Groupthink and Denial on a Grand Scale
Chapter 23: Employment guarantees
A central idea in economics is efficiency, which means getting the best out of what you have available. The concept is extremely loaded and is the focus of many disputes. But economists of all persuasions are united in saying that developing theories about how efficiency is to be attained at any level is a core activity of their profession. At the macroeconomic level, an economy is deemed to be operating at its maximum level if all productive resources are fully engaged. In more simple terms an efficient economy is one where there is full employment, where everyone can find a job that wants one. This concern about full employment was embodied in the policy frameworks and definitions of major institutions all around the world in the period following World War II. In his 1987 Ely Lecture to the American Economics Association, Princeton economist Alan Blinder described the failure to provide productive employment for all those willing and able to work as one of the ‘major weaknesses of market capitalism’. He argued that the failure had been ‘shamefully debilitating’ since the mid 1970s, and that the associated costs make ‘reducing high unemployment a political, economic and moral challenge of the highest order’ (Blinder, 1989: 139). In 2013, Blinder said there was still an emergency, ‘five years after the worst . . . we have this titanic loss of output . . . something we number crunching economists tend to emphasize.
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