Global Recession, Unemployment and the Changing Economics of the Self

Abstract

The dimensions of global recession of the world economy are now well established: the International Monetary Fund’s (IMF) (2008) World Economic Outlook warns that the world economy is ‘entering a major downturn’, the worst since the 1930s. While there is no commonly accepted definition of a global recession, the IMF estimates global growth to be less than 3% for 2009.[1] One of the consequences of this downturn is the massive loss of jobs: almost 80,000 jobs were lost in just one day (Monday, 26 January) as giants such as Caterpillar, Phillips, Corus (UK steelmaker), Spring Nextel and Pfizer, among others laid off workers. The US Bureau of Labor Statistics released statistics for December 2008 indicating that regional and state unemployment rates were universally higher in December, with all 50 states and the District of Columbia recording both over-the-month and over-the-year unemployment rate increases, and large regional differences, from 2.2% in Wyoming to -4.5% in Rhode Island.[2] The goal of the Obama administration is the creation of 3 million jobs in fixing America’s infrastructure and in the green energy sector, which falls considerably short of the commitment to full employment.[3] In this climate closer attention needs to be paid to the relationship between unemployment and the changing economics of the self. Unemployment is the new global reality for the developed world and also increasingly for developing economies like China and India that have experienced spectacular growth rates over the last five years. The relationship between education, work, and identity is often the basis for meaningful participation in society, and investment in quality education is indeed of the essence (International Labour Organization [ILO], 2007). Contemporary social theory, including economics, in the form of identity studies seeks the constitution and manufacture of consciousness and subjectivity in more nuanced ways, emphasizing cultural processes of formation within larger shifts concerning globalization, the ‘knowledge economy’, and the mobility of peoples across national boundaries and frontiers.[4] Accordingly, very often social theorists have given greater attention to the world of social media and new technologies in relation to identity formation and the transformation of patterns of work and its definition in a post-industrial society. In economics there has developed an entire new field called ‘behavioral economics’ that repudiates aspects of neoclassical theory based on the simplifying of Homo economicus, importing and basing its insights on psychology. At one time, at the very beginning of its disciplinary formation in the heyday of ‘political economy’, economics had a strong relationship to the other social sciences and, particularly, to questions of psychology. In The Theory of Moral Sentiments Adam Smith (1759) commented upon the psychological principles guiding human behavior providing the ethical and methodological principles for his later works. Broadly speaking, Smith followed his mentor, Francis Hutcheson, in dividing moral systems into two: nature (Propriety, Prudence, and Benevolence) and motive (SelfLove, Reason, and Sentiment). Smith, in contrast to Hutcheson, provides us with a psychological account of morality, beginning Moral Sentiments with the passage: