We offer a precautionary account of why business managers should proactively rethink about what kinds of automation firms ought to implement, by exploring two challenges that automation will potentially pose. We engage the current debate concerning whether life without work opportunities will incur a meaning crisis, offering an argument in favor of the position that if technological unemployment occurs, the machine age may be a structurally limited condition for many without work opportunities to have or add meaning to their (...) lives. We term this the axiological challenge. This challenge, if it turns out to be persuasive, leads to a second challenge, to which managers should pay special attention: the teleological challenge, a topic especially relevant to the broad literature about corporate purpose and governance. We argue that both the shareholder profit-maximization model and its major alternative, stakeholder theory, are insufficient to address the meaning crisis. Unless rebutted, the two challenges compel business leaders to proactively rethink the purpose of business for future society. Otherwise, businesses will be contributors to a major ethical crisis and societal externality in the coming society. (shrink)

Unemployment has been at historically high rates for an extended period, and while it has recently improved in certain countries, the unemployment that remains may be becoming structural. Aside from inequality, unemployment is accordingly the problem that is most likely to put critical pressure on our political institutions, disrupt the social fabric of our way of life, and even threaten the continuation of liberalism itself. Despite the obvious importance of the problem of unemployment, however, there has (...) been a curious lack of attention paid to this issue by contemporary non-Marxist political philosophers. Non-Marxists typically view unemployment as a technical matter, and doing something about it a question of means not ends, with the solution to this question depending on the kind of empirical determinations about what causes what that are best left to economists, not political philosophers. But I think this is a mistake. Because work is a major part of our social life, as well as something that for a great many people grounds their sense of who they are and provides the basis of their sense of self-respect, those unable to find work are missing out on a great deal of what makes for a meaningful life, and not just the economic benefits that social cooperation has to offer. Those who are unemployed accordingly have something to complain about, even if we do not let them starve, and the rest of us (or at least the institutions that represent us) may have some sort of moral obligation to take action to increase the number of employment opportunities currently available regardless of any uncertainty surrounding the effects that any actions open to us might have. The nature and extent of this moral obligation is what On Unemployment is dedicated to exploring. (shrink)

Unemployment is one of the greatest social problems all around the world including in modern capitalistic welfare states. Therefore its social critique is a necessary task for any critical social philosophy such as Axel Honneth's recognition approach, which understands social justice in terms of social conditions of recognition. This paper aims to develop an evaluation of unemployment and its moral weight from this perspective. I will lay out the recognition approach and present a moral evaluation of unemployment (...) as socially unjust based on the knowledge of its negative consequences for those affected. I will then discuss two objections to this conclusion, namely that a mere correlation of suffering and moral wrongness is not enough and that there are legitimate differences in the experience of recognition which could justify the existence of unemployment as deserved. In the next section, I will then refute both objections and first show that unemployment can be understood as socially unjust based on the knowledge that it is involuntary and that the unemployed are not responsible for their condition. Then I will discuss the relationship between the idea of meritocracy and unemployment to examine the assumption of unemployment as being deserved. I will finally conclude that unemployment is not a necessary side effect of meritocracy and that there are good reasons to argue for a moral and justified obligation to provide an actual access to paid work for all who want to work. However, such changes face serious obstacles and are not likely to happen under the current interpretation of meritocracy and social esteem which are one-sided and flawed. (shrink)

Technological unemployment is a situation when people are without work and seeking work because of innovative production processes and labor-saving organizational solutions.

In their Out of Work: Government and Unemployment in Twentieth Century America, Richard Vedder and Lowell Gallaway contend that government intervention in American labor markets has caused unemployment by raising the real price of labor. In my critique of the book, I allowed that while this might sometimes be the case, it is not as important as Vedder and Gallaway claim. Their Reply does not succeed in vindicating their argument, because their wage averages fail to take into account (...) variations in wages within phases of the business cycle; because they fail to take into account the effects of unemployment on potential productivity, distorting their measures of real wages; and because they ignore the vast literature on the subject. (shrink)

