Full
transcript of the video “On the Welfare State, employment, unemployment and
underemployment”: https://www.youtube.com/watch?v=gUUtrOYaY8w (Excerpt
from "Is there a future for the capitalism?" -full video in Spanish-,
discussion organized by Dante A. Urbina in the course of Political Economy,
Faculty of Economic Sciences of the Major National University of San Marcos
(Lima - Peru) on July 5, 2013).
This leads us to the issue of the Welfare State. The
Welfare State has as its fundamental point an infrastructure of free market
capitalism but with redistribution, this means that production is carried out
based on a capitalist free market, incomes are generated and from them
redistribution is performed. However this cannot be sustained long term and may
not be sustainable in times of crisis when production falls. And that is what
is currently showing us the financial crisis and the protests in Greece and all
other countries.
I think the problem is in the mechanism, that is,
instead of generating mechanisms to ensure that all people can participate
meaningfully in the productive system and get their own income based on their
effort and work, what is done is only a redistribution process that depends on
only a certain members of society. So, in fact, the Welfare State can end
excluding. Precisely the Welfare State is given in Europe where the phenomenon
of multilocalization or delocalization of production is most pronounced, that
is to say, where you can put a company in Switzerland and get that your whole
production takes place in Africa, or the bulk of the production takes place in
Africa, but the brand is from Switzerland.
That dynamic of delocalization of firms in the context
of globalization is generating an unemployment problem in a important part of
developed countries because, as people in Europe live in a Welfare State, the
State protects certain social rights to ensure that wages are relatively high.
What the companies do in this context of globalization is this: they seek labor
force abroad or outsource the production, they go to developing countries where
the laws are not as strict and where it is not established a Welfare State, and
pay much lower wages and even establish systems of informal recruitment or
outsourcing of services, etc.
So we see that in developed economies, with this
scheme, unemployment is being created and, in underdeveloped economies,
employment is not being created. In underdeveloped economies is underemployment
what is being created, or forms of precarious employment. And this is something
that Peruvian economists should keep in mind because whenever we see
statistics, when we see how the employment or the unemployment are moved, we
forget that our country (Peru) has underemployment basically. However, what
extent economic theory helps us think about underemployment? Economic theory
speaks us in terms of employment and unemployment, but not about the content of
the working conditions. That's a problem we have here and that is being
generated in globalization. Then we also have to think about that.
You can contact the author of this article
in: “Dante Abelardo Urbina Padilla” (Facebook) and dante.urbina1@gmail.com (email)
