Gilligan's Island: The seven castaways are stranded and realize they ain't gonna be rescued any time soon. So, they set about erecting a society and, of course, an economy. For simplicity, all the islanders eat, drink, wear one thing: coconuts. Let's further assume that they have calculated that, given climactic conditions and the size of the coconut tree grove on the island, they can safely harvest roughly 35 coconuts/day, each of which is consumed before the next day's distribution.
However, this is going to take some work, so they assign tasks (each of which "pays" 5 coconuts per day):
Mr. Howell- coconut distribution
Mrs. Howell- coconut distribution
Ginger- coconut tree cultivation
The Professor- coconut research
Maryanne- coconut harvesting
Meanwhile, Skipper and Gilligan earn their keep by building huts for them all.
Everything goes along great for a few months (with daily activity interrupted only by the occasional rescue attempt being fouled by Gilligan), until Skipper and his little buddy finish the huts. Oh hurrah! They spend the next day at the beach, and that night head to the camp fire for the daily coconut distribution. The scene...
SKIPPER (as Mrs. Howell skips him in her passing of coconuts from her wicker basket): Hey! Yo, lady! Need a coconut or five here!!!
MR. HOWELL: How dare you speak to my wife that way, you rapscallion! And besides, you don't *deserve* any coconuts! You didn't do any work today!
GILLIGAN: He's right, Skipper. You and me were down by the beach, and we spent the whole day building that really cool castle.
SKIPPER: But I see your point, Mr. Howell. After all, I’m a sailing
man, and a believer in discipline and hard work. But we're willing to pitch
in! What can we do?
*****STOP!!! Now the Say’s Law version of the ending!!!*****
MARYANNE: Hey Professor, don’t we have about 10 coconuts left over?
PROFESSOR: Yes, that’s right, we do!
GINGER: Well, what the heck, since we’re not doing anything else with them I’d be happy to pay Gilligan 5 in exchange for polishing my Oscars! I almost broke a nail doing it myself yesterday!
MRS. HOWELL: Ooooh, Thurston, can we use the other 5 to pay Skipper to fan me in the afternoons? I almost broke a sweat yesterday, and they’d never allow me back into the Club if they found out I perspired!
MR. HOWELL: Well certainly, Lovey, that’s a capital idea! After all, we’re not using those coconuts for anything else!
MORAL OF THE STORY: DEMAND (IN THIS CASE FOR WORKERS) CAN NEVER FALL
SHORT OF TOTAL SUPPLY SINCE OUR DESIRE FOR GOODS AND SERVICES IS INSATIABLE.
UNUSED RESOURCES WE CAN ALREADY AFFORD TO EMPLOY (I.E., GILLIGAN AND SKIPPER)
ARE A WASTE, SO WE WILL PUT THEM TO WORK DOING EVEN TRIVIAL TASKS RATHER
THAN LEAVE THEM IDLE.
*****ALTERNATE ENDING!!! Now Keyne’s “uncertainty” ending!!!*****
MR. HOWELL: Good for you, old man! However, I'm afraid that we don't have a task open for you right now. We have just about everything necessary for daily survival covered.
THE PROFESSOR: Yes, Mr. Howell is right, Skipper. In fact, given the unpredictability of weather patterns in this area of the Pacific, we’ve decided to save those coconuts–just in case!
SKIPPER: What! Well, what can Gilligan and I do to earn some of those? I mean, if all the jobs are done, can you just give up some?
THE PROFESSOR: What kind of precedent would that be, Skipper? I'm afraid you and Gilligan will have to go without.
GILLIGAN: I'm willing to work, Professor! Just point me in the right direction, and ZOOM!!! I'll be on it!
MRS. HOWELL: Oh darling, isn't Gilligan's spirit an inspiration to us all!
MR. HOWELL: Indeed it is, lovey. Keep that attitude, son, and you'll go a long way! But, as I said before, we've really nothing for you to do right now, and those 10 coconuts are spoken for. Nothing personal, of course–fine job on the huts!
[Chaos ensues as Gilligan and Skipper each take a log from the fire and threaten the other castaways with death, dismemberment, and worse if they don't get a coconut or two.]
MORAL OF THE STORY: DEMAND MAY BE INSATIABLE, BUT WHEN THE FUTURE IS UNCERTAIN, PART OF “DEMAND” IS A DESIRE FOR A STOCKPILE OF PURCHASING POWER TO MEET UNFORSEEN CIRCUMSTANCES. INCOME DIVERTED INTO THIS STOCKPILE DOES NOT CREATE EMPLOYMENT. READ MORE BELOW...
*****STOP FILMING...CUT...PRINT...THAT'S A WRAP!******
Enough of bad 1960's era situation comedies. Substitute consumer non-durables for the coconut-related jobs, and consumer durables and capital investment (the latter of which in economics means factories, etc.) for hut building. Here's the basic problem that emerges when you assume uncertainty: the profitable demand for employment in the durable sectors is unstable. Though we may go for long periods during which consumers buy new cars, houses, stereos, washers, etc., they can stop almost literally overnight (that was, by the way, the first sector to slow down during the summer of 1929). Likewise the building of new productive capital. We only need so many Denny's, so many office buildings, so many machine tools, etc., at any given point in time. The short-term demand for goods and services IS NOT insatiable!
What caused the Great Depression? Well, it was (in the US) preceded by a long and sustained economic expansion: the Roaring 20's. We built cars (and the factories to make them), radios and refrigerators (and the factories to make them), roads, refineries, service stations (yes, a great deal of the expansion was automobile-related), and rural electrical lines. All the while, workers were migrating from the country (where they were no longer really needed to work on the farm as productivity was rising) to the city. And then there is a multiplier effect of these employments, as those workers spend money and create other jobs. Very little government spending back in the 1920's, so this is pretty much all private market forces.
But what do each of those employments have in common? Durable. Keynes (whose work is not to be confused with "Keynesianism") says in the GENERAL THEORY that only one rail line is needed between London and Birmingham. Quite right.
As our ability to produce rises, so the stability of the profit-oriented forces of demand that keep us employed become less stable. Isn't it ironic that the Great Depression–a period of unprecedented and still unequaled economic misery (where there was no welfare or unemployment insurance)–should have followed such a period of economic growth? By all accounts, the 1930's should have been a glorious time when we all sat back and enjoyed the fruits of our labor through the 1920's (just as Gilligan and Skipper were trying to enjoy their increased leisure time). But it doesn't work that way. In the 1930's we had the *capacity* to provide for Americans on a scale the likes of which civilization had never before seen, but we couldn't figure a way to make sure everyone *deserved* a share.
Who solves the Great Depression for America? Japan, with the words "Tora, tora, tora." Give Gilligan and Skipper a stick each to beat back foreign invaders from the beaches of the island, and pay them five coconuts each–what the hell, we had the five anyway! In the same way, overnight the US economy had "recovered."
The fewer folks we need in the coconut industry, the more sensitive
to such problems we become. Oh, there will be times when non-coconut folks
will find themselves working, and perhaps for extended periods. But slumps
will happen, as demand for durable items is satiated. And those slumps
will be magnified by psychological factors, the impact of debt deflation,
and the multiplier effect. That is the nature of a system that depends
on the profit motive to generate employment. Rising productivity makes
employing fewer people profitable!