How should policymakers respond to the risk of technological unemployment that automation brings? First, I develop a procedure for answering this question that consults, rather than usurps, individuals’ own attitudes and ambitions towards that risk. I call this the insurance argument. A distinctive virtue of this view is that it dispenses with the need to appeal to a class of controversial reasons about the value of employment, and so is consistent with the demands of liberal political morality. Second, I (...) appeal to the insurance argument to show that governments ought not simply to provide those who are displaced by machines with unemployment benefits. Instead, it must offer re-training programmes, as well as enact more general macroeconomic policies that create new opportunities for employment. My contribution is important not only because it helps us to resolve a series of urgent policy disputes—disputes that have been discussed extensively by labour market economists and policymakers, but less so by political philosophers—but also because my analysis sheds light on more general philosophical controversies relating to risk. (shrink)

A retrospective ELSPAC study (N = 2756) compared three groups of mothers of three-year-old children: 1) employed, 2) voluntarily unemployed, and 3) involuntarily unemployed, about the quality of their partnership and family relationships. The results show that the involuntarily unemployed mothers have the lowest quality of family life. In these families there is more conflict, disagreement and hostile communication towards the woman and child. Employed mothers also experience some family problems. Overall, those most satisfied with their family lives are the (...) voluntarily unemployed mothers. There is more positive communication between partners, including sharing and intimacy in this group. The results were interpreted as stemming from the distress caused by involuntary unemployment, the double burden of the female role and gender role models in the family. (shrink)

Unemployment is a major concern of societies and people around the world. In addressing this phenomenon, the literature has suggested a change in unemployed people’s perceptions of this transition period. In this paper, we apply a differential approach to explore the concept of unemployment normalization, an individual emotional regulation process. The results show how the global socioeconomic context and some individual and psychological variables influence the normalization of unemployment. Thus, the age of the person but also work (...) involvement, coping strategies, locus of control, and level of self-esteem have indirect differential effects, mediated by unemployment normalization dimensions, on unemployed people’s perceived health. Only neuroticism has a direct link to subjective well-being. These results offer a new understanding of the perception of unemployment and are also discussed in the area of career and vocational counseling. (shrink)

This paper argues that even though massive technological unemployment will likely be one of the results of automation, we will not need to institute mass-scale redistribution of wealth to deal with its consequences. Instead, reasons are given for cautious optimism about the standards of living the newly unemployed workers may expect in the fully-automated future. It is not claimed that these predictions will certainly bear out. Rather, they are no less likely to come to fruition than the predictions of (...) those authors who predict that massive technological unemployment will lead to the suffering of the masses on such a scale that significant redistributive policies will have to be instituted to alleviate it. Additionally, the paper challenges the idea that the existence of a moral obligation to help the victims of massive unemployment justifies the coercive taking of anyone else’s property. (shrink)

This book brings together recent work analysing the labour market behaviour of agents, particularly with regard to unemployment, job search, and labour supply. It considers the economic and demographic factors involved, and in particular the responsiveness of labour market behaviour to changes in these factors. There has been considerable recent progress in the design of appropriate econometric techniques and models with which to confront labour market theories with available data. The contributions to this volume represent important extensions or applications (...) by some of the foremost researchers in the field, provide tests of the available theories, and draw the consequent conclusions for policy. Subjects covered include unemployment, the duration of unemployment, the effects of insurance, benefits and taxation, youth unemployment, models of labour supply, and female participation. The contributors come from the USA, Canada, UK, France, Sweden, and Denmark. (shrink)

If we want to make people more equal, what should we make them more equal in? For example, should it be resources, such as income, or should it be subjective well-being, such as preference satisfaction? The aim of this article is to critically examine the two main answers to this question within a luck egalitarian moral framework, which is a framework that aims to eliminate inequalities caused by non-responsibility factors, while preserving inequalities due to responsibility factors. I argue that the (...) arguments typically presented in favor of equalizing incomes rather than subjective well-being are weak and that within a luck egalitarian moral framework the claim that resources and not welfare should be considered the appropriate basis for interpersonal comparisons is in need of justification.The question of what society should equalize is applied to the issue of what should be the fair level of unemployment insurance compensation: Should we only compensate the involuntary unemployed for the income loss associated with unemployment, or also for the non-pecuniary costs associated with unemployment? The answer to this question, I argue, depends on where the cut between responsibility factors and non-responsibility factors is drawn. (shrink)

