De Long's criticisms of our explanation of unemployment patterns in the United States are empirically false. His assertion that we have the direction of causation reversed collapses in light of the lag between artificially high wages and unemployment. Nor are his claims about the nature of cyclical movements in productivity and real wages consistent with the data. Finally, his contention that the model we present does not work in the post‐World War II era is, at best, misleading. The evidence shows (...) with remarkable consistency that government attempts to prop up wages have caused twentieth‐century increases in U.S. employment. (shrink)

PROSPERITY AND UPHEAVAL: THE WORLD ECONOMY 1945?1980 by Herman Van der Wee translated by Robin Hogg and Max R. Hall Berkeley: University of California Press, 1987. 621pp., $14.95 Van der Wee uncritically accepts that Keynesianism is responsible for post?war economic stability. Against this belief, it is argued that an analysis of the historical record shows no significant efforts at countercyclical fiscal management in the post?war era, while efforts to control the economy via monetary policy were associated with increasing instability, culminating (...) in the crisis years of the 1970s. Thus, in the American case at least, post?war stability has been the result of self?correcting market tendencies, while instability has followed government macroeconomic intervention. (shrink)

Is there truth to the widespread belief that the ig8os saw a redistribution of income upward, from the poor and the middle class to the rich? While the eighties witnessed an abundance of new and high‐paying jobs and a sharp redistribution of taxes upward, income inequality did increase. But this was not because the poor lost ground but because the rich gained more ground than the poor. In reality, then, the eighties were not only good for the rich and the (...) middle class but met Rawlsian standards of “justice as fairness.”. (shrink)