''Full Employment in a Free Society'' (1944) is a book by

William Beveridge William Henry Beveridge, 1st Baron Beveridge, (5 March 1879 – 16 March 1963) was a British economist and Liberal politician who was a progressive and social reformer who played a central role in designing the British welfare state. His 194 ...

, author of the

Beveridge Report The Beveridge Report, officially entitled ''Social Insurance and Allied Services'' ( Cmd. 6404), is a government report, published in November 1942, influential in the founding of the welfare state in the United Kingdom. It was drafted by the Libe ...

. It was first published in the UK by

Allen & Unwin George Allen & Unwin was a British publishing company formed in 1911 when Sir Stanley Unwin purchased a controlling interest in George Allen & Co. It went on to become one of the leading publishers of the twentieth century and to establish an ...

Overview

The book begins with the thesis that because individual employers are not capable of creating full employment, it must be the responsibility of the

state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

Full employment Full employment is a situation in which there is no cyclical or unemployment#Cyclical unemployment, deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely Structu ...

is defined as a state where there are slightly more vacant jobs than there are available workers, so people who lose jobs can find new ones immediately. Unemployment should be aimed to be reduced to 3%. Beveridge claimed that the upward pressure on wages, due to the increased bargaining strength of labour, would be eased by rising productivity, and kept in check by a system of wage arbitration. The cooperation of workers would be secured by the common interest in the ideal of full employment. The book was written in the context of an economy which would have to transfer from wartime direction to peace time. Government direction of labour (under the Essential Works Order) would cease, and workers would have a free choice of occupation. Beveridge argued that pre-war unemployment, that hit great heights during the 1930s depression, was due to ineffective demand for industrial products, imperfect labour mobility and general labour market disorganisation. Instead, the economy should be planned, so that demand is socialised, and supply is maintained at all times. To maintain demand, fiscal policy should be utilised. That means the Treasury's budget should gear towards increased spending when demand is otherwise down. The Social Security proposals in his better known ''

'' was an integral part of this.

Frictional unemployment Frictional unemployment is a form of unemployment reflecting the gap between someone voluntarily leaving a job and finding another. As such, it is sometimes called search unemployment, though it also includes gaps in employment when transferring ...

could be remedied through the use of planning law and subsidies to draw the location of industry to the door of the labourer. The advantage of that would be fewer costs in housing and social dislocation which results from large movements of labour. Full use of employment exchanges - public employment agencies - could be used to channel mobile labour, such as younger people, where it is needed. The evidential support for Beveridge's policy comes from the war experience. War solved unemployment by socialising demand.

Reception

The most common criticism was always that the circumstances of the war were special and people were willing to tolerate more in those times than they might have otherwise. Therefore, it could not be said that just because unemployment had disappeared during the war, it would hold in times of peace. Furthermore, soldiers drafted into the war were often in forced idleness when there was no work for them. Nevertheless, the book was highly influential, for it melding of

Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...

and Fabian politics. Years later, Nobel Laureate

Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...

, quoted in ''Hayek on Hayek'' (Chicago:

The University of Chicago Press The University of Chicago Press is the largest and one of the oldest university presses in the United States. It is operated by the University of Chicago and publishes a wide variety of academic titles, including ''The Chicago Manual of Style'', ...

, 1994), would claim that Beveridge's ''Full Employment in a Free Society'' was ghost-written by

Nicholas Kaldor Nicholas Kaldor, Baron Kaldor (12 May 1908 – 30 September 1986), born Káldor Miklós, was a Cambridge economist in the post-war period. He developed the "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons (1939), d ...

. Hayek said of Beveridge, " wasn't the least interested in economics. He knew no economics whatever."

*Part I - Introduction and Summary *Part II - Unemployment in Peace **Section 1. Facts of Unemployment **Section 2. Theories of Unemployment **Section 3. The New Face of Unemployment *Part III - Full Employment in War *Part IV - A Full Employment Policy for Peace **Section I. The Meaning and Three Conditions of Full Employment **Section 2. The First Condition: Adequate Total Outlay **Section 3. The Second Condition: Controlled Location of Industry **Section 4. The Third Condition: Organized Mobility of Labour

"return to the old ways of engaging labour should be definitely made impossible. Industries like dock and harbour service, which by practising casual engagement have been the main generators of chronic under-employment in the past, have been transformed in the war. It may be assumed that the main principle of the transformation will remain in peace, that the men following such occupations will have guaranteed weekly wages, and that this will lead in due course to the organization of regular work as well as of regular wages, with men working for a single employing agency or for groups of employers, in place of taking their chance with single employers at a number of separate taking-on places. It may be hoped that in many other industries the former position in regard to the engagement of men will be transformed by the substitution of weekly for daily or hourly engagements."para 231

**Section 5. Changes of Government Machinery **Section 6. Some Alternatives Examined **Section 7. A Full Policy for Full Employment *Part V - Internal Implications of Full Employment *Part VI - International Implications of Full Employment **Section I. Internal Policy and International Effects **Section 2. Britains's Need of Imports **Section 3. Bilateralism and the Three Conditions of Multilateral Trade **Section 4. The Need for Common Action **Section 5. The Choice for Britain *Part VII - Full Employment and Social Conscience *Postscript *Appendices *List of Tables

Notes

{{Reflist, 2

External links

*Review of ''Full Employment in a Free Society'' o
JSTOR
1944 non-fiction books Full employment Books about labour

Overview

Reception

Contents

See also

Notes

External links