In 1930, John Maynard Keynes published a masterpiece that should be a compulsory reading for any educated person, a short essay entitled Economic Possibilities for our Grandchildren (Keynes 1930, 1972).All references are from the 1931 online version of Keynes (1930) provided by Project Gutenberg, so pages are left unspecified. I am sure Keynes would have found such free access to information coherent with the philosophy of the essay. It was an attempt to see what life would be like if peace, (...) prosperity and techno-scientific developments were increasingly part of humanity’s future. Of course, things went otherwise. The Great Depression begun in the same year, and World War II soon followed. In the subsequent decades, other disasters, conflicts and crises awaited humanity. The essay became a philosophical exercise that could collect dust in the libraries. Yet the fact that history took such terrible and tragic steps back does not in any way detract from Keynes’ brilliant insights. And to. (shrink)

Automation can bring the risk of technological unemployment, as employees are replaced by machines that can carry out the same or similar work at a fraction of the cost. Some believe that the appropriate response is to tax automation. In this paper, I explore the justifiability of view, maintaining that we can embrace automation so long as we compensate those employees whose livelihoods are destroyed by this process by creating new opportunities for employment. My contribution in this paper is (...) important not only because I develop a theoretical framework that we can use to resolve this urgent policy dispute—a dispute that has been discussed extensively by labour economists, tax lawyers, and policymakers, but largely neglected by political philosophers—but also because my analysis sheds lights on a wider range of controversies relating to the moral and political importance of unemployment. (shrink)

Unemployment has been at historically high rates for an extended period, and while it has recently improved in certain countries, the unemployment that remains may be becoming structural. Aside from inequality, unemployment is accordingly the problem that is most likely to put critical pressure on our political institutions, disrupt the social fabric of our way of life, and even threaten the continuation of liberalism itself. Despite the obvious importance of the problem of unemployment, however, there has (...) been a curious lack of attention paid to this issue by contemporary non-Marxist political philosophers. Non-Marxists typically view unemployment as a technical matter, and doing something about it a question of means not ends, with the solution to this question depending on the kind of empirical determinations about what causes what that are best left to economists, not political philosophers. But I think this is a mistake. Because work is a major part of our social life, as well as something that for a great many people grounds their sense of who they are and provides the basis of their sense of self-respect, those unable to find work are missing out on a great deal of what makes for a meaningful life, and not just the economic benefits that social cooperation has to offer. Those who are unemployed accordingly have something to complain about, even if we do not let them starve, and the rest of us (or at least the institutions that represent us) may have some sort of moral obligation to take action to increase the number of employment opportunities currently available regardless of any uncertainty surrounding the effects that any actions open to us might have. The nature and extent of this moral obligation is what On Unemployment is dedicated to exploring. (shrink)

_Unemployment poses a significant threat to Pakistan's economy alongside other global countries. The current study tries to determine the substantial determinants affecting unemployment in the country. Data was retrieved from the worldwide development indicator (WDI) and worldwide governance indicators (WGI) by employing Time series analysis from 1996 to 2021. Augmented Dicky Fuller and Philips-Perron Unit root test were employed to check the stationary of the data. To figure out the short-run and long-run cointegration among variables, the model Autoregressive distributed (...) lag (ARDL) was applied. Findings indicate that all variables were statistically significant. Inflation, FDI and GDP are negatively affecting unemployment. While population growth, external debt and governance index have a positive association with unemployment. Growing population and external debt are substantial contributors to unemployment, while governance reveals inadequate effectiveness in addressing this challenge. Study recommended to improve FDI and GDP growth in Pakistan to reduce unemployment. Furthermore, govt stability and effective policies are necessary to overcome the problem of unemployment._. (shrink)

Recently, economic studies on labor market developments have indicated that there is a potential threat of technological mass unemployment. Both smart robotics and information technology may perform a broad range of tasks that today are fulfilled by human labor. This development could lead to vast inequalities. Proponents of an unconditional basic income have, therefore, employed this scenario to argue for their cause. In this chapter, the author argues that, although a basic income might be a valid answer to the (...) challenge of technological unemployment, it fails to account for some ethical problems specific to future expectations of mass unemployment. The author introduces the proposal of an unconditional basic capital and shows how it can address these problems adequately and avoid objections against a basic income. However, the basic capital proposal cannot replace all redistributive social policies. It has to be interpreted as a supplement to either a basic income or more traditional redistributive policies. (shrink)

