Abstract
Advocates of Job Guarantee (JG) or Employer of Last Resort (ELR) schemes have suggested that if the state provides ‘buffer stock’ employment to workers displaced from private employment, then full employment can be maintained over the course of the business cycle. Kalecki was sceptical about the prospects for maintaining full employment in capitalist economies, without fundamental institutional change that would alleviate certain political constraints on the maintenance of full employment. We argue that in and of themselves, JG/ELR schemes do not create the fundamental institutional change required to address Kalecki’s concerns and so ensure that full employment becomes achievable as a permanent state.
Highlights
Despite co-discovering, with Keynes, the theoretical framework for the principle of effective demand, Kalecki was dubious about the ability of governments in capitalist economies to use macroeconomic policy to create full employment in the longer term
Some heterodox economists have proposed a solution to the problem of unemployment in capitalist economies referred to as either buffer stock employment, or as a job guarantee (JG) or employer of last resort (ELR) scheme
We ask: can the implementation of a JG/ELR program change the dialectics of capitalist economies, reforming class relations so that full employment becomes achievable as a permanent state? Since Kriesler and Halevi (2001), concern with this issue has arisen elsewhere (see, for example, Palley (2018, p.24 and Levrero (2019, pp.47, 53-54)), but it has been addressed more-or-less in passing, in the course of more general reactions to JG/ELR schemes or Modern Money Theory (MMT)
Summary
Despite co-discovering, with Keynes, the theoretical framework for the principle of effective demand, Kalecki was dubious about the ability of governments in capitalist economies to use macroeconomic policy to create full employment in the longer term. We consider the precise form of the state and its implications for those in buffer stock employment This does not impinge on the capacity of JG/ELR schemes to maintain full employment per se, it is – as will become clear – germane to our broader concern with the political aspects of such schemes.
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