Who’s Going to Demand Full Employment?
Recently, a print-only Jacobin article from Chris Maisano inspired a worthwhile discussion between Shawn Gude and Matt Yglesias over full employment, a “moderate idea with radical implications,” as Yglesias put it. (Mike Konczal had a good piece about this, too, in The American Prospect.) All of these contributions are worth your time. But while everyone seems to be on the same page when it comes to the desirability of full employment, I think we need to deepen our understanding of how to achieve it.
In his response to Shawn, Yglesias reminds that, weird as it may seem from today’s vantage, there was a time — not so long ago and in this very galaxy — when elites throughout the developed world were genuinely committed to a policy of full employment. From roughly the Second World War to the mid- to late-1970s, relevant policymakers and their constituents tried to keep the unemployment level as low as possible, for reasons both economic (more people with jobs = more people to buy stuff) and social (inequality gets people a little riot-y). Whether those elites were just better people than the current crop, or whether they simply had a better handle on their own self-interest than today’s one percent, I couldn’t say.
Whatever the reason, Yglesias is correct in noting that, unlike tax cuts leading to higher revenue, the existence of a capitalist ruling class that genuinely seeks to maintain full employment is no myth:
In fact they were pursued in the West for ~30 years after World War II and they were ultimately discredited by actual mismanagement of the macroeconomic stabilization regime (basically policymakers tried to respond to negative supply shocks by increasing aggregate demand) rather than an inexplicable revolt of the bosses. And today countries from China to India to Brazil show that a variety of political economies that are not myopically focused on 2 percent inflation targeting are perfectly possible. Australia hasn’t had a recession in over twenty years. This can be done right.
Something is missing from Yglesias’s brief history, however, and it’s to my mind a rather crucial factor in explaining the full employment phenomenon: unions! For example, let’s take another look at that roughly 30-year period of full employment in the United States. Here’s a graph by Dave Aldrich, using data from the Bureau of Labor Statistics, comparing rates of unionization in the private workforce and unemployment over the past 50-plus years. I think it speaks for itself:
(Graph via http://snohomishobserver.com)
What this all says to me is that Yglesias isn’t wrong to focus so much on full employment. Any left-of-center person should consider it a paramount goal. Where he (seemingly) missteps is in his explanation of why America had a generation of full employment era and how it can do it again. Monetary policy is no doubt important, as is infrastructure, education, and so on. But none of these universally beneficial ends can be reached simply through journalists, experts, and professional do-gooders begging through their respective media platforms. You need muscle to steer the ship of state. You need unions.