The Problem of Unemployment
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Abstract
Of all forms of social insurance, unemployment insurance has always presented the greatest difficulties as to both theory and method of organization. In fact, the difficulties were so great that for many years even the keenest students of the problem practically admitted them to be insurmountable. The history of social insur? ance presents no more dismal failures than those that attended some of the experiments that were tried in connection with the prob? lem of unemployment. It was claimed by many that the problem of unemployment relief would have to be considered as a prob? lem of relief only, without any reference to insurance principles; by others, that it was a problem of wages primarily. On the other extreme could be found the theory, still held by many in this coun? try, though emphatically contradicted by all known facts of eco? nomic life, that the whole problem of unemployment was a problem of psychology, since work exists for all who want. But whatever was thought of the principles of unemployment insurance, the whole subject has been immediately placed upon a solid scientific basis through the bold act by which Lloyd-George's British national insurance law established recently a national compulsory system of unemployment insurance for nearly 2,500,000 wage-workers. All criticism of modern industrial society focuses on the con? ditions of unemployment, especially as expressed in large industrial crises; and in search of correspondingly broad economic measures of relief, the suggestion of insurance is often sneeringly referred to as being altogether incapable of dealing with the grave situation confronting the wage-workers. It is perhaps advisable, therefore, to point out in the very beginning that in one respect theoretically at least, the problem of unemployment is no different from problems of accident, sickness, or invalidity?in each case it may be readily admitted that prevention is better than relief. It is certainly much more desirable that there should be no industrial accidents