Full Employment Abandoned

Full Employment Abandoned

Shifting Sands and Policy Failures

William Mitchell and Joan Muysken

This book dismantles the arguments used by policy makers to justify the abandonment of full employment as a valid goal of national governments. Bill Mitchell and Joan Muysken trace the theoretical analysis of the nature and causes of unemployment over the last 150 years and argue that the shift from involuntary to ‘natural rate’ conceptions of unemployment since the 1960s has driven an ideological backlash against Keynesian policy interventions.

Chapter 10: Conclusion: The Urgency of Full Employment

William Mitchell and Joan Muysken

Subjects: economics and finance, labour economics

Extract

Our motivation for writing this book, which underpins the research to which we have dedicated our academic careers, is straightforward and linked to our understanding of employment as a basic human right. We also adopt a simple rule of thumb when considering the effectiveness of public policy such that a good policy initiative is seen not in terms of ‘how rich it makes the rich’, but rather in terms of ‘how rich it makes the poor’ in a given society. Further, in terms of social justice, we consider that relative assessments of inequality are as justified as absolute comparisons. In this regard, we unapologetically started from a values perspective which emphasised the underlying rights of citizens to be fully involved members of their communities. We then extended the discussion to define what these underlying rights imply for the design and operation of the economic system. Our starting-point from this perspective is espoused clearly in Article 23 of the 1948 Universal Declaration of Human Rights: ‘everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment’. Our articulation of the full employment framework in Chapter 1 captured the reality that prevailed in the post-Second World War period up until the mid-1970s, whereby governments used aggregate demand policies to maintain full employment as an overriding goal of economic policy. Within this framework, mass unemployment was constructed as a systemic failure that restrained living standards through loss of...

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