Social democracy and full employment
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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- Bhaskar, V. & Glyn, A., 1992. "Investment and Profitability: The Evidence from the Advanced Capitalist Countries," Economics Series Working Papers 99144, University of Oxford, Department of Economics.
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"A Signaling Theory of Unemployment,"
7, Boston University - Department of Economics.
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"Unemployment in the OECD Countries,"
Economics Series Working Papers
99130, University of Oxford, Department of Economics.
- Glyn, A, 1997.
"Does Aggregate Profitability Really Matter?,"
17, Centre for Economic Performance & Institute of Economics.
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- Nickell, S., 1991. "Wages, Unemployment and Population Change," Economics Series Working Papers 99122, University of Oxford, Department of Economics.
- Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
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