Unemployment - Unemployment Versus Shortages
If inflation is controlled, there is a tradeoff to be made between unemployment and shortages. If the government wants unemployment to be zero, it could print money until shortages are common. With lots of businesses trying to increase production, people could easily find work. Unlike today where it is difficult to see where work needs to be done, the shortages would make it clear to everyone where people should look for work.
With few unemployed people, it would be difficult for businesses to adapt to shifts in the economy. Sectors that need to expand production may find it takes a long time to do so. If we don’t like the resulting shortages, the government could allow a low level of unemployment to create a pool of workers that businesses could hire from. Since unemployed people are serving a useful purpose and their numbers can be controlled, the government could pay unemployed people to hunt for a job. A pool of job candidates could be maintained without imposing a burden on those who are looking for work.
The problem of unemployment can be solved simply and directly by printing money if inflation can be prevented. A way needs to be found to control inflation. The first step in my quest to control inflation is to rethink how private-sector businesses operate.
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