This article was first published by Business Day on 17 March 2025
What does it mean when one third of your labor force is unemployed? By the nature of human existence, we do not expect everyone to work or to be formally employed. Young children are dependent on their parents and older siblings for sustenance and support, taking on household work only as they learn and grow. A housewife, by definition, is employed in the essential and highly important work of nurturing the children and managing the home. But by most official (government) definitions, a housewife is not part of the “labour force” and is therefore not “employed.”
Nature does not provide us with knowledge and sustenance without some thoughtful effort on our part. Someone must do the work in any community. And the fewer the people who work, the less food there is to eat – thus the biblical admonition against sloth. Most of us are proud to work and to provide for those for whom we are responsible and who depend on us. It is painful when we are prevented or discouraged from doing this.
When we speak of “unemployment,” we really mean involuntary unemployment. You want to work but something is preventing you – at least temporarily – from finding employment outside the home. Official measures of unemployment attempt to include all those who are actively searching for employment but are unable to get hired. To be employed or to be searching for employment is to be included in the official count of the labour force. And the unemployment rate is the number of unemployed divided by the number in the labour force.
To become discouraged and to stop looking for work is to leave the labor force and to be no longer counted as unemployed. Thus, the unemployment rate appears to decrease even though you have not yet found employment. But why were your efforts to find work thwarted, and why did you lose hope of finding it?
Prosperity – that is, living above sustenance – depends on an aptitude for more than mere survival. It also depends on community and a culture that promotes personal responsibility and respect for the lives and property of others in that community. In societies where this is lacking, civility and standards of living decline; life becomes more difficult, and society faces diminished viability.
The culture of a society is reflected in the types of leaders that emerge, and in the types of governance structures that it creates and how it sustains them over time. A culture that recognises the value of deliberation in governance and respect for one’s fellows, based on a realistic view of human nature, is more likely to generate governmental institutions that are compatible with civility and prosperity.
Such is the difference between a country with a 30 percent unemployment rate and a country with 3 percent. Whatever the natural limits of a people within any society, no one needs to tell them that their levels of personal prosperity depend on the thoughtfulness and direction of their own efforts. Individuals can and do make mistakes, but when their efforts are consistently thwarted by governmental policies and regulations that block or control productive commercial relations between people, their business and employment prospects are materially diminished.
A culture that recognises the importance of personal responsibility will recognise that freedom requires self-restraint, not license. Indeed, it is a sense of entitlement that ruins everything. When based on mutual respect, employment relationships flourish. But no relationship can survive politically motivated laws and regulations that interfere with people’s rights to associate voluntarily with mutual informed consent.
When a third of your population is unemployed, what are they doing? How are they surviving? Other than a life of crime, are they providing for themselves in the informal sector or are they dependent on taxpayer-funded “social grants”– or both? One path is productive, the other is a de facto burden on society however we might justify it. Perhaps the worst burden of any system of welfare payments is the extent to which it discourages productive activity and the learning and personal growth that come with it.
To provide for one’s family is a moral duty and personal choice. As the burdens of taxation and regulatory compliance grow, it becomes more difficult to fulfill that duty. A government can claim legitimacy only to the extent that it nurtures community and the elevation of life. When a government cannot protect the lives and property of its citizens from crime – and from its own predation – productivity and culture are both diminished.
Economic freedom, however imposed, transcends culture and aptitude. Its blessing – to any society – is widespread productive employment and prosperity. But economic freedom and its blessings cannot survive a culture of entitlement and a government that promotes sloth at the expense of those who are prudent and productive, and of those who want to be productive.
Only when citizens are free and equal under the law to work with and to hire others in mutual benefit and to live secure in their person and property, will we truly benefit “from each according to his ability.”
