Public Works

Abstract

Public works to relieve unemployment is an idea as old as the pyramids. From the cathedrals of the Middle Ages to the dams of the Tennessee Valley Authority, recent centuries abound with examples of such government-supported schemes. However, it is only fairly late in the history of economic theory that economists started devoting some analytical thought to this problem. In fact, it was around the turn of the 20th century, with the appearance on the Continent of the first systematic work on business cycles, that economists stopped looking at unemployment as a ‘pathological’ problem to be tackled primarily as one of charity and relief. Even down to the British 1909 Report of the Poor Law Commission a majority still considered unemployment as no challenge to economic theory: if properly applied, in the long run, the normal laws of value and distribution would see to a solution to this problem.KeywordsBalanced budget multiplierBeveridge, W. HCrowding outEffective demandGeneral glutsHawtrey, R.G.HoardingKahn, R. F.KeynesianismMultiplier analysisNeoclassical synthesisNew classical macroeconomicsPigou, A. C.Primary and secondary labour marketsPropensity to consumePublic worksRicardo, D.Saving equals investmentTreasury viewUnderconsumptionismUnemploymentWebb, B. and S.JEL ClassificationsB0