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Political Aspects of Full Employment

Michael Kalecki
Political Quarterly, 1943
Level: beginner
Perspectives: Marxian Political Economy, Post-Keynesian Economics
Topic: (De-)growth, Crises, Criticism of Capitalism, Inequality & Class, Institutions, Governments & Policy, Labour & Care, Macroeconomics, Reflection of Economics, Social movements & Transformation
Format: Text
Link: https://mronline.org/2010/05/22/political-aspects-of-full-employment/

In this famous article, Michal Kalecki describes the three main reasons that push business leaders to reject the intervention of the government to ensure full employment:

"(i) dislike of government interference in the problem of employment as such;

(ii) dislike of the direction of government spending (public investment and subsidizsing consumption);

(iii) dislike of the social and political changes resulting from the maintenance of full employment."


Comment from our editors:

Michael Kalecki is one of the main thinkers of Post-Keynesian economics (PKE). In this article, he offers his view on the reasons that motivate big businesses to reject government intervention. He underlines that this attitude is not easy to explain from a purely economic view: "higher output and employment benefit not only workers but entrepreneurs as well, because the latter's profits rise. And the policy of full employment outlined above does not encroach upon profits because it does not involve any additional taxation. The entrepreneurs in the slump are longing for a boom; why do they not gladly accept the synthetic boom which the government is able to offer them? It is this difficult and fascinating question with which we intend to deal in this article" (p.2) Hence, the author underlines the ideological, social and political reasons that motivate this position. As Covid and inflation have hit our economies in the recent years, it is not always clear why the governments do not engage into full employment policies. This article sheds some light on the tug of war between businesses and the State, which is done at the expense of the working class.

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