 First US edition | |
| Author | William Beveridge |
|---|---|
| Publisher | Allen & Unwin, W. W. Norton |
Publication date | 1944 |
| Publication place | United Kingdom |
Full Employment in a Free Society (1944) is a book by William Beveridge, author of the Beveridge Report. It was first published in the UK by Allen & Unwin. [1]
The book begins with the thesis that because individual employers are not capable of creating full employment, it must be the responsibility of the state. Full employment is defined as a state where there are slightly more vacant jobs than there are available workers, so people who lose jobs can find new ones immediately.
Unemployment should be aimed to be reduced to 3%. Beveridge claimed that the upward pressure on wages, due to the increased bargaining strength of labour, would be eased by rising productivity, and kept in check by a system of wage arbitration. The cooperation of workers would be secured by the common interest in the ideal of full employment.
The book was written in the context of an economy which would have to transfer from wartime direction to peace time. Government direction of labour (under the Essential Works Order) would cease, and workers would have a free choice of occupation.
Beveridge argued that pre-war unemployment, that hit great heights during the 1930s depression, was due to ineffective demand for industrial products, imperfect labour mobility and general labour market disorganisation. Instead, the economy should be planned, so that demand is socialised, and supply is maintained at all times.
To maintain demand, fiscal policy should be utilised. That means the Treasury's budget should gear towards increased spending when demand is otherwise down. The Social Security proposals in his better known Beveridge Report was an integral part of this.
Frictional unemployment could be remedied through the use of planning law and subsidies to draw the location of industry to the door of the labourer. The advantage of that would be fewer costs in housing and social dislocation which results from large movements of labour. Full use of employment exchanges - public employment agencies - could be used to channel mobile labour, such as younger people, where it is needed.
The evidential support for Beveridge's policy comes from the war experience. War solved unemployment by socialising demand.
The most common criticism was always that the circumstances of the war were special and people were willing to tolerate more in those times than they might have otherwise. Therefore, it could not be said that just because unemployment had disappeared during the war, it would hold in times of peace. Furthermore, soldiers drafted into the war were often in forced idleness when there was no work for them.
Nevertheless, the book was highly influential, for it melding of Keynesian economics and Fabian politics. Years later, Nobel Laureate Friedrich Hayek would claim that Beveridge's Full Employment in a Free Society was ghost-written by Nicholas Kaldor. Hayek said of Beveridge, "[H]e wasn't the least interested in economics. He knew no economics whatever." [2]
"return to the old ways of engaging labour should be definitely made impossible. Industries like dock and harbour service, which by practising casual engagement have been the main generators of chronic under-employment in the past, have been transformed in the war. It may be assumed that the main principle of the transformation will remain in peace, that the men following such occupations will have guaranteed weekly wages, and that this will lead in due course to the organization of regular work as well as of regular wages, with men working for a single employing agency or for groups of employers, in place of taking their chance with single employers at a number of separate taking-on places. It may be hoped that in many other industries the former position in regard to the engagement of men will be transformed by the substitution of weekly for daily or hourly engagements." [3]
Keynesian economics are the various macroeconomic theories and models of how aggregate demand strongly influences economic output and inflation. In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy. It is influenced by a host of factors that sometimes behave erratically and impact production, employment, and inflation.
Labour economics, or labor economics, seeks to understand the functioning and dynamics of the markets for wage labour. Labour is a commodity that is supplied by labourers, usually in exchange for a wage paid by demanding firms. Because these labourers exist as parts of a social, institutional, or political system, labour economics must also account for social, cultural and political variables.
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Because minimum wages increase the cost of labor, companies often try to avoid minimum wage laws by using gig workers, by moving labor to locations with lower or nonexistent minimum wages, or by automating job functions. Minimum wage policies can vary significantly between countries or even within a country, with different regions, sectors, or age groups having their own minimum wage rates. These variations are often influenced by factors such as the cost of living, regional economic conditions, and industry-specific factors.
Unemployment, according to the OECD, is people above a specified age not being in paid employment or self-employment but currently available for work during the reference period.
Full employment is an economic situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. For instance, workers who are "between jobs" for short periods of time as they search for better employment are not counted against full employment, as such unemployment is frictional rather than cyclical. An economy with full employment might also have unemployment or underemployment where part-time workers cannot find jobs appropriate to their skill level, as such unemployment is considered structural rather than cyclical. Full employment marks the point past which expansionary fiscal and/or monetary policy cannot reduce unemployment any further without causing inflation.
