Monday, July 27, 2009

"My Messenger before Thy Face"




(Around Tokyo...)

Unemployment vs. Economists


Economists misunderstand something important, since they cannot create wealth, cannot produce any advanced products, and above all cannot employ many workers.

You should not entrust a task of managing a huge amount of money to them, since economics itself is based on very ambiguous definitions regarding its mission.

Individual welfare and happiness, social order and settlement, and administration of the nation to avoid a civil war and chaos are still difficult questions for economists if they are rewarded with Nobel Prize.

But, you had better think that the basic mission of economics is to reduce an unemployment rate in a nation.

(Click to enlarge.)(http://www2.ttcn.ne.jp/honkawa/3080.html)

One important factor to be analyzed with unemployment rates is productivity or the labor productivity index, as everybody knows.

(Click to enlarge)

A change in productivity in the service sector is almost zero in major countries since the middle of 1990's.

A rate of increase in productivity in the manufacturing sector is almost steady and constant in major countries with the U.S. at the highest rate of 6.2% for 16 years between 1991 and 2006, the U.K. at 3.6%, France at 3.6%, and Japan at 3.2%.

( http://activity.jpc-sed.or.jp/detail/01.data/activity000894/attached.pdf)

Yet, an unemployment rate has widely fluctuated all through this period, indicating the demand side as more important than the supply side.

In other words, consumers are more important than businesses for national economy and economics. Yet, economists are useless to increase buying power of the people, though they might be able to give some advice to corporate management on investment, interest handling, or labor reduction effects.

Ultimately, if economists have no love to consumers, they will be enemies to the people. They will help greedy corporate management how to exploit workers, consumers, and citizens.

But, even if economists have any love to consumers, they will not be of great help to consumers, since definitions of economics are so vague.

Consequently, the unemployment issue is committed to politicians or lawmakers.

It is so, since economists will claim that their economics is proven to be right if economy is growing while 200 million Americans eat beefsteak everyday, and 100 million Americans cannot eat beefsteak any day due to unemployment.

Nonetheless, there is one important element that can largely explain the trend of unemployment as shown in the above figure: the effect of development of computation and telecommunications, namely PCs and the Internet.

Look at the trend of the unemployment rates of the U.S. and European nations and then you will see the effect of diffusion of PCs and the Internet since early 1990's for the U.S. and the U.K. and since the middle of 1990's for European countries (though the trend in Germany between 2002 and 2005 is exceptional).

On the other hand, Japan's unemployment rate has been increasing during the same period while PCs and the Internet were being introduced in the Japanese society at the similar pace with other major powers.

The difference cannot be explained by any economic theories and any economists. It is so, since it is related to the difference in culture and traditions between Japan and other major powers.

If introduction of PCs and the Internet has not drastically increased productivity in Western countries, it has activated people's life and boosted business chances in Europe and America.

But, in Japan, it has not so much activated people's life and boosted business chances as in Europe and America, due to the unique nature of its culture and society.

Indeed, Japan is a Buddhist country rather than a Christian country which the U.S., the U.K., Germany, France, Italy, and Canada are.

(That is why you cannot trust a Japanese economist who has never studied Christianity.)


(To be continued...)




Luk 7:25 But what went ye out for to see? A man clothed in soft raiment? Behold, they which are gorgeously apparelled, and live delicately, are in kings' courts.

Luk 7:26 But what went ye out for to see? A prophet? Yea, I say unto you, and much more than a prophet.

Luk 7:27 This is he, of whom it is written, Behold, I send my messenger before thy face, which shall prepare thy way before thee.