Preface

Once again employment has become a matter of general concern, and once again the only answer to the problem that the “authorities” are able to come up with is to try to buy it. So again we embark on costly and inefficient programs of inflation and public employment, no different from those that have been so unsatisfactory in the past.

There is a rather general impression at the moment that the answers to all problems can be bought; that money is the universal remedy for social and economic ills. We are told repeatedly that a nation which can afford to spend billions on going to the moon and on foreign wars can certainly afford to spend the necessary billions to solve our domestic problems, and we are constantly exhorted to start the spending immediately and forthwith. But notwithstanding this very common opinion;. the power of money is limited. It cannot always win a war, as we are now painfully aware; it cannot change deep-seated patterns of human behavior, as we are slowly beginning to realize; and it cannot buy good performance of our productive system. After all, the purpose of that system is to produce income; it is not something on which we should be spending our income.

Economic problems seldom have completely satisfactory solutions: In the final analysis, such a problem usually boils down to a matter of making some hard decisions: determining which of our objectives must be scaled down or abandoned because our resources are limited. But employment should be the outstanding exception. It is not another claimant competing for a share of the national product; it is an essential feature of the activity from which we derive that product. The right kind of measures to increase employment should add to the national income rather than consume part of it. Thus the mere existence of the problem, the fact that there is such a thing as involuntary unemployment, is prima facie evidence that there is something wrong with current thinking on the subject. Obviously, the view of the situation that we get from present-day economic theory, the view that leads to the self contradictory conclusion that we must buy a productive activity, is seriously in error. A new approach to the problem is clearly needed.

This volume is a report of the results of an investigation based on recognizing that unemployment is a factual matter, not a matter of opinion or judgment, and can therefore appropriately be attacked by the methods and procedures of the physical sciences, the most powerful and effective means of dealing with factual issues that the human race has ever been able to devise. Following the standard scientific practice, the first step in this investigation was to determine the true cause of unemployment, which strangely enough, had not previously been identified. Once this cause is known, it becomes obvious; not only that there are many practical means by which the present high unemployment rate can be quickly and easily reduced, but, more significantly, that it is not necessary to tolerate any unemployment at all. The results of the investigation confirm what should be evident from any careful consideration of the nature of the problem; that is, expenditure of income is not the proper way to correct deficiencies in an income-producing activity. These results show that if the right kind of measures are not put into effect, an efficient economy with full productive employment is impossible, regardless of how much is spent to achieve it, while if actions of the proper nature are taken, that result can be attained, not only without cost to the taxpayers; but with a substantial decrease in the burden that the taxpayers are now carrying.

D.B. Larson