There's a difference between an economy with equilibrium tendencies and an economy with full employment tendencies. It's the difference between an emergent order and a Panglossian order. It's also about assuming a coincidence between what we as individuals in a much bigger system value and what the system tends toward which seems to me to be a little naive and atypical of natural systems we usually encounter.
I need to start writing posts in the title :)
ReplyDeleteIf I read you right, I don't think many arrive at the full-employment conclusion through some assumed coincidence of tendency and what we value. From what I can tell, it's a lot harder to contrive cases (theoretically speaking) in which, in the long-run, you don't get full-employment.
ReplyDeleteI think a lot of individuals don't value employment when the gap between their former wages and the wages they can now earn is so large. Employers don't value employment as much as the lower vulnerability of having fewer workers. I don't think individuals value housing as much as their housing expenses suggest.
ReplyDeleteI think the ability to fool individual companies into hiring by artificially increasing demand is pretty low and also ignores sticky hiring. In other words I don't think it's easy to force optimism.