- Australian unemployment 4.8% (January 2009) - source
- American unemployment 8.1% (25 year high, February 2009) - source
A commodity is simply something that can be bought or sold.
If commodities can’t be sold (such as houses or cars at the moment) then capitalists will stop making them and stop or slow down buying the materials used to make them. If labour power cannot be used then capitalists will lay off (sack) workers or not employ new workers. Labour power is subject to supply and demand since it is just another commodity.
There is never full employment or guaranteed work under capitalism because labour power is just another commodity. Just as there is no guarantee that someone will buy a car from General Motors today there is also no guarantee that some capitalist will employ a particular worker. That is how a market economy works. If there was zero unemployment then workers could bargain for higher wages up to the point where the profits of the capitalist would become minimized. So, it is important for capitalism to always have some unemployment or a reserve army of labour to keep wages in check.
In Australia, we have had chronically high unemployment for many years now (since 1974). As a teacher in disadvantaged schools I have seen the effects of generational unemployment (parents don’t have jobs and kids don’t aspire to have a job) and concentrated unemployment (in some housing trust areas no one in the street works). People can survive on welfare these days but some of them don’t value education or aspire to employment. Generational welfare dependency can be very ugly
The capitalist system can still function “normally” while unemployment remains within limits (say, below 5%).
At the moment we have a recession (defined as two quarters of zero or negative growth) where buying and selling at the marketplace grinds to a halt. The means of production are still there, in those industries which are sacking workers. In the abstract it is still possible to make products and distribute them to people who want them but since they can’t be bought or sold, since we live in a market economy, then that will not happen.
Historically, other social systems have not had unemployment, they have not had the concept of unemployment. There may be all sorts of other problems with these social systems but unemployment is not one of them. Hunter-gatherer Aboriginal society in Australia, before whites arrived, did not have any unemployment. Slave society and feudal society did not have unemployment. There was no unemployment in the socialist Soviet Union during the 1930s Great Depression. In many science fiction future scenarios there is no concept of unemployment.
update 8th March: There is no unemployment in the Free Software industry whose products power the internet (LAMP).
Unemployment is part and parcel of the market economy, an essential feature. But obviously, these are not normal times, unemployment is rapidly increasing. This requires further explanation. Why has the normal arrangement of relatively low unemployment broken down?
(based on Unemployment and Revolution, Part 1)