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Back to Full Employment
Why we should put full employment back on the national agenda and how we can summon the political will to achieve it.
Full employment used to be an explicit goal of economic policy in most of the industrialized world. Some countries even achieved it. In Back to Full Employment, economist Robert Pollin argues that the United States—today faced with its highest level of unemployment since the Great Depression—should put full employment back on the agenda.
There are good reasons to seek full employment, Pollin writes. Full employment will help individuals, families, and the economy as a whole, while promoting equality and social stability. Equally important, creating a full-employment economy can be joined effectively with two other fundamental policy aims: ending our dependence on fossil fuels and creating an economy powered by clean energy.
Explaining views on full employment in macroeconomic theory from Marx to Keynes to Friedman, Pollin argues that the policy was abandoned in the United States in the 1970s for the wrong reasons, and he shows how it can be achieved today despite the serious challenges of inflation and globalization.
Pollin believes the biggest obstacle to creating a full-employment economy is politics. Putting an end to the prevailing neoliberal opposition to full employment will require nothing less than an epoch-defining reallocation of political power away from the interests of big business and Wall Street and toward the middle class, working people, and the poor, while mounting a strong defense of the environment. In the end, achieving full employment will be a matter of political will: Can the United States make having a decent job a fundamental right?
Full employment used to be an explicit goal of economic policy in most of the industrialized world. Some countries even achieved it. In Back to Full Employment, economist Robert Pollin argues that the United States—today faced with its highest level of unemployment since the Great Depression—should put full employment back on the agenda.
There are good reasons to seek full employment, Pollin writes. Full employment will help individuals, families, and the economy as a whole, while promoting equality and social stability. Equally important, creating a full-employment economy can be joined effectively with two other fundamental policy aims: ending our dependence on fossil fuels and creating an economy powered by clean energy.
Explaining views on full employment in macroeconomic theory from Marx to Keynes to Friedman, Pollin argues that the policy was abandoned in the United States in the 1970s for the wrong reasons, and he shows how it can be achieved today despite the serious challenges of inflation and globalization.
Pollin believes the biggest obstacle to creating a full-employment economy is politics. Putting an end to the prevailing neoliberal opposition to full employment will require nothing less than an epoch-defining reallocation of political power away from the interests of big business and Wall Street and toward the middle class, working people, and the poor, while mounting a strong defense of the environment. In the end, achieving full employment will be a matter of political will: Can the United States make having a decent job a fundamental right?
- GenresEconomics
188 pages, Hardcover
First published January 1, 2012
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September 30, 2013
Pollin is one of the leading progressive economists in the US. This is a useful book for both "policy wonk" types and political activists, and makes a compelling case for making full employment a central component of a progressive agenda.
The emergence of neoliberalism as the orthodoxy among policy-makers since 1980 resulted in the end of a commitment to full employment that prevailed in the postwar years. One of Pollin's main arguments is that full employment is not simply a technical matter, but a matter of political will and the balance of class forces. Pollin's discussion of Marx, Keynes, Kalecki and Friedman on the "natural" rate of unemployment under capitalism and a question of class power is especially insightful, although explained in more detail in earlier writings. Full employment strengthens the power of the working class, and the emergence of neoliberalism has weakened workers and strengthened business.
Pollin points to the "Rehn-Meidner model" in Sweden as something progressives and the labor movement can work for - which was able to balance a commitment to full employment while curtailing inflation. A class pact existed where unions played a key role in the health of the overall economy and where wage increases were linked to productivity. This model included incomes policies, active labor market policy, etc. Pollin however concedes this model began to unravel in the 1990s. One can perhaps criticize Pollin for underestimating the ability of a return to that model in Sweden, let alone implementing it in the US.
Pollin argues, correctly in my view, that "globalization" is not the culprit for declining wages, job losses, reduced trade union power, etc., but rather the shift to neoliberal policy. He argues against "protectionist" solutions, such as restricting immigration, tariffs, devaluing the dollar etc. A move toward protectionist barriers would result in other countries responding in kind and have only a limited impact and is unsolidaristic towards Third World workers and economic development. "Buy American" policies are most effective as a component of a broader industrial strategy.
Pollin outlines a short-term strategy for the recession, including more stimulus and taxing the excess of cash reserves held by banks and corporations. A long-term strategy would focus on transforming the economy away from military and fossil fuels. Education and the "green economy" are more labor-intensive and thus create more jobs per million dollars spent. Education creates 2.5 times as many jobs as military spending, and renewable energy 3 times as many jobs as fossil fuels. In addition, industrial policies and greater regulation and taxation of Wall Street are also part of this strategy.
Overall, this is a highly readable book that can hopefully bring full employment back on the table and spark discussion of progressive strategies.
The emergence of neoliberalism as the orthodoxy among policy-makers since 1980 resulted in the end of a commitment to full employment that prevailed in the postwar years. One of Pollin's main arguments is that full employment is not simply a technical matter, but a matter of political will and the balance of class forces. Pollin's discussion of Marx, Keynes, Kalecki and Friedman on the "natural" rate of unemployment under capitalism and a question of class power is especially insightful, although explained in more detail in earlier writings. Full employment strengthens the power of the working class, and the emergence of neoliberalism has weakened workers and strengthened business.
Pollin points to the "Rehn-Meidner model" in Sweden as something progressives and the labor movement can work for - which was able to balance a commitment to full employment while curtailing inflation. A class pact existed where unions played a key role in the health of the overall economy and where wage increases were linked to productivity. This model included incomes policies, active labor market policy, etc. Pollin however concedes this model began to unravel in the 1990s. One can perhaps criticize Pollin for underestimating the ability of a return to that model in Sweden, let alone implementing it in the US.
Pollin argues, correctly in my view, that "globalization" is not the culprit for declining wages, job losses, reduced trade union power, etc., but rather the shift to neoliberal policy. He argues against "protectionist" solutions, such as restricting immigration, tariffs, devaluing the dollar etc. A move toward protectionist barriers would result in other countries responding in kind and have only a limited impact and is unsolidaristic towards Third World workers and economic development. "Buy American" policies are most effective as a component of a broader industrial strategy.
Pollin outlines a short-term strategy for the recession, including more stimulus and taxing the excess of cash reserves held by banks and corporations. A long-term strategy would focus on transforming the economy away from military and fossil fuels. Education and the "green economy" are more labor-intensive and thus create more jobs per million dollars spent. Education creates 2.5 times as many jobs as military spending, and renewable energy 3 times as many jobs as fossil fuels. In addition, industrial policies and greater regulation and taxation of Wall Street are also part of this strategy.
Overall, this is a highly readable book that can hopefully bring full employment back on the table and spark discussion of progressive strategies.
Displaying 1 of 1 review