But during the 1970s, economists came to see economic problems that might have passed into history as mistakes of policy and external shocks, as, instead, the result of fundamental errors of theory. This put macro-economic policy, the manipulation of budget deficits and interest rates to achieve grand goals of employment and growth, on the sidelines. Economic policy moved from the macro to the micro, from the demand side to the supply side, from a focus on accounting aggregates to focus on individual incentives.
Full employment is the hoariest phrase in our lexicon, the true mark of a Keynesian relic.
Full employment was an objective well suited to a world of unionised industrial workers, a time when fewer women worked, when there were no migrants to speak of and little competition from Third World manufactures. For this reason, full employment has largely lost its value as a political objective. The Left should stop recycling Keynesian employment policies, New Deal public works and welfare programs and the Civil Rights movements. As social forces these are spent, in some cases corrupted, and as economic programs they have been outflanked. As such, we have lost our moral standing, our voice.