Hyperunemployment

Unemployment so high that the government cannot raise enough taxation revenue to fund unemployment benefits and pensions (and cannot borrow enough to fill the gap). How high this is depends primarily on (a) the proportion of the workforce out of work, and for how long, and (b) the rate of taxation. Tax could in principle rise to very high levels. The authorities in the declining years of Rome were willing to take tax rates to the limit. Farmers in the third century were reduced to selling their children into slavery as the only way of meeting the tax demands from Rome, or to abandoning their farms altogether. In some cases the tax rates equalled the whole of their harvest, leaving farmers themselves with no way of feeding their families other than going to the cities in search of food hand-outs.^H57

Rome could test such extremes because it was unencumbered by democracy but, whatever the politics, there is a degree of disruption beyond which there is not, by any standards, enough revenue to redistribute. At this point, no job means no income, and no means of staying alive—with the exception, of course, of those cases where the lack of a job is compensated by participation in the informal economy. With the arrival of hyperunemployment, the career of the market economy as a provider is over.

Related entries:

Leisure, Growth, Economics, Lean Economics, Profession, Slack and Taut.