Institutional Adjustment Planning for Full Employment

Abstract

The idea of government as the Employer of Last Resort (ELR) has been present in the Institutionalist literature since the early twentieth century. In 1919, well before Keynes recognized that capitalist economies lack an inherent mechanism to create full employment, John Dewey wrote: The first great demand of a better social order, I should say, then, is the guarantee of the right, to every individual who is capable of it, to work – not the mere legal right which is enforceable so that the individual will always have the opportunity to engage in some form of useful activity, and if the ordinary economic machinery breaks down through a crisis of some sort, then it is the duty of the state to come to the rescue and see that individuals have something to do that is worth while – not breaking stones in a stoneyard, or something else to get a soup ticket with, but some kind of productive work which a self-respecting person may engage in with interest and with more than mere pecuniary profit. Whatever may be said about the fortune of what has technically been called socialism, it would seem to be simply part of ordinary common sense that society should reorganize itself to make sure that individuals can make a living and be kept going, not by charity, but by having productive work to do. ([1919] 1939, 420-421) Several prominent institutionalists such as Morris Copeland (1967),

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