This is a literature review study, of unemployment which is widespread in today's societies, where individuals with work capacity, find themselves without employment activity due to a lack of opportunities or simply because they cannot find a job. The research aims to learn and understand the causes of unemployment and underemployment in Ecuador, particularly in the Province of Chimborazo during the years 2021-2022. To achieve this we have relied on the collection of statistical data and its subsequent analysis, (...) interpretation, judgment, and prospection, which provides a base tool for decision-making, as well as for academic and business deepening. (shrink)

The paper rehearses arguments for and against the prediction of massive technological unemployment. The main argument in favor is that robots are entering a large number of industries; making more expensive human labor redundant. The main argument against the prediction is that for two hundred years we have seen a massive increase in productivity with no long term structural unemployment caused by automation. The paper attempts to move past this argumentative impasse by asking what humans contribute to the (...) supply side of the economy. Historically; humans have contributed muscle and brains to production but we are now being outcompeted by machinery; in both areas; in many jobs. It is argued that this supports the conjecture that massive unemployment is a likely result. It is also argued that a basic income guarantee is a minimal remedial measure to mitigate the worst effects of technological unemployment. (shrink)

This paper discusses the concept of “human disenhancement”, i.e. the worsening of human individual abilities and expectations through technology. The goal is provoking ethical reflection on technological innovation outside the biomedical realm, in particular the substitution of human work with computer-driven automation. According to some widely accepted economic theories, automatization and computerization are responsible for the disappearance of many middle-class jobs. I argue that, if that is the case, a technological innovation can be a cause of “human disenhancement”, globally, and (...) all things considered, even when the local and immediate effect of that technology is to increase the demand of more sophisticated human skills than the ones they substitute. The conclusion is that current innovations in the ICT sector are objectionable from a moral point of view, because they disenhance more people than they enhance. (shrink)

Is sex work (specifically, prostitution) vulnerable to technological unemployment? Several authors have argued that it is. They claim that the advent of sophisticated sexual robots will lead to the displacement of human prostitutes, just as, say, the advent of sophisticated manufacturing robots have displaced many traditional forms of factory labour. But are they right? In this article, I critically assess the argument that has been made in favour of this displacement hypothesis. Although I grant the argument a degree of (...) credibility, I argue that the opposing hypothesis -- that prostitution will be resilient to technological unemployment -- is also worth considering. Indeed, I argue that increasing levels of technological unemployment in other fields may well drive more people into the sex work industry. Furthermore, I argue that no matter which hypothesis you prefer -- displacement or resilience -- you can make a good argument for the necessity of a basic income guarantee, either as an obvious way to correct for the precarity of sex work, or as a way to disincentivise those who may be drawn to prostitution. (shrink)

Suppose we are about to enter an era of increasing technological unemployment. What implications does this have for society? Two distinct ethical/social issues would seem to arise. The first is one of distributive justice: how will the efficiency gains from automated labour be distributed through society? The second is one of personal fulfillment and meaning: if people no longer have to work, what will they do with their lives? In this article, I set aside the first issue and focus (...) on the second. In doing so, I make three arguments. First, I argue that there are good reasons to embrace non-work and that these reasons become more compelling in an era of technological unemployment. Second, I argue that the technological advances that make widespread technological unemployment possible could still threaten or undermine human flourishing and meaning, especially if they do not remain confined to the economic sphere. And third, I argue that this threat could be contained if we adopt an integrative approach to our relationship with technology. In advancing these arguments, I draw on three distinct literatures: the literature on technological unemployment and workplace automation; the antiwork critique—which I argue gives reasons to embrace technological unemployment; and the philosophical debate about the conditions for meaning in life—which I argue gives reasons for concern. (shrink)

