Unemployment and the State

One of the more persistent modern political philosophies asserts that eliminating unemployment is a key behavioral responsibility of the State.  There is much to discuss related to the ethics, economic viability, and effectiveness related to such an assertion but the State nonetheless pursues this purported objective with ever-increasing incremental gusto.


For the sake of focus and brevity, let us simply highlight the easily and immediately measurable aspect of this assertion – efficacy.  But first, some historical context:


The United States federal government officially entered the business of regulating national employment full-time in 1946 with the advent of the Employment Act.  The final effective form the act took was a de facto resolution, a guiding policy that essentially declared a national goal of full market employment and production.  The lone significant policy measure the act implemented turned out to be the creation of the Council of Economic Advisors, the remainder stripped of its Keynesian policy enforcement measures and powers by skeptical congressmen along the way.  However, the act was eventually amended by the Full Employment and Balanced Growth Act of 1978 and it is this amending legislation that granted the federal government direct and indirect powers of fiat monetary manipulation and outright government “stimulus” of the economy (among others) to “promote full employment…” (emphasis added).


However, one prefatory fact is historically clear enough: full employment has never been realized in the United States, either through mixed market dynamics, Keynesian economic and monetary theory, or bureaucratic policy enforcement.  There exists compelling evidence to suggest that such an outcome is not practicably possible through any artificial and/or State regulatory means, for a number of complexities and factors.  Full employment is theoretically possible in a free market; however a true free market has never been allowed to function on a significantly large scale (i.e., a national one) in any modern economic sense.  In the face of this objective’s perhaps predestined failure to materialize, what exactly has the State appreciably brought to the table in exchange for its increased real power, incurred debt (including inflation), and forced capital reallocation?


In short, the exact opposite of its stated goal.  In this sense, capital is not only reallocated from the market but is indeed demonstrably misallocated – a common theme in government spending in general.  Not only has the 1978 “toothed” amendment failed to deliver on its ostensible goal, but unemployment rates have steadily risen despite supposedly mitigating direct government outlays and indirect spending through so-called “quantitative easing” – all expenses that must be directly or indirectly recouped from the property of others sooner or later.


Since that act’s initial implementation until 1978, the national unemployment rate averaged 5.1%.  From 1979 through September 2013, that rate has risen to an average 6.7%.   In the past ten years alone, the recorded unemployment rate has averaged 6.9%.1  This last metric is especially troubling when considered against the backdrop of arguably the greatest period of Keynesian interventionism on the part of the federal government and the Federal Reserve in American history.2


The evidence clearly dispels any purported correlation between government involvement in the pursuit of unemployment and any actual progress toward that stated goal.  All ethical and economic considerations aside, the law immediately falls on its merits when considering the following abridged objective statement: “to assert the responsibility of the Federal Government to use all practicable programs and policies to promote full employment…” (emphasis added).




1. These statistics collectively compiled from data available from the following sources:

2012 Census Bureau employment statistics

Bureau of Labor Statistics data


2.  None of these figures incorporate qualified members of the labor force who have either given up on seeking work after a period of activity, or members who never sought regulated employment in the first place.


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  1. A Discussion of Global Warming |
  2. Minimum Wage Laws Ban Employment |

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