Chapter 12: A Concluding Comment
These pages began with the assertion that the abiding problem of macroeconomics was to explain why there is unemployment. But it may be thought, to judge from the central tendency of macroeconomic theorizing of the past several decades, that the key task of macroeconomics has been to explain how there is not unemployment; to explain how, against near universal belief, there are no periods of a general excess supply of labour; there are no circumstances that spell ‘too many applicants for available jobs’; and that any belief to the contrary is the fruit of an illusion, delusion or simplicity of mind. For since about 1970 sophisticated thinking about macroeconomics has been dominated by various rationalizations of labour market behaviour that, as if from first principles, shun the possibility that there could be ‘too many applicants for available jobs’. The impetus behind these theories, and the credence that adheres to them, has not arisen from any success of theirs in empirical contests with the alternatives; there has been no such success. Rather, the underlying current that impels them is a discomfort with Keynesian and Classical theories on account of their apparent violation of the tenets of rational behaviour. This book has a different response to the shortcomings of Keynesian and Classical doctrines, and adopts a different end. The goal of this work is to advance and develop a rational explanation of the presence of a socially wasteful excess supply of labour. To that end it airs and sustains the doctrine that...
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