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Strange7 comments on Unemployment explanations - Less Wrong
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Supply is defined as that which is produced by human beings, not that which is made of physical matter. Otherwise, saying that demand only responds to changes in supply would fail to constrain our expectations any more than the laws of physics do. But we're pursuing a different level of analysis when we engage economic questions.
You are looking at aspects of my example that are irrelevant to my argument. My point is that human decisions and innovations are not the only factors behind changes in demand. Whether or not we restrict our analysis to the ice cream market alone, the point stands that demand would be changed if the Sun's behavior changed and thus we need to look at things other than changes to supply if we want to accurately predict changes in demand.
Henry George was looking at the labor market, and pointing out that you can't really understand the causes of large-scale unemployment, "the paralysis which produces dullness in all trades," without looking all the way back up the supply chain, if necessary to natural resources and how they're being used or prevented from use, until you find something necessary that's not being supplied. Can you find a counterexample to THAT claim, a cause for general unemployment which can't be traced back to a lack of supply?
If by necessary you mean "in demand", then yes I agree, otherwise I don't know what you mean. You need to look at what products have unmet demand if you think the market's being prevented from reaching full employment. But examining supply chains from the ground up isn't a requirement for this, and actually no one understands the economy that well as it's computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don't think that's always so.
Two exceptions to this:
Governments can employ people to do jobs that aren't demanded by the market.
There might not be enough resources for people to do any work that's in demand. For example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.