'Competitive Austerity' and the Impasse of Capitalist Employment Policy

Gregory Albo


Keynes closed his General Theory with the warning that 'it is certain that the world will not much longer tolerate the unemployment which, apart from brief intervals of excitement, is associated - and, in my opinion, inevitably associated - with present-day capitalistic individualism'. Despite Keynes's conviction that 'a right analysis of the problem [would] cure the disease', present-day capitalism is again associated with mass unemployment. This represents a remarkable reversal of the postwar 'golden age' of high growth and low unemployment. In the period from 1966-73 a state of virtual full employment was reached, with unemployment falling below 3 per cent in many states, with Germany and Japan even suffering serious labour shortages. From the oil shock of 1973 to the 1981-82 Volcker recession, mass unemployment spread across the OECD area, accompanied by accelerating inflation, giving rise to the awkward, if descriptive, term stagflation. Despite the recovery of the mid-80s and the squashing of inflation, the majority of the advanced capitalist bloc continues to be characterized by low-productivity increases, 'jobless growth' and steadily mounting unemployment. Even in the case of what often has been misleadingly referred to as the 'great North American jobs machine' unemployment has failed to drop back to pre-crisis levels.

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