Arthur Cecil Pigou was an English economist. As a teacher and builder of the School of Economics at the University of Cambridge, he trained and influenced many Cambridge economists who went on to take chairs of economics around the world. His work covered various fields of economics, particularly welfare economics, but also included business cycle theory, unemployment, public finance, index numbers, and measurement of national output. His reputation was affected adversely by influential economic writers who used his work as the basis on which to define their own opposing views. He reluctantly served on several public committees, including the Cunliffe Committee and the 1919 Royal Commission on income tax.
William Henry Beveridge, 1st Baron Beveridge, was a British economist and Liberal politician who was a progressive, social reformer, and eugenicist who played a central role in designing the British welfare state. His 1942 report Social Insurance and Allied Services served as the basis for the welfare state put in place by the Labour government elected in 1945.
Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt work procedures which appear pointless, complex and time-consuming merely to employ additional workers. The term "make-work" is sometimes used as a synonym for featherbedding.
The natural rate of unemployment is the name that was given to a key concept in the study of economic activity. Milton Friedman and Edmund Phelps, tackling this 'human' problem in the 1960s, both received the Nobel Memorial Prize in Economic Sciences for their work, and the development of the concept is cited as a main motivation behind the prize. A simplistic summary of the concept is: 'The natural rate of unemployment, when an economy is in a steady state of "full employment", is the proportion of the workforce who are unemployed'. Put another way, this concept clarifies that the economic term "full employment" does not mean "zero unemployment". It represents the hypothetical unemployment rate consistent with aggregate production being at the "long-run" level. This level is consistent with aggregate production in the absence of various temporary frictions such as incomplete price adjustment in labor and goods markets. The natural rate of unemployment therefore corresponds to the unemployment rate prevailing under a classical view of determination of activity.
Economics in One Lesson is an introduction to economics written by Henry Hazlitt and first published in 1946. It is based on Frédéric Bastiat's essay Ce qu'on voit et ce qu'on ne voit pas.
The term efficiency wages was introduced by Alfred Marshall to denote the wage per efficiency unit of labor. Marshallian efficiency wages are those calculated with efficiency or ability exerted being the unit of measure rather than time. That is, the more efficient worker will be paid more than a less efficient worker for the same amount of hours worked.
Labour power is the capacity to do work, a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, i.e. labour power, and the physical act of working, i.e. labour. Labour power exists in any kind of society, but on what terms it is traded or combined with means of production to produce goods and services has historically varied greatly.
A Beveridge curve, or UV curve, is a graphical representation of the relationship between unemployment and the job vacancy rate, the number of unfilled jobs expressed as a proportion of the labour force. It typically has vacancies on the vertical axis and unemployment on the horizontal. The curve, named after William Beveridge, is hyperbolic-shaped and slopes downward, as a higher rate of unemployment normally occurs with a lower rate of vacancies. If it moves outward over time, a given level of vacancies would be associated with higher and higher levels of unemployment, which would imply decreasing efficiency in the labour market. Inefficient labour markets are caused by mismatches between available jobs and the unemployed and an immobile labour force.
The post-war consensus, sometimes called the post-war compromise, was the economic order and social model of which the major political parties in post-war Britain shared a consensus supporting view, from the end of World War II in 1945 to the late-1970s. It ended during the governance of Conservative Party leader Margaret Thatcher. The consensus tolerated or encouraged nationalisation, strong trade unions, heavy regulation, high taxes, and an extensive welfare state.
This article gives detailed information on the employment situation in Hong Kong.
Reserve army of labour is a concept in Karl Marx's critique of political economy. It refers to the unemployed and underemployed in capitalist society. It is synonymous with "industrial reserve army" or "relative surplus population", except that the unemployed can be defined as those actually looking for work and that the relative surplus population also includes people unable to work. The use of the word "army" refers to the workers being conscripted and regimented in the workplace in a hierarchy under the command or authority of the owners of capital.
The degree of labour market flexibility is the speed with which labour markets adapt to fluctuations and changes in society, the economy or production. This entails enabling labour markets to reach a continuous equilibrium determined by the intersection of the demand and supply curves.
In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity to have market power over all sellers as the only purchaser of a good or service. This is a similar power to that of a monopolist, which can influence the price for its buyers in a monopoly, where multiple buyers have only one seller of a good or service available to purchase from.
Non-accelerating inflation rate of unemployment (NAIRU) is a theoretical level of unemployment below which inflation would be expected to rise. It was first introduced as NIRU by Franco Modigliani and Lucas Papademos in 1975, as an improvement over the "natural rate of unemployment" concept, which was proposed earlier by Milton Friedman.
In economics, non-accelerating inflation buffer employment ratio (NAIBER) refers to a systemic proposal for an in-built inflation control mechanism devised by economists Bill Mitchell and Warren Mosler, and advocated by Modern Money Theory as replacement for NAIRU. The concept of NAIBER is related to the idea of a job guarantee aimed to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).