Now that the pettiness of primary campaign politics may be over because Rick Santorum has “suspended” his bid for the Republican nomination, it’s likely that we’ll get back to some serious discussion about the ills that are plaguing our society, particularly the lack of jobs. However, the task of creating enough jobs to keep pace with population growth is a highly complex problem.
In the early days of industrialization, many farmers were needed to supply food for the masses that moved into cities; a craftsman started with raw materials and produced a finished product; a wide variety of agents distributed goods from farmers and manufacturers to consumers.
In that system, perhaps Adam Smith’s “Invisible Hand,” the law of supply and demand, governed the economy well enough to meet the humble expectations of the era. However, let’s see how the system has changed as we have continued the process of industrialization.
Europe, particularly England, had a huge head start on the United States, which was still dealing with the hardships of survival in a wilderness. But, look at Europe today. Our official unemployment rate (currently about 8.8 percent) doesn’t look so bad when compared with countries like Greece, Spain, Italy, or Portugal. In fact, the only country on the continent that is doing substantially better than the U.S. (not counting Scandinavia) is Germany (unemployment about 5.6 percent)...