Every person has the capability of labor power. Everyone, by working, has the ability of producing something of value. And, with the current state of technology, everyone's labor can be turned into tremendous value. A single textile worker produces clothing for thousands in a few hours. A mail clerk, in one day of work, will ship out $5,000 to $10,000 worth of postage. Even the construction worker, who now has the advantage of truck and wrecking crane, can remove decaying buildings that normally would have taken a hundred times more workers. If everyone can produce value, and there is technology available to significantly increase this value, then why is there so much unemployment?
Why is it that these factories, these farms, these "small businesses" and "entrepreneurs" are not able to provide employment for everyone? After all, those people who produce thousands of dollars of value a day receive very little compared to this amount. Since businesspeople want to see returns on their investments, it is logical that they will place their money where it can help them receive the most profit. But, why are they abstaining from so many opportunities to make profits, only operating a handful of industries, and not all of them? Why are half of the fields cultivated by workers, and the other half intentionally left bare? Why are only some of the factories in operation, some of the industries providing jobs?
Why an investor chooses one business to operate is an easy question: its profitability, ease, comfort, and not having to work. However, when we turn away from this, and ask the next question, we're not quite so certain: "But, why doesn't the investor place their wealth in the other industries? Why is it that some are chosen, and others neglected?" Certainly, the chosen path is done for the highest profits that can be obtained, but what about the neglected paths? These certainly have not been overlooked by the Capitalist business people; they were simply not chosen.
Consider what might possibly deter a Capitalist from putting funds into more industries. Since it is an impulse to wealth that leads them to where they do invest their money, it may naturally be this same impulse when the Capitalist does not invest in this business. But, why would they withdraw funds from any project that had meaningful opportunity in creating some profits, even if it wasn't as high a profit as they typically expect? This raises some interesting questions and thoughts about the concept of entrepreneurship in the development of jobs. Any farming or manufacturing job, chosen in a secure field like non-durable goods and wheat, has always been guaranteed of higher profit and security than bonds; so why would the later be chosen, instead of the first? One must broaden their understanding and interpretation of "profit" for this question to be answered.
Imagine, then, an economy where one Capitalist possesses many industries in a theoretically "free market economy." The profits of any business must, in some way, be through sales and retailing. It is easy to see that mining companies provide ore, manufacturing plants provide goods, and farms provide food. But sometimes the sale is not always so apparent, such as when a company hires a financial firm to do consulting. In this case, a service is being sold, but all profit is dependent upon sales; and there is no profitability where an industry is not buying and selling.
Profit depends on sales, whether or not the industry is specifically "a retailer." Sales, in their turn, depend on customers, who by their form, must necessarily have some income -- whether it is by working, owning, or a combination of the two that typically befalls "the small business owner." In this environment, imagine that a business possessing a large market share decides to invest more. This means expenditure on land, the productive tools of land, and those who are expected to work these tools. But all of this requires time, especially a period where the business is unknown and obscure, not yet reaching its productive maximum, and struggling to survive.
Consider the situation, though, once it has ripened, taken that the rest of the economy has more-or-less continued the same motions as before. There will be more production of a particular good or sale, whatever new business that was picked by the wealthy Capitalist. The market will have more goods, but what about the money required to purchase those goods? Clearly, there will be an increase in the amount of money available to consumers. With more workers, that means a greater number for the total wages paid to laborers, and this has a chance to be coupled with the profits gained by the Capitalist in their venture.
But by how much can the profits of this new industry gain? For the consumers' receive an increased amount of wealth according to the wages being paid at this new industry. If the Capitalist expects to make more money than they spend, then they must absolutely receive enough sales to cover the costs of business: capital and wages. But the consumers of the market are not receiving more wealth than this. If it does happen, that this particular Capitalist, can make their business thrive, the most likely route is by taking away the customers of other businesses or industries.
