‘Political Aspects of Persisting Unemployment’: Kalecki and Beyond

Abstract

Kalecki’s ‘Political Aspects of Full Employment’ (Kalecki, 1943)¹ is a recog- nised masterpiece that is still widely quoted by economists of different orientation (a significant recent example maybe found in Krugman, 2012: pp. 94–96 and 206). Its insights are still useful to clarify and understand many crucial issues lying on the border between macroeconomics, poli- tics and macroeconomic policy. In this chapter we intend to reconsider his essay from the specular point of view of persisting structural (or invol- untary) unemployment as experienced in the last three great crises that have upset developed countries in the last century: the Great Depression of the 1930s, the Great Stagflation of the 1970s and the Great Recession which started in 2007. Kalecki’s insights on full employment economies were prompted by the Great Depression and the scientific, policy and political reactions to it, but succeeded in capturing a few crucial structural features of contemporary capitalism that may also shed light on what happened afterwards. In this chapter, we argue that in particular they help us to understand better not only the Great Depression as analysed by Kalecki himself, but also the Great Stagflation as has long been argued (for example by Robinson, 1976), and — as we are going to argue — the ongoing deep crisis often called Great Recession.