INVOLUNTARY UNEMPLOYMENT

Abstract

Our claim is that in the purely free enterprise system, there can be no such thing as involuntary unemployment, as long as wage demands are in accord with expected productivity, as perceived by the potential employer. Seeming counter examples are shown to violate one or more of these conditions. Nevertheless, there is great resistance on the part of professional economists to this axiomatic claim. The second part of the paper attempts to probe the cause of this resistance, and finds in praxeology, a rejection of Keynesian economics and psychological analysis, the cure for it.