This book explores unemployment from a monetary macroeconomics perspective, identifying the pathology at the origin of unemployment and the principles of reform that will enable a passage from capitalism to post‑capitalism.
Bernard Schmitt explores the problem of involuntary unemployment by developing his quantum monetary macroeconomic analysis, demonstrating that the presence of fixed capital increases both physical productivity and the production of economic value. Money is at the core of Schmitt’s analysis because the relation between money and output is what makes it difficult to explain the origin of involuntary unemployment. Schmitt shows that unemployment is formally impossible in any economy producing wage‑, interest‑, and investment‑goods. It is only when the economic system includes fixed capital amortization that the conditions for the formation of unemployment are met. The determining role is played by the natural rate of interest: when this rate falls below the market rate of interest, unemployment sets in. Schmitt provides a new explanation of the mechanism leading to unemployment and advocates a reform that, if implemented, would break any link between capital accumulation and unemployment.
This book is essential reading for those interested in issues around unemployment and post‑capitalism as well as the fields of political economy, macroeconomics, economic theory, and heterodox economics more broadly.
PART I Understanding Money 1 The two monies present in modern economies 2 The integration of the product into money PART II Unemployment is formally impossible in economies where only wage income exists. 3 Wage-goods are already sold in the formation of wages 4 Savings and lending wages 5 The factors of production are their own employer 6 Unemployment is necessarily nil in an economy where wages are the only income PART III Unemployment is formally impossible in economies where only households income may be found 7 Households’ non-wage income is taken from wages 8 An economy where household income is the only income cannot be affected by unemployment PART IV Unemployment cannot result from consumptions or investments 9 The oft-repeated theory of the adjustment between global supply and demand 10 Production, income, and unemployment 11 Invested profit PART V Summary of the financial operations associated with the production of wage- and profit-goods 12 Profit deposits 13 The lending of profit deposits in capitalism PART VI The amortization of fixed capital 14 Healthy amortization and pathological amortization 15 Even the correct definition of amortization allows for it to be devoid of any pathology 16 The logical framework of the explanation of unemployment PART VII Keys ideas of the reform that will defeat unemployment 17 A remainder of a few essential ideas 18 The solution to involuntary unemployment 19 Post-capitalism, profit-deposits, allocation of income and sectors 20 An outline of the reform APPENDIX Bibliography Index
Bernard Schmitt was a Full Professor of Monetary Macroeconomics at the Universities of Burgundy (Dijon), France, and of Fribourg, Switzerland. He is the author of many publications, including Monnaie, salaires et profits, Macroeconomic Theory: A Fundamental Revision, Théorie unitaire de la monnaie, nationale et internationale, New Proposals for World Monetary Reform, and Inflation, Unemployment and Capital Malformations. Alvaro Cencini is Professor Emeritus of Monetary Economics at the Università della Svizzera italiana (USI), Switzerland. Xavier Bradley is retired, formerly Associate Professor of Economics at the University of Burgundy in Dijon, France. He is a member of the Research Laboratory in Monetary Economics at the University of Lugano, Switzerland.
