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Social democracy and full employment

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  • Glyn, Andrew

Abstract

Full employment was the centrepiece of the economic policy of social democracy in the post-war period. Whilst the role of Keynesianism in policy making may be exaggerated, it offered the prospect of maintaining full employment without any section of society having to pay. Problems with the foreign balance and with the budget deficits, however, may require that some part of society has to pay with reduced consumption for full employment. This will tend to sharpen the distributive conflicts which, as Kalecki argued, are endemic to full employment capitalism and which eventually rendered it unsustainable by undermining profitability and the dynamism of private investment. The demand necessary to sustain full employment can be maintained by a balanced budget expansion provided the political support can be secured for the higher taxation and provided the institutions for containing distributional conflict can be developed.

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  • Glyn, Andrew, 1995. "Social democracy and full employment," Discussion Papers, Research Unit: Economic Change and Employment FS I 95-302, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbece:fsi95302
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    References listed on IDEAS

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    Cited by:

    1. David R. Howell, 2010. "Institutions, Aggregate Demand and Cross-Country Employment Performance: Alternative Theoretical Perspectives and the Evidence," Working Papers wp228, Political Economy Research Institute, University of Massachusetts at Amherst.
    2. Ozlem Albayrak, 2020. "Household Consumption, Household Indebtedness, and Inequality in Turkey: A Microeconometric Analysis," Economics Working Paper Archive wp_954, Levy Economics Institute.
    3. Ioannidis, Yiorgos, 2011. "Employment in the Keynesian and neoliberal universe: theoretical transformations and political correlations," MPRA Paper 45062, University Library of Munich, Germany.
    4. Jochem, Sven, 1998. "The social democratic full-employment model in transition: The Scandinavian experiences in the 1980s and 1990s," Working papers of the ZeS 02/1998, University of Bremen, Centre for Social Policy Research (ZeS).
    5. Eduardo F Bastian & Mark Setterfield, 2020. "Nominal exchange rate shocks and inflation in an open economy: towards a structuralist inflation targeting agenda," Cambridge Journal of Economics, Oxford University Press, vol. 44(6), pages 1271-1299.
    6. Hancké, Bob, 1996. "Labour Unions, business co-ordination and economic adjustment in Western Europe, 1980-90," Discussion Papers, Research Unit: Economic Change and Employment FS I 96-309, WZB Berlin Social Science Center.

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