UNEMPLOYMENT IN HISTORY: Economic Thought and Public Policy by John A. Garraty

UNEMPLOYMENT IN HISTORY: Economic Thought and Public Policy

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With Depression not far behind and a high level of unemployment persisting, this is certainly a timely topic. But as Garraty is quick to point out, the very concept of unemployment, as differentiated from idleness, is a modern one. Not surprisingly, his haft-effort to read the concept into the history of antiquity and feudalism does not get very far--it is meaningless to speak of unemployment where labor is not predominantly bought and sold at the market. Garraty himself identifies unemployment as ""a disease of capitalism,"" and he is more successful in tracing the changing attitudes toward unemployment during the last three centuries. At first, assuming that wealth is a function of total production, local governments were active in providing work and supporting the unemployed through bad harvests. With Adam Smith's Wealth of Nations (1776) a new attitude emerged: a freely operating market economy could absorb everyone willing and able to work--all the government had to do to eliminate unemployment was to keep out. This became the accepted view of classical economics, as modified and developed by Malthus, Ricardo, and, a century later, by Alfred Marshall. It also became public policy in the US and England. In the late 19th century, unemployment as a functional concept in the modern sense developed, spurred on by study of the unemployed and their miserable lives. An ethical reformism brought unemployment insurance, but treatment of this ""disease"" remained sporadic until the Depression shocked economists and politicians into a new course, charted by Keynes: unemployment could be controlled through manipulation of interest rates--at the cost of inflation. This ""solution"" has been no solution at all, and no one seems to know what to do next, including Garraty, who meekly concludes that we can tolerate a certain level of unemployment to offset the more serious dangers of inflation. In linking unemployment to capitalism, Garraty could have explored the results achieved in planned economies for possible leads, but he only mentions Soviet efforts in passing, and ignores other examples. He gives us a thorough description of where we've been, but no idea of where we're going.

Pub Date: Jan. 25th, 1977
Publisher: Harper & Row