In this article, we address the problem of the potential crisis in people’s life’s meaning due to massive automation-driven technological unemployment. Assuming that the problem of (re)distribution of economic resources to the whole of society in such a scenario will be solved (e.g. through provision of a Universal Basic Income), the question arises concerning the meaning of people’s lives in a world in which almost everyone does not have to (or even could not) work in order to live. Here, (...) we side with many current proposals that paid work is not the only possible source of meaning and hence, that a meaningful life could indeed be led in a post-work society. We especially focus on one of the most developed accounts, Danaher’s Virtual Utopia (Danaher, 2016, 2019, 2022). According to him, living immersed in playful virtual worlds where new, expanded and personalized possibilities of personal and collective experiences and actions, could not only be perfectly meaningful lives, but furthermore, “be the utopia we are looking for” (Danaher, 2019, p. 270). However, our analysis will suggest that although it is a very well thought and carefully articulated position, it suffers from various important problems. Our criticism will be based on an alternative framework to think about life’s meaning and the conditions for leading a good life in general. This alternative is based on the philosophy of buen vivir (“good living”). This notion has its roots in common aspects of various Latin American indigenous cultures regarding a community-centered way of life where humans, society and nature are taken to be deeply interconnected and interdependent, and where the notions of respect, harmony and balance are at the core of this interrelationship (Gudynas, 2011; Acosta, 2008; Beling et al., 2021). Buen vivir has many facets, but we will focus on three: the importance of healthy human communities, the human-nature relationship, and the intrinsic value of nature. Based on these, we argue that the Virtual Utopia is not a good candidate for human’s post-work utopia because i) it unnecessarily augments the environmental damage that is already involved in massive labor automation; ii) it entails an unnecessary and detrimental dependence on technology for human relationships; and iii) increases the severance of the link between humanity and nature. We conclude that the buen vivir approach is a promising candidate for an alternative utopian project, but one that needs further construction. (shrink)

Purpose of the article: Most regional macroeconomic processes may not be adequately analyzed without accounting for their spatial nature: regional distances, interactions between neighbors, spill-over effects and interdependencies. This contribution focuses on various factors ruling unemployment dynamics in the Visegrad Group countries and their major economic partners: Germany and Austria. The analysis is performed at the NUTS2 level. Methodology/methods: Spatial econometrics is a unique tool for a broad range of quantitative analyses and evaluations. Spatial econometric models are based on (...) geo-coded data. Spatial econometrics and regional competitiveness paradigms are combined into different types of regression model specifications describing unemployment dynamics. Alternative spatial structures are used for verification of stability in estimated model properties. Scientific aim: We aim to provide a detailed empirical evaluation of spatially determined factors of regional unemployment dynamics, along with insight into the robustness of such approach. Both conceptually and parametrically varying neighbor definitions are used to provide evidence for model evaluation. Findings: We find strong positive spatial dependence patterns in the estimated models, robust against varying neighborhood definitions. Our results strongly support the importance of regional and potentially cross-border cooperation in macroeconomic policies addressing unemployment. The estimated models also underline the importance of using spatial models, by pointing out the bias in OLS-estimated models. Conclusions and limits: Spatial approach to econometric analysis provides important insight and robustness to a broad range of unemployment analyses that may be carried out using regional data. At the same time, it should be noted that this article focuses mostly on the spatial and stability aspects of model estimation, while leaving out other interesting topics such as spill-over effects calculations as based on estimated models. Also, estimations provided in this article might benefit from spatial panel data-based methods - once data availability issues are sorted. (shrink)

Unemployment in Europe is currently a major challenge. Two models for solving the problem are frequently proposed: a work model, which in its radical version institutes a legally binding right to employment, and a basic income model, which in its radical form establishes a universal, unconditional right to income security. In practice, western democracies have experimented with mixed forms of both models, with a greater emphasis on guaranteeing work. This article examines the justifications of these two models in their (...) radical versions, with a special focus on the experience of self-respect. The conclusion is that the benefits that traditionally are associated with paid work function better in justifying a right to basic income than a right to work. (shrink)

In this paper I describe Gandhi’s vision for a way of life that would be an essential part of any sustainable solution to worldwide problems of unemployment, societal breakdown and ecological degradation. Gandhi’s vision included a communitarian lifestyle of simplicity and non-accumulation in which agriculture would be supported by cottage industries using appropriate technologies (e.g., spinning). Assuming obligations to future generations, Gandhi’s proposal highlights the degree to which our First-World lifestyle is morally impermissible. One objection to this criticism of (...) our First-World lifestyles is that we can solve the problem of ecological degradation by exporting only appropriate technologies to the Third World and supplementing our use of consumptive technologies with technological cleanups. This suggestion is not only irresponsible and unjust, but also hopeless, for our resource consumptive standards are already the model for development worldwide. To counteract this destructive model we must begin to recreate, in the First World, sustainable lifestyles that others will want to emulate. Part of this task involves the inner work that has been a casualty of the ideologies of modernity, and Gandhi’s vision is a blueprintfor both the outer and inner work that are essential to recreate a sustainable society. (shrink)

