Friday, December 30, 2011

Why isn't Ireland’s Unemployment Higher?

The answer is: a mass exodus from a country devastated by neoliberal austerity. Ireland’s unemployment rate is currently 14.5%, and it would be much worse without this outflow of the labour force.

Is this supposed to be what the West’s economies can look forward to under neoclassical economics? Depopulation and a generation lost to emigration.


  1. The underlying neoclassical assumptions are that the excess population will starve to death, die young from the diseases of poverty, or leave the country and become somebody else's problem.

    Latvia is the same.

  2. That was actually the explicit assumption of Classical Political Economy, in its most pessimistic Malthusian form: no right to exist for human beings, except for what you can get on the market or by private charity.


    Our laws indeed say that [sc. human beings have] this right and bind society to furnish employment and food to those who cannot get them in the regular market; but in so doing they attempt to reverse the laws of nature; and it is in consequence to be expected, not only that they should fail in their object, but that the poor who were intended to be benefited, should suffer most cruelly from the inhuman deceit practised upon them.

    Thomas R. Malthus, 1989. An Essay on the Principle of Population (1803 edn.), Cambridge University Press, Cambridge. Vol. II, ch. VI. p. 154.

    A man who is born into a world already possessed if he cannot get subsistence from his parents on whom he has a just demand and if the society do not want his labour, has no claim of right to the smallest portion of food, and, in fact, has no business to be where he is. At nature's mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he do not work upon the compassion of some of her guests. If these guests get up and make room for him, other intruders immediately appear demanding the same favour. The report of a provision for all that come fills the hall with numerous claimants. The order and harmony of the feast is disturbed, the plenty that before reigned is changed into scarcity; and the happiness of the guests is destroyed by the spectacle of misery and dependence in every part of the hall, and by the clamorous importunity of those who are justly enraged at not finding the provisions which they had been taught to expect. The guests learn too late their error, in counteracting those strict orders to all intruders, issued by the great mistress of the feast, who, wishing that all her guests should have plenty, and knowing that she could not provide for unlimited numbers humanely refused to admit fresh comers when her table was already full.

    Thomas R. Malthus, 1989. An Essay on the Principle of Population (1803 edn.), Cambridge University Press, Cambridge. Vol. II, ch. VI. pp. 127-128.

    This is why economics became known as the dismal science.

  3. Same thing's happening in Greece and Portugal.

  4. As Neil Wilson says, Latvia has also been hit by the same exodus of unemployed.

  5. LK,

    Could you please give your theory/underline evidence for the assertion that it could been much worst.

  6. That Irish unemployment would have been higher had there not been a net outflow of unemployed persons?

    You're asking me explain something that should be obvious to anyone with elementary mathmatics?

    e.g. (numbers at random),

    20 million - 5 million = 15 million.

    If 5 million had not been subtracted, you would have 20 million, not 15.

  7. "This is why economics became known as the dismal science."

    Because of one man whose views weren't necessarily popular among others of his profession in his time?

    The reason that "Malthusian" is an adjective is that those views are almost singularly that of Malthus.

    It would be difficult to dispute the deep humanity of many early classical economists, some of whom gave away much of their wealth for the poor. Adam Smith was an example.

  8. "Because of one man whose views weren't necessarily popular among others of his profession in his time?"

    I should have said: "This is why later Classical economics became known as the dismal science."

    Yes, Adam Smith was considerably more optimistic than Malthus. But, then, a number of Classical econonists also shared Malthus's views on population.

    Moroever, Ricardian economics is deeply pessimistic in many ways, with its

    (1) "iron law of wages", and

    (2) class conflict between capitalists/workers and landlords, and even some conflict between capitalists and workers (because of the corn laws).

    Marx's economics is almost a logical development of Ricardian theory, with the labour theory of value given emphasis.

    "The reason that "Malthusian" is an adjective is that those views are almost singularly that of Malthus."

    I disagree with that: John Stuart Mill endorsed Malthusianism, and he's considered one of the most humane Classical liberals of the 19th century.

  9. LK,

    A few follow up questions

    Where do you get 5 million?
    Why would the 5 million be unemployed? I assume their must be a reason. What is your theory for employment in Ireland and why 5 million, why not 4 million.
    Please give me details on who the five million are, why they are unemployed, and how did they get unemployed.
    Please give me details, applied your theory to this specific case.
    By the way much respect to you. I have purchase Keynes return of the master and Paul Davidson the Keynes solution based on your recommendation.

  10. "Where do you get 5 million?"

    The whole figures:

    20 million - 5 million = 15 million.

    are just *imaginary* ones, as an example.

    I've not done the actual calculations on how many people have emigrated from 2009-2011, to find employment.

    If one did so, then most of these people, if they had stayed, probably still be unemployed.

    Therefore they would have added to the employment rate.

  11. Thanks for the response LK, but what I was hoping for was support for your statement “It would have been much worse.” Please explain by the deductive-nomological method outlined in Carl Hempel essay “Studies in the logic of explanation”, which I believe is your chosen method of explanation. What I am looking for per the deductive-nomological method is to explain the assertion, “It would of been much worse”, meaning if there was not a mass exit of the labor force from Ireland unemployment would have been much worst, “please define much worst”, then 14.5%.

  12. I heard from Michael Hudson there has been a big emigration from Latvia, and I know there has been in Greece as well. Makes sense....we learned in Labor Econ people will move to where there's jobs, in a country, but makes sense they will move out if there are no jobs at all.
    Real shame...those who can escape austerity will, it's falling solely on the working class and poor