Ralf Einert

THE WORLD SPIRIT - Part 2:

Studies of Economic Change

"Labour Market" without intersection!

The last two parts of this chapter about the labour marked have analysed the labour demand and labour supply separately. A market is characterised by a correspondence between supply and demand. To be allowed to speak about a functioning market an intersection is needed.

If you put both lines on the top of each other following pictures results:

The original situation by which the accepted doctrines are influenced and which describes the phase of economic growth during the post war area is characterised by an intersection between the supply and demand: The labour market is in fact a functioning market. Full employment during the so called economic miracle is therefore an example. Economic growth and increasing wages were the normality.

But it could be demonstrated that on the one hand the line of the labour demand is getting steeper and on the other hand the line of the labour supply turns around its axis. So both lines are getting a similar shape over the time. Consequently the intersection between them disappears according to the improving scientific and technological development which is based on high demands due to the idea of the evolution theory.

There is no intersection between the labour demand and labour supply.

A market for labour does not exist.

But despite this labour has to be offered even without any demand as humans have to bear for their existence - there is no choice. Assuming there were no social welfare humans have to commit suicide if they do not want to supply their manpower even under the condition that there is no demand. The condition on the market for goods and services are similar with the different that anyone has to commit suicide: If supply and demand do not fit together goods and services are not produced - they do not exist - but humans exist.

This means that the economic equilibrium theories which are usually taught at schools and universities have to be replaced. But it is obvious that there is no adequate alternative at the moment at all. Otherwise we would have had another economic and social policy already.

Consequently the basic research in economic policy has to be intensified.