impotence of our attempts to cure what are indeed serious economic (and social) problems has left us staring ourselves blind on the symptoms. The solution to our economic difficulties lies not primarily in the technical details of understanding how money functions, how to make and market a product, or how to manage a business, important as they are. First and foremost, we should acknowledge that these activities can only thrive in an environment of spiritual health and moral virtue.
The scourge of unemployment will not be eliminated by merely fine-tuning a severely flawed system. It will require wisdom rooted in the Judeo-Christian understanding of human responsibility and divine providence.