Abstract
It is common knowledge that John Maynard Keynes advocated bold government action to deal with recessions and unemployment. What is not commonly known is that modern Keynesian bear little, if any, resemblance to policy measures Keynes himself believed would guarantee true full employment over long run. This paper corrects this misconception and outlines the road not taken; that is, long-term program for full employment found in Keynes’s writings and elaborated on by others in works that are missing from mainstream textbooks and policy initiatives. The analysis herein focuses on why private sector ordinarily fails to produce full employment, even during strong expansions and in presence of strong government action. It articulates reasons why job of policymaker is, not to nudge private firms to create jobs for all, but to do so itself directly as a matter of last resort. This paper discusses various designs of direct job creation policies that answer Keynes’s call for long-run full employment policies.
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