Since the onset of the latest United States (U.S.) recession (beginning in December 2007), the U.S. economy has been posting high unemployment levels consistently exceeding 8 percent. Of specific interest, the U.S. Department of Labor, Bureau of Labor Statistics (BLS), reports on a specific subset of the U.S. unemployed: the long‐term unemployed, defined as those who are unemployed for 27 weeks and over. Since December 2009, the share of the long‐term unemployed of the total U.S. unemployed has exceeded 40 (...) percent (through April 2012), the highest level since 1948 when data was first collected. A phenomenon of this recession is an alleged public bias by American private sector employers against hiring the long‐term unemployed, or even simply those unemployed. While the authors support the removal of discrimination against the unemployed in job advertisements, they cannot support the larger notion of including those who are unemployed as a protected class of employees. Becoming or being unemployed is a state that one can change, and based on the lack of research on how widespread this discrimination is (beyond anecdotal stories or limited research surveys), they believe that extending protection under equal employment opportunity legislation would be overreaching and inappropriate at this time. (shrink)

It is widely accepted that global forces of technology and trade have caused a profound shift in labor demand toward the most highly skilled, generating sharply rising earnings inequality in flexible labor markets and persistently high unemployment in rigid labor markets. This article critically assesses the evidence for this “Unified Theory.” It finds little compelling empirical support for either the skill-biased demand-shift explanation for high U.S. earnings inequality or the rigid labor markets explanation for high unemployment in Europe. (...) This assessment challenges the policy orthodoxy of the 1990s that developed economies feature a strict inequality-unemployment trade-off and that policy options are therefore limited to skills enhancement in the United States and labor market deregulation in Europe. It is suggested that the theoretical dominance of the textbook supply/demand model has contributed to the neglect of labor market institutions for U.S. wage outcomes and tight macroeconomic policy for European unemployment. (shrink)

The seventeen seminal essays by Robert J. Gordon collected here, including three previously unpublished works, offer sharply etched views on the principal topics of macroeconomics - growth, inflation, and unemployment. The author re-examines their salient points in a uniquely creative, accessible introduction that serves on its own as an introduction to modern macroeconomics. Each of the four parts into which the essays are grouped also offers a new introduction. The papers in Part I explore different key aspects of the (...) history, theory, and measurement of productivity growth. The essays in Part II investigate the sources of business cycles and productivity fluctuations. Those in Part III cover the effects of supply shocks in macroeconomics. The final group presents empirical studies of the dynamics of inflation in the United States. The foreword by Nobel Laureate Robert M. Solow comments on the abiding importance of these essays drawn from 1968 to the present. (shrink)

The third quarter of the twentieth century with full employment in most Western countries is a historically unique period, forming The Great Trough in unemployment. This article analyses the beginning, continuation, and demise of The Great Trough, contrasting a supply-and-demand framework derived from economic theory with a power-sensitive approach focusing on long-term positive-sum conflicts involving major interest and reflected in unemployment, inflation, industrial disputes, and the functional distribution of national income. Comparative empirical data from eighteen countries are used (...) in analyses of hypotheses implied by the different theoretical perspectives. (shrink)

This article explores the experiences of employed and unemployed Ontario Basic Income recipients in the Hamilton and Brantford pilot site. Integrating data from surveys and interviews, the self-reported outcomes of both groups are summarized. These outcomes pertain to employment, physical health, mental health, use of health services, food security, housing stability, financial well-being and social activities. The article highlights the difference in the degree of improvements between recipients who were working before and during the pilot versus those who were not (...) employed at both times. Its broad conclusion is that both groups reported significant benefits, but it was recipients who were continuously employed that reported the greatest improvements. This suggests that basic income could be an important policy tool to improve the lives of low-income and precarious workers in Ontario and perhaps elsewhere. (shrink)

The aim of this paper is to address the problem of unemployment. Economists generally agree that a zero rate of unemployment is not only unattainable but also undesirable within capitalism. This is problematic because, as it will be shown, unemployment has adverse effects on both individuals and societies. Assuming that the primary aim of economics is to improve people’s lives, it behooves us to find a solution to the problem of unemployment. Two solutions will be offered. (...) The first works within the confines of the capitalist system –it requires instituting welfare policies that alleviate the adverse effects of unemployment. The second involves a paradigm change –it requires replacing capitalism with an alternative economic system that is consistent with a zero rate of unemployment. (shrink)

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)