THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

usiness boom cycle, or whether we are dealing with a structural
process, which will systematically grow over time. Much academic
ink has been spilt on trying to distinguish which of the two we are
dealing with. In truth we may be dealing with both.
I will distinguish between three types of unemployment.
1. The so-called 'frictional' unemployment. Even under the best of
economic circumstances in a free market there will be some people
who are fired or who leave and who remain for a few weeks or
months 'in between jobs'. We should expect that there will always be
some small percentage of people in such a transition.
2. Unemployment due to the 'inventory adjustments' in the normal
business cycle. This occurs when stockpiles of finished goods grow in
an industry. While this inventory is being gradually liquidated,
businesses quite often tend to reduce their production workforce
temporarily. Again, we should expect that as long as there is a
business cycle, demand for labour will also fluctuate between the
good and the bad years.
3. However, we now have evidence that in addition to both wellknown
types of unemployment described above, a long-term
structural trend has also started to build up. This explains why the
'frictional' unemployment seems to get worse decade after decade.
This structural trend turns out to be just the job market consequence
of the shift in the production processes from the Industrial Age to the
Information Age. To the extent that this is true, none of the solutions
proposed within the traditional left- right political divide framework
will be capable of dealing with the structural nature of this problem.
As we are only just starting to enter the Information Age, we should
expect a further acceleration of the corresponding trends.