This is no Sunday school: prosperity comes with pain
Discord and suffering are the price we pay for getting richer.
Discord and suffering are the price we pay for getting richer. WHEN I was a kid, marbles were the rage. When you played at home with your brothers and sisters, mum made sure that, whoever won, everyone got their marbles back when the game was over. When you played at school, however, the big boys insisted on "playing for keeps", so kids like me went home with a lot fewer marbles.I also went to Sunday school, which was run by kindly mothers. If you forgot to memorise your verse of scripture, there was no comeback. If you misbehaved there was no punishment, just a look of disappointment on the face of your teacher.We've been hearing a lot lately about people losing their jobs. Firms in manufacturing, but also other industries, are announcing redundancies. There have been so many they could give you the impression that employment is falling. Fortunately, it isn't the people losing their jobs are being more than made up for by others gaining jobs (including people who lost their jobs earlier).Sometimes people are laid off because the economy is in recession, but at present it's happening because powerful forces are changing the industrial structure of the economy. Older industries are shrinking newer ones are expanding.It must be a terrible thing to lose your job through no fault of your own, even if they do give you a fat cheque as they push you out. It's anxious waiting after an announcement to see if you'll be among those tapped on the shoulder. When "downsizing" was the fashion in the 1980s and '90s, it was said even those who kept their jobs suffered "survivor guilt".When you're a victim of structural change it's tempting to look for someone to blame. Managers have been altogether too ruthless in protecting the bottom line they took too long to recognise the problem, and when they did respond they could have done it better the government should have stepped in to protect the industry.Since managers are as subject to human frailty as ordinary employees (just extraordinarily more highly paid), there's often some truth to these criticisms especially with the wisdom of hindsight.If businesses weren't so quick on the trigger in laying off workers in the early stages of a downturn, fewer downturns would turn into full-blown recessions. If they were more imaginative and innovative, they would find less painful solutions to problems.But when there are major changes in the forces bearing down on an industry, there's no point imagining change could have been resisted, nor any way all human pain could have been avoided.The economy isn't run like a Sunday school. In an economy like ours, everyone bosses, workers, customers pursues their self-interest. The economic game is played for keeps. So everyone runs a greater or lesser risk of losing their job. Even bosses get the bullet.All of us act in self-regarding ways that, whether or not we realise it, contribute to someone's job insecurity. And that means a fair bit of uncertainty, anxiety, fear, disappointment, loss of status, self-doubt, frustration, family discord, despair, humiliation, depression, belt-tightening and worse are part of the deal.Nor is the risk of pain fairly distributed. Some people never lose their job in a long career, some make the transition to a new job relatively easily, some move into retirement earlier than they'd bargained for, some have considerable difficulty finding another job, some never work again.Perhaps the greatest force driving structural change is advances in technology people inventing new products, new things to do or new ways of doing old things. The digital revolution is reshaping our economy destroying jobs here, creating them there in ways and to an extent we as yet see only dimly.Does anyone suggest we should halt technological advance because of all the economic disruption it brings and has brought since the days of the Luddites? Does anyone imagine such an attempt could work?Another major force driving economic change is globalisation the lowering of natural and government-made barriers between countries, caused by technological advance and, to a lesser extent, deregulation.The re-emergence of the mighty economies of China and India and the rapid economic development of poor countries generally is shifting jobs around the world.Most rich countries are benefiting from cheaper imported manufactures, but Australians are also benefiting from higher prices and quantities for our rural and mineral exports. Think the poor countries' pursuit of prosperity should be stopped because of the economic disruption it's causing? Think it could be?For decades we tried to shut out change from the rest of the world by protecting particular industries. These days we use taxpayer subsidies. But jobs in particular industries can be protected only at the expense of jobs in unprotected industries. Import restrictions and subsidies merely SHIFT the job pressure (which never troubles the people demanding assistance).When you're in the thick of it, it's easy to imagine structural change leads to ever-rising unemployment. But businesses have been installing new "labour-saving" technology for two centuries without it leading to mass unemployment. Structural change doesn't reduce jobs overall it destroys them in some industries and creates them in others.Market economies deliver almost continuously rising material prosperity. But they do so by continually changing, and that change comes with a fair bit of pain for many people.