There are a few other possibilities. One other option is for the Capitalist to successfully encourage consumers to spend their savings on consumption goods. And in modern Capitalism, where credit and debit are popular trends, savings are extremely low -- for American citizens, savings are negative 0.5% of their total income. [*1] Again, a new possibility is the introduction of labor-saving devices, to reduce the costs of wages. But this, too, has its significant obstacles. Many Capitalists have found that by preventing the introduction of technology, they actually make more money, as in the oil cartel and its control over the automotive industry, or in the software industry, or railway, computers, and manufacturing. And, where it is implemented, there are certainly limits.
Other Capitalists, doing the same, will increase their savings, by reducing the total amount of laborers they have, the Capitalists together become equally responsible for a general decline in consumers. This is normal, since there are more living by begging and crime, as employment for the means of life has not been an option. With productive machinery, there are fewer workers, and therefore, fewer consumers, and therefore, less and less wealth being spent on industries. Wages decline, as people become more desperate for work and willing to accept less and less. Unemployment continues, wages continue to fall, and a general trend of misery follows.
Finally, the economy wakes up and gains its life again, though never in a single moment. It begins by the first unlikely option: savings. As the Capitalists have received so much on their behalf, and seeing so little on the other side of society, they will see that they have reached the limits of profit's profitability. For what good could wealth be, except personal expenditure, when it is tremendous and secure? The economy is brought back to life by the consumption spending of the Capitalists who have been hoarding up society's produce. And, as they have every luxury imaginable desired, the economy can only continue by a growth of this luxury spending.
This can mean lavish and expensive education, food, and homes for the evergrowing children of the industrialist's family. It can mean the sudden increase in value of a particular metal, now the only one usable for a particular commodity. It can mean new service industries, which treat every trifling desire and impulse of a client, from emotional acceptance to physically servility. It can mean new technology that satisfies wants that the human was not born with, such as the printing press' introduction of the book, valuable only to those who have been taught reading and its worth. The development of computers and modern communications technology, likewise, follows a similar path: not only does it replace older technology, but it satisfies needs that we ordinarily would not have.
With this picture of the economy's cyclic motions, are we really closer to understanding a legitimate answer to why you may have become unemployed? When the economy is spiraling towards inactivity, with wealth hoarding up into hands that have no use for it, there will be increasing unemployment; and, once these hands feel free to dispense of their wealth, it will mean a reversal. It is like the tide, which can only recede, once it has reached the final point of its rise, or like a pendulum, which only falls back down with the same force and power that it rose.
But why are you unemployed? Why is anyone unemployed? In following these cycles, we can find periods where there are "more" or "less" unemployed, but to completely remove it entirely seems impossible. Nor does unemployment ever reach acceptable levels. Today, it is at 22% in the United States, only 3% away from its point at the Great Depression. [*2] News reporters, however, have redefined unemployment so that they can report lower numbers. Those who have been unemployed for too long are discounted -- though this method is never used when measuring the horrible rates of unemployment during the Great Depression. This keeps an unbalanced perspective in the mind of the news listener and reader.
If we know why investors, those who possess the lands and the factories, do not invest more and hire more, then we have a slightly better picture as why unemployment exists. In simple language, investors do not invest when it is not profitable. And it is not profitable when they already have such a dominating control over the economy, that more goods on the market can simply mean diminished profits from their other investments. Other cycles, such as luxury and technology trends, as well as a variety of completely non-economic factors, such as culture and religion, will have their effect in boosting or decreasing unemployment.
As to why you are unemployed... it is because there are a few who possess society's productive powers. Possessing enough to guarantee all the needs of profitability, Capitalists will not hire more or operate more businesses. Such business will not give the Capitalist a larger share of the total portion of industry's profits, but rather, it even has a possible tendency of reducing it. And where profits and profitability are going to be reduced, the Capitalist will hesitate. They will hesitate even if it means keeping millions of people from producing the bread and homes they need to live. The private profits of an Capitalist are not invested in the well-being of all, but in the well-being of themselves.
*1. "A penny earned is a penny spent," by Marilyn Gardner, 2006, CSMonitor.com.